6,100,000 Shares Class A Common Stock ($0.01 par value per Share) Underwriting Agreement
Exhibit 1.1
6,100,000 Shares
Class A Common Stock
($0.01 par value per Share)
($0.01 par value per Share)
October [ ], 2007
October [ ], 2007
UBS Securities LLC
Xxxxxxx, Xxxxx & Co.
as Representatives
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Xxxxxxx, Xxxxx & Co.
as Representatives
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Pzena Investment Management, Inc., a Delaware corporation (the “Company”), proposes to
issue and sell to the underwriters named in Schedule A annexed hereto (the
“Underwriters”), for whom you are acting as representatives (the
“Representatives”), an aggregate of 6,100,000 shares (the “Firm Shares”) of Class A
common stock, $0.01 par value per share (the “Class A Common Stock”), of the Company. In
addition, solely for the purpose of covering over-allotments, the Company proposes to grant to the
Underwriters the option to purchase from the Company up to an additional 915,000 shares of Class A
Common Stock (the “Additional Shares”). The Firm Shares and the Additional Shares are
hereinafter collectively sometimes referred to as the “Shares.” The Shares are described
in the Prospectus which is referred to below.
In connection with the consummation of the offering contemplated by this Agreement, the
Company, Pzena Investment Management, LLC (“Pzena LLC”) and the current members of Pzena
LLC (collectively, the “Current Members”) will effect a series of transactions as a result of which
the Company will be the sole managing member of Pzena LLC and, assuming that the Underwriters do
not purchase any of the Additional Shares, (i) the Company and the Current Members, except for one
Current Member (the “Continuing Members”), will own approximately 10.0% and 90.0%,
respectively, of the membership units of Pzena LLC, (ii) the Company will issue an aggregate of
57,937,910 shares of its Class B common stock, par value $0.000001 per share, to the Continuing
Members, which will represent approximately 97.9% of the combined voting power of the Company’s
common stock. Each of the foregoing transactions, along with other transactions, are described
under “Reorganization Transactions and Our Holding Company Structure” in the Prospectus (as defined
below) (collectively, the “Reorganization Transactions”).
The Company hereby acknowledges that, in connection with the proposed offering of the Shares,
it has requested UBS Financial Services Inc. (“UBS-FinSvc”) to administer a directed share
program (the “Directed Share Program”) under which up to 610,000 Firm Shares, or 10% of the
Firm Shares to be purchased by the Underwriters (the “Reserved Shares”), shall be reserved
for sale by UBS-FinSvc at the initial public offering price to the Company’s officers, directors,
employees and consultants and other persons having a relationship with the Company as designated by
the Company (the “Directed Share Participants”) as part of the distribution of the Shares
by the Underwriters, subject to the terms of this Agreement, the applicable rules, regulations and
interpretations of the Financial Industry Regulatory Authority (the “FINRA”) and all other
applicable laws, rules and regulations. The number of Shares available for sale to
the general public will be reduced to the extent that Directed Share Participants purchase
Reserved Shares. The Underwriters may offer any Reserved Shares not purchased by Directed Share
Participants to the general public on the same basis as the other Shares being issued and sold
hereunder. The Company has supplied UBS-FinSvc with the names, addresses and telephone numbers of
the individuals or other entities which the Company has designated to be participants in the
Directed Share Program. It is understood that any number of those so designated to participate in
the Directed Share Program may decline to do so.
The Company has prepared and filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the “Act”), with
the Securities and Exchange Commission (the “Commission”) a registration statement on Form
S-1 (File No. 333-143660) under the Act, including a prospectus, relating to the Shares.
Except where the context otherwise requires, “Registration Statement,” as used herein,
means the registration statement, as amended at the time of such registration statement’s
effectiveness for purposes of Section 11 of the Act, as such section applies to the respective
Underwriters (the “Effective Time”), including (i) all documents filed as a part thereof,
(ii) any information contained in a prospectus filed with the Commission pursuant to Rule 424(b)
under the Act, to the extent such information is deemed, pursuant to Rule 430A or Rule 430C under
the Act, to be part of the registration statement at the Effective Time, and (iii) any registration
statement filed to register the offer and sale of Shares pursuant to Rule 462(b) under the Act.
The Company has furnished to you, for use by the Underwriters and by dealers in connection
with the offering of the Shares, copies of one or more preliminary prospectuses relating to the
Shares. Except where the context otherwise requires, “Preliminary Prospectus,” as used
herein, means each such preliminary prospectus, in the form so furnished.
Except where the context otherwise requires, “Prospectus,” as used herein, means the
prospectus, relating to the Shares, filed by the Company with the Commission pursuant to Rule
424(b) under the Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act), or, if no such filing is required, the final prospectus
included in the Registration Statement at the time it became effective under the Act, in each case
in the form furnished by the Company to you for use by the Underwriters and by dealers in
connection with the offering of the Shares.
“Permitted Free Writing Prospectuses,” as used herein, means the documents listed on
Schedule B attached hereto and each “road show” (as defined in Rule 433 under the Act), if
any, related to the offering of the Shares contemplated hereby that is a “written communication”
(as defined in Rule 405 under the Act) (each such road show, an “Electronic Road Show”).
The Company has not offered or sold and will not offer or sell, without the Representatives’ prior
written consent, any Shares by means of any “free writing prospectus” (as defined in Rule 405 under
the Act) prepared by or on behalf of the Company or used or referred to by the Company in
connection with the offering of the Shares other than a Permitted Free Writing Prospectus. The
Underwriters have not offered or sold and will not offer or sell, without the Company’s consent,
any Shares by means of any “free writing prospectus” (as defined in Rule 405 under the Act) that is
required to be filed by the Underwriters with the Commission pursuant to Rule 433 under the Act,
other than a Permitted Free Writing Prospectus.
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“Disclosure Package,” as used herein, means the most recent Preliminary Prospectus
together with each “free writing prospectus” filed or used by the Company on or before the
Effective Time (an “Issuer Free Writing Prospectus”) other than a road show that is an
Issuer Free Writing Prospectus but is not required to be filed under Rule 433 under the Act.
As used in this Agreement, “business day” shall mean a day on which the New York Stock
Exchange (the “NYSE”) is open for trading. The terms “herein,” “hereof,” “hereto,”
“hereinafter” and similar terms, as used in this Agreement, shall in each case refer to this
Agreement as a whole and not to any particular section, paragraph, sentence or other subdivision of
this Agreement. The term “or,” as used herein, is not exclusive.
The Company has prepared and filed, in accordance with Section 12 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”), a registration statement (the “Exchange Act Registration Statement”) on Form 8-A
(File No. [___]) to register the class of securities consisting of the Class A Common Stock under
Section 12(b) of the Exchange Act.
The Company and Pzena LLC on the one hand and the Underwriters on the other agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the
respective Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase
from the Company the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A annexed hereto, subject to adjustment in accordance with Section 8 hereof, bears
to the total number of Firm Shares, at a purchase price of $[___] per Share. The Company is
advised by you that the Underwriters intend (i) to make a public offering of their respective
portions of the Firm Shares as soon after the effective date of the Registration Statement as in
your judgment is advisable and (ii) initially to offer the Firm Shares upon the terms set forth in
the Prospectus. You may from time to time increase or decrease the public offering price after the
initial public offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the option (the
“Over-Allotment Option”) to purchase, and upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Underwriters shall have
the right to purchase, severally and not jointly, from the Company, ratably in accordance with the
number of Firm Shares to be purchased by each of them, all or a portion of the Additional Shares as
may be necessary to cover over-allotments made in connection with the offering of the Firm Shares,
at the same purchase price per share to be paid by the Underwriters to the Company for the Firm
Shares. The Over-Allotment Option may be exercised by the Representatives on behalf of the several
Underwriters at any time and from time to time on or before the thirtieth day following the date of
the Prospectus, by written notice to the Company. Such notice shall set forth the aggregate number
of Additional Shares as to which the Over-Allotment Option is being exercised and the date and time
when the Additional Shares are to be delivered (any such date and time being herein referred to as
an “additional time of purchase”); provided, however, that unless otherwise
agreed by the parties, no additional time of purchase shall be earlier than the “time of purchase”
(as defined below) nor earlier than the third business day after the date on
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which the Over-Allotment Option shall have been exercised nor later than the tenth business
day after the date on which the Over-Allotment Option shall have been exercised. The number of
Additional Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule A hereto bears to the
total number of Firm Shares (subject, in each case, to such adjustment as the Representatives may
determine to eliminate fractional shares), subject to adjustment in accordance with Section 8
hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares shall be
made to the Company by Federal Funds wire transfer against delivery of the certificates for the
Firm Shares to you through the facilities of The Depository Trust Company (“DTC”) for the
respective accounts of the Underwriters. Such payment and delivery shall be made at 10:00 A.M.,
New York City time, on October [ ], 2007 (unless another time shall be agreed to by you
and the Company or unless postponed in accordance with the provisions of Section 8 hereof). The
time at which such payment and delivery are to be made is hereinafter sometimes called the
“time of purchase.” Electronic transfer of the Firm Shares shall be made to you at the
time of purchase in such names and in such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be made at the additional time
of purchase in the same manner and at the same office as the payment for the Firm Shares.
Electronic transfer of the Additional Shares shall be made to you at the additional time of
purchase in such names and in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with respect to the purchase of the
Shares shall be made at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP at 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time, on the date of the closing of the purchase
of the Firm Shares or the Additional Shares, as the case may be.
