Ÿ] Shares Fortegra Financial Corporation Common Stock PURCHASE AGREEMENT
Exhibit 1.1
[Ÿ] Shares
Fortegra Financial Corporation
Common Stock
[Ÿ], 2010
XXXXX XXXXXXX & CO.
As Representative of the several
Underwriters named in Schedule II hereto
Underwriters named in Schedule II hereto
| c/o | Xxxxx Xxxxxxx & Co. 000 Xxxxxxxx Xxxx, Xxxxx 000 Xxxxxxxxxxx, XX 00000 |
Ladies and Gentlemen:
Fortegra Financial Corporation, a Delaware corporation (the “Company”), and the stockholders
of the Company listed in Schedule I hereto (the “Selling Stockholders”) severally and not jointly
propose to sell to the several Underwriters named in Schedule II hereto (the “Underwriters”) an
aggregate of [Ÿ] shares (the “Firm Shares”) of Common Stock, $[Ÿ] par value per share
(the “Common Stock”), of the Company. The Firm Shares consist of [Ÿ] authorized but unissued
shares of Common Stock to be issued and sold by the Company and [Ÿ] outstanding shares of
Common Stock to be sold by the Selling Stockholders. The Company and certain of the Selling
Stockholders have also granted to the several Underwriters an option to purchase up to [Ÿ]
and [Ÿ] additional shares of Common Stock, respectively, on the terms and for the purposes
set forth in Section 3 hereof (the “Option Shares”). The Firm Shares and any Option Shares
purchased pursuant to this Purchase Agreement are herein collectively called the “Securities.”
The Company and the Selling Stockholders hereby confirm their agreement with respect to the
sale of the Securities to the several Underwriters, for whom you are acting as representative (the
“Representative”).
1. Registration Statement and Prospectus. A registration statement on Form S-1 (File No.
333-[Ÿ]) (the “initial registration statement”) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the “Act”), and the rules and regulations
(“Rules and Regulations”) of the Securities and Exchange Commission (the “Commission”) thereunder
and has been filed with the Commission; one or more amendments to such registration statement have
also been so prepared and have been, or will be, so filed; and, if the Company has elected to rely
upon Rule 462(b) of the Rules and Regulations to increase the size of the offering registered under
the Act, the Company will prepare and file with the Commission a registration
statement with respect to such increase pursuant to Rule 462(b) (the “additional registration
statement”). Copies of such registration statements and amendments and each related preliminary
prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and Regulations, the
Company has prepared and will promptly file an amendment to the registration statement and an
amended prospectus. If the Company has elected to rely upon Rule 430A of the Rules and
Regulations, it will prepare and file a prospectus pursuant to Rule 424(b) of the Rules and
Regulations that discloses the information previously omitted from the prospectus in reliance upon
Rule 430A (“Rule 430A Information”). The term “Original Registration Statement” as of any time
means the initial registration statement, in the form then filed with the Commission, including all
amendments to the initial registration statement as of such time, all information contained in the
additional registration statement (if any) and then deemed to be a part of the initial registration
statement pursuant to the General Instructions of Form S-1 and all information (if any) included in
a prospectus then deemed to be a part of the initial registration statement pursuant to Rule 430C
of the Rules and Regulations or retroactively deemed to be a part of the initial registration
statement pursuant to Rule 430A(b) of the Rules and Regulations. The term “Rule 462(b)
Registration Statement” as of any time means the additional registration statement in the form then
filed with the Commission, including the contents of the Original Registration Statement
incorporated by reference therein and including all information (if any) included in a prospectus
then deemed to be a part of the additional registration statement pursuant to Rule 430C or
retroactively deemed to be a part of the additional registration statement pursuant to Rule
430A(b). The term “Registration Statement” as of any time means the Original Registration
Statement and any Rule 462(b) Registration Statement as of such time. For purposes of the
foregoing definitions, information contained in a form of prospectus that is deemed retroactively
to be a part of the Registration Statement pursuant to Rule 430A shall be considered to be included
in the Registration Statement as of the time specified in Rule 430A. For purposes of this
Agreement, the term “Effective Time” with respect to the Original Registration Statement or the
Rule 462(b) Registration Statement means the date and time as of which such Registration Statement
was declared effective by the Commission or has become effective upon filing pursuant to Rule
462(b). The term “Registration Statement” without reference to a time means the Registration
Statement as of its Effective Time. The term “Prospectus” means the prospectus filed with the
Commission pursuant to Rule 424(b) that discloses the public offering price and other final terms
of the Securities and the offering and otherwise satisfies Section 10(a) of the Act. The term
“Preliminary Prospectus” as of any time means any prospectus included in the Registration Statement
prior to the time it becomes or became effective under the Act and any prospectus that omits Rule
430A Information. The term “most recent Preliminary Prospectus” means the Preliminary Prospectus
included in the Original Registration Statement immediately prior to the Effective Time. All
references in this Agreement to the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement to any of the foregoing, shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering, analysis and Retrieval
System (“XXXXX”).
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2. Representations and Warranties of the Company and the Selling Stockholders.
(a) The Company represents and warrants to, and agrees with, the several Underwriters as
follows:
(i) No order preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission and the most recent Preliminary Prospectus, at the time of filing
thereof or the time of first use within the meaning of the Rules and Regulations, complied
in all material respects with the requirements of the Act and the Rules and Regulations and,
when considered together with the information set forth on Schedule III, did not contain an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading; except that the foregoing shall not apply to
statements in or omissions from the most recent Preliminary Prospectus in reliance upon, and
in conformity with, written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation thereof, it being
understood and agreed that the only such information furnished by any Underwriter consists
of the information described as such in Section 6(h).
(ii) As of the time any part of each of the Original Registration Statement and, if
applicable, the 462(b) Registration Statement (or any post-effective amendment thereto)
became effective and at all other subsequent times until expiration of the Prospectus
Delivery Period (as hereinafter defined), upon the filing or first use within the meaning of
the Rules and Regulations of the Prospectus (or any supplement to the Prospectus) and at all
other subsequent times until expiration of the Prospectus Delivery Period and at the First
Closing Date and Second Closing Date, (A) the Registration Statement and the Prospectus (in
each case, as so amended and/or supplemented) conformed or will conform in all material
respects to the requirements of the Act and the Rules and Regulations, (B) the Registration
Statement (as so amended) did not or will not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (C) the Prospectus (as so supplemented) did not or
will not include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of
the circumstances in which they are or were made, not misleading; except that each of the
foregoing shall not apply to statements in or omissions from any such document in reliance
upon, and in conformity with, written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation thereof, it being
understood and agreed that the only such information furnished by any Underwriter consists
of the information described as such in Section 6(h). If the Registration Statement has
been declared effective by the Commission, no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that purpose has been
initiated or, to the Company’s knowledge, threatened by the Commission.
(iii) Neither (A) the Issuer General Free Writing Prospectus(es) issued at or prior to
the Time of Sale and set forth on Schedule III, the information on
Schedule IV, and the most recent Preliminary Prospectus, all considered together
(collectively, the
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“Time of Sale Disclosure Package”), nor (B) any individual Issuer
Limited-Use Free Writing Prospectus, when considered together with the Time of Sale
Disclosure Package, includes or included as of the Time of Sale any untrue statement of a
material fact or omits or omitted as of the Time of Sale to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to statements
in or omissions from the most recent Preliminary Prospectus or any Issuer Free Writing
Prospectus based upon and in conformity with written information furnished to the Company by
you or by any Underwriter through you specifically for use therein; it being understood and
agreed that the only such information furnished by any Underwriter consists of the
information described as such in Section 6(h). As used in this paragraph and elsewhere in
this Agreement:
(1) “Time of Sale” means [•]:00 [a.m.] (Eastern Time) on the date of this
Agreement.
(2) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 of the Rules and Regulations, relating to the
Securities that (A) is required to be filed with the Commission by the Company or
(B) is exempt from filing pursuant to Rule 433(d)(5)(i) of the Rules and Regulations
because it contains a description of the Securities or of the offering that does not
reflect the final terms or pursuant to Rule 433(d)(8)(ii) because it is a “bona fide
electronic roadshow,” as defined in Rule 433 of the Rules and Regulations which is
made available without restriction, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained in
the Company’s records pursuant to Rule 433(g) of the Rules and Regulations.
(3) “Issuer General Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors, as
evidenced by its being specified in Schedule III to this Agreement.
(4) “Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing Prospectus. The term Issuer
Limited-Use Free Writing Prospectus also includes any “bona fide electronic road
show,” as defined in Rule 433 of the Rules and Regulations, that is made available
without restriction pursuant to Rule 433(d)(8)(ii) of the Rules and Regulations,
even though not required to be filed with the Commission.
(iv) (A) Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the Securities or
until any earlier date that the Company notified or notifies Xxxxx Xxxxxxx & Co. as
described in Section 4(a)(iii)(B), did not, does not and will not include any information
that conflicted, conflicts or will conflict with the information contained in the
Registration Statement, the most recent Preliminary Prospectus or the Prospectus. The
foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing
Prospectus based upon and in conformity with written information furnished to the
Company by you or by any Underwriter through you specifically for use therein; it being
understood and agreed that the
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only such information furnished by any Underwriter consists
of the information described as such in Section 6(h).
(B) (1) At the time of filing the Registration Statement and (2) on the date hereof,
the Company was not and is not an “ineligible issuer,” as defined in Rule 405 of the Rules
and Regulations, including the Company or any subsidiary in the preceding three years not
having been convicted of a felony or misdemeanor or having been made the subject of a
judicial or administrative decree or order as described in Rule 405 (without taking account
of any determination by the Commission pursuant to Rule 405 that it is not necessary that
the Company be considered an ineligible issuer), nor an “excluded issuer” as defined in Rule
164 of the Rules and Regulations.
(C) Each Issuer Free Writing Prospectus satisfied, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the Securities, all
other conditions to use thereof as set forth in Rules 164 and 433 of the Rules and
Regulations.
(v) The financial statements of the Company, together with the related notes, set forth
in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus comply
in all material respects with the requirements of the Act and fairly present in all material
respects the financial condition of the Company and its consolidated subsidiaries as of the
dates indicated and the results of operations and changes in cash flows for the periods
therein specified in conformity with generally accepted accounting principles in the United
States consistently applied throughout the periods involved; the supporting schedules
included in the Registration Statement present fairly in all material respects the
information required to be stated therein; all non-GAAP financial information included in
the Registration Statement, the Time of Sale Disclosure Package and the Prospectus complies
in all material respects with the requirements of Regulation G and Item 10 of Regulation S-K
of the Rules and Regulations; and, except as disclosed in the Time of Sale Disclosure
Package and the Prospectus, there are no material off-balance sheet arrangements (as defined
in Regulation S-K of the Rules and Regulations, Item 303(a)(4)(ii)) or any other
relationships with unconsolidated entities or other persons, that may have a material change
or, to the Company’s knowledge, material future effect on the Company’s financial condition,
results of operations, liquidity, capital expenditures, capital resources or significant
components of revenue or expenses. No other financial statements or schedules are required
to be included in the Registration Statement, the Time of Sale Disclosure Package or the
Prospectus. Xxxxxxx Xxxxxxx & Co. LLP, which has expressed its opinion with respect to the
consolidated financial statements and schedules of the Company and subsidiaries at December
31, 2009 and 2008, for each of the two years ended December 31, 2009 and 2008, the period
from June 20, 2007 to December 31, 2007 and the period from January 1, 2007 to June 19, 2007
filed as a part of the Registration Statement and included in the Registration Statement,
the Time of Sale Disclosure Package and the Prospectus, is (x) an independent public
accounting firm within the meaning of the Act and the Rules and Regulations, (y) a
registered public accounting firm (as defined in Section 2(a)(12) of the Xxxxxxxx-Xxxxx Act
of 2002 (the “Xxxxxxxx-Xxxxx Act”)) and (z) not in violation of the auditor independence
requirements of the Xxxxxxxx-Xxxxx Act.
PricewaterhouseCoopers LLP, which has expressed its opinion with respect to the
financial statements and schedules
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of Bliss and Xxxxxxx, Inc. at December 31, 2008 and 2007,
for the period from October 1, 2008 to December 31, 2008, for the period from January 1,
2008 to September 30, 2008 and for the year ended December 31, 2007 filed as a part of the
Registration Statement and included in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus, is (x) an independent public accounting firm within
the meaning of the Act and the Rules and Regulations, (y) a registered public accounting
firm (as defined in Section 2(a)(12) of the Xxxxxxxx-Xxxxx Act) and (z) not in violation of
the auditor independence requirements of the Xxxxxxxx-Xxxxx Act.
