E*TRADE FINANCIAL CORPORATION 435,000,000 Shares of Common Stock ($0.01 par value per share) UNDERWRITING AGREEMENT
Exhibit
1.1
E*TRADE
FINANCIAL CORPORATION
435,000,000
Shares of
Common
Stock
($0.01
par value per share)
June 18,
2009
▇.▇.
▇▇▇▇▇▇ Securities Inc.
Sandler
▇'▇▇▇▇▇ & Partners, L.P.
E*TRADE
Securities LLC
c/o ▇.▇.
▇▇▇▇▇▇ Securities Inc.
Sandler
▇'▇▇▇▇▇ & Partners, L.P.
as
Representatives of the several
Underwriters
listed in Schedule 1 hereto
c/o ▇.▇.
▇▇▇▇▇▇ Securities Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
E*TRADE
Financial Corporation, a Delaware corporation (the “Company”), confirms
its agreement with the several Underwriters listed in Schedule 1 hereto (the
“Underwriters”), for
whom ▇.▇. ▇▇▇▇▇▇ Securities Inc. (“▇.▇. ▇▇▇▇▇▇”) and
Sandler ▇'▇▇▇▇▇ & Partners, L.P. are acting as representatives (the “Representatives”),
with respect to the issuance and sale by the Company, subject to the terms and
conditions described below (this “Agreement”), of an
aggregate of 435,000,000 shares (the “Underwritten Shares”)
of common stock, $0.01 par value per share (the “Common Stock”), of
the Company and, at the option of the Underwriters, up to an additional
65,000,000 shares of common stock of the Company (the “Option
Shares”). The Underwritten Shares and the Option Shares are
herein referred to as the “Shares”.
The
Company has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (No. 333-158636) for the registration of the
Shares under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “Securities Act”); and
such registration statement sets forth the material terms of the offering, sale
and plan of distribution of the Shares and contains additional information
concerning the Company and its business. As used herein, “Registration
Statement” means such registration statement, as amended at the time of
such registration statement’s effectiveness for purposes of Section 11 of the
Securities Act, as such section applies to the Underwriters , including (1) all
documents filed as a part thereof or incorporated, or deemed to be incorporated,
by reference therein and (2) any information contained or incorporated by
reference in a prospectus filed with the Commission pursuant to Rule 424(b)
under the Securities Act, to the extent such information is deemed, pursuant to
Rule 430B or Rule 430C under the Securities Act, to be part of the registration
statement at the effective time. “Basic Prospectus”
means the prospectus dated April 17, 2009, filed as part of the Registration
Statement,
including the documents incorporated by reference therein as of the date of such
prospectus; “Preliminary
Prospectus” means each prospectus included in such registration statement
(and any amendments thereto) before effectiveness, any prospectus filed with the
Commission pursuant to Rule 424(a) under the Securities Act and the prospectus
included in the Registration Statement at the time of its effectiveness that
omits Rule 430 Information; “Prospectus” means the
prospectus (including the Basic Prospectus) in the form first used (or made
available upon request of purchasers pursuant to Rule 173 under the Securities
Act) in connection with confirmation of sales of the Shares; and “Permitted Free Writing
Prospectuses” has the meaning set forth in Section 3(b). Any
reference herein to the Registration Statement, any Preliminary Prospectus, the
Basic Prospectus or the Prospectus shall, unless otherwise stated, be deemed to
refer to and include the documents, if any, incorporated, or deemed to be
incorporated, by reference therein (the “Incorporated
Documents”), including, unless the context otherwise requires, the
documents, if any, filed as exhibits to such Incorporated
Documents. Any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement, the Basic Prospectus,
any Preliminary Prospectus, the Prospectus or any Permitted Free Writing
Prospectus shall, unless stated otherwise, be deemed to refer to and include the
filing of any document under the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder (collectively, the
“Exchange Act”)
on or after the initial effective date of the Registration Statement or the date
of the Basic Prospectus, the Prospectus or such Permitted Free Writing
Prospectus, as the case may be, and deemed to be incorporated therein by
reference. At or prior to the Time of Sale (as defined below), the
Company had prepared the following information (collectively with the pricing
information set forth on Annex A, the “Pricing Disclosure
Package”): a Preliminary Prospectus dated June 17, 2009 and
each “free-writing prospectus” (as defined pursuant to Rule 405 under the
Securities Act) listed on Annex B hereto.
“Time of
Sale” means 6:30 P.M., New York City time, on June 18, 2009.
1. Purchase of the Shares by
the Underwriters.
(a) The
Company agrees to issue and sell the Underwritten Shares to the several
Underwriters as provided in this Agreement, and each Underwriter, on the basis
of the representations, warranties and agreements set forth herein and subject
to the conditions set forth herein, agrees, severally and not jointly, to
purchase from the Company the respective number of Underwritten Shares set forth
opposite such Underwriter’s name in Schedule 1 hereto at a price per share (the
“Purchase
Price”) of $1.034; provided that any shares sold by the several
Underwriters to Citadel Investment Group, L.L.C. (“Citadel”) shall be
sold to the Underwriters at a price per share of $1.10, which shall be the same
price at which the Underwriters sell the shares to the public (the “Citadel Shares Purchase
Price”).
In
addition, the Company agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters, on the basis
of the representations, warranties and agreements set forth herein and subject
to the conditions set forth herein, shall have the option to purchase, severally
and not jointly, from the Company the Option Shares at the Purchase Price or,
with respect to any of the Option Shares sold by the Underwriters to Citadel,
the Citadel Shares Purchase Price, less an amount per share equal to any
dividends or distributions declared by the Company and payable on the
Underwritten Shares but
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not
payable on the Option Shares. The public offering price of the Shares
is not in excess of the price recommended by Sandler ▇’▇▇▇▇▇ & Partners,
L.P., acting as a “qualified independent underwriter” within the meaning of NASD
Rule 2720 of the Financial Industry Regulatory Authority, Inc.
(“FINRA”).
If any
Option Shares are to be purchased, the number of Option Shares to be purchased
by each Underwriter shall be the number of Option Shares which bears the same
ratio to the aggregate number of Option Shares being purchased as the number of
Underwritten Shares set forth opposite the name of such Underwriter in Schedule
1 hereto (or such number increased as set forth in Section 8 hereof) bears to
the aggregate number of Underwritten Shares being purchased from the Company by
the several Underwriters, subject, however, to such adjustments to eliminate any
fractional Shares as the Representatives in their sole discretion shall
make.
The
Underwriters may exercise the option to purchase Option Shares at any time in
whole, or from time to time in part, on or before the thirtieth day following
the date of the Prospectus, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for, which may be the same date and
time as the Closing Date (as hereinafter defined) but shall not be earlier than
the Closing Date or later than the tenth full business day (as hereinafter
defined) after the date of such notice (unless such time and date are postponed
in accordance with the provisions of Section 8 hereof). Any such
notice shall be given at least two business days prior to the date and time of
delivery specified therein.
(b) The
Company understands that the Underwriters intend to make a public offering of
the Shares as soon after the effectiveness of this Agreement as in the judgment
of the Representatives is advisable, and initially to offer the Shares on the
terms set forth in the Prospectus. The Company acknowledges and
agrees that the Underwriters may offer and sell Shares to or through any
affiliate of an Underwriter.
(c) Payment
for the Shares shall be made by wire transfer in immediately available funds to
the account specified by the Company to the Representatives in the case of the
Underwritten Shares, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 A.M., New York City time, on June 24,
2009, or at such other time or place on the same or such other date, not later
than the fifth business day thereafter, as the Representatives and the Company
may agree upon in writing or, in the case of Option Shares, on the date and at
the time and place specified by the Representatives in the written notice of the
Underwriters’ election to purchase such Option Shares. The time and
date of such payment for the Underwritten Shares is referred to herein as the
“Closing Date”,
and the time and date for any such payment for Option Shares, if other than the
Closing Date, is herein referred to as an “Additional Closing
Date.”
Payment
for the Shares to be purchased on the Closing Date or the Additional Closing
Date, as the case may be, shall be made against delivery to the Representatives
for the respective accounts of the several Underwriters of the Shares to be
purchased on such date with any transfer taxes payable in connection with the
sale of such Shares duly paid by the Company. Delivery of the Shares
shall be made through the facilities of The Depository Trust Company (“DTC”)
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unless
the Representatives shall otherwise instruct. The certificates for
the Shares will be made available for inspection and packaging by the
Representatives at the office of DTC or its designated custodian not later than
1:00 P.M., New York City time, on the business day prior to the Closing Date or
the Additional Closing Date, as the case may be.