3. Representations and Warranties of the Company and Pzena LLC. The Company and Pzena
LLC, jointly and severally, represent and warrant to and agree with each of the Underwriters that:
(a) the Registration Statement has heretofore become effective under the Act or, with
respect to any registration statement to be filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the Act, will be filed with the Commission and become
effective under the Act no later than 10:00 P.M., New York City time, on the date of
determination of the public offering price for the Shares; no stop order of the Commission
preventing or suspending the use of any Preliminary Prospectus or Permitted Free Writing
Prospectus, or the effectiveness of the Registration Statement, has been issued, and no
proceedings for such purpose have been instituted or, to the Company’s knowledge, are
contemplated by the Commission; the Exchange Act Registration Statement has become effective
as provided in Section 12 of the Exchange Act.
(b) the Registration Statement complied when it became effective, and, if amended, will
comply when so amended, in all material respects, with the requirements
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of the Act; the Registration Statement did not, as of the Effective Time, 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 not misleading; each Preliminary
Prospectus complied, at the time it was filed with the Commission, in all material respects
with the requirements of the Act; at the date of each Preliminary Prospectus, such
Preliminary Prospectus did not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, the Disclosure Package, as of the
“applicable time” (as defined in the Act), when taken together with (i) the number of Shares
offered for sale pursuant to the Prospectus and (ii) the public offering price per Share, as
reflected on the cover page of the Prospectus, did not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; the
Prospectus will comply at the time it is filed with the Commission, in all material
respects, with the requirements of the Act (including, without limitation, Section 10(a) of
the Act); the Prospectus will not, as of its date or the time of purchase (and any amendment
thereto will not), include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; at the date of any Permitted Free
Writing Prospectus, such Permitted Free Writing Prospectus did not include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading or conflict with the information contained in the Registration Statement, any
Preliminary Prospectus or the Prospectus; provided, however, that neither
the Company nor Pzena LLC makes any representation or warranty in this Section 3(b) with
respect to any statement contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in
conformity with information concerning an Underwriter and furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in the Registration
Statement, such Preliminary Prospectus, the Prospectus or such Permitted Free Writing
Prospectus;
(c) prior to the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of
the Act) or used any “prospectus” (within the meaning of the Act) in connection with the
offer or sale of the Shares, in each case other than the Preliminary Prospectuses and the
Permitted Free Writing Prospectuses, if any; the Company has not, directly or indirectly,
prepared, used or referred to any Permitted Free Writing Prospectus except in compliance
with Rules 164 and 433 under the Act; assuming that such Permitted Free Writing Prospectus
is accompanied or preceded by the most recent Preliminary Prospectus that contains a price
range or the Prospectus, as the case may be, and that such Permitted Free Writing Prospectus
is so sent or given after the Registration Statement was filed with the Commission (and
after such Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under
the Act, filed with the Commission), the sending or giving, by any Underwriter, of any
Permitted Free Writing Prospectus will satisfy the provisions of Rule 164 and Rule 433
(without reliance on subsections (b), (c) and (d) of
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Rule 164); the Preliminary Prospectus dated October 9, 2007 is a prospectus that, other
than by reason of Rule 433 or Rule 431 under the Act, satisfies the requirements of Section
10 of the Act, including a price range where required by rule; the Company is not
disqualified, by reason of subsection (f) or (g) of Rule 164 under the Act, from using, in
connection with the offer and sale of the Shares, “free writing prospectuses” (as defined in
Rule 405 under the Act) pursuant to Rules 164 and 433 under the Act; the Company is not an
“ineligible issuer” (as defined in Rule 405 under the Act) as of the eligibility
determination date for purposes of Rules 164 and 433 under the Act with respect to the
offering of the Shares contemplated by the Registration Statement; the Company has caused
there to be made available at least one version of a “bona fide electronic road show” (as
defined in Rule 433 under the Act) in a manner that, pursuant to Rule 433(d)(8)(ii) under
the Act, causes the Company not to be required, pursuant to Rule 433(d) under the Act, to
file, with the Commission, any Electronic Road Show;
(d) as of June 30, 2007, after giving effect to the issuance of the Shares, the use of
the net proceeds therefrom as described in “Use of Proceeds” in the Registration Statement,
the Preliminary Prospectuses and the Prospectus and the amendment and restatement of the
operating agreement of Pzena LLC as described in “The Reorganization Transactions and Our
Holding Company Structure” in Registration Statement, the Preliminary Prospectuses and the
Prospectus, Pzena LLC and the Company would have an authorized and outstanding
capitalization as set forth under the pro forma and pro forma as adjusted columns,
respectively, of the capitalization table in the sections of the Registration Statement, the
Preliminary Prospectuses and the Prospectus entitled “Capitalization” (and any similar
sections or information, if any, contained in any Permitted Free Writing Prospectus), and,
as of June 30, 2007, after giving effect to the Reorganization Transactions, Pzena LLC would
have an authorized and outstanding capitalization as set forth under the pro forma column of
the capitalization table in the sections of the Registration Statement, the Preliminary
Prospectuses and the Prospectus entitled “Capitalization” (and any similar sections or
information, if any, contained in any Permitted Free Writing Prospectus) (subject, in each
case, to the issuance of shares of Class A Common Stock upon exercise of stock options and
warrants disclosed as outstanding in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the Prospectus and the grant of options under
existing stock option plans described in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the Prospectus); following the filing of the
Company’s Amended and Restated Certificate of Incorporation (the “Amended and Restated
Certificate of Incorporation”) with the Secretary of State of the State of Delaware, all
of the issued and outstanding shares of capital stock (including the Shares and all other
shares of the Class A Common Stock) of the Company will have been duly authorized and, upon
payment and delivery, will be validly issued, fully paid and non-assessable, will be issued
in compliance with all applicable securities laws and will not be issued in violation of any
preemptive right, resale right, right of first refusal or similar right; the Shares are duly
listed, and admitted and authorized for trading, subject to official notice of issuance and
evidence of satisfactory distribution, on the NYSE.
(e) each of the Company and Pzena LLC has been duly incorporated or organized, as the
case may be, and is validly existing as a corporation or limited liability
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company, as the case may be, in good standing under the laws of the State of Delaware,
with full corporate or limited liability company power, as the case may be, and authority to
own, lease and operate its properties and conduct its business as described in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, to execute and deliver this Agreement and, in the case of the
Company, to issue, sell and deliver the Shares pursuant hereto as contemplated herein;
(f) each of the Company and Pzena LLC is duly qualified to do business as a foreign
business and is in good standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not, individually or in the aggregate,
(i) have a material adverse effect on the business, properties, financial condition, results
of operations or prospects of the Company and the Subsidiaries (as defined below) taken as a
whole, (ii) prevent or materially interfere with consummation of the transactions
contemplated hereby, or (iii) prevent the shares of Class A Common Stock from being accepted
for listing on, or result in the delisting of shares of Class A Common Stock from the NYSE
(the occurrence of any such effect or any such prevention or interference or any such result
described in the foregoing clauses (i), (ii) and (iii) being herein referred to as a
“Material Adverse Effect”);
(g) Pzena LLC has no subsidiaries (as defined under the Act) other than the entities
listed on Schedule C hereto (collectively, the “Pzena LLC Subsidiaries”)
and, after giving effect to the Reorganization Transactions, the Company will have no
subsidiaries other than Pzena LLC and the Pzena LLC Subsidiaries (together, the
“Subsidiaries”); Pzena LLC owns all of the issued and outstanding capital stock or
other equity interests of each of the Pzena LLC Subsidiaries other than as indicated on
Schedule C hereto; other than the capital stock or other equity interests of the
Pzena LLC Subsidiaries, Pzena LLC does not own, directly or indirectly, any shares of stock
or any other equity interests or long-term debt securities (collectively, the
“Interests”) of any corporation, firm, partnership, joint venture, association or
other entity other than certain Interests in the ordinary course of its investment
management business; complete and correct copies of the certificate of incorporation and the
bylaws of the Company and the certificate of formation and operating agreement of Pzena LLC,
each as currently in effect have been delivered to you, and, except as set forth in the
exhibits to the Registration Statement, no changes therein will be made on or after the date
hereof through and including the time of purchase or, if later, any additional time of
purchase; each Subsidiary has been duly incorporated or formed, as the case may be, and is
validly existing as a corporation, limited liability company or limited liability
partnership in good standing under the laws of the jurisdiction of its incorporation or
formation, with full corporate, limited liability company power or limited liability
partnership power, as applicable, and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any; each
Subsidiary is duly qualified to do business as a foreign business and is in good standing in
each jurisdiction where the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be so qualified and in
good standing would
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not, individually or in the aggregate, have a Material Adverse Effect; the membership
interests of Pzena LLC to be purchased by the Company in connection with the Reorganization
Transactions have been duly authorized and validly issued and, upon their acquisition by the
Company, will be owned by the Company subject to no security interest, other encumbrance or
adverse claims; all of the outstanding shares of capital stock or other equity interests of
each of the Subsidiaries have been duly authorized and validly issued, and, in the case of shares of capital stock, are fully paid and non-assessable, have been issued in compliance
with all applicable securities laws, were not issued in violation of any preemptive right,
resale right, right of first refusal or similar right, and are owned by Pzena LLC subject to
no security interest, other encumbrance or adverse claims; and no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the Subsidiaries are