(vi) The unaudited pro forma financial information, together with the related
disclosure set forth in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus has been compiled on the pro forma basis described therein, and the
assumptions used in the preparation thereof were reasonable at the time made, and the
adjustments used therein are based upon good faith estimates and assumptions believed by the
Company to be reasonable at the time made.
(vii) Each of the Company and its subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its subsidiaries has full corporate power and
authority to own its properties and conduct its business as currently being carried on and
as described in the Registration Statement, the Time of Sale Disclosure Package and
Prospectus, and is duly qualified to do business as a foreign corporation in good standing
in each jurisdiction in which it owns or leases real property or in which the conduct of its
business makes such qualification necessary and in which the failure to so qualify would
reasonably be likely to have a material adverse effect upon the business, prospects,
management, properties, operations, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries, taken as a whole (“Material Adverse
Effect”).
(viii) Since the date of the last financial statements and the related notes of the
Company set forth in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, there has not occurred any change in the business, prospects, management,
properties, operations, condition (financial or otherwise) or results of operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the Disclosure
Package and the Prospectus (exclusive of any amendments or supplements thereto subsequent to
the date of this Agreement) that would reasonably be likely to result in a Material Adverse
Effect.
(ix) Except as contemplated in the Time of Sale Disclosure Package and in the
Prospectus, subsequent to the respective dates as of which information is given in the Time
of Sale Disclosure Package, neither the Company nor any of its subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution of any kind with
respect to its capital stock; and, except as contemplated in the Time of Sale Disclosure
Package and in the Prospectus, there has not been any change in the capital stock (other
than a change in the number of outstanding shares of Common Stock
due to the issuance of shares upon the exercise of outstanding options or warrants), or
any material change in the
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short-term or long-term debt, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock, of the
Company or any of its subsidiaries, or any material adverse change in the general affairs,
condition (financial or otherwise), business, prospects, management, properties, operations
or results of operations of the Company and its subsidiaries, taken as a whole (“Material
Adverse Change”) or any development which would reasonably be expected to result in any
Material Adverse Change.
(x) Except as set forth in the Time of Sale Disclosure Package and in the Prospectus,
there is not pending or, to the knowledge of the Company, threatened or contemplated, any
action, suit or proceeding (a) to which the Company or any of its subsidiaries is a party or
(b) which has as the subject thereof any officer or director of the Company, any employee
benefit plan sponsored by the Company or any property or assets owned or leased by the
Company before or by any court or Governmental Authority (as defined below), or any
arbitrator, which, individually or in the aggregate, which would be reasonably likely to
result in any Material Adverse Change, or would materially and adversely affect the ability
of the Company to perform its obligations under this Agreement or which would otherwise be
reasonably likely to be material in the context of the sale of the Securities. There are no
current or, to the knowledge of the Company, pending, legal, governmental or regulatory
actions, suits or proceedings (x) to which the Company or any of its subsidiaries is subject
or (y) which has as the subject thereof any officer or director of the Company, any employee
plan sponsored by the Company or any property or assets owned or leased by the Company, that
are required to be described in the Registration Statement, the Time of Sale Disclosure
Package and Prospectus by the Act or by the Rules and Regulations and that have not been so
described.
(xi) There are no statutes, regulations, contracts or documents that are required to be
described in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus or required to be filed as exhibits to the Registration Statement by the Act or
by the Rules and Regulations that have not been so described or filed.
(xii) This Agreement has been duly authorized, executed and delivered by the Company,
and constitutes a valid, legal and binding obligation of the Company, enforceable in
accordance with its terms; except as rights to indemnity hereunder may be limited by federal
or state securities laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated will not (A) 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 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,
(B) result in any violation of the provisions of the Company’s
charter or by-laws or (C) result in the violation of any law or statute or any
judgment, order, rule, regulation or decree of any court or arbitrator or federal, state,
local or foreign
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governmental agency or regulatory authority having jurisdiction over the
Company or any of its subsidiaries or any of their properties or assets (each, a
“Governmental Authority”), except with respect to clauses (A) and (C) for such violations
that would not reasonably be expected to have a Material Adverse Effect. No consent,
approval, authorization or order of, or registration or filing with any Governmental
Authority is required for the execution, delivery and performance of this Agreement or for
the consummation of the transactions contemplated hereby, including the issuance or sale of
the Securities by the Company, except such as may be required under the Act, the Exchange
Act of 1934, as amended (the “Exchange Act”), the rules of the Financial Industry Regulatory
Authority, Inc. (“FINRA”), state securities or blue sky laws or state department of
insurance statutes relating to prior approvals for persons that acquire 10% or more of the
Common Stock; and the Company has full power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby, including the authorization, issuance
and sale of the Securities as contemplated by this Agreement.
(xiii) All of the issued and outstanding shares of capital stock of the Company,
including the outstanding shares of Common Stock, are duly authorized and validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state and
foreign securities laws, were not issued in violation of or subject to any preemptive rights
or other rights to subscribe for or purchase securities that have not been waived in writing
(a copy of which has been delivered to counsel to Xxxxx Xxxxxxx & Co.), and the holders
thereof are not subject to personal liability by reason of being such holders; the
Securities which may be sold hereunder by the Company have been duly authorized and, when
issued, delivered and paid for in accordance with the terms of this Agreement, will have
been validly issued and will be fully paid and nonassessable, and the holders thereof will
not be subject to personal liability by reason of being such holders; and the capital stock
of the Company, including the Common Stock, conforms to the description thereof in the
Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus.
Except as otherwise stated in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus, there are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the voting or transfer of, any shares of Common
Stock pursuant to the Company’s charter, by-laws or any agreement or other instrument to
which the Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound. Except as disclosed in the Registration Statement, in the Time
of Sale Disclosure Package and in the Prospectus, neither the filing of the Registration
Statement nor the offering or sale of the Securities as contemplated by this Agreement gives
rise to any rights for or relating to the registration of any shares of Common Stock or
other securities of the Company (collectively “Registration Rights”), and any person to whom
the Company has granted Registration Rights has agreed not to exercise such rights until
after expiration of the Lock-Up Period (as defined below). All of the issued and
outstanding shares of capital stock of each of the Company’s subsidiaries have been duly and
validly authorized and issued and are fully paid and nonassessable, and, except as otherwise
described in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus, the Company owns of record and beneficially, free and clear of any security
interests, claims, liens, proxies, equities or other encumbrances, all of the issued and
outstanding shares of such stock. Except as described in the Registration Statement,
in the Time of Sale Disclosure Package and in the Prospectus, there are no options,
warrants,
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agreements, contracts or other rights in existence to purchase or acquire from the
Company or any subsidiary of the Company any shares of the capital stock of the Company or
any subsidiary of the Company. The Company has an authorized and outstanding capitalization
as set forth in the Registration Statement, in the Time of Sale Disclosure Package and in
the Prospectus under the caption “Capitalization.” The Common Stock (including the
Securities) conforms in all material respects to the description thereof contained in the
Time of Sale Disclosure Package and the Prospectus. The description of the Company’s stock
option, stock bonus and other stock plans or arrangements, and the options or other rights
granted thereunder, set forth in the Time of Sale Disclosure Package and the Prospectus
accurately and fairly presents in all material respects the information required to be shown
with respect to such plans, arrangements, options and rights.
(xiv) The Company and each of its subsidiaries holds, and is operating in compliance in
all material respects with, all material franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders of any Governmental Authority or
self-regulatory body required for the conduct of its business and all such franchises,
grants, authorizations, licenses, permits, easements, consents, certifications and orders
are valid and in full force and effect; and neither the Company nor any of its subsidiaries
has received notice of any revocation or modification of any such franchise, grant,
authorization, license, permit, easement, consent, certification or order or has reason to
believe that any such franchise, grant, authorization, license, permit, easement, consent,
certification or order will not be renewed in the ordinary course; and, when considered in
the entirety, the Company and each of its subsidiaries is in compliance in all material
respects with all applicable federal, state, local and foreign laws, regulations, orders and
decrees.
(xv) Each subsidiary of the Company that is required to be organized or licensed as an
insurance company in its jurisdiction of incorporation (each, an “Insurance Subsidiary”) is
licensed as an insurance company in its respective jurisdiction of incorporation and is duly
licensed or authorized as an insurer in each other jurisdiction where it is required to be
so licensed or authorized to conduct its business, in each case with such exceptions as
would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect; except as otherwise described in the Registration Statement, the Time of
Sale Disclosure Package or the Prospectus, each Insurance Subsidiary has all other
approvals, orders, consents, authorizations, licenses, certificates, permits, registrations
and qualifications (collectively, the “Approvals”) of and from all insurance regulatory
authorities to conduct its business, with such exceptions as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect; there is no
pending or threatened action, suit, proceeding or investigation that could reasonably be
expected to lead to any revocation, termination or suspension of any such Approval, the
revocation, termination or suspension of which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; and no insurance regulatory
agency or body has issued any order or decree impairing, restricting or prohibiting the
payment of dividends by any Insurance Subsidiary to its parent which would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;
(xvi) Each Insurance Subsidiary is in compliance with the requirements of the insurance
laws and regulations of its state of incorporation and the insurance laws
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and regulations of
other jurisdictions which are applicable to such Insurance Subsidiary, and has filed all
notices, reports, documents or other information required to be filed thereunder, except
where the failure to so comply or file would not have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole.
(xvii) The Company and its subsidiaries have good and marketable title to all property
(whether real or personal) described in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus as being owned by them, in each case free and clear
of all liens, claims, security interests, other encumbrances or defects except such as are
described in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus. The property held under lease by the Company and its subsidiaries is held by
them under valid, subsisting and enforceable leases with only such exceptions with respect
to any particular lease as do not interfere in any material respect with the conduct of the
business of the Company or its subsidiaries.
(xviii) The Company and each of its subsidiaries owns, possesses, or can acquire on
reasonable terms, all Intellectual Property necessary for the conduct of the Company’s and
it subsidiaries’ business as now conducted or as described in the Registration Statement,
the Time of Sale Disclosure Package and the Prospectus to be conducted, except as such
failure to own, possess, or acquire such rights would not reasonably be expected to result
in a Material Adverse Effect. Furthermore, except as set forth in the Registration
Statement, Time of Sale Disclosure Package and the Prospectus, (A) to the knowledge of the
Company, there is no infringement, misappropriation or violation by third parties of any
such Intellectual Property, except as such infringement, misappropriation or violation would
not reasonably be expected to result in a Material Adverse Effect; (B) there is no pending
or, to the knowledge of the Company, threatened, action, suit, proceeding or claim by others
challenging the Company’s or any of its subsidiaries’ rights in or to any such Intellectual
Property, and to the knowledge of the Company, there are no facts which would form a
reasonable basis for any such claim; (C) the Intellectual Property owned by the Company and
its subsidiaries, and to the knowledge of the Company, the Intellectual Property licensed to
the Company and its subsidiaries, has not been adjudged invalid or unenforceable, in whole
or in part, and there is no pending or threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual Property, and the Company
is unaware of any facts which would form a reasonable basis for any such claim; (D) there is
no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim
by others that the Company or any of its subsidiaries infringes, misappropriates or
otherwise violates any Intellectual Property or other proprietary rights of others, neither
the Company or any of its subsidiaries has received any written notice of such claim and the
Company is unaware of any other fact which would form a reasonable basis for any such claim;
and, (E) to the Company’s knowledge, no employee of the Company or any of its subsidiaries
is in or has ever been in violation of any term of any employment contract, patent
disclosure agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such employee’s employment with
the Company nor any of its
subsidiaries or actions undertaken by the employee while employed with the Company or
any of its subsidiaries, except as such violation would not reasonably be expected to result
in
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a Material Adverse Effect. “Intellectual Property” shall mean all rights in or arising
from patents, patent applications, trade and service marks, trade xxxx and service xxxx
registrations, trade names, copyrights, intellectual property licenses, inventions, trade
secrets, domain names, technology, know-how and other intellectual property.