2. [Reserved]
3. Representations, Warranties
and Agreements of the Company. The Company represents and
warrants to, and agrees with, each Underwriter, on and as of (i) the Time of
Sale, (ii) the Closing Date and (iii) each Additional Closing Date, as
applicable (each such date listed in (i) through (iii), a “Representation
Date”), as follows:
(a) No order
preventing or suspending the use of any Preliminary Prospectus has been issued
by the Commission, and each Preliminary Prospectus included in the Pricing
Disclosure Package, at the time of filing thereof, complied in all material
respects with the Securities Act, and no Preliminary Prospectus, at the time of
filing thereof, contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use in any Preliminary Prospectus, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 9(b)
hereof. The Pricing Disclosure Package as of the Time of Sale did
not, and as of the Closing Date and, if applicable, as of any Additional Closing
Date, as the case may be, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty with
respect to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use in such
Pricing Disclosure Package, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in Section 9(b) hereof. The Registration Statement is an
“automatic shelf registration statement” as defined under Rule 405 of the
Securities Act that has been filed with the Commission not earlier than three
years prior to the date hereof; there is no order preventing or suspending the
use of the Registration Statement, the Prospectus or any Permitted Free Writing
Prospectus, and, to the knowledge of the Company, no proceeding for that purpose
or pursuant to Section 8A of the Securities Act against the Company or related
to the offering has been initiated or threatened by the Commission; no notice of
objection of the Commission to the use of such Registration Statement pursuant
to Rule 401(g)(2) under the Securities Act has been received by the Company; the
Registration Statement complied when it initially became effective, complies as
of the date hereof and, as then amended or supplemented, as of each other
Representation Date will comply, in all material respects, with the requirements
of the Securities Act; the conditions to the use of Form S-3 in connection with
the offering and sale of the Shares
4
as
contemplated hereby have been satisfied; the Registration Statement meets, and
the offering and sale of the Shares as contemplated hereby complies with, the
requirements of Rule 415 under the Securities Act (including, without
limitation, Rule 415(a)(5)); the Prospectus complied or will comply, at the time
it was or will be filed with the Commission, and will comply, as then amended or
supplemented, as of each Representation Date (other than the date hereof), in
all material respects, with the requirements of the Securities Act; the
Registration Statement did not, as of the time of its initial effectiveness, and
does not or will not, as then amended or supplemented, as of each Representation
Date, 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; as of each Representation Date (other than the date hereof), the
Prospectus, as then amended or supplemented, together with all of the then
issued Permitted Free Writing Prospectuses, if any, will not contain 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; provided, however, that the Company makes no
representation or warranty with respect to any statement or omission in the
Registration Statement, the Prospectus or any Permitted Free Writing Prospectus
in reliance upon and in conformity with information concerning any Underwriter
and furnished in writing by or on behalf of such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus
or such Permitted Free Writing Prospectus (it being understood that such
information consists solely of the information specified in Section
9(b)).
(b) Prior to
the execution of this Agreement, the Company has not, directly or indirectly,
offered or sold any of the Shares by means of any “prospectus” (within the
meaning of the Securities Act) or used any “prospectus” (within the meaning of
the Securities Act) in connection with the offer or sale of the Shares, in each
case other than the Basic Prospectus and the Preliminary
Prospectus. The Company represents and agrees that, unless it obtains
the prior consent of the Representatives, it has not made and will not make any
offer relating to the Shares that would constitute an “issuer free writing
prospectus” (as defined in Rule 433 under the Securities Act) or that would
otherwise constitute a “free writing prospectus” (as defined in Rule 405 under
the Securities Act). Any such free writing prospectus relating to the
Shares consented to by the Representatives is hereinafter referred to as a
“Permitted Free
Writing Prospectus.” The Company represents that it has
complied and will comply in all material respects with the requirements of Rule
433 under the Securities Act applicable to any Permitted Free Writing
Prospectus, including timely filing with the Commission where required,
legending and record keeping. The conditions set forth in one or more
of subclauses (i) through (iv), inclusive, of Rule 433(b)(1) under the
Securities Act are satisfied, and the registration statement relating to the
offering of the Shares contemplated hereby, as initially filed with the
Commission, includes a prospectus that, other than by reason of Rule 433 or Rule
431 under the Securities Act, satisfies the requirements of Section 10 of the
Securities Act; neither the Company nor any Underwriter is disqualified, by
reason of Rule 164(f) or (g) under the Securities Act, from using, in connection
with the offer and sale of the Shares, “free writing
prospectuses” (as defined in Rule 405 under the Securities Act) pursuant
to Rules 164 and 433 under the Securities Act; the Company is not an “ineligible issuer”
(as defined in Rule 405 under the Securities Act) as of the
5
eligibility
determination date for purposes of Rules 164 and 433 under the Securities Act
with respect to the offering of the Shares contemplated by the Registration
Statement.
(c) The
Incorporated Documents, when they were filed with the Commission, conformed in
all material respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and none of such documents contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Registration Statement,
the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing
Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(d) The
financial statements and the related notes thereto included or incorporated by
reference in the Registration Statement, the Pricing Disclosure Package, the
Prospectus and any Permitted Free Writing Prospectus comply in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act, as applicable, and present fairly the financial position of the Company and
its consolidated subsidiaries at the dates indicated and their results of
operations, stockholders’ equity and cash flows for the periods specified, and
such financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States (“GAAP”) applied on a
consistent basis throughout the periods involved. The other
historical financial and statistical information and data included in the
Registration Statement, the Pricing Disclosure Package, Prospectus or any
Permitted Free Writing Prospectus are, in all material respects, fairly
presented.
(e) Except in
each case as otherwise disclosed in the Registration Statement, the Pricing
Disclosure Package, the Prospectus and any Permitted Free Writing Prospectus,
since the date of the most recent financial statements of the Company included
or incorporated by reference in the Registration Statement, the Pricing
Disclosure Package, the Prospectus and any Permitted Free Writing Prospectus,
(i) there has not been any material change in the capital stock or long-term
debt of the Company or any of its subsidiaries and there has not been a Material
Adverse Effect (as defined below), (ii) neither the Company nor any of its
subsidiaries has entered into any transaction or agreement that is material to
the Company and its subsidiaries, taken as a whole, or incurred any liability or
obligation, direct or contingent, except for such liabilities or obligations
that, individually or in the aggregate, would not have a Material Adverse Effect
and (iii) neither the Company nor any of its subsidiaries has sustained any loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor disturbance or dispute or
any action, order or decree of any court or arbitrator or governmental or
regulatory authority, except for such losses that, individually or in the
aggregate, would not have a Material Adverse Effect. As used herein,
“Material Adverse
Effect” means a material adverse
6
effect on
the earnings, business, properties, condition (financial or otherwise), results
of operations or prospects of the Company and its subsidiaries taken as a
whole.
(f) The
Company has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the state of Delaware, has the corporate power and
authority to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not reasonably be
expected to have a Material Adverse Effect.
(g) Each of
the subsidiaries of the Company listed on Schedule 2 hereto
(the “Named
Subsidiaries”) has been duly organized, and is validly existing and in
good standing under the laws of its respective jurisdictions of formation or
organization, has the corporate power and authority to own, lease and operate
its property and to conduct its business as described in Registration Statement,
the Pricing Disclosure Package and the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect; all of the issued shares
of capital stock of each Named Subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims (“Liens”), except as to
Liens disclosed in the Prospectus. Each significant subsidiary (as defined in
Rule 1-02(w) of Regulation S-X) of the Company is a Named
Subsidiary.
(h) The
Company has an authorized capitalization as set forth in the Registration
Statement, the Pricing Disclosure Package, the Prospectus and any Permitted Free
Writing Prospectus; all the outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable and are not subject to any pre-emptive or similar rights; except
as described in or expressly contemplated by the Registration Statement, the
Pricing Disclosure Package, the Prospectus or any Permitted Free Writing
Prospectus, there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other equity interests
in the Company or any of its significant subsidiaries, nor any contracts,
commitments, agreements, understandings or arrangements of any kind relating to
the issuance of any capital stock of the Company or any such significant
subsidiary, any such convertible or exchangeable securities or any such rights,
warrants or options; and the capital stock of the Company conforms in all
material respects to the description thereof contained in the Registration
Statement, the Pricing Disclosure Package, the Prospectus and any Permitted Free
Writing Prospectus.
(i) The
Shares have been duly authorized by the Company and, when issued and delivered
and paid for as provided under this Agreement, will be duly and validly issued,
will be fully paid and nonassessable and will conform to the description thereof
in the Registration Statement, the Pricing Disclosure Package, the Prospectus,
and any
7
Permitted
Free Writing Prospectus; and the shareholders of the Company do not have any
preemptive or similar rights with respect to the Shares.
(j) The
Company has full right, power and authority to execute and deliver this
Agreement and perform its obligations hereunder or thereunder; and all action
required to be taken for the due and proper authorization, execution and
delivery by it of this Agreement and the consummation by it of the transactions
contemplated hereby and thereby has been duly and validly taken.
(k) This
Agreement has been duly authorized, executed and delivered by the
Company.
(l) This
Agreement conforms in all material respects to the description thereof contained
in the Registration Statement, the Pricing Disclosure Package, the Prospectus
and any Permitted Free Writing Prospectus.
(m) Neither
the Company nor any of its subsidiaries is (i) in violation of its charter or
by-laws or similar organizational documents, (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject, or (iii) in violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (ii) and (iii) above, for any such
default or violation that would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
(n) The
execution, delivery and performance by the Company of this Agreement, the
issuance and sale of the Shares, the compliance by the Company with the terms
hereof and the consummation of the transactions contemplated hereby will not (i)
contravene, conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any material indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, (ii)
contravene or result in any violation of the provisions of the charter or bylaws
of the Company or (iii) contravene or result in the violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses (i) and
(iii) above, for any such conflict, breach, violation or default that would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the execution, delivery and performance by the Company of this
Agreement, the issuance and sale of the Shares and compliance by the Company
with the terms hereof and the consummation of the transactions
8
contemplated
hereby, except as have been made or obtained and except as may be required by
and made with or obtained from state securities laws or
regulations.
(o) The
execution and delivery by the Company of, and the performance by the Company of
its obligations under, this Agreement, including without limitation, the
issuance and sale of the Shares, do not require any consent or approval of any
shareholders or any other securityholders of the Company.
(p) The
Company and its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively, “Intellectual
Property”) necessary to carry on the business now operated by them, and
neither the Company nor its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate, would result
in a Material Adverse Effect.
(q) Except as
set forth in the Registration Statement, the Pricing Disclosure Package, the
Prospectus or any Permitted Free Writing Prospectus, each of the Company and its
subsidiaries holds, and is in compliance in all material respects with, all
material permits, licenses, authorizations, exemptions, orders and approvals
(“Permits”),
necessary for the operation of their respective businesses, and there are no
proceedings pending to which the Company or any of its subsidiaries is a party
or, to the knowledge of the Company, threatened by any governmental entity
seeking to terminate, revoke or limit any such Permits, nor, to the knowledge of
the Company, do grounds exist for any such action by any governmental
entities.