outstanding; and Pzena LLC has no “significant subsidiary,” as that term is defined in Rule
1-02(w) of Regulation S-X under the Act;
(h) the capital stock of the Company, including the Shares, conforms in all material
respects to each description thereof contained in the Registration Statement, the
Preliminary Prospectuses and the Prospectus under “Description of Capital Stock” and in the
Permitted Free Writing Prospectuses, if any; and the certificates for the Shares comply with
the requirements of the NYSE and the Delaware General Corporation Law;
(i) this Agreement has been duly authorized, executed and delivered by the Company and
Pzena LLC;
(j) none of the Company, Pzena LLC nor any of the Subsidiaries is in breach or
violation of or in default under (nor has any event occurred which, with notice, lapse of
time or both, would result in any breach or violation of, constitute a default under or give
the holder of any indebtedness (or a person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a part of such indebtedness under)
(A) certificate of incorporation and the bylaws of the Company or the certificate of
formation and operating agreement or partnership agreement, as applicable, of any
Subsidiary, or (B) any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other agreement or
instrument to which it is a party or by which it or any of its properties may be bound or
affected, or (C) any federal, state, local or foreign law, regulation or rule, or (D) any
rule or regulation of any self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the rules and regulations of the NYSE, or (E) any
decree, judgment or order applicable to it or any of its properties, except, in the cases of
clauses (B), (C), (D) or (E), where such breach, violation or default would not,
individually or in the aggregate, have a Material Adverse Effect;
(k) the execution, delivery and performance of this Agreement, the issuance and sale of
the Shares pursuant hereto and the consummation of the Reorganization Transactions and the
transactions contemplated hereby will not conflict with, result in any breach or violation
of or constitute a default under (nor constitute any event which, with notice, lapse of time
or both, would result in any breach or violation of, constitute a
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default under or give the holder of any indebtedness (or a person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of all or a
part of such indebtedness under) (or result in the creation or imposition of a lien, charge
or encumbrance on any property or assets of the Company, Pzena LLC or any Subsidiary
pursuant to) (A) the certificate of incorporation and the bylaws of the Company and the
certificate of formation and operating agreement or partnership agreement, as applicable, of
any of the Subsidiaries, or (B) any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company, Pzena LLC or any of the Subsidiaries is a
party or by which any of them or any of their respective properties may be bound or
affected, or (C) any federal, state, local or foreign law, regulation or rule, or (D) any
rule or regulation of any self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the rules and regulations of the NYSE), or (E) any
decree, judgment or order applicable to the Company, Pzena LLC or any of the Subsidiaries or
any of their respective properties, except, in the case of clause (B), where such breach,
violation or default would not, individually or in the aggregate, have a Material Adverse
Effect;
(l) no approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority or agency, or
of or with any self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the NYSE), or approval of the stockholders of the Company,
is required in connection with the issuance and sale of the Shares or the consummation of
the transactions contemplated hereby, other than (i) registration of the Shares under the
Act, which has been effected (or, with respect to any registration statement to be filed
hereunder pursuant to Rule 462(b) under the Act, will be effected in accordance herewith),
(ii) any necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters or (iii) under the
Conduct Rules of the NASD;
(m) except as described in the Registration Statement (excluding the exhibits thereto),
each Preliminary Prospectus and the Prospectus, (i) no person has the right, contractual or
otherwise, to cause the Company to issue or sell to it any shares of Class A Common Stock or shares of any other capital stock or other equity interests of the Company, (ii) no person
has any preemptive rights, resale rights, rights of first refusal or other rights to
purchase any shares of Class A Common Stock or shares of any other capital stock of or other
equity interests in the Company and (iii) no person has the right to act as an underwriter
or as a financial advisor to the Company in connection with the offer and sale of the
Shares; except as described in the Registration Statement (excluding the exhibits thereto),
each Preliminary Prospectus and the Prospectus, no person has the right, contractual or
otherwise, to cause the Company to register under the Act any shares of Class A Common Stock
or shares of any other capital stock of or other equity interests in the Company, or to
include any such shares or interests in the Registration Statement or the offering
contemplated thereby;
(n) each of the Company, Pzena LLC and the Pzena LLC Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
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filings required under any applicable law, regulation or rule, and has obtained all
necessary licenses, authorizations, consents and approvals from other persons, in order to
conduct their respective businesses except where the failure to have obtained any such
license, authorization, consent or approval would not, individually or in the aggregate,
have a Material Adverse Effect; none of the Company, Pzena LLC or any of the Xxxxx LLC
Subsidiaries is in violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such license, authorization,
consent or approval or any federal, state, local or foreign law, regulation or rule or any
decree, order or judgment applicable to the Company, Pzena LLC or any of the Pzena LLC
Subsidiaries, except where such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect;
(o) there are no actions, suits, claims, investigations or proceedings pending or, to
the Company’s knowledge, threatened or contemplated to which the Company, Pzena LLC or any
of the Pzena LLC Subsidiaries or any of their respective directors or officers is or would
be a party or of which any of their respective properties is or would be subject at law or
in equity, before or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or before or by any self-regulatory
organization or other non-governmental regulatory authority (including, without limitation,
the NYSE), except any such action, suit, claim, investigation or proceeding which, if
resolved adversely to the Company, Pzena LLC or any Pzena LLC Subsidiary, would not,
individually or in the aggregate, have a Material Adverse Effect;
(p) X.X. Xxxx LLP, whose report on the consolidated financial statements of Pzena LLC
and the Subsidiaries is included in the Registration Statement, the Preliminary Prospectuses
and the Prospectus, are independent registered public accountants as required by the Act and
by the rules of the Public Company Accounting Oversight Board;
(q) Ernst & Young LLP, whose report on the consolidated financial statements of Pzena
LLC and the Subsidiaries is included in the Registration Statement, the Preliminary
Prospectuses and the Prospectus, are independent registered public accountants as required
by the Act and by the rules of the Public Company Accounting Oversight Board;
(r) the historical financial statements included in the Registration Statement, the
Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any, together with the related notes and schedules, present fairly the consolidated
financial position of Pzena LLC and the Pzena LLC Subsidiaries as of the dates indicated and
have been prepared in compliance with the requirements of the Act and Exchange Act and in
conformity with U.S. generally accepted accounting principles applied on a consistent basis
during the periods involved; all pro forma financial statements or data included in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, comply with the requirements of the Act and the Exchange Act,
and the assumptions used in the preparation of such pro forma financial statements and data
are reasonable, the pro forma
-10-
adjustments used therein are appropriate to give effect to the transactions or
circumstances described therein and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of those statements and data; the other financial
and statistical data contained in the Registration Statement, the Preliminary Prospectuses,
the Prospectus and the Permitted Free Writing Prospectuses, if any, are accurately and
fairly presented and prepared on a basis consistent with the financial statements and books
and records of Pzena LLC; there are no financial statements (historical or pro forma) that
are required to be included in the Registration Statement, any Preliminary Prospectus or the
Prospectus that are not included as required by the requirements of the Act or the Exchange
Act; the Company, Pzena LLC and the Pzena LLC Subsidiaries do not have any material
liabilities or obligations, direct or contingent (including any off-balance sheet
obligations), not described in the Registration Statement (excluding the exhibits thereto),
each Preliminary Prospectus and the Prospectus; and all disclosures contained in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, regarding “non-GAAP financial measures” (as such term is
defined by the rules and regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act, to the extent applicable;
(s) subsequent to the respective dates as of which information is given in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, in each case excluding any amendments or supplements to the
foregoing made after the execution of this Agreement, there has not been (i) any material
adverse change, or any development involving a prospective material adverse change, in the
business, properties, management, financial condition or results of operations of the
Company, Pzena LLC and the Pzena LLC Subsidiaries taken as a whole, (ii) any transaction
which is material to the Company, Pzena LLC and the Pzena LLC Subsidiaries taken as a whole,
(iii) any obligation or liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company, Pzena LLC or any Pzena LLC Subsidiary, which is
material to the Company, Pzena LLC and the Pzena LLC Subsidiaries taken as a whole, (iv) any
change in the capital stock or outstanding indebtedness of the Company, Pzena LLC or any
Pzena LLC Subsidiaries or (v) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company, Pzena LLC or any Pzena LLC Subsidiary;
(t) the Company has obtained for the benefit of the Underwriters the agreement (a
“Lock-Up Agreement”), in the form set forth as Exhibit A hereto, of (i) each
of its directors and “officers” (within the meaning of Rule 16a-1(f) under the Exchange Act)
and (ii) each Directed Share Participant who has purchased Shares for a purchase price of
$100,000 or more;
(u) none of the Company, Pzena LLC or any Pzena LLC Subsidiary is, and at no time
during which a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in connection with any
sale of Shares will any of them be, and, after giving effect to the offering and sale of the
Shares, none of them will be, an “investment company” or an
-11-
entity “controlled” by an “investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended (the “Investment Company Act”);
(v) Pzena LLC is duly registered with the Commission as an investment adviser under the
Investment Advisers Act of 1940, as amended (the “Advisers Act”), and is not
prohibited by any provision of the Advisers Act or the Investment Company Act, or the
respective rules and regulations thereunder, from acting as an investment adviser pursuant
to the agreements pursuant to which it acts as such.