(xix) Neither the Company nor any of its subsidiaries (A) is in violation of its
respective charter, by-laws or other organizational documents, or (B) is in breach of or
otherwise in default, and no event has occurred which, with notice or lapse of time or both,
would constitute such a default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note, indenture, loan agreement or any other contract,
lease or other instrument to which it is subject or by which any of them may be bound, or to
which any of the material property or assets of the Company or any of its subsidiaries is
subject, except such defaults that would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(xx) The Company and its subsidiaries have timely filed all federal, state, local and
foreign income and franchise tax returns required to be filed and are not in default in the
payment of any taxes which were payable pursuant to said returns or any assessments with
respect thereto, other than any (i) which the Company or any of its subsidiaries is
contesting in good faith or (ii) where the failure to file such return or pay such taxes
would not reasonably be expected to have a Material Adverse Effect. There is no pending
dispute with any taxing authority relating to any of such returns, and the Company has no
knowledge of any proposed liability for any tax to be imposed upon the properties or assets
of the Company for which there is not an adequate reserve reflected in the Company’s
financial statements included in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus.
(xxi) The Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Securities other than any
Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus or other
materials permitted by the Act to be distributed by the Company; provided, however, that,
except as set forth on Schedule III, the Company has not made and will not make any offer
relating to the Securities that would constitute a “free writing prospectus” as defined in
Rule 405 of the Rules and Regulations, except for electronic roadshows in accordance with
the provisions of Section 4(a)(xv) of this Agreement.
(xxii) The Securities have been approved for listing on the New York Stock Exchange
upon official notice of issuance and, on the date the Original Registration Statement became
effective, the Company’s Registration Statement on Form 8-A or other applicable form under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), became effective.
Except as previously disclosed to counsel for the Underwriters or as set forth in the Time
of Sale Disclosure Package and the Prospectus, there are no affiliations with members of
FINRA among the Company’s officers or, to the knowledge of the Company, any director or any
five percent or greater stockholders of the Company or any beneficial owner of the Company’s
unregistered equity securities that were
acquired during the 180-day period immediately preceding the initial filing date of the
Registration Statement.
-11-
(xxiii) Other than (A) the subsidiaries of the Company listed in Exhibit 21.1 to the
Registration Statement, (B) subsidiaries that in the aggregate would not be considered a
“significant subsidiary” (as described in Rule 405 of the Rules and Regulations) and (C)
capital stock or other equity or ownership or proprietary interests in entities as part of
the ordinary course investment activities of the Company and its subsidiaries and as
disclosed in the Time of Sale Disclosure Package and the Prospectus under the caption
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources—Invested Assets,” the Company, directly or
indirectly, owns no capital stock or other equity or ownership or proprietary interest in
any corporation, partnership, association, trust or other entity.
(xxiv) The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted
accounting principles in the United States and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to any
differences. Except as disclosed in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus, the Company’s internal control over financial
reporting is effective and none of the Company, its board of directors and audit committee
is aware of any “significant deficiencies” or “material weaknesses” (each as defined by the
Public Company Accounting Oversight Board) in its internal control over financial reporting,
or any fraud, whether or not material, that involves management or other employees of the
Company who have a significant role in the Company’s internal controls; and since the end of
the latest audited fiscal year, there has been no change in the Company’s internal control
over financial reporting (whether or not remediated) that has materially and adversely
affected, or is reasonably likely to materially and adversely affect, the Company’s internal
control over financial reporting. The Company’s board of directors has, subject to the
exceptions, cure periods and the phase-in periods specified in the applicable stock exchange
rules (“Exchange Rules”), validly appointed an audit committee to oversee internal
accounting controls whose composition satisfies the applicable requirements of the Exchange
Rules and the Company’s board of directors and/or the audit committee has adopted a charter
that satisfies the requirements of the Exchange Rules.
(xxv) Other than as contemplated by this Agreement, the Company has not incurred any
liability for any finder’s or broker’s fee or agent’s commission in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xxvi) The Company carries, or is covered by, insurance from insurers with
appropriately rated claims paying abilities in such amounts and covering such risks as is
adequate for the conduct of its business and the value of its properties; all material
policies of insurance and any fidelity or surety bonds insuring the Company or any of
its subsidiaries or its business, assets, employees, officers and directors are in full
force and effect; the Company and its subsidiaries are in compliance with the terms of such
policies and
-12-
instruments in all material respects; there are no claims by the Company or any
of its subsidiaries under any such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights clause; neither the Company nor
any of its subsidiaries has been refused any insurance coverage sought or applied for; and
neither the Company nor any of its subsidiaries has reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business at a
cost that would not reasonably be expected to have a Material Adverse Effect.
(xxvii) The Company is not and, after giving effect to the offering and sale of the
Securities, will not be an “investment company,” as such term is defined in the Investment
Company Act of 1940, as amended.
(xxviii) The Company is in compliance with all applicable provisions of the
Xxxxxxxx-Xxxxx Act and the rules and regulations of the Commission thereunder, subject to
exceptions and phase-in periods permitted thereby.
(xxix) The Company has established and maintains disclosure controls and procedures (as
defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and procedures
are effective in ensuring that material information relating to the Company, including its
subsidiaries, is made known to the principal executive officer and the principal financial
officer. The Company has utilized such controls and procedures in preparing and evaluating
the disclosures in the Registration Statement, in the Time of Sale Disclosure Package and in
the Prospectus.
(xxx) Each of the Company, its subsidiaries and any of their respective officers,
supervisors, managers, agents, or employees, or, to the knowledge of the Company, any of
their respective directors, has not violated, and its participation in the offering will not
violate, and the Company has instituted and maintains policies and procedures designed to
ensure continued compliance with, each of the following laws: (a) anti-bribery laws,
including but not limited to, any applicable law, rule, or regulation of any locality,
including but not limited to any law, rule, or regulation promulgated to implement the OECD
Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act of
1977, as amended, or any other law, rule or regulation of similar purposes and scope, (b)
anti-money laundering laws, including but not limited to, applicable federal, state,
international, foreign or other laws, regulations or government guidance regarding
anti-money laundering, including, without limitation, Title 18 US. Code section 1956 and
1957, the Patriot Act, the Bank Secrecy Act, and international anti-money laundering
principles or procedures by an intergovernmental group or organization, such as the
Financial Action Task Force on Money Laundering, of which the United States is a member and
with which designation the United States representative to the group or organization
continues to concur, all as amended, and any Executive order, directive, or regulation
pursuant to the authority of any of the foregoing, or any orders or licenses issued
thereunder
or (c) laws and regulations imposing U.S. economic sanctions measures, including, but
not limited to, the International Emergency Economic Powers Act, the Trading with the Enemy
Act, the United Nations Participation Act and the Syria Accountability and Lebanese
Sovereignty
-13-
Act, all as amended, and any Executive Order, directive, or regulation pursuant
to the authority of any of the foregoing, including the regulations of the United States
Treasury Department set forth under 31 CFR, Subtitle B, Chapter V, as amended, or any orders
or licenses issued thereunder.
(xxxi) Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer or employee of the Company or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Department of the Treasury.
(xxxii) To the Company’s knowledge, no transaction has occurred between or among the
Company and its subsidiaries, on the one hand, and any of the Company’s officers, directors
or 5% stockholders or any affiliate or affiliates of any such officer, director or 5%
stockholders, on the other hand, that is required to be described that is not so described
in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus.
Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, the Company has not, directly or indirectly, extended or maintained credit,
or arranged for the extension of credit, or renewed an extension of credit, in the form of a
personal loan to or for any of its directors or executive officers in violation of
applicable laws, including Section 402 of the Xxxxxxxx-Xxxxx Act.
(xxxiii) Except as disclosed in the Time of Disclosure Package and the Prospectus,
neither the Company nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any Governmental Authority or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, “Environmental Laws”), owns or operates any real property
contaminated with any substance that is subject to any environmental laws, is liable for any
off-site disposal or contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect; and the Company is not aware of any pending investigation which might lead to such a
claim.
(xxxiv) Except as would not reasonably be expected to have a Material Adverse Effect,
the Company and each of its subsidiaries (A) is in compliance, in all material respects,
with any and all applicable foreign, federal, state and local laws, rules, regulations,
treaties, statutes and codes promulgated by any and all governmental authorities (including
pursuant to the Occupational Health and Safety Act) relating to the protection of human
health and safety in the workplace (“Occupational Laws”); (B) has received all material
permits, licenses or other approvals required of it under applicable Occupational Laws to
conduct its business as currently conducted; and (C) is in
compliance, in all material respects, with all terms and conditions of such permit,
license or approval. Except as would not reasonably be expected to have a Material Adverse
Effect, no action, proceeding, revocation proceeding, writ, injunction or claim is pending
or, to the Company’s knowledge, threatened against the Company or any of its
-14-
subsidiaries
relating to Occupational Laws, and the Company does not have knowledge of any facts,
circumstances or developments relating to its operations or cost accounting practices that
could reasonably be expected to form the basis for or give rise to such actions, suits,
investigations or proceedings.
(xxxv) (i) To the knowledge of the Company, no “prohibited transaction” as defined
under Section 406 of ERISA or Section 4975 of the Code and not exempt under ERISA Section
408 and the regulations and published interpretations thereunder has occurred with respect
to any Employee Benefit Plan. At no time within six years prior to the date hereof has the
Company or any ERISA Affiliate maintained, sponsored, participated in, contributed to or has
or had any liability or obligation in respect of any Employee Benefit Plan subject to Part 3
of Subtitle B of Title I of ERISA, Title IV of ERISA, or Section 412 of the Code or any
“multiemployer plan” as defined in Section 3(37) of ERISA or any multiple employer plan for
which the Company or any ERISA Affiliate has incurred or could incur liability under Section
4063 or 4064 of ERISA. No Employee Benefit Plan provides or promises, or at any time
provided or promised, retiree health, life insurance, or other retiree welfare benefits
except as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, or similar state law. Each Employee Benefit Plan is and has been operated in
material compliance with its terms and all applicable laws, including but not limited to
ERISA and the Code and, to the knowledge of the Company, no event has occurred (including a
“reportable event” as such term is defined in Section 4043 of ERISA) and no condition exists
that would reasonably be expected to subject the Company or any ERISA Affiliate to any
material tax, fine, lien, penalty or liability imposed by ERISA, the Code or other
applicable law. Each Employee Benefit Plan intended to be qualified under Code Section
401(a) is so qualified and has a favorable determination or opinion letter from the IRS upon
which it can rely, and any such determination or opinion letter remains in effect and has
not been revoked; to the knowledge of the Company, nothing has occurred since the date of
any such determination or opinion letter that is reasonably likely to adversely affect such
qualification; and (ii) the Company does not have any obligations under any collective
bargaining agreement with any union and no organization efforts are underway with respect to
Company employees. As used in this Agreement, “Code” means the Internal Revenue Code of
1986, as amended; “Employee Benefit Plan” means any “employee benefit plan” within the
meaning of Section 3(3) of ERISA, under which (A) any current or former employee or director
of the Company or its subsidiaries has any present or future right to benefits and which are
contributed to, sponsored by or maintained by the Company or any of its respective
subsidiaries or (B) the Company or any of its subsidiaries has had or has any present or
future obligation or liability; “ERISA” means the Employee Retirement Income Security Act of
1974, as amended; and “ERISA Affiliate” means any member of the company’s controlled group
as defined in Code Section 414(b), (c), (m) or (o).
(xxxvi) The Company has not established, maintained or contributed to any Employee
Benefit Plan outside of the United States of America or any Employee Benefit Plan that
covers any employee working or residing outside of the United States of America.
-15-
(xxxvii) Except as disclosed in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, the Company has not granted rights to develop, manufacture,
produce, assemble, distribute, license, market or sell its products to any other person and
is not bound by any agreement that affects the exclusive right of the Company to develop,
manufacture, produce, assemble, distribute, license, market or sell its products in any
manner that would materially adversely affect the business of the Company and its
subsidiaries.
(xxxviii) No labor problem or dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its or its subsidiaries’
principal suppliers, contractors or customers, that would reasonably be expected to have a
Material Adverse Effect.
(xxxix) No subsidiary of the Company is currently prohibited, directly or indirectly,
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 property or assets
to the Company or any other subsidiary of the Company, except as described in or
contemplated by the Time of Sale Disclosure Package and the Prospectus.
(xl) Any third-party statistical and market-related data included in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus are based on or derived
from sources that the Company reasonably believes to be reliable and accurate in all
material respects.