(r) Each of
the Company and its subsidiaries (i) has not violated its charter, by-laws or
any other applicable organizational documents, (ii) has not defaulted, and no
event has occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its property or assets is subject, (iii) is in compliance, in
the conduct of its business, with all applicable laws, ordinances, governmental
rules, capital regulatory requirements, regulations or court decrees to which it
or its property or assets may be subject, including, but not limited to, the
laws, regulations and rules administered by the Commission, FINRA, the Federal
Reserve, the Office of Thrift Supervision (the “OTS”), the Federal
Deposit Insurance Corporation (the “FDIC”), any
applicable state, federal or self regulatory organization and the Office of
Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), the Equal
Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act,
the Home Mortgage Disclosure Act, the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and
9
Obstruct
Terrorism (USA PATRIOT ACT) Act of 2001, all other applicable fair lending and
fair housing laws or other laws relating to discrimination (including, without
limitation, anti-redlining, equal credit opportunity and fair credit reporting),
truth-in-lending, real estate settlement procedures, adjustable rate mortgages
disclosures or consumer credit (including, without limitation, the federal
Consumer Credit Protection Act, the federal Truth-in Lending Act and Regulation
Z thereunder, the federal Real Estate Settlement Procedures Act of 1974 and
Regulation X thereunder, and the federal Equal Credit Opportunity Act and
Regulation B thereunder) or with respect to the Flood Disaster Protection Act
and the Bank Secrecy Act, except, in the case of clause (ii) and (iii) for any
default or violation that is accurately described in all material respects in
the Registration Statement, the Pricing Disclosure Package, the Prospectus or
any Permitted Free Writing Prospectus and any default or violation that would
not have a Material Adverse Effect.
(s) Each of
the Company and ETB Holdings, Inc. is duly registered with the OTS as a savings
and loan holding company under the Home Owners Loan Act, as amended (“HOLA”); E*TRADE Bank
continues to hold a valid charter to do business as a federal savings bank;
E*TRADE Bank meets the qualified thrift lender test under Section 10(m) of HOLA;
and the Company is a savings and loan holding company under Section 10 of HOLA,
as amended; and the direct and indirect activities of the Company and its
subsidiaries comply with restrictions on holding company activities provided in
Section 10 of HOLA. E*TRADE Bank is well capitalized according to the
capital standards set forth by the OTS. E*TRADE Bank and its deposits
are insured by FDIC to the fullest extent permitted by law.
(t) Each of
E*TRADE Securities LLC, E*TRADE Clearing LLC and E*TRADE Capital Markets, LLC is
duly registered as a broker-dealer with the Commission, and is registered as a
broker-dealer with each state and is a member in good standing of each
self-regulatory organization where its business so requires.
(u) None of
the Company and its Named Subsidiaries (including E*TRADE Asset Management,
Inc., E*TRADE Capital Management, LLC, Kobren Insight Management, Inc., ▇▇▇▇▇▇
Capital Management, Inc. and E*TRADE Financial Advisory Services, Inc.
(together, the “Advisers”)) (i) is
subject or is party to, or has received any notice or advice that any of them
may become subject or party to, any legal or governmental proceedings pending or
threatened, including but not limited to, any investigation with respect to any
cease-and-desist order, consent agreement, any commitment letter or similar
undertaking to, memorandum of understanding or other regulatory enforcement
action, proceeding or order with or by, other than proceedings accurately
described in all material respects in the Registration Statement, the Pricing
Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus and
proceedings that would not have a Material Adverse Effect, or on the power or
ability of the Company to perform its obligations under this Agreement or to
consummate the transactions contemplated hereby or (ii) is subject to any
directive by, or has been a recipient of any supervisory letter from, or has
adopted any board resolutions at the request of, any Regulatory Agency (as
defined below) that currently restricts in any material respect the conduct of
their business or that in any material manner relates to
10
their
capital adequacy, their credit policies, their management or their business
(each, a “Regulatory
Agreement”), nor has the Company or any of its subsidiaries been advised
by any Regulatory Agency that it is considering issuing or requesting any such
Regulatory Agreement or that they may be subject to an investigation, audit or
other examination which is likely to lead to the imposition of any civil
monetary or other penalties that would have a Material Adverse Effect, and there
is no unresolved violation, criticism or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of the Company
or any of its subsidiaries which, in the reasonable judgment of the Company, is
expected to result in a Material Adverse Effect. As used herein, the
term “Regulatory
Agency” means OTS, FDIC, the Federal Reserve Bank, and any other federal
or state agency charged with the supervision or regulation of depository
institutions or holding companies of depository institutions, or engaged in the
insurance of depository institution deposits, or the Commission, FINRA or any
other applicable self regulatory organization, or any court, administrative
agency or commission or other governmental agency, authority or instrumentality
having supervisory or regulatory authority with respect to the Company or any of
its subsidiaries.
(v) The
Company, E*TRADE Bank and each of the Company’s applicable subsidiaries have
duly filed with the OTS and the FDIC, as the case may be, in correct form the
reports required to be filed under applicable laws and regulations and such
reports were in all material respects complete and accurate and in compliance
with the requirements of applicable laws and regulations; provided that
information as of a later date shall be deemed to modify information as of an
earlier date; and the Company has previously delivered or made available to the
Representatives which has requested the same accurate and complete copies of all
such reports. Except as disclosed in the Registration Statement, the
Pricing Disclosure Package, the Prospectus or any Permitted Free Writing
Prospectus, neither the Company nor E*TRADE Bank is subject to, or expects to be
subject to, any formal or informal enforcement or supervisory action by the OTS
or the FDIC. Neither the Company nor E*TRADE Bank has been required
by the OTS or the FDIC to make material corrections or changes in its
management, operations or policies or procedures, which to the knowledge of the
Company or E*TRADE Bank, have not been substantially corrected or changed to the
satisfaction of the regulators.
(w) The
Company has delivered or made available to the Representatives, a true and
complete copy of the Company’s and its subsidiaries’ currently effective Forms
BD and ADV as filed with the Commission and all other similar forms required to
be filed with governmental entities. The information contained in
such forms and reports was or will be, in the case of any forms and reports
filed after the date of this Agreement, complete and accurate in all material
respects as of the time of filing thereof.
(x) Except
for such as would not, individually or in the aggregate, have a Material Adverse
Effect, neither the Company nor any of its subsidiaries nor any of their
respective officers, directors or employees has been the subject of any
disciplinary proceedings or orders of any governmental entity arising under
applicable laws or regulations which would be required to be disclosed on Forms
BD or ADV except as disclosed thereon, and no such disciplinary proceeding or
order is pending or, to the knowledge of the Company, threatened, nor, to the
knowledge of the Company, do
11
grounds
exist for any such material action by any governmental entity; and except as
disclosed on such Form BD or ADV, neither the Company nor any of its
subsidiaries nor any of their respective officers, directors or employees has
been enjoined by the order, judgment or decree of any governmental entity from
engaging in or continuing any conduct or practice in connection with any Company
activity or in connection with the purchase or sale of any
security.
(y) Except as
disclosed in the Registration Statement, the Pricing Disclosure Package, the
Prospectus or any Permitted Free Writing Prospectus, no subsidiary of the
Company is currently prohibited, directly or indirectly, under any agreement or
other instrument to which it is a party or is subject, from paying any dividends
to the Company or to a subsidiary of the Company, from making any other
distribution on such subsidiary’s capital stock to the Company or to a
subsidiary of the Company, from repaying to the Company or to a subsidiary of
the Company any loans or advances to such subsidiary from the Company or a
subsidiary of the Company or from transferring any of such subsidiary’s
properties or assets to the Company or any other subsidiary of the Company,
other than prohibitions arising under applicable law.
(z) There are
no contracts or other documents that are required under the Securities Act to be
filed as exhibits to the Registration Statement and described in the
Registration Statement, the Pricing Disclosure Package, Prospectus or any
Permitted Free Writing Prospectus that are not so filed as exhibits to the
Registration Statement, the Pricing Disclosure Package or described in the
Registration Statement and the Prospectus.
(aa) Deloitte
& Touche LLP, who certified the financial statements and supporting
schedules, if any, included or incorporated by reference in the Pricing
Disclosure Package or the Prospectus, is (i) an independent certified public
accountant with respect to the Company and the subsidiaries within the meaning
of Rule 101 of the Code of Professional Conduct of the American Institute of
Certified Public Accountants and (ii) registered with the Public Company
Accounting Oversight Board.
(bb) Each of
the Company and its subsidiaries has filed all material federal, state, local
and foreign income and franchise tax returns required to be filed through the
date hereof (taking into account any extension of time to file granted or
obtained on behalf of the Company or any of its subsidiaries) and has paid all
taxes due thereon (except as contested in good faith and adequately reserved for
in accordance with GAAP), and no tax deficiency has been determined, as a result
of a final determination, adversely to the Company or any of its subsidiaries
which has had (nor does the Company or any of its subsidiaries have any
knowledge of any tax deficiency which, if determined adversely to the Company or
any of its subsidiaries, would have) a Material Adverse Effect.
(cc) The
Company is not and, after giving effect to the offering and sale of the Shares
and the application of the net proceeds thereof as described in the Registration
Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free
Writing Prospectus, will not be an “investment company” within the meaning of
the Investment
12
Company
Act of 1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, the “Investment Company
Act”).
(dd) No client
of the Advisers, except for E*TRADE Funds, is currently registered as an
investment company under the Investment Company Act of 1940.
(ee) Each of
the Company and its subsidiaries (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) has received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its respective businesses and (iii) is
in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a Material Adverse Effect.
(ff) There are
no costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, and to
the Company’s knowledge, have a Material Adverse Effect.