(w) none of the Company, Pzena LLC or any of the Pzena LLC Subsidiaries owns any real
property; the Company, Pzena LLC and each of the Pzena LLC Subsidiaries have good and
marketable title to all personal property owned by any of them, free and clear of all liens,
claims, security interests or other encumbrances; all the property described in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, as being held under lease by the Company, Pzena LLC or a Pzena
LLC Subsidiary is held thereby under valid, subsisting and enforceable leases;
(x) each of the Company, Pzena LLC and the Pzena LLC Subsidiaries owns or possesses all
inventions, patent applications, patents, trademarks (both registered and unregistered),
tradenames, service names, copyrights, trade secrets and other proprietary information
described in the Registration Statement, the Preliminary Prospectuses, the Prospectus and
the Permitted Free Writing Prospectuses, if any, as being owned or licensed by it or which
is necessary for the conduct of, or material to, its businesses (collectively, the
“Intellectual Property”), and the Company is unaware of any claim to the contrary or
any challenge by any other person to the rights of the Company, Pzena LLC or any of the
Pzena LLC Subsidiaries with respect to the Intellectual Property. None of the Company,
Pzena LLC or any of the Pzena LLC Subsidiaries has received notice of a claim of
infringement of the intellectual property of a third party. To the best of the Company’s
knowledge, none of the Company, Pzena LLC or any of the Pzena LLC Subsidiaries has infringed
or is infringing the intellectual property of a third party;
(y) none of the Company, Pzena LLC or any of the Pzena LLC Subsidiaries is engaged in
any unfair labor practice; except for matters which would not, individually or in the
aggregate, have a Material Adverse Effect, (i) there is (A) no unfair labor practice
complaint pending or, to the Company’s knowledge, threatened against the Company or Pzena
LLC before the National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements is pending or, to the Company’s
knowledge, threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to the
Company’s knowledge, threatened against the Company or Pzena LLC, and (C) no union
representation dispute currently existing concerning the employees of the Company or Pzena
LLC, (ii) to the Company’s knowledge, no union organizing activities are currently taking
place concerning the employees of the Company or Pzena LLC and (iii) there has been no
violation of any federal, state, local or foreign law relating to discrimination in the
hiring, promotion or pay of employees, any applicable wage or hour laws or any provision of
the Employee Retirement Income
-12-
Security Act of 1974 (“ERISA”) or the rules and regulations promulgated
thereunder concerning the employees of the Company or Pzena LLC;
(z) all tax returns required to be filed by the Company, Pzena LLC or any of the Pzena
LLC Subsidiaries have been timely filed or extensions to file such returns have been timely
requested and all taxes and other assessments of a similar nature (whether imposed directly
or through withholding) including any interest, additions to tax or penalties applicable
thereto due or claimed to be due from such entities have been timely paid, other than those
being contested in good faith and for which adequate reserves have been provided;
(aa) the Company and Pzena LLC maintain insurance covering the properties, operations,
personnel and business of the Company, Pzena LLC and the Pzena LLC Subsidiaries as the
Company reasonably deems adequate; such insurance insures against such losses and risks to
an extent which is adequate in accordance with customary industry practice to protect the
Company, Pzena LLC and the Subsidiaries and their collective business; all such insurance is
fully in force on the date hereof and will be fully in force at the time of purchase and
each additional time of purchase, if any; none of the Company, Pzena LLC or any Subsidiary
has reason to believe that it will not be able to renew any such insurance as and when such
insurance expires;
(bb) each of the investment advisory agreements to which Pzena LLC is a party is a
valid and legally binding obligation of the parties thereto and in compliance with the
Investment Advisers Act, except for any failures to be so in compliance that, individually
or in the aggregate, would not have a Material Adverse Effect; none of Pzena LLC, the
Subsidiaries or affiliates of Pzena LLC is in breach or violation of or in default under any
such agreement, which breach, violation or default, individually or in the aggregate, would
have a Material Adverse Effect; and to the knowledge of the Company, there is no pending or
threatened termination of any such agreement which, individually or in the aggregate, would
have a Material Adverse Effect;
(cc) Except as disclosed in the most recent Preliminary Prospectus and the Prospectus
or as otherwise could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect, the Company and each of its subsidiaries (i) make and keep accurate books
and records and (ii) maintain and have maintained effective internal control over financial
reporting as defined in Rule 13a-15 under the Exchange Act and a system of internal
accounting controls sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management’s general or specific authorization, (B) transactions
are recorded as necessary to permit preparation of the Company’s financial statements in
conformity with accounting principles generally accepted in the United States and to
maintain accountability for its assets, (C) access to the Company’s assets is permitted only
in accordance with management’s general or specific authorization and (D) the recorded
accountability for the Company’s assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences; Since the date
of the latest audited financial statements included in the Pricing Prospectus, except as
disclosed in the Preliminary Prospectus and the Prospectus there has been no change in the
Company’s internal control over financial
-13-
reporting that has materially affected, or is reasonably likely to materially adversely
affect the Company’s internal control over financial reporting;
(dd) (i) The Company and each of its subsidiaries have established and maintain
disclosure controls and procedures (as such term is defined in Rule 13a-15 under the
Exchange Act), (ii) such disclosure controls and procedures are designed to ensure that the
information required to be disclosed by the Company and its subsidiaries in the reports they
will file or submit under the Exchange Act is accumulated and communicated to management of
the Company and its subsidiaries, including their respective principal executive officers
and principal financial officers, as appropriate, to allow timely decisions regarding
required disclosure to be made and (iii) such disclosure controls and procedures are
effective in all material respects to perform the functions for which they were established;
(ee) the Company has taken all necessary actions to ensure that, upon and at all times
after the filing of the Registration Statement, the Company and the Subsidiaries and their
respective officers and directors, in their capacities as such, will be in compliance in all
material respects with the applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx Act”) and the rules and regulations promulgated thereunder;
(ff) each “forward-looking statement” (within the meaning of Section 27A of the Act or
Section 21E of the Exchange Act) contained in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, has been
made with a reasonable basis and in good faith;
(gg) all statistical or market-related data included in the Registration Statement, the
Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any, are based on or derived from sources that the Company reasonably believes to be
reliable and accurate, and no consent for the use of such data is required.
(hh) none of the Company, Pzena LLC or any of the Pzena LLC Subsidiaries is aware of or
has taken any action, directly or indirectly, that would result in a violation by such
entities of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “Foreign Corrupt Practices Act”); to the knowledge of
the Company, none of the directors, officers or employees of the Company, the manager,
officers, members or employees of Pzena LLC or any of the Pzena LLC Subsidiaries is aware of
or has taken any action, directly or indirectly, that would result in a violation by such
persons of the FCPA and the rules and regulations thereunder; and the Company and Pzena LLC
have instituted and maintains policies and procedures designed to ensure continued
compliance therewith;
(ii) the operations of the Company, Pzena LLC and the Pzena LLC Subsidiaries are and
have been conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions to which Company, Pzena LLC or
any of the Pzena LLC Subsidiaries may be subject, the rules and regulations thereunder and
any related or similar rules,
-14-
regulations or guidelines, issued, administered or enforced by any governmental agency
having jurisdiction over the Company, Pzena LLC or any of the Pzena LLC Subsidiaries
(collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any arbitrator or
non-governmental authority involving the Company, Pzena LLC or any of the Pzena LLC
Subsidiaries with respect to the Money Laundering Laws is pending or, to the Company’s
knowledge, threatened;
(jj) none of the Company, Pzena LLC or any of the Pzena LLC Subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); to the best knowledge of the Company, none of the
directors, officers or employees of the Company, the manager, officers, members or employees
of Pzena LLC or any of the Pzena LLC Subsidiaries has received notice that they are subject
to any U.S. sanctions administered by the OFAC; to the best knowledge of the Company, none
of the directors, officers or employees of the Company, the manager, officers, members or
employees of Pzena LLC or any of the Pzena LLC Subsidiaries is currently subject to any U.S.
sanctions administered by the OFAC; and the Company will not directly or indirectly use the
proceeds of the offering of the Shares contemplated hereby, or lend, contribute or otherwise
make available such proceeds to any Pzena LLC Subsidiary, joint venture partner or other
person or entity for the purpose of financing the activities of any person currently subject
to any U.S. sanctions administered by OFAC;
(kk) neither Pzena LLC nor any Pzena LLC Subsidiary is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other distribution
on such Subsidiary’s capital stock or other equity interests, 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, except as described
in the Registration Statement, each Preliminary Prospectus and the Prospectus;
(ll) except as described in the Registration Statement, each Preliminary Prospectus and
the Prospectus, the issuance and sale of the Shares as contemplated herein will not cause
any holder of any shares of capital stock of the Company, securities convertible into or
exchangeable or exercisable for such capital stock or options, warrants or other rights to
purchase capital stock or any other securities of the Company to have any right to acquire
any shares of preferred stock of the Company;
(mm) except pursuant to this Agreement, none of the Company, Pzena LLC or any of the
Pzena LLC Subsidiaries has 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 or by the Registration Statement;
(nn) none of the Company, Pzena LLC or any of the Pzena LLC Subsidiaries nor any of
their respective directors, officers, affiliates or controlling persons has taken, directly
or indirectly, any action designed, or which has constituted or might reasonably
-15-
be expected to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares;
(oo) to the Company’s knowledge, there are no affiliations or associations between (i)
any member of the NASD and (ii) the Company or any of the Company’s officers, directors or
5% or greater security holders or any beneficial owner of the Company’s unregistered equity
securities that were acquired at any time on or after the 180th day immediately preceding
the date the Registration Statement was initially filed with the Commission, except as
disclosed in the Registration Statement (excluding the exhibits thereto), the Preliminary
Prospectuses and the Prospectus;
(pp) no approval, authorization, consent or order of or filing with any governmental or
regulatory commission, board, body, authority or agency, other than those heretofore
obtained, is required in connection with the offering of the Reserved Shares in any
jurisdiction where the Reserved Shares are being offered;
(qq) the Company has not offered, or caused the Underwriters to offer, Shares to any
person pursuant to the Directed Share Program with the intent to influence unlawfully (i) a
customer or supplier of the Company or any of the Subsidiaries to alter the customer’s or
supplier’s level or type of business with the Company or any of the Subsidiaries, or (ii) a
trade journalist or publication to write or publish favorable information about the Company
or any of the Subsidiaries or any of their respective products or services.