(xli) The Company has not taken, directly or indirectly, any action designed to or that
would constitute or that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the price of any security issued
by it to facilitate the sale or resale of the Securities.
(b) Each Selling Stockholder, severally and not jointly, represents and warrants to, and
agrees with, the several Underwriters as follows:
(i) Such Selling Stockholder is the record and beneficial owner of, and has, and on the
First Closing Date and/or the Second Closing Date, as the case may be, will have, valid and
marketable title to the Securities to be sold by such Selling Stockholder, free and clear of
all security interests, claims, liens, restrictions on transferability, legends, proxies,
equities or other encumbrances other than the Custody Agreement (as defined below); and upon
delivery of and payment for such Securities hereunder, the several Underwriters will acquire
valid and marketable title thereto, free and
clear of any security interests, claims, liens, restrictions on transferability,
legends, proxies, equities or other encumbrances. Such Selling Stockholder is selling the
Securities to be sold by such Selling Stockholder for such Selling Stockholder’s own account
and is not selling such Securities, directly or indirectly, for the benefit of the Company
or any Underwriter, and no part of the proceeds of such sale received by such Selling
Stockholder will inure, either directly or
-16-
indirectly, to the benefit of the Company or any
Underwriter other than as described in the Registration Statement, the Time of Sale
Disclosure Package and Prospectus.
(ii) Such Selling Stockholder, other than Summit Partners and its affiliates, (each, an
“Individual Selling Stockholder”) has full right, power and authority to enter into a Letter
of Transmittal and Custody Agreement (“Custody Agreement”), with [Custodian], as Custodian
(the “Custodian”); pursuant to the Custody Agreement, the Individual Selling Stockholder has
placed in custody with the Custodian, for delivery under this Agreement, the certificates
representing the Securities to be sold by such Individual Selling Stockholder; such
certificates represent validly issued, outstanding, fully paid and nonassessable shares of
Common Stock; and such certificates were duly and properly endorsed in blank for transfer,
or were accompanied by all documents duly and properly executed that are necessary to
validate the transfer of title thereto, to the Underwriters, free of any legend, restriction
on transferability, proxy, lien or claim, whatsoever.
(iii) Such Individual Selling Stockholder has the full right, power and authority to
enter into an irrevocable power of attorney (a “Power of Attorney”) authorizing and
directing [Attorney 1] and [Attorney 2], as attorneys-in-fact (the “Attorneys-in-Fact”), or
either of them, to effect the sale and delivery of the Securities being sold by such
Individual Selling Stockholder, to enter into this Agreement and to take all such other
action as may be necessary hereunder.
(iv) This Agreement, [the Custody Agreement and the Power of Attorney] have each been
duly authorized, executed and delivered by or on behalf of such Selling Stockholder. [Each
of the Custody Agreement and the Power of Attorney] constitutes a valid and binding
agreement of such Selling Stockholder, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or laws
affecting the rights of creditors generally and subject to general principles of equity.
The execution and delivery of this Agreement, [the Custody Agreement and the Power of
Attorney] and the performance of the terms hereof and thereof and the consummation of the
transactions herein and therein contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any agreement or instrument
to which such Selling Stockholder is a party or by which such Selling Stockholder is bound,
or any law, regulation, order or decree applicable to such Selling Stockholder, except such
breaches or violations that would not, individually or in the aggregate, reasonably be
expected to have an adverse effect on the ability of such Selling Stockholder to execute,
deliver and perform the transactions contemplated by this Agreement. No consent, approval,
authorization or order of, or filing with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement, [the Custody
Agreement and the Power of Attorney] or for the consummation of the transactions
contemplated hereby and thereby, including the sale of the Securities
being sold by such Selling Stockholder, except such as may be required under the Act or
state securities laws or blue sky laws.
(v) Such Selling Stockholder does not have any registration or other similar rights to
have any equity or debt securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this
-17-
Agreement, except as described in
the Registration Statement, the Time of Sale Disclosure Package and the Prospectus.
(vi) Such Selling Stockholder has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale of the
Securities other than any Preliminary Prospectus, the Time of Sale Disclosure Package or the
Prospectus or other materials permitted by the Act to be distributed by such Selling
Stockholder; provided, however, that no Selling Stockholder has made nor will make any offer
relating to the Securities that would constitute a “free writing prospectus” as defined in
Rule 405 of the Rules and Regulations except a Permitted Free Writing Prospectus (as defined
below) authorized by the Company and the Underwriters for distribution in accordance with
the provisions of Section 4(a)(xix).
(vii) As of the time any part of each of the Original Registration Statement and, if
applicable, the 462(b) Registration Statement (or any post-effective amendment thereto)
became effective and at all other subsequent times until expiration of the Prospectus
Delivery Period, upon the filing or first use within the meaning of the Rules and
Regulations of the Prospectus (or any supplement to the Prospectus) and at all other
subsequent times until expiration of the Prospectus Delivery Period and at the First Closing
Date and Second Closing Date, (A) the Registration Statement and the Prospectus (in each
case, as so amended and/or supplemented) conformed or will conform in all material respects
to the requirements of the Act and the Rules and Regulations, (B) the Registration Statement
(as so amended) did not or will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, and (C) the Prospectus (as so supplemented) did not or will not
include an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of the
circumstances in which they are or were made, not misleading. The preceding sentence with
respect to any Selling Stockholder applies only to the extent that any statements in or
omissions from a Registration Statement or the Prospectus are based on written information
concerning such Selling Stockholder furnished to the Company by such Selling Stockholder
specifically for use therein, it being understood and agreed that the only information
furnished by such Selling Stockholder consists solely of the information relating to such
Selling Stockholder under the caption “Principal and Selling Stockholders” in the most
recent Preliminary Prospectus or in the Prospectus (any such written information concerning
any Selling Stockholder furnished to the Company by such Selling Stockholder specifically
for such use being referred to as the “Selling Stockholder Information”).
(viii) As of the Applicable Time, neither (i) the Time of Sale Disclosure Package nor
(ii) any individual Limited Use Issuer Free Writing Prospectus, when considered together
with the Time of Sale Disclosure Package, included any untrue
statement of a material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence with respect to any Selling Stockholder
applies only to the extent that any statements in or omissions from the Time of Sale
Disclosure Package or any Issuer Limited-Use Free Writing Prospectus are based on the
Selling Stockholder Information furnished by such Selling Stockholder.
-18-
(ix) All Selling Stockholder Information furnished by such Selling Stockholder
contained in any Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the Securities or until any
earlier date that such Selling Stockholder notified or notifies the Company and Xxxxx
Xxxxxxx & Co. as described in the next sentence, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the related information then
contained in the Registration Statement. If at any time following issuance of an Issuer
Free Writing Prospectus there occurred or occurs an event or development as a result of
which such Selling Stockholder Information, if republished immediately following such event
or development, conflicted or would conflict with the Selling Stockholder Information then
contained in the Registration Statement or as a result of which such Selling Stockholder
Information would include any untrue statement of a material fact or omitted or would omit
to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, such Selling Stockholder has
promptly notified or will promptly notify the Company and Xxxxx Xxxxxxx & Co. and will
provide the Company with all necessary information so as to correct such untrue statement or
omission.
(c) Any certificate signed by any officer of the Company and delivered to you or to counsel
for the Underwriters shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby; any certificate signed by or on behalf of any
Selling Stockholder as such and delivered to you or to counsel for the Underwriters shall be deemed
a representation and warranty by such Selling Stockholder to each Underwriter as to the matters
covered thereby.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to issue and sell
[Ÿ] Firm Shares, and each Selling Stockholder agrees, severally and not jointly, to sell the
number of Firm Shares set forth opposite the name of such Selling Stockholder in Schedule I hereto,
to the several Underwriters, and each Underwriter agrees, severally and not jointly, to purchase
from the Company and the Selling Stockholders the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule II hereto. The purchase price for each Firm Share shall be
$[Ÿ] per share. The obligation of each Underwriter to each of the Company and the Selling
Stockholders shall be to purchase from each of the Company and the Selling Stockholders that number
of Firm Shares (to be adjusted by Xxxxx Xxxxxxx & Co. to avoid fractional shares) which represents
the same proportion of the number of Firm Shares to be sold by each of the Company and the Selling
Stockholders pursuant to this Agreement as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule II hereto represents to the total number of Firm
Shares to be purchased by all Underwriters pursuant to this Agreement. In making this
Agreement, each Underwriter is contracting severally and not jointly; except as provided in
paragraph (c) of this Section 3 and in Section 8 hereof, the agreement of each Underwriter is to
purchase only the respective number of Firm Shares specified in Schedule II.
The Firm Shares will be delivered by the Company and the Custodian to you for the accounts of
the several Underwriters against payment of the purchase price therefor by wire transfer
-19-
of same
day funds payable to the order of the Company and the Custodian, as appropriate, at the offices of
Xxxxx & XxXxxxx LLP, 1301 Avenue of the Americas, New York, New York, or such other location as may
be mutually acceptable, at 9:00 a.m. (Central Time) on the third (or if the Securities are priced,
as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. (Eastern Time), the
fourth) full business day following the date hereof, or at such other time and date as you and the
Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, such time and date of delivery
being herein referred to as the “First Closing Date.” If Xxxxx Xxxxxxx & Co. so elects, delivery
of the Firm Shares may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by Xxxxx Xxxxxxx & Co. Certificates representing the Firm
Shares, in definitive form and in such denominations and registered in such names as you may
request upon at least two business days’ prior notice to the Company and the Custodian, or evidence
of their issuance, will be made available for checking at a reasonable time preceding the First
Closing Date at the offices of Xxxxx & XxXxxxx LLP, New York, New York, or such other location as
may be mutually acceptable.
(b) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company, with respect to [Ÿ] of the
Option Shares, and the Selling Stockholders, with respect to the number of Option Shares set forth
opposite the name of such Selling Stockholder in Schedule I hereto, hereby grant to the several
Underwriters an option to purchase all or any portion of the Option Shares at the same purchase
price as the Firm Shares, for use solely in covering any over-allotments made by the Underwriters
in the sale and distribution of the Firm Shares. The option granted hereunder may be exercised in
whole or in part at any time (but not more than once) within 30 days after the effective date of
this Agreement upon notice (confirmed in writing) by Xxxxx Xxxxxxx & Co. to the Company and to the
[Attorneys-in-Fact] setting forth the aggregate number of Option Shares as to which the several
Underwriters are exercising the option, the names and denominations in which the certificates for
the Option Shares are to be registered and the date and time, as determined by you, when the Option
Shares are to be delivered, such time and date being herein referred to as the “Second Closing” and
“Second Closing Date”, respectively; provided, however, that the Second Closing Date shall not be
earlier than the First Closing Date nor earlier than the second business day after the date on
which the option shall have been exercised. If the option is exercised, the obligation of each
Underwriter shall be to purchase from the Selling Stockholders granting an option to purchase the
Option Shares, on a pro rata basis up to [Ÿ] Option Shares, that number of Option Shares (to
be adjusted by Xxxxx Xxxxxxx & Co. to avoid fractional shares) which represents the same proportion
that the number of Option Shares granted by each such Selling Stockholder bears to the total number
of Option Shares granted by all such Selling Stockholders, and, to the extent the option to
purchase Option Shares exceeds [Ÿ], from the Company up to an aggregate of [Ÿ] Option
Shares. The number of Option Shares to be purchased by each Underwriter shall be the same
percentage of the total number of Option Shares to be purchased by the several Underwriters as the
number of Firm Shares to be purchased by such Underwriter is of the total number of Firm Shares to
be purchased by the several
Underwriters, as adjusted by Xxxxx Xxxxxxx & Co. in such manner as it deems advisable to avoid
fractional shares. No Option Shares shall be sold and delivered unless the Firm Shares previously
have been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Custodian and the Company, as appropriate, to you
for the accounts of the several Underwriters against payment of the purchase price therefor by wire
transfer of same day funds payable to the order of the Custodian or the
-20-
Company, as appropriate, at
the offices of Xxxxx & XxXxxxx LLP, 1301 Avenue of the Americas, New York, New York, or such other
location as may be mutually acceptable at 9:00 a.m., Central time, on the Second Closing Date. If
Xxxxx Xxxxxxx & Co. so elects, delivery of the Option Shares may be made by credit through full
fast transfer to the accounts at The Depository Trust Company designated by Xxxxx Xxxxxxx & Co.