(gg) No
prohibited transaction (as defined in Section 406 of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time (the
“Code”)) has
occurred with respect to any employee benefit plan of the Company or any of its
subsidiaries, excluding transactions effected pursuant to a statutory or
administrative exemption, which would have a Material Adverse Effect; each such
employee benefit plan is in compliance with applicable law, including ERISA and
the Code, except where such noncompliance, individually or in the aggregate,
would not have a Material Adverse Effect; none of the Company, any subsidiary,
or any entity that was at any time required to be treated as a single employer
together with the Company under Section 414(b)(c)(m) or (o) of the Code or
Section 4001(a)(14) of ERISA has at any time maintained, sponsored or
contributed to, and none of the employee benefit plans of the Company or any
subsidiary is, a single employer plan (within the meaning of Section 4001(a)(15)
of ERISA), a multiemployer plan (within the meaning of Section 3(37) or
4001(a)(3) of ERISA) or a single employer pension plan (within the meaning of
Section 4001(a)(15) of ERISA) for which the Company or any subsidiary could
incur liability under Section 4063 or 4064 of ERISA; and each such pension plan
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and, to the knowledge of the Company, nothing
has occurred, whether by action or by failure to act, which would cause the loss
of such qualification.
13
(hh) The
Company and its subsidiaries maintain an effective system of “disclosure
controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that
complies with the requirements of the Exchange Act and that has been designed to
ensure that information required to be disclosed by the Company in reports that
it files or submits under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the Commission’s rules and
forms, including controls and procedures designed to ensure that such
information is accumulated and communicated to the Company’s management as
appropriate to allow timely decisions regarding required
disclosure. The Company and its subsidiaries have carried out
evaluations of the effectiveness of their disclosure controls and procedures as
required by Rule 13a-15 of the Exchange Act.
(ii) The
Company and its subsidiaries maintain systems of “internal control over
financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that
comply with the requirements of the Exchange Act and have been designed by, or
under the supervision of, their respective principal executive and principal
financial officers, or persons performing similar functions, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles, including, but not limited to,
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. Based on the Company’s most recent
evaluation of its internal controls over financial reporting pursuant to Rule
13a-15(c) of the Exchange Act, except as disclosed in the Registration
Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free
Writing Prospectus, as of December 31, 2008, there are no material weaknesses in
the Company’s internal controls. The Company’s auditors and the Audit
Committee of the Board of Directors of the Company have been advised of: (i) all
significant deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting which have adversely affected or are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information; and (ii) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting.
(jj) The
Company and each of its subsidiaries carry or are covered by insurance covering
their respective properties, operations, personnel and businesses, including
business interruption insurance, which insurance is in amounts and insures
against such losses and risks as are prudent and customary in the businesses
which they are engaged or the Company believes in its reasonable judgment are
adequate to protect the Company and its subsidiaries and their respective
businesses.
14
(kk) None of
the Company, any of its subsidiaries or, to the knowledge of the Company, any
director, officer, agent or employee of the Company or any of its subsidiaries
is currently included on the List of Specially Designated Nationals and Blocked
Persons (the “SDN
List”) maintained by the OFAC or currently subject to any U.S. sanctions
administered by the OFAC; and the Company shall not directly or indirectly use
the proceeds of the offering of the Shares under this Agreement, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint
venture partner or other person or entity, for the purpose of financing the
activities of any person currently included on the SDN List maintained by
OFAC.
(ll) Neither
the Company nor, to the knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the Company or
any of the subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(mm) Other
than as set forth in the Registration Statement, the Pricing Disclosure Package,
the Prospectus or any Permitted Free Writing Prospectus, there are no material
transactions, contracts, agreements or understandings that are required to be
disclosed under Item 404 of Regulation S-K between any of the Company or any of
its subsidiaries and (i) any director or executive officer of the Company or any
of its subsidiaries, (ii) any nominee for elections as director of the Company
or any of its subsidiaries, (iii) any 5% securityholder of the Company or any of
its subsidiaries, or (iv) any member of the immediate family of the foregoing
persons.
(nn) The
operations of the Company and its subsidiaries are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering
Laws”), except as disclosed on Form BD, and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(oo) There is
and has been no failure on the part of the Company or any of the Company's
directors or officers, in their capacities as such, to comply in all material
respects with any provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations promulgated in connection therewith (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(pp) Neither
the Company nor any of its subsidiaries is a party to any contract, agreement or
understanding with any person (other than this Agreement) that could
15
reasonably
be expected to give rise to a valid claim against the Company or any of its
subsidiaries or any Underwriter for a brokerage commission, finder’s fee or like
payment in connection with the offering and sale of the Shares.
(qq) Other
than pursuant to the Registration Rights Agreement between the Company and
▇▇▇▇▇▇▇ Capital Ltd. dated as of November 29, 2007, no person has the right to
require the Company or any of its subsidiaries to register any securities for
sale under the Securities Act by reason of the filing of the Registration
Statement with the Commission or the issuance and sale of the
Shares.
(rr) The
Company has not taken, directly or indirectly, any action designed to or that
would constitute or that might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, stabilization or manipulation of the price
of any security of the Company.
(ss) No
forward-looking statement (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) contained or incorporated by reference
in the Registration Statement, the Pricing Disclosure Package, the Prospectus or
any Permitted Free Writing Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
(tt) Nothing
has come to the attention of the Company that has caused the Company to believe
that the statistical and market-related data included in the Registration
Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free
Writing Prospectus, is not based on or derived from sources that are reliable
and accurate in all material respects.
(uu) The
Company is a “well-known seasoned issuer” as defined under the Securities Act
and at the times specified in the Securities Act in connection with the offering
of the Shares. The Company has paid or will pay the registration fee
for this offering pursuant to Rule 456(b)(1) under the Securities Act within the
time period specified in such Rule.
(vv) The
Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and
the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the NASDAQ Global Select Market (the
“Exchange”), nor has the Company received any notification that the Commission
or the Exchange is contemplating terminating such registration or
listing. The outstanding shares of the Common Stock have been
approved for listing and the Shares being sold hereunder have been approved for
listing, subject only to official notice of issuance, on the
Exchange.
(ww) There are
no transfer taxes or other similar fees or charges under federal law or the laws
of any state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the issuance and
sale by the Company of the Shares.
16
(xx) There are
no legal or governmental proceedings pending or threatened to which the Company
or any of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be described
in the Registration Statement, the Pricing Disclosure Package, the Prospectus or
any Permitted Free Writing Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement, the Prospectus or Permitted Free Writing Prospectus
or to be filed as exhibits to the Registration Statement that are not described
or filed as required.
(yy) Each of
(i) the Exchange Agreement between the Company and Citadel Equity Fund Ltd,
dated as of June 17, 2009, (ii) the Amended and Restated Equities and Options
Order Handling Agreement, dated as of June 15, 2009 among the Company, E*TRADE
Securities LLC and Citadel Derivatives Group LLC and (iii) the Company’s Stockholder
Rights Plan, as amended, conforms in all material respects to the description
thereof contained in the Registration Statement, the Pricing Disclosure Package
and the Prospectus.
Any
certificate signed by any officer of the Company or any subsidiary delivered to
any Underwriter or to counsel to the Underwriters pursuant to or in connection
with this Agreement shall be deemed a representation and warranty by the Company
to the Underwriters as to the matters covered thereby.
4. Certain Covenants of the
Company. The Company hereby agrees with each Underwriter as
follows:
(a) For so
long as the delivery of a prospectus is required (whether physically or through
compliance with Rule 172 under the Securities Act or any similar rule) in
connection with the offering or sale of the Shares (the “Prospectus Delivery
Period”), before amending
or supplementing the Registration Statement or the Prospectus (in each case,
other than due to the filing of an Incorporated Document), (i) to furnish to the
Representatives a copy of each such proposed amendment or supplement within a
reasonable period of time before filing any such amendment or supplement with
the Commission, (ii) that the Company shall not use or file any such proposed
amendment or supplement to which the Representatives reasonably object, unless
the Company’s
legal counsel has advised the Company that filing such document is required by
law, and (iii) that the Company shall not use or file any Permitted Free Writing
Prospectus to which the Representatives reasonably object, unless the
Company’s
legal counsel has advised the Company that the use or filing of such document is
required by applicable law.
(b) To file
the final Prospectus with the Commission within the time periods specified by
Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act; to file any
Permitted Free Writing Prospectus to the extent required by Rule 433 under the
Securities Act; to provide copies of the Pricing Disclosure Package, the
Prospectus and each Permitted Free Writing Prospectus (to the extent not
previously delivered or filed on the Commission’s Interactive Data
Electronic Applications system or any successor system thereto (collectively,
“IDEA”)) to the
Representatives via e-mail in “pdf” format on such
filing date to e-mail accounts designated by the Representatives; and, at the
17
Representatives’ request, to
furnish copies of the Pricing Disclosure Package, the Prospectus to each
exchange or market on which sales were effected as may be required by the rules
or regulations of such exchange or market.
(c) During
the Prospectus Delivery Period, to file timely all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
and during such same period to advise the Representatives, promptly after the
Company receives notice thereof, (i) of the time when any amendment to the
Registration Statement has been filed or has become effective or any supplement
to any Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus,
any Permitted Free Writing Prospectus or any amended Prospectus has been filed
with the Commission, (ii) of the issuance by the Commission of any stop order or
any order preventing or suspending the use of any prospectus (including any
Preliminary Prospectus) relating to the Shares or the initiation or threatening
of any proceeding for that purpose, pursuant to Section 8A of the Securities
Act, (iii) of any objection by the Commission to the use of Form S-3ASR by the
Company pursuant to Rule 401(g)(2) under the Securities Act, (iv) of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, (v) of any request by the Commission for the amendment of the
Registration Statement or the amendment or supplementation of any Preliminary
Prospectus, the Prospectus or for additional information, (vi) of the occurrence
of any event as a result of which any Preliminary Prospectus, the Pricing
Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus as
then amended or supplemented includes any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances existing
when such Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus
or any such Permitted Free Writing Prospectus is delivered to a purchaser, not
misleading and (vii) of the receipt by the Company of any notice of objection of
the Commission to the use of the Registration Statement or any post-effective
amendment thereto.
(d) In the
event of the issuance of any such stop order or of any such order preventing or
suspending the use of any such prospectus or suspending any such qualification,
or of any notice of objection pursuant to Rule 401(g)(2) under the Securities
Act, to use promptly its commercially reasonable efforts to obtain its
withdrawal.