In addition, any certificate signed by any officer of the Company or Pzena LLC and delivered
to the Underwriters or counsel for the Underwriters pursuant to this Agreement shall be deemed to
be a representation and warranty by the Company, as to matters covered thereby, to each
Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky laws of such
states or other jurisdictions as you may designate and to maintain such qualifications in
effect so long as you may request for the distribution of the Shares; provided,
however, that the Company shall not be required to qualify as a foreign corporation
or to consent to the service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the Shares); and to promptly
advise you of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Shares for offer or sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon as practicable
after this Agreement becomes effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the
-16-
Underwriters reasonably request for the purposes contemplated by the Act; in case any
Underwriter is required to deliver (whether physically or through compliance with Rule 172
under the Act or any similar rule), in connection with the sale of the Shares, a prospectus
after the nine-month period referred to in Section 10(a)(3) of the Act, the Company will
prepare, at its expense, promptly upon request such amendment or amendments to the
Registration Statement and the Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered, it is necessary or
appropriate for a post-effective amendment to the Registration Statement, or a Registration
Statement under Rule 462(b) under the Act, to be filed with the Commission and become
effective before the Shares may be sold, the Company will use its best efforts to cause such
post-effective amendment or such Registration Statement to be filed and become effective,
and will pay any applicable fees in accordance with the Act, as soon as possible; and the
Company will advise you promptly (i) when such post-effective amendment or such Registration
Statement has become effective, and (ii) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner in accordance with such Rules);
(d) to advise you promptly, confirming such advice in writing, of any request by the
Commission for amendments or supplements to the Registration Statement or the Exchange Act
Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free
Writing Prospectus or for additional information with respect thereto, or of notice of
institution of proceedings for, or the entry of a stop order, suspending the effectiveness
of the Registration Statement and, if the Commission should enter a stop order suspending
the effectiveness of the Registration Statement, to use its best efforts to obtain the
lifting or removal of such order as soon as possible; to advise you promptly of any proposal
to amend or supplement the Registration Statement or the Exchange Act Registration
Statement, any Preliminary Prospectus or the Prospectus, and to provide you and
Underwriters’ counsel copies of any such documents for review and comment a reasonable
amount of time prior to any proposed filing and to file no such amendment or supplement to
which you shall reasonably object in writing;
(e) subject to Section 4(d) hereof, to file promptly all reports and documents and any
preliminary or definitive proxy or information statement required to be filed by the Company
with the Commission in order to comply with the Exchange Act for so long as a prospectus is
required by the Act to be delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of Shares; and to provide
you, for your review, with a copy of such reports and statements and other documents to be
filed by the Company pursuant to Section 13, 14 or 15(d) of the Exchange Act during such
period a reasonable amount of time prior to any proposed filing, and to file no such report,
statement or document to which you shall have objected in writing; and to promptly notify
you of such filing;
(f) to advise the Underwriters promptly of the happening of any event within the period
during which a prospectus is required by the Act to be delivered (whether
-17-
physically or through compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Shares, which event would reasonably require the making of any
change in the Prospectus then being used so that the Prospectus would not include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are made, not
misleading, and to advise the Underwriters promptly if, during such period, it shall become
necessary to amend or supplement the Prospectus to cause the Prospectus to comply with the
requirements of the Act, and, in each case, during such time, subject to Section 4(d)
hereof, to prepare and furnish, at the Company’s expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be necessary to reflect any such change
or to effect such compliance;
(g) to make generally available to its security holders, and to deliver to you, an
earnings statement of the Company, which will satisfy the provisions of Section 11(a) of the
Act (including, at the option of the Company, Rule 158 under the Act), covering a period of
twelve months beginning after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Act) as soon as is reasonably practicable after the termination of
such twelve-month period but in any case not later than 16 months after the date on which
the Effective Time occurs;
(h) to furnish to you an electronic copy of the Registration Statement, as initially
filed with the Commission, and of all amendments thereto;
(i) to apply the net proceeds from the sale of the Shares in the manner set forth under
the caption “Use of Proceeds” in the Prospectus and to file such reports with the Commission
with respect to the sale of the Shares and the application of the proceeds therefrom as may
be required by Rule 463 under the Act;
(j) except as limited below, to pay all costs, expenses, fees and taxes in connection
with (i) the preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, each Permitted Free Writing Prospectus and any amendments or
supplements thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares, including any stock or transfer taxes
and stamp or similar duties payable upon the sale, issuance or delivery of the Shares to the
Underwriters, (iii) the qualification of the Shares for offering and sale under state or
foreign laws and the determination of their eligibility for investment under state or
foreign law (including the related filing fees and the reasonable legal fees and other
disbursements of counsel for the Underwriters) and the printing and furnishing of copies of
any blue sky surveys or legal investment surveys to the Underwriters, (iv) any listing of
the Shares on any securities exchange or qualification of the Shares for quotation on the
NYSE and any registration thereof under the Exchange Act, (v) any filing for review of the
public offering of the Shares by the NASD, including NASD filing fees and reasonable legal
fees and other disbursements of counsel to the Underwriters relating to NASD matters, (vi)
the fees and disbursements of any transfer agent or registrar for the Shares, (vii) in
connection with presentations or meetings undertaken in connection with the marketing of the
offering and sale of the Shares to prospective investors, (A) the
-18-
Company will pay (1) all expenses for its officers and employees related to commercial
travel and hotels and (2) 50% of the cost of any chartered aircraft and (B) the Underwriters
will pay all other road show expenses, including (1) expenses related to luncheons and the
rental of conference space for investor meetings and (2) expenses for officers and employees
of the Underwriters related to commercial travel and hotels and (3) 50% of the cost of any
chartered aircraft, (viii) the costs and expenses of qualifying the Shares for inclusion in
the book-entry settlement system of the DTC, (ix) the preparation and filing of the Exchange
Act Registration Statement, including any amendments thereto and (x) the performance of the
Company’s other obligations hereunder;
(k) to comply with Rule 433(d) under the Act (without reliance on Rule 164(b) under the
Act) and with Rule 433(g) under the Act;
(l) beginning on the date hereof and ending on, and including, the date that is 180
days after the date of the Prospectus (the “Lock-Up Period”), without the prior
written consent of the Representatives, not to (i) issue, sell, offer to sell, contract or
agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning of Section
16 of the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, with respect to, any Class A Common Stock or any other securities of the Company
that are substantially similar to Class A Common Stock, or any securities convertible into
or exchangeable or exercisable for, or any warrants or other rights to purchase, the
foregoing, (ii) file or cause to become effective a registration statement under the Act
relating to the offer and sale of any Class A Common Stock or any other securities of the
Company that are substantially similar to Class A Common Stock, or any securities
convertible into or exchangeable or exercisable for, or any warrants or other rights to
purchase, the foregoing, (iii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of Class A
Common Stock or any other securities of the Company that are substantially similar to Class
A Common Stock, or any securities convertible into or exchangeable or exercisable for, or
any warrants or other rights to purchase, the foregoing, whether any such transaction is to
be settled by delivery of Class A Common Stock or such other securities, in cash or
otherwise or (iv) publicly announce an intention to effect any transaction specified in
clause (i), (ii) or (iii), except, in each case, for (A) the registration of the offer and
sale of the Shares as contemplated by this Agreement, (B) issuances of Class A Common Stock
upon the exercise of options or warrants disclosed as outstanding in the Registration
Statement (excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus,
(C) issuances of Class A common stock to non-employee directors of the Company as disclosed
in the Preliminary Prospectus and the Prospectus and (D) the issuance of employee stock
options not exercisable during the Lock-Up Period pursuant to stock option plans described
in the Registration Statement (excluding the exhibits thereto), each Preliminary Prospectus
and the Prospectus; provided, however, that if (a) during the period that
begins on the date that is fifteen (15) calendar days plus three (3) business days before
the last day of the Lock-Up Period and ends on the last day of the Lock-Up Period, the
Company issues an earnings release or material news or a material
-19-
event relating to the Company occurs; or (b) prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during the sixteen (16)
day period beginning on the last day of the Lock-Up Period, then the restrictions imposed by
this Section 4(l) shall continue to apply until the expiration of the date that is fifteen
(15) calendar days plus three (3) business days after the date on which the issuance of the
earnings release or the material news or material event occurs;
(m) prior to the time of purchase or any additional time of purchase, as the case may
be, to issue no press release or other communication directly or indirectly and hold no
press conferences with respect to the Company, Pzena LLC or any Subsidiary, the financial
condition, results of operations, business, properties, assets, or liabilities of the
Company or any Subsidiary, or the offering of the Shares, without your prior consent;
(n) not, at any time at or after the execution of this Agreement, to, directly or
indirectly, offer or sell any Shares by means of any “prospectus” (within the meaning of the
Act), or use any “prospectus” (within the meaning of the Act) in connection with the offer
or sale of the Shares, in each case other than the Prospectus;
(o) not to, and to cause the Subsidiaries not to, take, directly or indirectly, any
action designed, or which will constitute, or has constituted, or might reasonably be
expected to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares;
(p) to use its best efforts to maintain the listing of the Class A Common Stock,
including the Shares, on the NYSE;
(q) to maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Class A Common Stock;
(r) to cause each Directed Share Participant who purchases Shares for a purchase price
of $100,000 or more to execute a Lock-Up Agreement with respect to such Shares and otherwise
to cause such Shares to be restricted from sale, transfer, assignment, pledge or
hypothecation to such extent as may be required by the NASD and its rules, and to direct the
transfer agent to place stop transfer restrictions upon such Reserved Shares during the
Lock-Up Period or any such longer period of time as may be required by the NASD and its
rules; and to comply with all applicable securities and other laws, rules and regulations in
each jurisdiction in which the Reserved Shares are offered in connection with the Directed
Share Program.