Certificates representing the Option Shares in definitive form and in such denominations and
registered in such names as you have set forth in your notice of option exercise, or evidence of
their issuance, will be made available for checking at a reasonable time preceding the Second
Closing Date at the office of Xxxxx & XxXxxxx LLP, 1301 Avenue of the Americas, New York, New York,
or such other location as may be mutually acceptable.
(c) It is understood that you, individually and not as Representative of the several
Underwriters, may (but shall not be obligated to) make payment to the Company or the Selling
Stockholders, on behalf of any Underwriter for the Securities to be purchased by such Underwriter.
Any such payment by you shall not relieve any such Underwriter of any of its obligations hereunder.
Nothing herein contained shall constitute any of the Underwriters an unincorporated association or
partner with the Company or any Selling Stockholder.
(d) The Company hereby confirms its engagement of Xxxxx Xxxxxxx & Co. and Xxxxx
Xxxxxxx & Co. hereby confirms its agreement with the Company to render services as a “qualified
independent underwriter” within the meaning of Rule 2720 of the Conduct Rules of the National
Association of Securities Dealers, Inc. (“NASD”), which is administered by the Financial Industry
Regulatory Authority, Inc., with respect to the offering of the Securities. Xxxxx Xxxxxxx & Co.,
solely in its capacity as the “qualified independent underwriter” with respect to the offering of
the Securities, and not otherwise, is referred to herein as the “QIU.”
4. Covenants.
(a) The Company covenants and agrees with the several Underwriters as follows:
(i) The Company will notify you promptly of the time when the Original Registration
Statement or any post-effective amendment to the Original Registration Statement has become
effective or any supplement to the Prospectus has been filed and of any request by the
Commission for any amendment or supplement to the Original Registration Statement or
Prospectus or additional information; if the Company has elected to rely on Rule 430A of the
Rules and Regulations, the Company will prepare and file a Prospectus containing the
information omitted therefrom pursuant to Rule 430A of the Rules and Regulations with the
Commission within the time period required by, and otherwise in accordance with the
provisions of, Rules 424(b) and 430A of the Rules and Regulations; if the Company has
elected to rely upon Rule 462(b) of the Rules and
Regulations to increase the size of the offering registered under the Act and the Rule
462(b) Registration Statement has not yet been filed and become effective, the Company will
prepare and file the Rule 462 Registration Statement with the Commission within the time
period required by, and otherwise in accordance with the provisions of, Rule 462(b) and the
Act; the Company will prepare and file with the Commission, promptly upon your request, any
amendments or supplements to the Registration Statement or Prospectus that, in your opinion,
may be necessary or advisable in connection with the distribution of the Securities
-21-
by the
Underwriters; and the Company will furnish Xxxxx Xxxxxxx & Co. and counsel for the
Underwriters a copy of any proposed amendment or supplement to the Registration Statement or
Prospectus and will not file any amendment or supplement to the Registration Statement or
Prospectus to which you shall reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing.
(ii) The Company will advise you, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or any post-effective amendment thereto or
preventing or suspending the use of any Preliminary Prospectus, the Time of Sale Disclosure
Package, the Prospectus or any Issuer Free Writing Prospectus, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose; and the Company will
promptly use its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such a stop order should be issued. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b) and 430A, as applicable, of the Rules and
Regulations and will use its reasonable efforts to confirm that any filings made by the
Company under Rule 424(b), Rule 433 or Rule 462 of the Rules and Regulations were received
in a timely manner by the Commission.
(iii) (A) Within the time during which a prospectus (assuming the absence of Rule 172
of the Rules and Regulations) relating to the Securities is required to be delivered under
the Act by any Underwriter or dealer, the Company will comply as far as it is able with all
requirements imposed upon it by the Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Securities as contemplated by the provisions hereof, the Time of
Sale Disclosure Package and the Prospectus. If during such period any event occurs as a
result of which the Prospectus (or if the Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package) would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances then existing, not misleading, or if during such period it is
necessary to amend the Registration Statement or supplement the Prospectus (or if the
Prospectus is not yet available to prospective investors, the Time of Sale Disclosure
Package) to comply with the Act, the Company will promptly notify you and will amend the
Registration Statement or supplement the Prospectus (or, if the Prospectus is not yet
available to prospective purchasers, the Time of Sale Disclosure Package) (at the expense of
the Company) so as to correct such statement or omission or effect such compliance.
(B) If at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer
Free Writing Prospectus conflicted or would conflict with the information contained in the
Registration Statement, the most recent Preliminary Prospectus, the Time of Sale Disclosure
Package or the Prospectus relating to the Securities or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the case of any prospectus, in the light of the
circumstances under which they were made, not misleading, the Company will promptly notify
Xxxxx Xxxxxxx & Co. and will promptly amend or supplement, at its own expense, such
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Issuer
Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(iv) The Company shall take or cause to be taken all necessary action to qualify the
Securities for sale under the securities laws of such jurisdictions as you reasonably
designate and to continue such qualifications in effect so long as required for the
distribution of the Securities, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a general consent to service of
process in any state.
(v) The Company will furnish, at its own expense, to the Underwriters and counsel for
the Underwriters copies of the Registration Statement (three of which will be signed and
will include all consents and exhibits filed therewith), and to the Underwriters and any
dealer each Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, any
Issuer Free Writing Prospectus and all amendments and supplements to such documents, in each
case as soon as available and in such quantities as you may from time to time reasonably
request.
(vi) During a period of two years commencing with the date hereof, the Company will
furnish to Xxxxx Xxxxxxx & Co., and to each Underwriter who may so request in writing,
copies of all periodic and special reports furnished generally to the stockholders of the
Company and all information, documents and reports filed with the Commission, FINRA or any
securities exchange (other than any such information, documents and reports that are filed
with the Commission electronically via XXXXX or any successor system or are otherwise
available on the Company’s website).
(vii) The Company will make generally available to its security holders as soon as
practicable, but in no event later than 15 months after the end of the Company’s current
fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period
beginning after the effective date of the Original Registration Statement (or if later the
Rule 462(b) Registration Statement) that shall satisfy the provisions of Section 11(a) of
the Act and Rule 158 of the Rules and Regulations.
(viii) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is prevented from becoming effective under the provisions of
Section 9(a) hereof or is terminated, will pay or cause to be paid (A) all expenses
(including transfer taxes allocated to the respective transferees) incurred in connection
with the delivery to the Underwriters of the Securities, (B) all expenses and fees
(including, without limitation, fees and expenses of the Company’s accountants and counsel
but, except as otherwise provided below, not including fees of the Underwriters’ counsel) in
connection with the preparation, printing, filing, delivery, and shipping of the
Registration Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Securities, each Preliminary Prospectus, the Time of
Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus and any
amendment thereof or supplement thereto, and the printing, delivery, and shipping of this
Agreement and other underwriting documents, including Blue Sky Memoranda (covering the
states and other applicable jurisdictions), (C) all filing fees and reasonable fees and
disbursements of the
-23-
Underwriters’ counsel incurred in connection with the qualification of
the Securities for offering and sale by the Underwriters or by dealers under the securities
or blue sky laws of the states and other jurisdictions which you shall designate, (D) the
fees and expenses of the Custodian and any transfer agent or registrar, (E) the filing fees
and fees and disbursements of Underwriters’ counsel incident to any required review and
approval by FINRA of the terms of the sale of the Securities, (F) the fees and expenses of
the QIU, including reasonable fees and disbursements of counsel, incurred by the QIU in its
capacity as a “qualified independent underwriter” within the meaning of Rule 2720 of the
Conduct Rules of the NASD with respect to the offering of the Securities (such fees and
expenses not to exceed $10,000), (G) listing fees, if any, (H) the cost and expenses of the
Company relating to investor presentations or any “roadshow” undertaken in connection with
marketing of the Securities, and (I) all other costs and expenses of the Company and any
Selling Stockholder incident to the performance of its obligations hereunder that are not
otherwise specifically provided for herein. If the sale of the Securities provided for
herein is not consummated by reason of action by the Company pursuant to Section 9(a) hereof
which prevents this Agreement from becoming effective, if this Agreement is terminated by
Xxxxx Xxxxxxx & Co. pursuant to Section 9 hereof or if the sale of the Securities provided
for herein is not consummated by reason of any failure, refusal or inability on the part of
the Company or the Selling Stockholders to perform any agreement on its or their part to be
performed, or because any other condition of the Underwriters’ obligations hereunder
required to be fulfilled by the Company or the Selling Stockholders is not fulfilled, the
Company or such Selling Stockholder will reimburse the several Underwriters for all
out-of-pocket disbursements (including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, facsimile and telephone charges) incurred by
the Underwriters in connection with their investigation, preparing to market and marketing
the Securities or in contemplation of performing their obligations hereunder.
(ix) The Company will apply the net proceeds from the sale of the Securities to be sold
by it hereunder for the purposes set forth in the Time of Sale Disclosure Package and in the
Prospectus and will file such reports with the Commission with respect to the sale of the
Securities and the application of the proceeds therefrom as may be required in accordance
with Rule 463 of the Rules and Regulations.
(x) The Company will not, without the prior written consent of Xxxxx Xxxxxxx & Co.,
from the date of execution of this Agreement and continuing to and including the date 180
days after the date of the Prospectus (the “Lock-Up Period”), (A) 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 Common Stock or (B)
enter into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such transaction
described in clause (A) or (B) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise, except to the Underwriters pursuant to this
Agreement, except for (i) the issuance of Common Stock as consideration in acquisitions,
provided that all such shares of Common Stock issued during the Lock-Up Period in the
aggregate shall not exceed 5% of the shares issued and outstanding as of the First Closing
Date or the
-24-
Second Closing date, as the case may be, in each case after taking into account
the issuance of the Securities, (ii) the Securities to be sold hereunder, (iii) any shares
of Common Stock issued upon the exercise of an option or the conversion of a security
outstanding on the date hereof and referred to in the Prospectus, (iv) any shares of Common
Stock, stock options, stock appreciation rights, restricted stock, restricted stock units or
other stock-based awards granted pursuant to Employee Benefit Plans of the Company described
in the Prospectus and (v) the filing of any registration statement on Form S-8. The Company
agrees not to accelerate the vesting of any option or warrant or the lapse of any repurchase
right prior to the expiration of the Lock-Up Period. If (1) during the last 17 days of the
initial Lock-Up Period, (a) the Company issues an earnings release, (b) the Company publicly
announces material news or (c) a material event relating to the Company occurs; or (2) prior
to the expiration of the Lock-Up Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the initial Lock-Up Period,
then in each case, the Lock-Up Period will be extended, unless otherwise waived by Xxxxx
Xxxxxxx & Co., in writing, until the expiration of the date that is 18 calendar days after
the date on which (a) the Company issues the earnings release, (b) the Company publicly
announces material news or (c) a material event relating to the Company occurs. The Company
will provide Xxxxx Xxxxxxx & Co. with prior notice of any such announcement that gives rise
to the extension of the Lock-Up Period.
(xi) The Company has caused to be delivered to you prior to the date of this Agreement
a letter, in the form of Exhibit A hereto (the “Lock-Up Agreement”), from each of the
Company’s directors and executive officers. The Company will enforce the terms of each
Lock-Up Agreement and issue stop-transfer instructions to the transfer agent for the Common
Stock with respect to any transaction or contemplated transaction that would constitute a
breach of or default under the applicable Lock-Up Agreement.
(xii) The Company has not taken and will not take, directly or indirectly, any action
designed to or which might reasonably be expected to cause or result in, or which has
constituted, the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities, and has not effected any sales of Common
Stock which are required to be disclosed in response to Item 701 of Regulation S-K under the
Rules and Regulations which have not been so disclosed in the Registration Statement.
(xiii) The Company will not incur any liability for any finder’s or broker’s fee or
agent’s commission in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(xiv) The Company and its subsidiaries will maintain such controls and other
procedures, including without limitation those required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act and the applicable regulations thereunder, that are designed to ensure
that information required to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms, including without limitation,
controls and procedures designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management, including its principal
-25-
executive officer and its
principal financial officer, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure, to ensure that material information
relating to Company, including its subsidiaries, is made known to them by others within
those entities.