(e) 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 as the Representatives may reasonably designate and to
maintain such qualifications in effect so long as required for the distribution
of the Shares; provided that the Company shall
not be required to qualify as a foreign corporation, become a dealer of
securities, or become subject to taxation in, or to consent to the service of
process under the laws of, any such state.
(f) To make
available to the Representatives at its offices in New York City, without
charge, as soon as practicable after the Registration Statement becomes
effective,
18
and
thereafter from time to time to furnish to the Representatives, as many copies
of the Pricing Disclosure Package and the Prospectus (or of the Pricing
Disclosure Package or the Prospectus as amended or supplemented if the Company
shall have made any amendments or supplements thereto and documents incorporated
by reference therein after the effective date of the Registration Statement) and
each Permitted Free Writing Prospectus as the Representatives may reasonably
request during the Prospectus Delivery Period; and for so long as this Agreement
is in effect, the Company shall prepare and file promptly such amendment or
amendments to the Registration Statement, the Prospectus or any Permitted Free
Writing Prospectus as may be necessary to comply with the requirements of
Section 10(a)(3) of the Securities Act.
(g) If during
the Prospectus Delivery Period, any event shall occur or condition shall exist
as a result of which it is necessary in the reasonable opinion of counsel to the
Underwriters or counsel to the Company, to further amend or supplement the
Pricing Disclosure Package, the Prospectus or any Permitted Free Writing
Prospectus as then amended or supplemented in order that the Pricing Disclosure
Package, the Prospectus or any such Permitted Free Writing Prospectus will not
include an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, in light of the circumstances existing at the time the
Pricing Disclosure Package, the Prospectus or any such Permitted Free Writing
Prospectus is delivered to a purchaser, or if it shall be necessary, in the
reasonable opinion of either such counsel, to amend or supplement the
Registration Statement, the Pricing Disclosure Package, the Prospectus or any
Permitted Free Writing Prospectus in order to comply with the requirements of
the Securities Act, in the case of such a determination by counsel to the
Company, notice shall be given promptly, and confirmed in writing, to the
Representatives to cease the solicitation of offers to purchase the Shares, and,
in either case, the Company shall promptly prepare and file with the Commission
such amendment or supplement, whether by filing documents pursuant to the
Securities Act, the Exchange Act or otherwise, as may be necessary to correct
such untrue statement or omission or to make the Registration Statement, the
Pricing Disclosure Package, the Prospectus or any such Permitted Free Writing
Prospectus comply with such requirements.
(h) To
generally make available to its security holders as soon as reasonably
practicable, but not later than 90 days after the close of the period covered
thereby, an earnings statement (in a form complying with the provisions of
Section 11(a) of the Securities Act and Rule 158 under the Securities Act)
covering the twelve-month period beginning not later than the first day of the
Company’s
fiscal quarter next following the “effective
date” (as
defined in Rule 158) of the Registration Statement.
(i) To apply
the net proceeds from the sale of the Shares in the manner described in the
Registration Statement or the Prospectus under the caption “Use of
proceeds”.
(j) Not to,
and to cause its subsidiaries not to, take, directly or indirectly, any action
designed to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the
19
Company
to facilitate the sale or resale of the Shares; provided that nothing herein
shall prevent the Company from filing or submitting reports under the Exchange
Act or issuing press releases in the ordinary course of business.
(k) Except as
otherwise agreed between the Company and the Underwriters, to pay all costs,
expenses, fees and taxes in connection with (A) the preparation and filing of
the Registration Statement (including registration fees pursuant to Rule
456(b)(1)(i) under the Securities Act), the Preliminary Prospectus, the
Prospectus, any 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),
(B) the registration, issue and delivery of the Shares, (C) the preparation,
printing and delivery to the Underwriters of this Agreement, the Shares, and
such other documents as may be required in connection with the offer, purchase,
sale, issuance or delivery of the Shares and any cost associated with electronic
delivery of any of the foregoing by the Underwriters to investors, (D) the
qualification of the Shares for offering and sale under state laws and the
determination of their eligibility for investment under state law as aforesaid
(including the reasonable legal fees and filing fees and other disbursements of
counsel to the Underwriters in connection therewith) and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to the
Underwriters, (E) the listing of the Shares on the Exchange and any registration
thereof under the Exchange Act, (F) any filing for review of the public offering
of the Shares by FINRA, (G) the fees and disbursements of counsel to the Company
and of the Company’s independent
registered public accounting firm (H) the cost of preparing the certificates for
the Shares; (I) the costs and charges of any transfer agent or registrar or
paying agent, (J) the reasonable and documented expenses of Sandler ▇’▇▇▇▇▇ &
Partners, L.P. in its capacity as a “qualified
independent underwriter,” provided,
however, that in no event shall such expenses exceed $10,000 and (K) the
performance of the Company’s other
obligations hereunder; provided that the
Underwriters shall be responsible for any transfer taxes on resale of Shares by
it, any costs and expenses associated with the sale and marketing of the Shares
and fees and disbursements of its counsel other than as specifically provided
above or elsewhere in this Agreement.
(l) Not to
distribute any offering material in connection with the offer and sale of the
Shares, other than the Registration Statement, the Pricing Disclosure Package,
the Prospectus, any Permitted Free Writing Prospectus and other materials
permitted by the Securities Act or the rules and regulations promulgated
thereunder.
(m) To
retain, pursuant to reasonable procedures developed in good faith, copies of
each Permitted Free Writing Prospectus that is not filed with the Commission in
accordance with Rule 433 under the Securities Act.
(n) To use
its commercially reasonable efforts to cause the Shares to be listed on the
Exchange.
(o) For a
period of 90 days after the date of the Prospectus, not to (i) offer, pledge,
announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to
20
purchase
or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or (ii) enter into any swap or other agreement that transfers,
in whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. and
Sandler ▇’▇▇▇▇▇ &
Partners, L.P., other than (A) the Shares to be sold hereunder, (B) any options
or other awards (including without limitation restricted stock or restricted
stock units), or shares of Common Stock issued with respect to such options and
other awards, granted under Company stock plans or otherwise in equity
compensation arrangements, in each case as in effect on the date hereof, with
directors, officers employees and consultants of the Company and its
subsidiaries and (C) any shares of Common Stock issued in connection with
exchange transactions for the Company’s 12.5% Springing
Lien Notes due 2017, 8% Senior Notes due 2011, 7.375% Senior Notes due 2013 and
7.875% Senior Notes due 2015 (including any shares of Common Stock issued upon
conversion, exercise or exchange of any securities issued in such exchange
transactions).
5. [Reserved].
6. Conditions of
Underwriters’
Obligations. The obligation of each Underwriter to purchase
the Underwritten Shares on the Closing Date or the Option Shares on the
Additional Closing Date, as the case may be, as provided herein is subject to
the following conditions:
(i) The
representations, warranties and agreements on the part of the Company herein
contained or contained in any certificate of an officer or officers of the
Company delivered pursuant to the provisions hereof shall be true and correct in
all respects.
(ii) The
Company shall have performed and observed its covenants and other obligations
hereunder in all material respects.
(iii) Trading
in the Common Stock on the Exchange shall not have been suspended.
(iv) From the
date of this Agreement, no event or condition of a type described in Section
3(e) hereof shall have occurred or shall exist, which event or condition is not
disclosed in the Pricing Disclosure Package (excluding any amendment or
supplement thereto) and the Prospectus (excluding any amendment or supplement
thereto), the effect of which in the reasonable judgment of the Representatives
makes it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Shares on the Closing Date or the Additional Closing Date, as
the case may be, on the terms and in the manner contemplated by this Agreement,
the Pricing Disclosure Package and the Prospectus.
21
(v) Subsequent
to the earlier of (A) the Time of Sale and (B) the execution and delivery of
this Agreement (i) no downgrading shall have occurred in the rating accorded any
debt securities of or guaranteed by the Company or any of its subsidiaries by
▇▇▇▇▇’▇
Investors Service, Inc. or Standard & Poor’s (a division of
the McGraw Hill Companies, Inc.) and (ii) neither organization shall have
publicly announced that it has under surveillance or review, or has changed its
outlook with respect to, its rating of any debt securities of or guaranteed by
the Company or any of its subsidiaries (other than an announcement with positive
implications of a possible upgrading).
(vi) The
Shares to be issued on the Closing Date or the Additional Closing Date, as
applicable, shall have been approved for listing on the Exchange, subject only
to notice of issuance.
(vii) (A) No
action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date or the
Additional Closing Date, as applicable, prevent the issuance or sale of the
Shares and (B) no injunction or order of any federal, state or foreign court
shall have been issued that would, as of the Closing Date or the Additional
Closing Date, as applicable, prevent the issuance or sale of the
Shares.
(viii) (A) No
order suspending the effectiveness of the Registration Statement shall be in
effect, no proceeding for such purpose or pursuant to Section 8A of the
Securities Act shall be pending before or threatened by the Commission and no
notice of objection of the Commission to the use of the Registration Statement
pursuant to Rule 401(g)(2) under the Securities Act shall have been received by
the Company; (B) the Prospectus and each Permitted Free Writing Prospectus shall
have been timely filed with the Commission under the Securities Act (in the case
of any Permitted Free Writing Prospectus, to the extent required by Rule 433
under the Securities Act); (C) all requests by the Commission for additional
information shall have been complied with to the reasonable satisfaction of the
Representatives; and (D) no suspension of the qualification of the Shares for
offering or sale in any jurisdiction, and no initiation or threatening of any
proceedings for any of such purposes, will have occurred and be in
effect.
(ix) No
amendment or supplement to the Registration Statement, the Pricing Disclosure
Package, the Prospectus or any Permitted Free Writing Prospectus shall have been
filed to which the Representatives shall have reasonably objected in
writing.
(x) All
filings with the Commission required by Rule 424 under the Act to have been
filed by the Closing Date or the Additional Closing Date, as applicable, shall
have been made within the applicable time period prescribed for such filing by
Rule 424 (without reliance on Rule 424(b)(8)).