5. Reimbursement of Underwriters’ Expenses. If the Shares are not delivered for any
reason other than the termination of this Agreement pursuant to the fifth paragraph of Section 8
hereof or the default by one or more of the Underwriters in its or their respective obligations
hereunder, the Company shall, in addition to paying the amounts described in Section 4(j) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees
and disbursements of their counsel.
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6. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and warranties on the
part of the Company and Pzena LLC on the date hereof, at the time of purchase and, if applicable,
at the additional time of purchase, the performance by the Company of its obligations hereunder and
to the following additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel
for the Company, addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with executed copies for each of the other
Underwriters, and in form and substance satisfactory to the Underwriters, in the form set
forth in Exhibit B hereto.
(b) The Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Xxxx Xxxxxx, General Counsel of the Company,
addressed to the Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with executed copies for each of the other Underwriters, and
in form and substance satisfactory to the Underwriters, in the form set forth in Exhibit
C hereto.
(c) You shall have received from X. X. Xxxx LLP a letter dated the date of this
Agreement, and addressed to the Underwriters (with executed copies for each of the
Underwriters) in the form satisfactory to the Underwriters, which letters shall cover,
without limitation, the various financial disclosures contained in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any.
(d) You shall have received from Ernst & Young LLP letters dated, respectively, the
date of this Agreement, the time of purchase and, if applicable, the additional time of
purchase, and addressed to the Underwriters (with executed copies for each of the
Underwriters) in the forms satisfactory to the Underwriters, which letters shall cover,
without limitation, the various financial disclosures contained in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any.
(e) You shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the favorable opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, dated the time of purchase or the additional time of purchase,
as the case may be, in form and substance reasonably satisfactory to the Underwriters.
(f) No Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which you shall have reasonably objected.
(g) The Registration Statement, the Exchange Act Registration Statement and any
registration statement required to be filed, prior to the sale of the Shares, under the Act
pursuant to Rule 462(b) shall have been filed and shall have become effective under
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the Act or the Exchange Act, as the case may be. If Rule 430A under the Act is used,
the Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the
Act at or before 5:30 P.M., New York City time, on the second full business day after the
date of this Agreement (or such earlier time as may be required under the Act).
(h) Prior to and at the time of purchase, and, if applicable, the additional time of
purchase, (i) no stop order with respect to the effectiveness of the Registration Statement
shall have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) as of the date(s) specified in paragraph (b) of Section 3 hereof, the
Registration Statement and all post-effective amendments thereto shall 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 not misleading; (iii) as of the date(s)
specified in paragraph (b) of Section 3 hereof, none of the Preliminary Prospectuses or the
Prospectus, and no amendment or supplement thereto, shall include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not misleading; (iv)
as of the “applicable time”, the Disclosure Package, when taken together with (A) the number
of Shares offered for sale pursuant to the Prospectus and (B) the public offering price per
Share, as reflected on the cover page of the Prospectus, shall not include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are made, not
misleading; and (v) as of their respective dates, none of the Permitted Free Writing
Prospectuses, if any, shall include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(i) The Company will, at the time of purchase and, if applicable, at the additional
time of purchase, deliver to you a certificate of its Chief Executive Officer and its Chief
Financial Officer, dated the time of purchase or the additional time of purchase, as the
case may be, in the form attached as Exhibit D hereto.
(j) You shall have received each of the signed Lock-Up Agreements referred to in
Section 3(s) hereof, and each such Lock-Up Agreement shall be in full force and effect at
the time of purchase and the additional time of purchase, as the case may be.
(k) The Company shall have furnished to you such other documents and certificates as to
the accuracy and completeness of any statement in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus as of the
time of purchase and, if applicable, the additional time of purchase, as you may reasonably
request.
(l) The Shares shall have been approved for listing on the NYSE, subject only to notice
of issuance and evidence of satisfactory distribution at or prior to the time of purchase or
the additional time of purchase, as the case may be.
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(m) The NASD shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions, contemplated
hereby.
(n) At the time of purchase, subject to the use of proceeds from the issuance of the
Shares, the Reorganization Transactions shall have been consummated and the Amended and
Restated Certificate of Incorporation shall have been filed with the Secretary of State of
the State of Delaware.
7. Effective Date of Agreement; Termination. This Agreement shall become effective
when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to termination in the
absolute discretion of the Representatives, if (1) since the time of execution of this Agreement
there has been any change or any development involving a prospective change in the business,
properties, management, financial condition or results of operations of the Company and the
Subsidiaries taken as a whole, the effect of which change or development is, in the judgment of the
Representatives, so material and adverse as to make it impractical or inadvisable to proceed with
the public offering or the delivery of the Shares on the terms and in the manner contemplated in
the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, or (2) since the time of execution of this Agreement, there shall
have occurred: (A) a suspension or material limitation in trading in securities generally on the
NYSE or the NASDAQ; (B) a suspension or material limitation in trading in the Company’s securities
on the NYSE; (C) a general moratorium on commercial banking activities declared by either federal
or New York State authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (D) an outbreak or escalation of hostilities
or acts of terrorism involving the United States or a declaration by the United States of a
national emergency or war; or (E) any other calamity or crisis or any change in financial,
political or economic conditions in the United States or elsewhere, if the effect of any such event
specified in clause (D) or (E), in the judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the Shares on the terms and in
the manner contemplated in the Registration Statement, the Disclosure Package and the Prospectus or
(3) since the time of execution of this Agreement, there shall have occurred any downgrading, or
any notice or announcement shall have been given or made of: (A) any intended or potential
downgrading or (B) any watch, review or possible change that does not indicate an affirmation or
improvement in the rating accorded any securities of or guaranteed by the Company or any Subsidiary
by any “nationally recognized statistical rating organization,” as that term is defined in Rule
436(g)(2) under the Act.
If the Representatives elect to terminate this Agreement as provided in this Section 7, the
Company and each other Underwriter shall be notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement, or if such sale is
not carried out because the Company shall be unable to comply with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this Agreement (except
to the extent provided in Sections 4(j), 5 and 9 hereof), and the Underwriters shall be
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under no obligation or liability to the Company under this Agreement (except to the extent
provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters’ Commitments. Subject to Sections 6 and 7 hereof, if any
Underwriter shall default in its obligation to take up and pay for the Firm Shares to be purchased
by it hereunder (otherwise than for a failure of a condition set forth in Section 6 hereof or a
reason sufficient to justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting shall have agreed but
failed to take up and pay for does not exceed 10% of the total number of Firm Shares, the
non-defaulting Underwriters (including the Underwriters, if any, substituted in the manner set
forth below) shall take up and pay for (in addition to the aggregate number of Firm Shares they are
obligated to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such Shares shall be taken
up and paid for by such non-defaulting Underwriters in such amount or amounts as you may designate
with the consent of each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters pro rata in
proportion to the aggregate number of Firm Shares set forth opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations hereunder, the Company
agrees with the non-defaulting Underwriters that it will not sell any Firm Shares hereunder unless
all of the Firm Shares are purchased by the Underwriters (or by substituted Underwriters selected
by you with the approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or by the Company for
a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the Company or
you shall have the right to postpone the time of purchase for a period not exceeding five business
days in order that any necessary changes in the Registration Statement and the Prospectus and other
documents may be effected.
The term “Underwriter” as used in this Agreement shall refer to and include any Underwriter
substituted under this Section 8 with like effect as if such substituted Underwriter had originally
been named in Schedule A hereto.
If the aggregate number of Firm Shares which the defaulting Underwriter or Underwriters agreed
to purchase exceeds 10% of the total number of Firm Shares which all Underwriters agreed to
purchase hereunder, and if neither the non-defaulting Underwriters nor the Company shall make
arrangements within the five business day period stated above for the purchase of all the Firm
Shares which the defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall terminate without further act or deed and without any liability on the part of the
Company to any Underwriter and without any liability on the part of any non-defaulting Underwriter
to the Company. Nothing in this paragraph, and no action taken hereunder, shall relieve any
defaulting Underwriter from liability in respect of any default of such Underwriter under this
Agreement.
9. Indemnity and Contribution.
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(a) The Company and Pzena LLC, jointly and severally, agree to indemnify, defend and
hold harmless each Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons, from and
against any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any such person may
incur under the Act, the Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement (or
in the Registration Statement as amended by any post-effective amendment thereof by the
Company) or arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading, except insofar as any such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a material fact
contained in, and in conformity with information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company expressly for use in,
the Registration Statement or arises out of or is based upon any omission or alleged
omission from such information, (ii) any untrue statement or alleged untrue statement of a
material fact included in any Prospectus (the term Prospectus for the purpose of this
Section 9 being deemed to include any Preliminary Prospectus, the Prospectus and any
amendments or supplements to the foregoing), in any Permitted Free Writing Prospectus, in
any “issuer information” (as defined in Rule 433 under the Act) of the Company which “issuer
information” is required to be, or is, filed with the Commission, or in any Prospectus
together with any combination of one or more of the Permitted Free Writing Prospectuses, if
any, or arises out of or is based upon any omission or alleged omission 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, except, with respect to such Prospectus or
Permitted Free Writing Prospectus, insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in, and in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter through you to the Company
expressly for use in, such Prospectus or Permitted Free Writing Prospectus or arises out of
or is based upon any omission or alleged omission from such information, or (iii) the
Directed Share Program, except, with respect to this clause (iii), insofar as such loss,
damage, expense, liability or claim is finally judicially determined to have resulted from
the gross negligence or willful misconduct of the Underwriters in conducting the Directed
Share Program.