(xv) The Company represents and agrees that, unless it obtains the prior written
consent of Xxxxx Xxxxxxx & Co., and each Underwriter severally represents and agrees that,
unless it obtains the prior written consent of the Company and Xxxxx Xxxxxxx & Co., it has
not made and will not make any offer relating to the Securities that would constitute an
“issuer free writing prospectus,” as defined in Rule 433 under the Rules and Regulations, or
that would otherwise constitute a “free writing prospectus,” as defined in Rule 405 of the
Rules and Regulations, required to be filed with the Commission; provided that the prior
written consent of the parties hereto shall be deemed to have been given in respect of the
free writing prospectuses included in Schedule III. Any such free writing prospectus
consented to by the Company and Xxxxx Xxxxxxx & Co. is hereinafter referred to as a
“Permitted Free Writing Prospectus.” The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an “issuer free writing
prospectus,” as defined in Rule 433 of the Rules and Regulations, and has complied and will
comply with the requirements of Rules 164 and 433 of the Rules and Regulations applicable to
any Permitted Free Writing Prospectus, including timely Commission filing where required,
legending and record keeping. The Company represents that it has satisfied and agrees that
it will satisfy the conditions in Rule 433 of the Rules and Regulations to avoid a
requirement to file with the Commission any electronic roadshow.
(b) Each Selling Stockholder covenants and agrees with the several Underwriters as follows:
(i) Except as otherwise agreed to by the Company and the Selling Stockholders pursuant
to an outstanding Stockholders Agreement, such Selling Stockholder will pay all taxes, if
any, on the transfer and sale, respectively, of the Securities being sold by such Selling
Stockholder and the fees of such Selling Stockholder’s counsel.
(ii) If this Agreement shall be terminated by the Underwriters because of any failure,
refusal or inability on the part of such Selling Stockholder to perform any agreement on
such Selling Stockholder’s part to be performed, or because any other condition of the
Underwriters’ obligations hereunder required to be fulfilled by such Selling Stockholder is
not fulfilled, such Selling Stockholder agrees to reimburse the Company,
severally and not jointly, on a pro rata basis, for all out-of-pocket disbursements
(including fees and disbursements of counsel for the Underwriters) incurred by the
Underwriters (and reimbursed by the Company pursuant to this Agreement) in connection with
their investigation, preparing to market and marketing the Securities or in contemplation of
performing their obligations hereunder. The Selling Stockholder shall not in any event be
liable to any of the Underwriters for loss of anticipated profits from the transactions
covered by this Agreement.
-26-
(iii) Such Selling Stockholder has delivered to you prior to the date of this Agreement
a Lock-Up Agreement, in the form of Exhibit A hereto, executed by or on behalf of such
Selling Stockholder and such agreement is in full force and effect.
(iv) Such Selling Stockholder has not taken and will not take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities, and has not effected any sales of Common Stock which, if
effected by the Company, would be required to be disclosed in response to Item 701 of
Regulation S-K.
(v) Such Selling Stockholder shall promptly notify you if any event occurs, or of any
change in the Selling Stockholder Information relating to such Selling Stockholder or the
Company or any new information relating to the Company or relating to any matter stated in
the Time of Sale Disclosure Package or in the Prospectus or any supplement thereto or any
Issuer General Free-Writing Prospectus, which results in the Time of Sale Disclosure Package
or in the Prospectus (as amended or supplemented) or any Issuer General Free-Writing
Prospectus including an untrue statement of a material fact or omitting to state any
material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(vi) Such Selling Stockholder shall deliver to the Custodian or Xxxxx Xxxxxxx & Co., as
appropriate, prior to the First Closing Date, a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters
hereunder are subject to the accuracy, as of the date hereof and at each of the First Closing Date
and the Second Closing Date (as if made at such Closing Date), of and compliance with all
representations, warranties and agreements of the Company and the Selling Stockholders contained
herein, to the performance by the Company and the Selling Stockholders of their respective
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than 5:00 p.m., Central
time, on the date of this Agreement, or such later time and date as you, as Representative of the
several Underwriters, shall approve and all filings required by Rules 424, 430A and 433 of the
Rules and Regulations shall have been timely made (without reliance on Rule 424(b)(8) or Rule
164(b) of the Rules and Regulations); no stop order suspending the effectiveness of the
Registration Statement or any part thereof or any amendment thereof, nor suspending or
preventing the use of the Time of Sale Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall
have been initiated or threatened; and any request of the Commission for additional information (to
be included in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, any
Issuer Free Writing Prospectus or otherwise) shall have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that (i) the Registration Statement or any
amendment thereof or supplement thereto contains an untrue statement of a
-27-
material fact which, in
your opinion, is material or omits to state a material fact which, in your opinion, is required to
be stated therein or necessary to make the statements therein not misleading, or (ii) the Time of
Sale Disclosure Package or the Prospectus, or any amendment thereof or supplement thereto, or any
Issuer Free Writing Prospectus contains an untrue statement of fact which, in your opinion, is
material, or omits to state a fact which, in your opinion, is material and is required to be stated
therein, or necessary to make the statements therein, in the light of the circumstances under which
they are made, not misleading.
(c) Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale Disclosure
Package and the Prospectus, neither the Company nor any of its subsidiaries shall have incurred any
liabilities or obligations, direct or contingent, material to the Company and its subsidiaries,
taken as a whole, or entered into any transactions material to the Company and its subsidiaries,
taken as a whole, except as contemplated in the Time of Sale Disclosure Package and in the
Prospectus, and the Company shall not have declared or paid any dividends or made any distribution
of any kind with respect to its capital stock; and except as contemplated in the Time of Sale
Disclosure Package and in the Prospectus, there shall not have been any change in the capital stock
(other than a change in the number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants), or any change in the short-term or
long-term debt of the Company, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock of the Company or any of its subsidiaries, in each case,
material to the Company and its subsidiaries, taken as a whole, or any Material Adverse Change or
any development involving a prospective Material Adverse Change (whether or not arising in the
ordinary course of business), that, in your judgment, makes it impractical or inadvisable to offer
or deliver the Securities on the terms and in the manner contemplated in the Time of Sale
Disclosure Package and in the Prospectus.
(d) On each Closing Date, there shall have been furnished to you, as Representative of the
several Underwriters, the opinion of Weil, Gotshal & Xxxxxx, counsel for the Company, dated such
Closing Date and addressed to you in a form reasonably satisfactory to Xxxxx Xxxxxxx & Co.
(e) On each Closing Date, there shall have been furnished to you, as Representative of the
several Underwriters, the opinion of [•], [General Counsel] of the Company, dated such Closing Date
and addressed to you in a form reasonably satisfactory to Xxxxx Xxxxxxx & Co.
(f) On each Closing Date, there shall have been furnished to you, as Representative of the
several Underwriters, the opinion of counsel for the Selling Stockholders,
dated such Closing Date and addressed to you in a form reasonably satisfactory to Xxxxx
Xxxxxxx & Co.
(g) On each Closing Date, there shall have been furnished to you, as Representative of the
several Underwriters, such opinion or opinions from Xxxxx & XxXxxxx LLP, counsel for the several
Underwriters, dated such Closing Date and addressed to you, with respect to the good standing of
the Company, the validity of the Securities, the Registration Statement, the Time of Sale
Disclosure Package or the Prospectus and other related matters as you reasonably may
-28-
request, and
such counsel shall have received such papers and information as they request to enable them to pass
upon such matters.
(h) On the date hereof and on each Closing Date you, as Representative of the several
Underwriters, shall have received a letter of Xxxxxxx Xxxxxxx & Co. LLP, dated such date and
addressed to you, confirming that it is an independent registered public accounting firm within the
meaning of the Act and are in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the Commission, and stating, as
of the date of such letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the Time of Sale
Disclosure Package, as of a date not prior to the date hereof or more than five days prior to the
date of such letter), the conclusions and findings of said firm with respect to the financial
information and other matters covered by its letter delivered to you concurrently with the
execution of this Agreement, and the effect of the letter so to be delivered on such Closing Date
shall be to confirm the conclusions and findings set forth in such prior letter.
(i) On each Closing Date, there shall have been furnished to you, as Representative of the
Underwriters, a certificate, dated such Closing Date and addressed to you, signed by the chief
executive officer and by a principal financial or accounting officer of the Company, to the effect
that:
(i) The representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of such Closing Date, and the
Company has complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such Closing Date;
(ii) No stop order or other order suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof or the qualification of the
Securities for offering or sale, nor suspending or preventing the use of the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued,
and no proceeding for that purpose has been instituted or, to the best of their knowledge,
is contemplated by the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and any amendments
thereof or supplements thereto, and (A) the Registration Statement, or any amendment
thereof, does not contain and did not contain when such part of the Registration Statement,
or any amendment thereof, became effective, any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or supplemented, does
not include and did not include as of its date or the time of first use within the meaning
of the Rules and Regulations, any untrue statement of material fact or omit to state and did
not omit to state as of its date or the time of first use within the meaning of the rules
and Regulations, a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading and (B) neither (1) the Time of
Sale Disclosure Package nor (2) any individual Issuer Limited-Use Free Writing Prospectus,
when considered together with the Time of Sale Disclosure Package, include,
-29-
nor included as
of the Time of Sale, any untrue statement of a material fact or omits, or omitted as of the
Time of Sale, to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(j) On each Closing Date, there shall have been furnished to you, as Representative of the
several Underwriters, a certificate or certificates, dated such Closing Date and addressed to you,
signed by each of the Selling Stockholders or either of such Selling Stockholder’s
Attorneys-in-Fact to the effect that the representations and warranties of such Selling Stockholder
contained in this Agreement are true and correct as if made at and as of such Closing Date, and
that such Selling Stockholder has complied with all the agreements and satisfied all the conditions
on such Selling Stockholder’s part to be performed or satisfied at or prior to such Closing Date.
(k) The Underwriters shall have received all of the Lock-Up Agreements referenced in Section
4.
(l) The Company shall have furnished to you and counsel for the Underwriters such additional
documents, certificates and evidence as you or they may have reasonably requested.
(m) FINRA shall have confirmed that it will raise no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(n) The Securities to be delivered on such Closing Date will have been approved for listing on
the New York Stock Exchange, subject to official notice of issuance.
All such opinions, certificates, letters and other documents will be in compliance with the
provisions hereof only if they are satisfactory in form and substance to you and counsel for the
Underwriters. The Company will furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company 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 Act or Section 20 of the Exchange Act (each, an “Indemnified Party”), from and
against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the 430A Information and any other information deemed to be a
part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant
to the Rules and Regulations, if applicable, any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing
Prospectus or in any materials or information provided to investors by, or with the prior written
approval of, the Company in connection with the marketing of the offering of the Common Stock
(“Marketing Materials”), including any roadshow or investor presentations made to investors by the
Company (whether in person or electronically), or arise out of or are based upon the omission or
alleged
-30-
omission to state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of any prospectus, in the light of the circumstances under
which they were made) not misleading, and will reimburse each Indemnified Party for any legal or
other expenses reasonably incurred by it in connection with investigating or defending against such
loss, claim, damage, liability or action as such expenses are incurred; provided, however, that (x)
the Company will not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the
Time of Sale Disclosure Package, the Prospectus, or any such amendment or supplement thereto, any
Issuer Free Writing Prospectus or in any Marketing Materials, in reliance upon and in conformity
with written information furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof; it being understood and agreed that the only
information furnished by an Underwriter consists of the information described as such in Section
6(h), and (y) the Company will not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from the Selling Stockholder Information.
(b) Each Selling Stockholder, severally and not jointly, agrees to indemnify and hold harmless
each Indemnified Party from and against any losses, claims, damages or liabilities, joint or
several, to which such Indemnified Party may become subject, under the Act or otherwise (including
in settlement of any litigation if such settlement is effected with the written consent of such
Selling Stockholder), insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including the 430A Information and any other
information deemed to be a part of the Registration Statement at the time of effectiveness and at
any subsequent time pursuant to the Rules and Regulations, if applicable, any Preliminary
Prospectus, the Time of Sale disclosure Package, the Prospectus, or any amendment or supplement
thereto, any Issuer Free Writing Prospectus, or in any Marketing Materials, or arise out of or are
based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of any prospectus, in the light of
the circumstances under which they were made) not misleading, and will reimburse each Indemnified
Party for any legal or other expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that (x) a Selling Stockholder shall be liable in any such case only to the
extent that any such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, or any such amendment or supplement thereto, any Issuer Free Writing Prospectus or in
any Marketing Materials in reliance upon and in conformity with Selling Stockholder
Information relating to such Selling Stockholder, and (y) in no event shall any Selling
Stockholder’s liability hereunder exceed the aggregate amount of net proceeds (after deducting
Underwriters’ discounts and commissions) received by such Selling Stockholder from the sale of the
Securities pursuant to this Agreement. No Selling Stockholder shall be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, or any such amendment or supplement thereto, any Issuer Free Writing Prospectus or in
any Marketing Materials, in reliance upon and in
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conformity with written information furnished to
the Company by you, or by any Underwriter through you, specifically for use in the preparation
thereof; it being understood and agreed that the only information furnished by an Underwriter
consists of the information described as such in Section 6(h).