22
(xi) The
Company shall have delivered to the Representatives an officer’s certificate
signed by one of the Company’s executive
officers, dated the Closing Date, certifying as to the matters set forth in
Exhibit A
hereto.
(xii) The
Company shall have delivered to the Representatives the opinion and negative
assurance letter of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel to the Company,
addressed to the Underwriters and dated the Closing Date, in the form of Exhibit B
hereto.
(xiii) The
Company shall have delivered to the Representatives an opinion of internal
counsel of the Company, addressed to the Underwriters and dated the Closing
Date, in the form of Exhibit C
hereto.
(xiv) The
Representatives shall have received an opinion and negative assurance letter of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the
Underwriters, addressed to the Underwriters and dated the Closing Date,
addressing such matters as the Representatives may reasonably
request.
(xv) On the
date of this Agreement and on the Closing Date or the Additional Closing Date,
as the case may be, Deloitte & Touche LLP shall have furnished to the
Representatives, at the request of the Company, letters, dated the respective
dates of delivery thereof and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Representatives, containing statements
and information of the type customarily included in accountants’ “comfort
letters” to
underwriters with respect to the financial statements and certain financial
information contained or incorporated by reference in the Registration
Statement, the Pricing Disclosure Package and the Prospectus; provided, that the
letter delivered on the Closing Date or the Additional Closing Date, as the case
may be, shall use a “cut-off” date no more than
three business days prior to such Closing Date or such Additional Closing Date,
as the case may be.
(xvi) The
Company shall have delivered to the Representatives a certificate signed by the
Company’s
corporate secretary, annexing, among other documents, the resolutions duly
adopted by the Company’s board of
directors authorizing the Company’s execution of
this Agreement and the consummation by the Company of the transactions
contemplated hereby, including the issuance and sale of the Shares.
(xvii) The “lock-up” agreements, each
substantially in the form of Exhibit D hereto,
between you and the shareholders, officers and directors of the Company listed
on Schedule 3
hereto, relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the date
hereof, shall be full force and effect on the Closing Date or Additional Closing
Date, as the case may be.
23
(xviii) The
Company shall have delivered to the Representatives such other documents as the
Representatives shall reasonably request.
(xix) On the
date of this Agreement and on the Closing Date, the Company shall have delivered
to the Representatives a certificate signed by the Company’s chief financial
officer, in a form satisfactory to the Representatives, certifying the financial
information set forth on the Company Current Report on Form 8-K dated June 17,
2009.
All
opinions, letters and other documents referred to above shall be satisfactory in
form and substance to the Representatives.
7. Termination.
(a) This
Agreement may be terminated in the absolute discretion of the Representatives if
after the execution and delivery of this Agreement and prior to the Closing Date
or, in the case of the Option Shares, prior to the Additional Closing Date, if,
(A)(i) trading generally shall have been materially suspended or materially
limited on or by, as the case may be, any of the Exchange, the New York Stock
Exchange or the American Stock Exchange, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either federal or New York state authorities, (iv)
there shall have occurred any attack on, or outbreak or escalation of
hostilities or act of terrorism involving, the United States, or any change in
financial markets or any calamity or crisis that, in each case, in the
Representatives’ judgment, is
material and adverse or (v) any material disruption of settlements of securities
or clearance services in the United States that would materially impair
settlement and clearance with respect to the Shares or (B) in the case of any of
the events specified in clauses (i) through (v), such event singly or together
with any other such event specified in clauses (i) through (v) makes it, in the
Representatives’ judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Pricing Disclosure Package and the Prospectus. If the
Representatives elect to terminate the obligations of the Underwriters pursuant
to this Section 7, the Company shall be notified promptly in
writing.
(b) If (i)
this Agreement is terminated pursuant to Section 7(a), (ii) the Company for any
reason fails to tender the Shares for delivery to the Underwriters or (iii) the
Underwriters decline to purchase the Shares for any reason permitted under this
Agreement, the Company agrees to reimburse the Underwriters for all
out-of-pocket costs and expenses (including the fees and expenses of their
counsel) reasonably incurred by the Underwriters in connection with this
Agreement and the offering contemplated hereby.
8. Defaulting
Underwriter.
(a) If, on
the Closing Date or the Additional Closing Date, as the case may be, any
Underwriter defaults on its obligation to purchase the Shares that it has agreed
to purchase hereunder on such date, the non-defaulting Underwriters may in their
discretion arrange for the purchase of such Shares by other persons satisfactory
to the Company on the terms contained in this Agreement. If, within
36 hours after any such default by any Underwriter, the non-
24
defaulting
Underwriters do not arrange for the purchase of such Shares, then the Company
shall be entitled to a further period of 36 hours within which to procure other
persons satisfactory to the non-defaulting Underwriters to purchase such Shares
on such terms. If other persons become obligated or agree to purchase
the Shares of a defaulting Underwriter, either the non-defaulting Underwriters
or the Company may postpone the Closing Date or the Additional Closing Date, as
the case may be, for up to five full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement and the Prospectus
or in any other document or arrangement, and the Company agrees to promptly
prepare any amendment or supplement to the Registration Statement and the
Prospectus that effects any such changes. As used in this Agreement,
the term “Underwriter” includes, for all
purposes of this Agreement unless the context otherwise requires, any person not
listed in Schedule 1 hereto that, pursuant to this Section 8, purchases Shares
that a defaulting Underwriter agreed but failed to purchase.
(b) If, after
giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company
as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may
be, does not exceed one-eleventh of the aggregate number of Shares to be
purchased on such date, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares that such
Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share
(based on the number of Shares that such Underwriter agreed to purchase on such
date) of the Shares of such defaulting Underwriter or Underwriters for which
such arrangements have not been made.
(c) If, after
giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company
as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may
be, exceeds one-eleventh of the aggregate amount of Shares to be purchased on
such date, or if the Company shall not exercise the right described in paragraph
(b) above, then this Agreement or, with respect to any Additional Closing Date,
the obligation of the Underwriters to purchase Shares on the Additional Closing
Date shall terminate without liability on the part of the non-defaulting
Underwriters. Any termination of this Agreement pursuant to this
Section 8 shall be without liability on the part of the Company, except that the
Company will continue to be liable for the payment of expenses as set forth in
Section 4(k) hereof and except that the provisions of Section 9 hereof shall not
terminate and shall remain in effect.
(d) Nothing
contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company or any non-defaulting Underwriter for damages caused by its
default.
9. Indemnity and
Contribution.
(a) The
Company agrees to indemnify and hold harmless each Underwriter, its affiliates,
partners, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from
25
and
against any and all losses, claims, damages and liabilities (including, without
limitation, reasonable out of pocket legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted, as such
fees and expenses are incurred) that arise out of, or are based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein not misleading or (ii) any untrue statement or
alleged untrue statement of a material fact contained in the Pricing Disclosure
Package (or any amendment or supplement thereto), the Prospectus (or any
amendment or supplement thereto), any Permitted Free Writing Prospectus (or any
amendment or supplement thereto) or caused by any omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, in each case except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to any Underwriter furnished to the Company in
writing by or on behalf of such Underwriter through the Representatives
expressly for use in the Registration Statement, the Pricing Disclosure Package
(or any amendment or supplement thereto) the Prospectus (or any amendment or
supplement thereto) or any Permitted Free Writing Prospectus (it being
understood that such information consists solely of the information specified in
Section 9(b)).
The
Company also agrees to indemnify and hold harmless Sandler ▇’▇▇▇▇▇ &
Partners, L.P., its affiliates, partners, directors and officers and each
person, if any, who controls Sandler ▇’▇▇▇▇▇ &
Partners, L.P. within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages and
liabilities incurred as a result of Sandler ▇’▇▇▇▇▇ &
Partners, L.P.’s participation as
a “qualified
independent underwriter” within the
meaning of NASD Rule 2720 of FINRA in connection with the offering of the
Shares.
(b) Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, its directors, its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the indemnity set forth in Section 9(a), but only with respect to any losses,
claims, damages or liabilities that arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to such Underwriter
furnished to the Company in writing by or on behalf of such Underwriter through
the Representatives expressly for use in the Registration Statement, the Pricing
Disclosure Package (or any amendment or supplement thereto), the Prospectus (or
any amendment or supplement thereto) or any Permitted Free Writing Prospectus;
it being understood that such information shall consist solely of the following:
the third and tenth paragraphs under the heading “Underwriting” in the
Preliminary Prospectus.
(c) If any
suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnification may be sought pursuant to either Sections
9(a) or 9(b) above, such person (the “Indemnified
Person”) shall promptly
notify the person against whom such indemnification may be sought (the “Indemnifying
Person”) in writing;
provided that the
failure to notify the
26
Indemnifying
Person shall not relieve it from any liability that it may have under this
Section 9 except to the extent that it has been materially prejudiced (through
the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the
failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this
Section 9. If any such proceeding shall be brought or asserted
against an Indemnified Person and it shall have notified the Indemnifying Person
thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to
the Indemnified Person (who shall not, without the consent of the Indemnified
Person, be counsel to the Indemnifying Person) to represent the Indemnified
Person and any others entitled to indemnification pursuant to this Section 9
that the Indemnifying Person may designate in such proceeding and shall pay the
fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed to the contrary;
(ii) the Indemnifying Person has failed within a reasonable time to retain
counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified
Person shall have reasonably concluded that there may be legal defenses
available to it that are different from or in addition to those available to the
Indemnifying Person; or (iv) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be paid or reimbursed as they are incurred;
provided, however that if indemnity may be sought pursuant to the second
paragraph of Section 9(a) above in respect of such proceeding, then in addition
to such separate firm of the Underwriters, their affiliates and such control
persons of the Underwriters the indemnifying party shall be liable for the fees
and expenses of not more than one separate firm (in addition to any local
counsel) for Sandler ▇’▇▇▇▇▇ &
Partners, L.P. in its capacity as a “qualified
independent underwriter”, its affiliates,
partners, directors, officers and all persons, if any, who control Sandler
▇’▇▇▇▇▇ &
Partners, L.P. within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act. Any such separate firm for the
Underwriters, their affiliates, partners, directors and officers and any control
persons of the Underwriters shall be designated in writing by the
Representatives and any such separate firm for the Company, its directors, its
officers who signed the Registration Statement and any control persons of the
Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but, if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. No Indemnifying Person shall,
without the written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (x) includes an
unconditional release of such Indemnified Person, in form and substance
reasonably satisfactory to such Indemnified Person, from all liability on claims
that are
27
the
subject matter of such proceeding and (y) does not include any statement as to
or any admission of fault, culpability or a failure to act by or on behalf of
any Indemnified Person.