Without limitation of and in addition to its obligations under the other paragraphs of
this Section 9, the Company agrees to indemnify, defend and hold harmless UBS-FinSvc and its
partners, directors and officers, and any person who controls UBS-FinSvc within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or severally,
UBS-FinSvc or any such person may incur under the Act, the Exchange Act,
-25-
the common law or otherwise, insofar as such loss, damage, expense, liability or claim
(1) arises out of or is based upon (a) any of the matters referred to in clauses (i) through
(iii) of the first paragraph of this Section 9(a), or (b) any untrue statement or alleged
untrue statement of a material fact contained in any material prepared by or on behalf or
with the consent of the Company for distribution to Directed Share Participants in
connection with the Directed Share Program or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (2) is or was caused by the failure of any Directed Share
Participant to pay for and accept delivery of Reserved Shares that the Directed Share
Participant has agreed to purchase; or (3) otherwise arises out of or is based upon the
Directed Share Program, provided, however, that the Company shall not be
responsible under this clause (3) for any loss, damage, expense, liability or claim that is
finally judicially determined to have resulted from the gross negligence or willful
misconduct of UBS-FinSvc in conducting the Directed Share Program. Section 9(c) shall apply
equally to any Proceeding (as defined below) brought against UBS-FinSvc or any such person
in respect of which indemnity may be sought against the Company pursuant to the immediately
preceding sentence, except that the Company shall be liable for the expenses of one separate
counsel (in addition to any local counsel) for UBS-FinSvc and any such person, separate and
in addition to counsel for the persons who may seek indemnification pursuant to the first
paragraph of this Section 9(a), in any such Proceeding.
(b) Each Underwriter severally agrees to indemnify, defend and hold harmless the
Company and Pzena LLC and each of their respective directors and officers and any person who
controls the Company and Pzena LLC within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and the successors and assigns of all of the foregoing persons, from
and against any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company, Pzena LLC, or any such person may
incur under the Act, the Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement (or
in the Registration Statement as amended by any post-effective amendment thereof by the
Company) which statement is in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter through you to the Company
expressly for use in such Registration Statement, or arises out of or is based upon any
omission or alleged omission to state a material fact in such Registration Statement which
was required to be stated therein or necessary to make the statements therein not
misleading, which material fact was not contained in such information, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in a Prospectus or a
Permitted Free Writing Prospectus, which statement is in conformity with information
concerning such Underwriter furnished in writing by or on behalf of such Underwriter through
you to the Company expressly for use in such Prospectus or Permitted Free Writing
Prospectus, or arises out of or is based upon any omission or alleged omission to state a
material fact in such Prospectus or Permitted Free Writing Prospectus which was necessary to
be stated in such Prospectus or Permitted Free Writing Prospectus in order to make the
statements therein, in the light
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of the circumstances under which they were made, not misleading, which material fact
was not contained in such information.
(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against
a person (an “indemnified party”) in respect of which indemnity may be sought
against the Company, Pzena LLC or an Underwriter (as applicable, the “indemnifying
party”) pursuant to subsection (a) or (b), respectively, of this Section 9, such
indemnified party shall promptly notify such indemnifying party in writing of the
institution of such Proceeding and such indemnifying party shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the
omission to so notify such indemnifying party shall not relieve such indemnifying party from
any liability which such indemnifying party may have to any indemnified party or otherwise.
The indemnified party or parties shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense of such
Proceeding or the indemnifying party shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to defend such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses available to it
or them which are different from, additional to or in conflict with those available to such
indemnifying party (in which case such indemnifying party shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties), in any of
which events the fees and expenses of such counsel shall be borne by such indemnifying party
and paid as incurred (it being understood, however, that such indemnifying party shall not
be liable for the expenses of more than one separate counsel (in addition to one local
counsel in any such jurisdiction) in any one Proceeding or series of related Proceedings in
the same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The indemnifying party shall not be liable for any settlement of any
Proceeding effected without its written consent but, if settled with its written consent,
such indemnifying party agrees to indemnify and hold harmless the indemnified party or
parties from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this Section 9(c), then the indemnifying
party agrees that it shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have fully reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 60 days’ prior written notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the
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subject matter of such Proceeding and does not include an admission of fault or
culpability or a failure to act by or on behalf of such indemnified party.
(d) If the indemnification provided for in this Section 9 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 9 or insufficient to hold an
indemnified party harmless in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses, damages,
expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters on the other
hand from the offering of the Shares 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 Pzena LLC on the one hand and of the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company and Pzena LLC on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the total proceeds from
the offering (net of underwriting discounts and commissions but before deducting expenses)
received by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the aggregate public offering price of the Shares. The relative
fault of the Company and Pzena LLC on the one hand and of the Underwriters on the other
shall be determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission relates to
information supplied by the Company or by the Underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(e) The Company and Pzena LLC and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations referred to
in subsection (d) above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by such Underwriter and distributed to the public were
offered to the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement or alleged untrue statement or
omission or alleged omission. 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 to
contribute pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
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(f) The indemnity and contribution agreements contained in this Section 9 and the
covenants, warranties and representations of the Company contained in this Agreement shall
remain in full force and effect regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of the Company,
Pzena LLC, their respective directors or officers or any person who controls the Company or
Pzena LLC within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
shall survive any termination of this Agreement or the issuance and delivery of the Shares.
The Company, Pzena LLC and each Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the Company or Pzena LLC,
against any of their officers or directors in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement, any Preliminary Prospectus, the
Prospectus or any Permitted Free Writing Prospectus.
10. Information Furnished by the Underwriters. In each of the Preliminary
Prospectuses and the Prospectus, the statements set forth in the (i) last sentence under the
caption “Summary—The Offering—Lock-Up”, (ii) last sentence under the caption “Shares Eligible for
Future Sale—Lock-Up Agreements”, (iii) last sentence of the first paragraph under the caption
“Underwriting—No Sales of Similar Securities” and (iv) the statements set forth under the captions
“Underwriting—Commissions and Discounts” and “Underwriting— Price Stabilization, Short Positions”
that relate to the amount of selling concession and reallowance or to over-allotment and
stabilization activities that may be undertaken by the Underwriters, constitute the only
information furnished by or on behalf of the Underwriters, as such information is referred to in
Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram or facsimile and, if to the Underwriters, shall
be sufficient in all respects if delivered or sent to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000-0000, Attention: Syndicate Department and Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Registration Department and, if to the
Company, shall be sufficient in all respects if delivered or sent to the Company at the offices of
the Company at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxx X. Xxxxx,
Chief Executive Officer.
12. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement
(“Claim”), directly or indirectly, shall be governed by, and construed in accordance with,
the laws of the State of New York. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the Company
and Pzena LLC each consent to the jurisdiction of such courts and
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personal service with respect thereto. The Company and Pzena LLC each hereby consents to
personal jurisdiction, service and venue in any court in which any Claim arising out of or in any
way relating to this Agreement is brought by any third party against any Underwriter or any
indemnified party. Each Underwriter and each of the Company and Pzena LLC (on its behalf and, to
the extent permitted by applicable law, on behalf of its stockholders and affiliates) waive all
right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort
or otherwise) in any way arising out of or relating to this Agreement. The Company and Pzena LLC
each agree that a final judgment in any such action, proceeding or counterclaim brought in any such
court shall be conclusive and binding upon the Company and Pzena LLC and may be enforced in any
other courts to the jurisdiction of which the Company or Pzena LLC is or may be subject, by suit
upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is made solely
for the benefit of the Underwriters and the Company and Pzena LLC and to the extent provided in
Section 9 hereof the controlling persons, partners, directors and officers referred to in such
Section, and their respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, association or corporation (including a
purchaser, as such purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. No Fiduciary Relationship. The Company and Pzena LLC hereby acknowledge that the
Underwriters are acting solely as underwriters in connection with the purchase and sale of the
Company’s securities. The Company and Pzena LLC each further acknowledge that the Underwriters are
acting pursuant to a contractual relationship created solely by this Agreement entered into on an
arm’s length basis, and in no event do the parties intend that the Underwriters act or be
responsible as a fiduciary to the Company and Pzena LLC their respective management, stockholders
or creditors or any other person in connection with any activity that the Underwriters may
undertake or have undertaken in furtherance of the purchase and sale of the Company’s securities,
either before or after the date hereof. The Underwriters hereby expressly disclaim any fiduciary
or similar obligations to the Company and Pzena LLC, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions, and the Company and
Pzena LLC each hereby confirm their understanding and agreement to that effect. The Company and
Pzena LLC and the Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions and that any opinions or views
expressed by the Underwriters to the Company and Pzena LLC regarding such transactions, including,
but not limited to, any opinions or views with respect to the price or market for the Company’s
securities, do not constitute advice or recommendations to the Company and Pzena LLC. The Company
and Pzena LLC each hereby waive and release, to the fullest extent permitted by law, any claims
that the Company and Pzena LLC may have against the Underwriters with respect to any breach or
alleged breach of any fiduciary or similar duty to the Company and Pzena LLC in connection with the
transactions contemplated by this Agreement or any matters leading up to such transactions.
16. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among the parties.
-30-
17. Successors and Assigns. This Agreement shall be binding upon the Underwriters and
the Company and Pzena LLC and their successors and assigns and any successor or assign of any
substantial portion of the Company’s and Pzena LLC and any of the Underwriters’ respective
businesses and/or assets.
18. Miscellaneous. UBS, an indirect, wholly-owned subsidiary of UBS AG, is not a bank
and is separate from any affiliated bank, including any U.S. branch or agency of UBS AG. Because
UBS is a separately incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBS are not deposits, are not insured by
the Federal Deposit Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
-31-
If the foregoing correctly sets forth the understanding among the Company and Pzena LLC and
the several Underwriters, please so indicate in the space provided below for that purpose,
whereupon this Agreement and your acceptance shall constitute a binding agreement among the Company
and Pzena LLC and the Underwriters, severally.
| Very truly yours, Pzena Investment Management, Inc. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Pzena Investment Management, LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Accepted and agreed to as of the date
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
| UBS Securities LLC |
||||
| Xxxxxxx, Xxxxx & Co. | ||||
By:
|
UBS Securities LLC | |||
By: |
||||
| Name: Title: |
||||
By: |
||||
| Name: Title: |
||||
By:
|
Xxxxxxx, Sachs & Co. | |||
By: |
||||
| Name: | ||||
| Title: | ||||
SCHEDULE A
| Number of | ||||
| Underwriter | Firm Shares | |||
UBS SECURITIES LLC |
[____] | |||
XXXXXXX, XXXXX & CO. |
[____] | |||
BANC OF AMERICA SECURITIES LLC |
[____] | |||
XXX-XXXX, XXXXXX INC. |
[____] | |||
X.X. XXXXXX SECURITIES INC. |
[____] | |||
XXXXX XXXXXXXX & XXXXX, INC. |
[____] | |||
Total |
[____] | |||
SCHEDULE B
PERMITTED FREE WRITING PROSPECTUSES
PERMITTED FREE WRITING PROSPECTUSES
[___]
SCHEDULE C
SUBSIDIARIES
| % Ownership of Pzena Investment | ||||
| Name | Management, LLC | |||
PZENA ALTERNATIVE INVESTMENTS, LLC
|
100% | |||
PAI HEDGED STRATEGIES, LP
|
[___] | |||
PAI HEDGED CAPITAL, LLC
|
[___] | |||
PAI HEDGED VALUE MASTER FUND LTD
|
[___] | |||
PZENA LARGE CAP VALUE FUND II, a
series of PZENA INVESTMENT FUNDS
|
99% | |||
PZENA LARGE CAP VALUE FUND, a series
of PZENA INVESTMENT FUNDS
|
99% | |||
PZENA MEGA CAP VALUE FUND, a series of
PZENA INVESTMENT FUNDS
|
99% | |||
PZENA EMERGING MARKETS VALUE SERVICE,
a series of PZENA INVESTMENT
MANAGEMENT INTERNATIONAL, LLC
|
90% | |||
EXHIBIT A
Lock-Up Agreement
October __, 2007
UBS Securities LLC
Xxxxxxx, Sachs & Co.
Together with the other Underwriters
named in Schedule A to the Underwriting Agreement
referred to herein
Xxxxxxx, Sachs & Co.
Together with the other Underwriters
named in Schedule A to the Underwriting Agreement
referred to herein
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
This Lock-Up Agreement is being delivered to you in connection with the proposed Underwriting
Agreement (the “Underwriting Agreement”) to be entered into by Pzena Investment Management,
Inc., a Delaware corporation (the “Company”), Pzena Investment Management, LLC and you (the
“Representatives”) and the other underwriters named in Schedule A to the Underwriting
Agreement, with respect to the public offering (the “Offering”) of Class A common stock,
par value $0.01 per share, of the Company (the “Class A Common Stock”).
In order to induce you to enter into the Underwriting Agreement, the undersigned agrees that,
for a period (the “Lock-Up Period”) beginning on the date hereof and ending on, and
including, the date that is 180 days after the date of the final prospectus relating to the
Offering, the undersigned will not, without the prior written consent of the Representatives, (i)
sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase
or otherwise dispose of or agree to dispose of, directly or indirectly, or file (or participate in
the filing of) a registration statement with the Securities and Exchange Commission (the
“Commission”) in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated
thereunder (the “Exchange Act”) with respect to, any Class A Common Stock or any other
securities of the Company that are substantially similar to Class A Common Stock, or any securities
convertible into or exchangeable or exercisable for, or any warrants or other rights to purchase,
the foregoing, (ii) enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of Class A Common Stock or any other
securities of the Company that are substantially similar to Class A Common Stock, or any securities
convertible into or exchangeable or exercisable for, or any warrants or other rights to purchase,
the foregoing, whether any such transaction is to be settled by delivery of Class A
A-1
Common Stock or such other securities, in cash or otherwise or (iii) publicly announce an
intention to effect any transaction specified in clause (i) or (ii). The foregoing sentence shall
not apply to (a) bona fide gifts, provided the recipient thereof agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Agreement or (b) dispositions to any trust
for the direct or indirect benefit of the undersigned and/or the immediate family of the
undersigned, provided that such trust agrees in writing with the Underwriters to be bound by the
terms of this Lock-Up Agreement. For purposes of this paragraph, “immediate family” shall mean the
undersigned and the spouse, any lineal descendent, father, mother, brother or sister of the
undersigned.
In addition, the undersigned hereby represents and warrants that it does not have any rights
during the Lock-Up Period to make any demand for the registration of Class A Common Stock or any
securities convertible into or exercisable or exchangeable for Class A Common Stock, or warrants or
other rights to purchase Class A Common Stock or any such securities.
Notwithstanding the above, if (a) during the period that begins on the date that is fifteen
(15) calendar days plus three (3) business days before the last day of the Lock-Up Period and ends
on the last day of the Lock-Up Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (b) prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during the sixteen (16) day
period beginning on the last day of the Lock-Up Period, then the restrictions imposed by this
Lock-Up Agreement shall continue to apply until the expiration of the date that is fifteen (15)
calendar days plus three (3) business days after the date on which the issuance of the earnings
release or the material news or material event occurs.
In addition, the undersigned hereby waives any and all preemptive rights, participation
rights, resale rights, rights of first refusal and similar rights that the undersigned may have in
connection with the Offering or with any issuance or sale by the Company of any equity or other
securities before the Offering, except for any such rights as have been heretofore duly exercised.
The undersigned hereby confirms that the undersigned has not, directly or indirectly, taken,
and hereby covenants that the undersigned will not, directly or indirectly, take, any action
designed, or which has constituted or will constitute or might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of shares of Class A Common Stock.
* * *
A-2
If (i) the Company notifies you in writing that it does not intend to proceed with the
Offering, (ii) the registration statement filed with the Commission with respect to the Offering is
withdrawn or (iii) for any reason the Underwriting Agreement shall be terminated prior to the “time
of purchase” (as defined in the Underwriting Agreement), this Lock-Up Agreement shall be terminated
and the undersigned shall be released from its obligations hereunder.
| Yours very truly, |
||||
| Name: | ||||
A-3
EXHIBIT B
FORM OF OPINION OF SKADDEN, ARPS, SLATE, XXXXXXX & XXXX LLP
B-1
EXHIBIT C
FORM OPINION OF THE COMPANY’S GENERAL COUNSEL
C-1
EXHIBIT D
OFFICERS’ CERTIFICATE
Each of the undersigned, Xxxxxxx X. Xxxxx, Chief Executive Officer of Pzena Investment
Management, Inc., a Delaware corporation (the “Company”), and Xxxxx X. Xxxxxxxxx, Chief
Financial Officer of the Company, on behalf of the Company, does hereby certify pursuant to Section
6(i) of that certain Underwriting Agreement dated October [ ], 2007 (the “Underwriting
Agreement”) among the Company and Pzena Investment Management, LLC and, on behalf of the
several Underwriters named therein, UBS Securities LLC and Xxxxxxx, Sachs & Co., that as of October
[ ], 2007:
| 1. | He has reviewed the Registration Statement, each Preliminary Prospectus, the Prospectus and each Permitted Free Writing Prospectus. | |
| 2. | The representations and warranties of the Company and Pzena LLC as set forth in the Underwriting Agreement are true and correct as of the date hereof and as if made on the date hereof. | |
| 3. | The Company has performed all of its obligations under the Underwriting Agreement as are to be performed at or before the date hereof. | |
| 4. | Prior to and at the time of purchase, and, if applicable, the additional time of purchase, (i) no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) as of the date(s) specified in paragraph (b) of Section 3 of the Underwriting Agreement, the Registration Statement and all post-effective amendments thereto shall 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 not misleading; (iii) as of the date(s) specified in paragraph (b) of Section 3 of the Underwriting Agreement, none of the Preliminary Prospectuses or the Prospectus, and no amendment or supplement thereto, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; (iv) as of the “applicable time”, the Disclosure Package, when taken together with (A) the number of Shares offered for sale pursuant to the Prospectus and (B) the public offering price per Share, as reflected on the cover page of the Prospectus, shall not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; and (v) as of their respective dates, none of the Permitted Free Writing Prospectuses, if any, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. |
Capitalized terms used herein without definition shall have the respective meanings ascribed
to them in the Underwriting Agreement.
D-1
In Witness Whereof, the undersigned have hereunto set their hands on this _________,
2007.
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Chief Executive Officer | |||
| Name: | Xxxxx X. Xxxxxxxxx | |||
| Title: | Chief Financial Officer | |||