(c) Without limitation of and in addition to its obligations under the other subsections of
this Section 6, the Company agrees to indemnify and hold harmless the QIU and each person, if any,
who controls the QIU within the meaning of Section 15 of the Act and Section 20 of the Exchange Act
from and against any losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or investigating any such
action or claim), as incurred, arising out of or based upon the QIU’s acting as a “qualified
independent underwriter” (within the meaning of Rule 2720 of the Conduct Rules of the NASD) in
connection with the offering contemplated by this Agreement; provided, however, that neither the
Company nor any Selling Stockholder shall be liable under this Section 6 for any losses, claims,
damages, liabilities or expenses to the extent that any such loss, claim, damage, liability or
expense results from the gross negligence or bad faith of the QIU.
(d) Each Underwriter will, severally and not jointly, indemnify and hold harmless the Company
and each Selling Stockholder, its respective affiliates, directors and officers and each person, if
any, who controls the Company and each Selling Stockholder within the meaning of Section 15 of the
Act and Section 20 of the Exchange Act (each, an “Underwriter Indemnified Party”), from and against
any losses, claims, damages or liabilities to which the Underwriter Indemnified Party may become
subject, under the Act or otherwise (including in settlement of any litigation, if such settlement
is effected with the written consent of such Underwriter), insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission or alleged omission
was made in the Registration Statement, any Preliminary Prospectus, the Time of Sale Disclosure
Package, the Prospectus, or any such amendment or supplement, or any Issuer Free Writing Prospectus
in reliance upon and in conformity with written information furnished to the Company by you, or by
such Underwriter through you, specifically for use in the preparation thereof (it being understood
and agreed that the only information furnished by an Underwriter consists of the information
described as such in Section 6(h)), and will reimburse the Underwriter Indemnified Party for any
legal or other expenses
reasonably incurred by the Underwriter Indemnified Party in connection with investigating or
defending against any such loss, claim, damage, liability or action as such expenses are incurred
(whether or not the Underwriter Indemnified Party is a party thereto), whether threatened or
commenced, and in connection with the enforcement of this provision with respect to the above as
such expenses are incurred.
(e) Promptly after receipt by an indemnified party under subsection (a), (b), (c) or (d) above
of notice of the commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection, notify the
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indemnifying
party in writing of the commencement thereof; provided that the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability that it may have to
any indemnified party except to the extent such indemnifying party has been materially prejudiced
by such failure (through the forfeiture of substantive rights or defenses); and provided further
that the failure to notify the indemnifying party shall not relieve it from any liability that it
may have to an indemnified party otherwise than under subsection (a), (b), (c) or (d) above. In
case any such action shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be counsel to the
indemnified party), and after notice from the indemnifying party to such indemnified party of the
indemnifying party’s election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 6 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that (i) if, in the sole judgment of Xxxxx Xxxxxxx &
Co., it is advisable for the Underwriters to be represented as a group by separate counsel, Xxxxx
Xxxxxxx & Co. shall have the right to employ a single counsel (in addition to local counsel) to
represent it and all Underwriters who may be subject to liability arising from any claim in respect
of which indemnity may be sought by the Underwriters under subsection (a) or (b) of this Section 6,
in which event the reasonable fees and expenses of such separate counsel shall be borne by the
indemnifying party or parties and reimbursed to the Underwriters as incurred, and (ii) if, in the
sole judgment of the QIU, it is advisable for the QIU to be represented by separate counsel, the
QIU shall have the right to employ a single counsel (in addition to appropriate local counsel) to
represent it for any claim in respect of which indemnity may be sought by the QIU under subsection
(a), (b) or (d) of this Section 6, in which event the reasonable fees and expenses of such separate
counsel shall be borne by the indemnifying party or parties and reimbursed to the QIU as incurred.
An indemnifying party shall not be obligated under any settlement agreement relating to any action
under this Section 6 to which it has not agreed in writing. In addition, no indemnifying party
shall, without the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding unless such settlement (i) includes an unconditional release of
such indemnified party for all liability on claims that are the subject matter of such proceeding
and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to
act by or on behalf of an indemnified party.
(f) If the indemnification provided for in this Section 6 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a), (b), (c) or (d) above, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in subsection (a), (b), (c) or (d)
above,
(i) in such proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters or the QIU, in its
capacity as QIU with respect to the offering of the Securities, as the case may be, on the other
from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters or the QIU, in its capacity as QIU with respect
to the offering of the Securities, as the case may be, 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
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relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters or the QIU in its capacity as QIU with
respect to the offering of the Securities, as the case may be, on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company and Selling Stockholders bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. Each of the parties to this Agreement acknowledges that Xxxxx Xxxxxxx & Co., in
its capacity as “qualified independent underwriter” within the meaning of Rule 2720 of the Conduct
Rules of the NASD with respect to the offering of the Securities will not benefit from the offering
of the Securities other than from the underwriting discounts and commissions it receives in its
capacity as Underwriter. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Company, the
Selling Stockholders, the Underwriters or the QIU and the parties’ relevant intent, knowledge,
access to information and opportunity to correct or prevent such untrue statement or omission. The
Company, the Selling Stockholders, the Underwriters and the QIU agree that it would not be just and
equitable if contributions pursuant to this subsection (f) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in the
first sentence of this subsection (f). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this subsection (f)
shall be deemed to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any action or claim which is the
subject of this subsection (f). Notwithstanding the provisions of this subsection (f), (i) no
Underwriter shall be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission, (ii) the QIU
shall not be required to contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by Xxxxx Xxxxxxx & Co. and distributed to the public were offered
to the public exceeds the amount of any damages that such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or alleged omission and
(iii) the liability under this subsection of each Selling Stockholder shall be limited to an amount
equal to the aggregate amount of net proceeds (after deducting Underwriters’ discounts and
commissions) received by such Selling Stockholder from the sale of Securities pursuant to this
Agreement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations in this subsection (f) to contribute
are several in proportion to their respective underwriting obligations and not joint. The
Selling Stockholders’ obligations in this subsection (f) to contribute are several in proportion to
their respective aggregate amount of net proceeds (after deducting Underwriters’ discounts
and
commissions) received by such Selling Stockholder from the sale of the Securities pursuant to this
Agreement and not joint.
(g) The obligations of the Company and the Selling Stockholders under this Section 6 shall be
in addition to any liability which the Company and the Selling Stockholders may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who controls any
Underwriter or the QIU within the meaning of the Act; and the obligations of the
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Underwriters and
the QIU under this Section 6 shall be in addition to any liability that the respective Underwriters
or the QIU may otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his consent, is named in the Registration
Statement as about to become a director of the Company), to each officer of the Company who has
signed the Registration Statement and to each person, if any, who controls the Company or any
Selling Stockholder within the meaning of the Act.
(h) The Underwriters severally confirm and the Company and each Selling Stockholder
acknowledges that the statements with respect to the public offering of the Securities by the
Underwriters set forth in [paragraphs numbered •] under the caption “Underwriting” in the Time of
Sale Disclosure Package and in the Prospectus are correct and constitute the only information
concerning such Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement, any Preliminary Prospectus,
the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus.
7. Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company and the Selling Stockholders herein or in certificates delivered pursuant
hereto, and the agreements of the several Underwriters, the Company and the Selling Stockholders
contained in Section 6 hereof, shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any Underwriter or the QIU or any controlling person
thereof, or the Company or any of its officers, directors, or controlling persons, or any Selling
Stockholders or any controlling person thereof, and shall survive delivery of, and payment for, the
Securities to and by the Underwriters hereunder.
8. Substitution of Underwriters.
(a) If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares not purchased does
not aggregate more than 10% of the total amount of Firm Shares set forth in Schedule II hereto, the
remaining Underwriters shall be obligated to take up and pay for (in proportion to their respective
underwriting obligations hereunder as set forth in Schedule II hereto except as may otherwise be
determined by you) the Firm Shares that the withdrawing or defaulting Underwriters agreed but
failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares not purchased
aggregates more than 10% of the total amount of Firm Shares set forth in Schedule II hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other persons are not made
within 36 hours thereafter, this Agreement shall terminate. In the event of any such termination
neither the Company nor any Selling Stockholder shall be under any liability to any Underwriter
(except to the extent provided in Section 4(a)(vii), Section 4(b)(i), Section 4(b)(ii) and Section
6 hereof) nor shall any Underwriter (other than an Underwriter who shall have failed, otherwise
than for some reason permitted under this Agreement, to purchase the amount of Firm Shares agreed
by such Underwriter to be purchased hereunder) be under any
-35-
liability to the Company or the Selling
Stockholders (except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the non-defaulting
Underwriters or by any other party or parties, Xxxxx Xxxxxxx & Co. or the Company shall have the
right to postpone the First Closing Date for not more than seven business days in order that the
necessary changes in the Registration Statement, in the Time of Sale Disclosure Package, in the
Prospectus or in any other documents, as well as any other arrangements, may be effected. As used
herein, the term “Underwriter” includes any person substituted for an Underwriter under this
Section 8.
9. Termination.
(a) You, as Representative of the several Underwriters, shall have the right to terminate this
Agreement by giving notice as hereinafter specified at any time at or prior to the First Closing
Date, and the option referred to in Section 3(b), if exercised, may be cancelled at any time prior
to the Second Closing Date, if (i) the Company shall have failed, refused or been unable, at or
prior to such Closing Date, to perform any agreement on its part to be performed hereunder, (ii)
any other condition of the Underwriters’ obligations hereunder is not fulfilled, (iii) trading on
the New York Stock Exchange shall have been wholly suspended, (iv) minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for securities shall have been required
on the New York Stock Exchange, by the New York Stock Exchange or by order of the Commission or any
other Governmental Authority, (v) a banking moratorium shall have been declared by federal or state
authorities, or (vi) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your judgment, is material and
adverse and makes it impractical or inadvisable to proceed with the completion of the sale of and
payment for the Securities. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 4(a)(vii), Section 4(b)(i), Section 4(b)(ii) and
Section 6 hereof shall at all times be effective.
(b) If you elect to terminate this Agreement as provided in this Section, the Company and an
Attorney-in-Fact, on behalf of the Selling Stockholders, shall be notified promptly by you by
telephone, confirmed by letter.
10. Default by One or More of the Selling Stockholders or the Company. If Summit Partners or
any of its affiliates or one or more of the Individual Selling Stockholders
representing, individually or in the aggregate, 10% or more of the Selling Stockholders’
Securities shall fail at the First Closing Date to sell and deliver the number of Securities which
such Selling Stockholder or Selling Stockholders are obligated to sell hereunder, and either (i)
the remaining Selling Stockholders do not exercise the right hereby granted to increase, pro rata
or otherwise, the number of Securities to be sold by them hereunder to the total number of
Securities to be sold by all Selling Stockholders as set forth in Schedule I or (ii) the Company
does not elect to offer additional Securities which such defaulting Selling Stockholder or Selling
Stockholders are obligated to sell hereunder, to the extent such shares do not represent,
individually or in the aggregate, 10% or more of the Securities, then the Underwriters may at your
option, by notice from you to the Company and the non-defaulting Selling Stockholders, either (a)
terminate this Agreement without any liability on the part of any Underwriter or, except as
provided in Section 4(a)(vii), Section 4(b)(i), Section
-36-
4(b)(ii) and Section 6 hereof, any
non-defaulting party or (b) elect to purchase the Securities which the Company and the
non-defaulting Selling Stockholders have agreed to sell hereunder.
In the event of a default by any Selling Stockholder as referred to in this Section, either
you or the Company or, by joint action only, the non-defaulting Selling Stockholders shall have the
right to postpone the First Closing Date for a period not exceeding seven days in order to effect
any required changes in the Registration Statement, in the Time of Sale Disclosure Package or in
the Prospectus or in any other documents or arrangements.