(d) If the
indemnification provided for in Sections 9(a) and 9(b) above is unavailable to
an Indemnified Person or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying Person under such
Sections, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the Underwriters
or Sandler ▇’▇▇▇▇▇ &
Partners, L.P. in its capacity as a “qualified
independent underwriter”, as the case may
be, on the other, from the offering of the Shares or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) but also the relative fault of the Company, on the one hand, and the
Underwriters or Sandler ▇’▇▇▇▇▇ &
Partners, L.P. in its capacity as a “qualified
independent underwriter”, as the case may
be, on the other, in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the
Company, on the one hand, and the Underwriters or Sandler ▇’▇▇▇▇▇ &
Partners, L.P. in its capacity as a “qualified
independent underwriter”, as the case may
be, on the other, shall be deemed to be in the same respective proportions as
the net proceeds (before deducting expenses) received by the Company from the
sale of the Shares to the total underwriting discounts and commissions received
by the Underwriters in connection therewith or the fee paid to Sandler ▇’▇▇▇▇▇ &
Partners, L.P. in its capacity as a “qualified
independent underwriter”, as the case may
be, bear to the aggregate offering price of the Shares. The relative
fault of the Company, on the one hand, and the Underwriters or Sandler ▇’▇▇▇▇▇ &
Partners, L.P. in its capacity as a “qualified
independent underwriter”, as the case may
be, on the other, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters or Sandler ▇’▇▇▇▇▇ &
Partners, L.P. in its capacity as a “qualified
independent underwriter”, as the case may
be, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The
Company 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 Section 9(d) above. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in Section 9(d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with any such action or
claim. Notwithstanding the provisions of this Section 9, in no event
shall any Underwriter be required to contribute any amount in excess of the
amount by which the total underwriting discounts and commissions received by
such Underwriter with respect to the offering of the Shares exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f)
28
of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(f) The
remedies provided for in this Section 9 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any Indemnified
Person at law or in equity.
10. Notices. All
notices and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given if mailed or transmitted and confirmed
by any standard form of communication, to the applicable party at the addresses
indicated below and:
(a)
if to the
Representatives or the Underwriters:
▇.▇.
▇▇▇▇▇▇ Securities Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: Equity
Syndication Desk
Facsimile
number (▇▇▇) ▇▇▇-▇▇▇▇
and
Sandler
▇'▇▇▇▇▇ & Partners, L.P.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
General Counsel
Facsimile
number: (▇▇▇) ▇▇▇-▇▇▇▇
with a
copy to:
▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Esq. and ▇▇▇▇▇▇ Silver, Esq.
(b)
if to the
Company:
E*TRADE
Financial Corporation
▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
General Counsel and Chief Financial Officer
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
29
with a
copy to (which shall not constitute notice):
▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation
No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇ ▇. Dallas, Esq. and ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
11. No Fiduciary
Relationship. The Company acknowledges and agrees (i) in
rendering the services set forth herein, the Underwriters are acting, in their
capacity as underwriters, solely in the capacity of an arm’s length
contractual counterparty to the Company and not as a financial advisor or
fiduciary to, or agent of, the Company or any of its affiliates; (ii) the
Underwriters may perform the services contemplated hereby in conjunction with
their affiliates, and any of their affiliates performing services hereunder
shall be entitled to the benefits and be subject to the terms of this Agreement;
(iii) each Underwriter is a securities firm engaged in securities trading and
brokerage activities and providing investment banking and financial advisory
services, and in the ordinary course of business, each Underwriter and its
affiliates may at any time hold long or short positions, and may trade or
otherwise effect transactions, for its own respective accounts or the accounts
of customers, in debt or equity securities of the Company or its affiliates; and
(iv) no Underwriter is an advisor as to legal, tax, accounting or regulatory
matters in any jurisdiction, and the Company must consult with its own advisors
concerning such matters and will be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and no
Underwriter shall have any responsibility or liability to the Company with
respect thereto. Any review of the Company, any of its affiliates,
any of the transactions contemplated hereby or any other matters relating to
such transactions that is performed by the Underwriters or any of their
affiliates will be performed solely for the benefit of the Underwriters, their
affiliates and its agents and shall not be on behalf of, or for the benefit of,
the Company, any of its affiliates or any other person.
12. Governing Law;
Construction.
(a) 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 (each a “Claim”), directly or
indirectly, shall be governed by, and construed in accordance with, the laws of
the State of New York.
(b) 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,
etc. Except as set forth below, no Claim may be commenced,
prosecuted or continued by the Company in any court other than the courts of the
▇▇
▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ 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
nonexclusive jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company irrevocably waives the defense of an
inconvenient forum or objections to personal jurisdiction with respect to the
maintenance of such legal suit, action or proceeding. Each
Underwriter and the Company, on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates, waives all right
to trial by jury in any action, proceeding, claim or counterclaim, whether based
upon contract, tort or otherwise, in any way arising out of or relating to this
Agreement or the performance of services hereunder. The Company
agrees that a final and non-appealable judgment in any such action, proceeding
or counterclaim brought in any such court shall be conclusive and binding upon
the Company and may be enforced in any other courts in the jurisdiction of which
the Company is or may be subject, by suit upon such judgment.
14. Parties in
Interest. The agreements set forth herein have been and are
made solely for the benefit of the Underwriters and the Company 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 the Underwriters)
shall acquire or have any right under or by virtue of this
Agreement.
15. Counterparts. This
Agreement may be signed in counterparts (which may include counterparts
delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same
instrument.
16. Successors and
Assigns. This Agreement shall be binding upon the
Underwriters, the Company, any other Indemnified Person and their respective
successors and assigns and any successor or assign of any substantial portion of
the Company’s
and the Underwriters’ respective
businesses and/or assets.
17. Survival. The
respective indemnities, rights of contribution, representations, warranties and
agreements of the Company and the Underwriters contained in this Agreement or
made by or on behalf of the Company or the Underwriters pursuant to this
Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Shares and shall remain in full force and
effect, regardless of any investigation made by or on behalf of the Company or
the Underwriters.
18. Certain Defined
Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the terms “affiliate” and “significant
subsidiary”
have the meanings ascribed thereto in Rule 405 under the Securities Act and (b)
the term “business day” means any day
other than a day on which banks are permitted or required to be closed in New
York City.
19. Amendments or
Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
31
20. Affiliates. ▇.▇.
▇▇▇▇▇▇, an indirect, wholly owned subsidiary of JPMorgan Chase & Co., is not
a bank and is separate from any affiliated bank, including any U.S. branch or
agency of JPMorgan Chase Bank. Because ▇.▇. ▇▇▇▇▇▇ 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
▇.▇. ▇▇▇▇▇▇ are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency of JPMorgan Chase Bank and
are not otherwise an obligation or responsibility of a branch or agency of
JPMorgan Chase Bank.
Lending
affiliates of the Underwriters may have lending relationships with issuers of
securities underwritten or privately placed by such Underwriter. To
the extent required under the securities laws, prospectuses and other disclosure
documents for securities underwritten or privately placed by such Underwriters
will disclose the existence of any such lending relationships and whether the
proceeds of the issue will be used to repay debts owed to affiliates of such
Underwriters.
The
Underwriters and one or more of their respective affiliates may make markets in
the Common Stock or other securities of the Company, in connection with which
they may buy and sell, as agent or principal, for long or short account, shares
of the Common Stock or other securities of the Company, at the same time that
such Underwriter is acting as an underwriter pursuant to this Agreement; provided that the
Underwriters acknowledges and agrees that any such transactions are not being,
and shall not be deemed to have been, undertaken at the request or direction of,
or for the account of, the Company, and that the Company has and shall have no
control over any decision by the Underwriters and their respective affiliates to
enter into any such transactions.
32
If the
foregoing correctly sets forth the understanding among the Company and the
Underwriters, please so indicate in the space provided below for the purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between the Company and the Underwriters.
|
Very
truly yours,
E*TRADE
FINANCIAL CORPORATION
|
|||
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇ | ||
| Name: ▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: Chief Financial Officer | |||
Accepted
as of the
date
first above written:
▇.▇.
▇▇▇▇▇▇ SECURITIES INC.
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇ | |
| Name: ▇▇▇▇▇ ▇▇▇▇▇ | ||
| Title: Executive Director | ||
SANDLER
▇’▇▇▇▇▇ &
PARTNERS, L.P.
|
By:
|
Sandler
▇’▇▇▇▇▇
and Partners Corp.
the sole general partner |
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||
| Title: An officer of the corporation | ||
For
themselves and the several
Underwriters
listed in Schedule
1 to
the
foregoing Agreement.
Annex
A
435,000,000
shares (with an over-allotment option to purchase an additional 65,000,000
shares)
Price to
Public: $1.10
Annex B
Free Writing Prospectus dated and filed
with the SEC on June 17, 2009.
Schedule 1
|
Underwriter
|
Number of
Shares
|
|||
|
▇.▇. ▇▇▇▇▇▇ Securities
Inc.
|
213,150,000 | |||
|
Sandler ▇’▇▇▇▇▇ & Partners,
L.P.
|
213,150,000 | |||
|
E*TRADE Securities LLC
|
8,700,000 | |||
|
Total
|
435,000,000 | |||
Schedule 2
Named Subsidiaries
E*TRADE Bank
E*TRADE Clearing LLC
ETFC Holdings, Inc.