If the Company shall fail at the First Closing Date to sell and deliver the number of
Securities which it is obligated to sell hereunder, then this Agreement shall terminate without any
liability on the part of any Underwriter or, except as provided in Section 6 hereof, any
non-defaulting party.
No action taken pursuant to this Section shall relieve the Company or any Selling Stockholders
so defaulting from liability, if any, in respect of such default.
11. Notices. Except as otherwise provided herein, all communications hereunder shall be in
writing and, if to the Underwriters, shall be mailed or delivered to Xxxxx Xxxxxxx & Co., 000
Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, except that notices given to an Underwriter pursuant
to Section 6 hereof shall be sent to such Underwriter at the address stated in the Underwriters’
Questionnaire furnished by such Underwriter in connection with this offering; if to the Company,
shall be mailed or delivered to it at Fortegra Financial Corporation, 000 Xxxx Xxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000, Attention: General Counsel; if to any of the Selling Stockholders, at
the address of the Attorneys-in-Fact as set forth in the Powers of Attorney, or in each case to
such other address as the person to be notified may have requested in writing. Any party to this
Agreement may change such address for notices by sending to the parties to this Agreement written
notice of a new address for such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 6 hereof. Nothing in this
Agreement is intended or shall be construed to give to any other person, firm or corporation any
legal or equitable remedy or claim under or in respect of this Agreement or any provision herein
contained. The term “successors and assigns” as herein used shall not include any purchaser, as
such purchaser, of any of the Securities from any of the several Underwriters.
13. Absence of Fiduciary Relationship. The Company and each of the Selling Stockholders
acknowledges and agrees that: (a) Xxxxx Xxxxxxx & Co. has been retained solely to act as
underwriter in connection with the sale of the Securities and that no fiduciary, advisory or agency
relationship between the Company or any Selling Stockholder and Xxxxx Xxxxxxx & Co. have been
created in respect of any of the transactions contemplated by this Agreement, irrespective of
whether Xxxxx Xxxxxxx & Co. has advised or is advising the Company or any Selling Stockholder on
other matters; (b) the price and other terms of the Securities set forth in this Agreement were
established by the Company and each of the Selling Stockholders following discussions and
arm’s-length negotiations with Xxxxx Xxxxxxx & Co. and the Company and each of the Selling
Stockholders is capable of evaluating and understanding and understands and accepts
-37-
the terms,
risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised
that Xxxxx Xxxxxxx & Co. and its affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and each of the Selling Stockholders and
that Xxxxx Xxxxxxx & Co. has no obligation to disclose such interests and transactions to the
Company or any Selling Stockholder by virtue of any fiduciary, advisory or agency relationship; (d)
it has been advised that Xxxxx Xxxxxxx & Co. is acting, in respect of the transactions contemplated
by this Agreement, solely for the benefit of itself and the other Underwriters, and not on behalf
of the Company or any Selling Stockholder; and (e) it, he or she waives, to the fullest extent
permitted by law, any claims it may have against Xxxxx Xxxxxxx & Co. for breach of fiduciary duty
or alleged breach of fiduciary duty in respect of any of the transactions contemplated by this
Agreement and agrees that Xxxxx Xxxxxxx & Co. shall have no liability (whether direct or indirect)
to the Company or any Selling Stockholder in respect of such a fiduciary duty claim on behalf of or
in right of any Selling Stockholder or the Company, including stockholders, employees or creditors
of the Company.
14. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
15. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original and
all such counterparts shall together constitute one and the same instrument.
16. General Provisions. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof. This Agreement may not
be amended or modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom the condition is
meant to benefit. Notwithstanding the foregoing, this Agreement may be amended without the QIU
signing the amendment if the amendment would not amend any provision of this Agreement in a manner
adverse to the QIU’s interests in its capacity as the “qualified independent underwriter” within
the meaning of Rule 2720 of the Conduct Rules of the NASD with respect to the offering of the
Securities. The Section headings herein are for the convenience of the parties only and shall not
affect the construction or interpretation of this Agreement.
[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of this letter whereupon this
letter will become a binding agreement between the Company, the Selling Stockholders and the
several Underwriters in accordance with its terms.
| Very truly yours, Fortegra Financial Corporation |
||||
| By | ||||
| [Name, Title] | ||||
| Summit Partners |
||||
| By | ||||
| [Name, Title] | ||||
| Individual Selling Stockholders |
||||
| By | ||||
| Attorney-in-Fact | ||||
| Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto. Xxxxx Xxxxxxx & Co. |
||||
| By | ||||
| Managing Director | ||||
| Xxxxx Xxxxxxx & Co., as “Qualified Independent Underwriter” |
||||
| By | ||||
| Managing Director | ||||
SCHEDULE I
Selling Stockholders
| Number of | Maximum Number of | |||||||
| Firm Shares | Option Shares | |||||||
| Name | to be Sold | Subject to Option | ||||||
Total |
||||||||
SCHEDULE II
| Underwriter | Number of Firm Shares (1) | |||
Xxxxx Xxxxxxx & Co. SunTrust Xxxxxxxx Xxxxxxxx, Inc. |
||||
Xxxxxxx Xxxxx & Company, L.L.C. FBR Capital Markets & Co. Xxxxx, Xxxxxxxx & Xxxxx, Inc. Macquarie Capital (USA) Inc. Liquidnet, Inc. |
||||
Total |
||||
| (1) | The Underwriters may purchase up to an additional [Ÿ] Option Shares, to the extent the option described in Section 3(b) of the Agreement is exercised, in the proportions and in the manner described in the Agreement. |
SCHEDULE III
Issuer General Free Writing Prospectuses
SCHEDULE IV
Pricing Information
EXHIBIT A
Form of Lock-Up Agreement
[Ÿ], 2010
Xxxxx Xxxxxxx & Co.
As representative of the underwriters named
in Schedule 1 to the Purchase Agreement
referred to below
As representative of the underwriters named
in Schedule 1 to the Purchase Agreement
referred to below
| c/o | Xxxxx Xxxxxxx & Co. 000 Xxxxxxxx Xxxx, Xxxxx 000 Xxxxxxxxxxx, XX 00000 |
Ladies and Gentlemen:
As an inducement to the underwriters (the “Underwriters”) to execute a purchase agreement (the
“Purchase Agreement”) providing for a public offering (the “Offering”) of common stock (the “Common
Stock”), of Fortegra Financial Corporation and any successor (by merger or otherwise)
thereto (the “Company”), the undersigned hereby agrees that without, in each case, the prior
written consent of Xxxxx Xxxxxxx & Co., during the period specified in the second succeeding
paragraph (the “Lock-Up Period”), the undersigned will not (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, make any short sale or
otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into, exercisable or exchangeable for or that represent the right to receive
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 securities which may be issued upon exercise of a stock option or warrant)
whether now owned or hereafter acquired (the “Undersigned’s Securities”) or (2) enter into any swap
or other agreement that transfers, in whole or in part, any of the economic consequences of
ownership of the Undersigned’s Securities, 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. The foregoing restriction is expressly agreed to preclude the undersigned from engaging
in any hedging or other transaction which is designed to or which reasonably could be expected to
lead to or result in a sale or disposition of the Undersigned’s Securities even if such
Undersigned’s Securities would be disposed of by someone other than the undersigned. Such
prohibited hedging or other transactions would include without limitation any short sale or any
purchase, sale or grant of any right (including without limitation any put or call option) with
respect to any of the Undersigned’s Securities or with respect to any security that includes,
relates to, or derives any significant part of its value from such Undersigned’s Securities.
In addition, the undersigned agrees that, without the prior written consent of Xxxxx Xxxxxxx &
Co., it will not, during the Lock-Up Period, make any demand for or exercise any right
with respect to, the registration of any Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
The initial Lock-Up Period will commence on the date of this Agreement and continue and
include the date 180 days after the date of the final prospectus used to sell Common Stock in the
Offering pursuant to the Purchase Agreement, to which you are or expect to become parties;
provided, however, that if (1) during the last 17 days of the initial Lock-Up Period, the Company
releases earnings results or material news or a material event relating to the Company occurs or
(2) prior to the expiration of the initial Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of the initial Lock-Up
Period, then in each case the Lock-Up Period will be extended until the expiration of the 18-day
period beginning on the date of release of the earnings results or the occurrence of the material
news or material event, as applicable, unless Xxxxx Xxxxxxx & Co. waives, in writing, such
extension.
The undersigned hereby acknowledges that the Company will be requested to agree in the
Purchase Agreement to provide notice to the undersigned of any event that would result in an
extension of the Lock-Up Period pursuant to the previous paragraph and agrees that any such notice
properly delivered will be deemed to have been given to, and received by, the undersigned. The
undersigned further agrees that, prior to engaging in any transaction or taking any other action
that is subject to the terms of this Agreement during the period from the date of this Agreement to
and including the 34th day following the expiration of the initial Lock-Up Period, it
will give notice thereof to the Company and will not consummate such transaction or take any such
action unless it has received written confirmation from the Company that the Lock-Up Period (as may
have been extended pursuant to the previous paragraph) has expired.
Notwithstanding the foregoing, any shares of Common Stock acquired by the undersigned in the
open market will not be subject to this Agreement; provided, however, that sales of such acquired
shares of Common Stock shall not be permitted if a filing under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), would be required or voluntarily made.
Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Securities (i)
as a bona fide gift or gifts, (ii) to any trust, to a family member or by will or if the
undersigned is a corporation, partnership, limited liability company or other business entity, to
any subsidiary, stockholder, partner, member or affiliate, as the case may be, and (iii) to the
Underwriters, pursuant to the Purchase Agreement; provided, in the case of (i) and (ii), that such
transfer shall not involve a disposition for value, and in the case of (ii), (x) the transferee
agrees in writing with the Underwriters to be bound by the terms of this Lock-Up Agreement, and (y)
no filing by any party under Section 16(a) of the Exchange Act shall be required or shall be made
voluntarily in connection with such transfer (other than (A) a filing on Form 5 made after the
expiration of the Lock-Up Period, or (B) in the case of an individual or an entity formed for the
benefit of an individual, a filing on Form 5 in connection with a transfer to a trust or other
entity solely for estate or tax planning purposes that does not result in a change in the aggregate
number of the Undersigned’s Securities beneficially owned by them, or (C) in the case of Summit
Partners, L.P., a filing on Form 3 or Form 4 in connection with a transfer or distribution that
does not result in a change in the aggregate number of the Undersigned’s Securities beneficially
owned by Summit Partners, L.P. and its affiliates and related persons). For purposes of this
Agreement, “family” shall mean any relationship by blood, marriage or adoption, nor more remote
than first cousin.
In addition, the foregoing restrictions shall not apply to (i) the exercise of stock options
granted pursuant to the Company’s equity incentive plans; provided that it shall apply to any of
the Undersigned’s Securities issued upon such exercise, or (ii) the establishment of any contract,
instruction or plan (a “Plan”) that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B)
under
the Exchange Act; provided that no sales of the Undersigned’s Securities shall be made
pursuant to such a Plan prior to the expiration of the Lock-Up Period (as such may have been
extended pursuant to the provisions hereof) , and such a Plan may only be established if no public
announcement of the establishment or existence thereof and no filing with the Securities and
Exchange Commission or other regulatory authority in respect thereof or transactions thereunder or
contemplated thereby, by the undersigned, the Company or any other person, shall be required, and
no such announcement or filing is made voluntarily, by the undersigned, the Company or any other
person, prior to the expiration of the Lock-Up Period (as such may have been extended pursuant to
the provisions hereof).
In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby
authorized to decline to make any transfer of shares of Common Stock if such transfer would
constitute a violation or breach of this Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Agreement. All authority herein conferred or agreed to be conferred
and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or
personal representatives of the undersigned.
The undersigned understands that the undersigned shall be released from all obligations under
this Agreement if (i) the Company notifies the Underwriters that it does not intend to proceed with
the Offering, (ii) the Purchase Agreement does not become effective, or if the Purchase Agreement
(other than the provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Common Stock to be sold thereunder, or (iii) the Offering
is not completed by March 31, 2011.
The undersigned understands that the Underwriters are entering into the Purchase Agreement and
proceeding with the Offering in reliance upon this Agreement.
This Agreement shall be governed by, and construed in accordance with, the laws of the State
of New York.
| Very truly yours, |
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| Name: | ||||