E*TRADE Capital Markets
LLC
E*TRADE Securities
LLC
E*TRADE Savings Bank
United Medical Bank
Schedule 3
[Lock-Up Letters]
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
C. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Citadel Investment Group,
L.L.C.
Citadel Limited
Partnership
Citadel Investment GROUP,
L.L.C.
Citadel Equity Fund
LTD
Citadel Derivatives Group,
LLC
Citadel Derivatives Trading
LTD
Citadel Holdings I
LP
Citadel Investment GROUP II, L.L.C.
Citadel Advisors LLC
Citadel Holdings II
LP
Exhibit A
OFFICER’S
CERTIFICATE
1. To the knowledge of the undersigned, on
behalf of the Company and not in his/her individual capacity, the
representations, warranties and agreements set forth in Sections 3(a), 3(b) and 3(c) of the
Underwriting Agreement are true and correct as of the date hereof as though made
on and as of this date;
2. The other representations, warranties
and agreements of the Company in the Underwriting Agreement are true
and correct as of the date
hereof as though made on and as of this date;
3. The Company has performed all
obligations and satisfied all conditions, in each case in all material respects,
on its part to be performed or satisfied pursuant to the Underwriting
Agreement at or prior to
the date hereof;
4. The Company’s Registration Statement (File No.
333-158636) under the Securities Act is effective; no stop order suspending the
effectiveness of such Registration Statement has been issued and no proceeding
for that purpose or
pursuant to Section 8A has been initiated or, to the knowledge of the
undersigned threatened by the Commission; no notice of objection of the
Commission to the use of such Registration Statement pursuant to Rule 401(g)(2)
under the Securities Act has been received by the Company;
and all requests for additional information on the part of the Commission have
been complied with;
5. (A) No downgrading has occurred in the
rating accorded any debt securities of or guaranteed by the Company or any
of its subsidiaries by
▇▇▇▇▇’▇ Investors Service, Inc. or Standard
& Poor’s (a division of the McGraw Hill
Companies, Inc.) and (B) neither organization has publicly announced that it has
under surveillance or review, or has changed its outlook with respect to, its rating of any debt securities
of or guaranteed by the Company or any of its subsidiaries (other than an
announcement with positive implications of a possible upgrading);
and
6. Except in each case as otherwise
disclosed in the Registration Statement, the Pricing Disclosure Package, the
Prospectus and any Permitted Free Writing Prospectus, since the date of the most
recent financial statements of the Company included or incorporated by reference
in the Registration Statement, the Pricing Disclosure Package, the Prospectus and any
Permitted Free Writing Prospectus, (i) there has not been any material change in
the capital stock or long-term debt of the Company or any of its subsidiaries
and there has not been a Material Adverse Effect, (ii) neither the Company nor any of its subsidiaries
has entered into any transaction or agreement that is material to the Company
and its subsidiaries, taken as a whole, or incurred any liability or obligation,
direct or contingent, except for such liabilities or obligations that, individually or in the
aggregate, would not have a Material Adverse Effect and (iii) neither the
Company nor any of its subsidiaries has sustained any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from
any labor disturbance or dispute or any action, order or decree of any court or
arbitrator or
A-1
governmental or regulatory authority,
except for such losses that, individually or in the aggregate, would not have a
Material Adverse Effect.
All capitalized terms used herein and
not otherwise defined shall have the respective meanings assigned to them in the
Underwriting Agreement.
A-2
Exhibit B
FORM OF
OPINION AND NEGATIVE ASSURANCE LETTER OF
▇▇▇▇▇ ▇▇▇▇
& ▇▇▇▇▇▇▇▇,
COUNSEL
TO THE
COMPANY
B-1
Exhibit C
FORM OF
OPINION OF
INTERNAL
COUNSEL TO THE COMPANY
C-1
Exhibit D
FORM OF LOCK-UP
AGREEMENT
_____________, 2009
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Sandler ▇'▇▇▇▇▇ & Partners,
L.P.
as Representatives of the
several
Underwriters listed in Schedule 1 to the
Underwriting Agreement
c/o ▇.▇. ▇▇▇▇▇▇ Securities
Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇
Re: E*TRADE Financial Corporation
--- Public
Offering
Ladies and
Gentlemen:
Each of the undersigned understands that
you, as Representatives of the several Underwriters (the “Representatives”), propose to enter into an Underwriting
Agreement (the “Underwriting
Agreement”) with E*TRADE Financial Corporation, a Delaware corporation
(the “Company”), providing for the public offering
(the “Public
Offering”) by the several Underwriters named in
Schedule 1 to the Underwriting Agreement (the “Underwriters”), of Common Stock of the Company (the
“Securities”). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Underwriting
Agreement.
In consideration of the
Underwriters’ agreement to purchase and make the
Public Offering of the Securities, and for other good and valuable consideration receipt of
which is hereby acknowledged, each of the undersigned hereby agrees that,
without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. and Sandler
▇'▇▇▇▇▇ & Partners, L.P. on behalf of the Underwriters,
such undersigned will not, during the period
ending 90 days after the date of the prospectus relating to the Public Offering
(the “Prospectus”), (1) offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract to
purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of common
stock, $0.01 per share par value, of the Company (the “Common
Stock”) beneficially owned prior to the date hereof or any
securities beneficially owned prior to the date hereof that are convertible into
or exercisable or exchangeable for Common Stock (including without limitation,
Common Stock which may be deemed to be beneficially owned by any of the undersigned in accordance with
the rules and regulations of the Securities and Exchange Commission and
securities which may be issued upon exercise of a stock option or warrant) or
(2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of any shares of Common Stock beneficially owned prior
to the date hereof, whether any such transaction described in clause (1)
D-1
or (2) above is to be settled by
delivery of such Common Stock or such other securities, in cash or
otherwise or (3) make any demand for or exercise any right with respect to the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock that are, in each case, beneficially owned prior the date
hereof without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc.
and Sandler ▇’▇▇▇▇▇ & Partners, L.P., in each case
other than, to the extent applicable to the undersigned, (A) with respect to any
of the undersigned that is
a corporation, limited liability company or limited partnership, distributions
of shares of Common Stock to stockholders, members or partners of such
undersigned, (B) transfers of shares of Common Stock as a bona fide gift or
gifts, (C) dispositions of shares of Common Stock to any
trust for the direct or indirect benefit of the undersigned and/or the immediate
family of the undersigned, (D) dispositions of shares of Common Stock by will or
under the laws of descent, (E) disposition of shares of Common Stock solely for the payment of
taxes in connection with the vesting of restricted stock or stock options
granted to the undersigned, (F) dispositions of shares of Common Stock pursuant
to a 10b5-1 sales plan entered into prior to the date of this Letter Agreement, (G) exercise or
assignment of option contracts entered into prior to the date of this Letter
Agreement, (H) dispositions of shares of Common Stock obtained through the
exercise or assignment of option contracts entered into prior to the date of this Letter Agreement, (I)
transfers of shares of Common Stock to directors, officers or employees of such
undersigned or its subsidiaries or affiliates, (J) dispositions of shares of
Common Stock in the form of a pledge, hypothecation (provided such hypothecation does not require
registration under the Securities Act) or encumbrance of Common Stock for
financing purposes and (K) Permitted Transfers; provided that in the case of any distribution or
transfer pursuant to clauses (A), (B), (C), (I) or (K), each donee, transferee or
distributee shall execute and deliver to the Representatives a lock-up letter in
the form of this paragraph; and provided, further, that in the case of any distribution
or transfer pursuant to clauses (A), (B), (C) or (I), no filing by any party (donor, donee,
transferor or transferee) under the Securities Exchange Act of 1934, as amended,
or other public announcement shall be required or shall be made voluntarily in
connection with such transfer or distribution (other than a filing on a Form 5 made after the
expiration of the 90-day period referred to above). For purposes of
this Letter Agreement, “Permitted
Transfers” shall mean any transfer by the
undersigned (i) to an affiliate, (ii) to an acquiring or offering person in
a transaction that is a
“change of control” under the Company’s outstanding debt instruments or a
tender offer for more than a majority of the outstanding shares of the
Company’s Common Stock or (iii) to any other
investment fund with respect to which the sponsor and discretionary investment
manager or advisor of the undersigned or an affiliate thereof serves as a
sponsor and discretionary investment manager or advisor. In addition,
the undersigned agrees that, without the prior written consent of ▇.▇.
▇▇▇▇▇▇ Securities Inc. and Sandler
▇’▇▇▇▇▇ & Partners, L.P. on behalf of
the Underwriters, it will not, during the period ending 90 days after the date
of the Prospectus, make any demand for or exercise any right with respect to,
the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common
Stock.
In furtherance of the foregoing, the
Company, and any duly appointed transfer agent for the registration or transfer
of the securities described herein, are hereby authorized to decline to make
any transfer of securities if such transfer would constitute a violation or
breach of this Letter Agreement.
D-2
Each of the undersigned hereby
represents and warrants that it has full power and authority to enter into
this Letter
Agreement. All authority herein conferred or agreed to be conferred
and any obligations of any of the undersigned shall be binding upon the
successors, assigns, heirs or personal representatives, as the case may be, of
any of the undersigned.
Each of the undersigned understands that,
if the Underwriting Agreement does not become effective, or if the Underwriting
Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Common Stock to be sold
thereunder, each of the undersigned shall be released from, all obligations
under this Letter Agreement. Each of the undersigned understands that
the Underwriters are entering into the Underwriting Agreement and
proceeding with the Public Offering in reliance
upon this Letter Agreement. In any event, this Letter Agreement shall
automatically terminate and be of no further force and effect if the
Underwriting Agreement is not entered into by the Company on or before July
15, 2009.
D-3
This Letter Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
regard to the conflict of laws principles thereof.
|
Very
truly yours,
[NAME OF
STOCKHOLDER]
|
|||
|
By:
|
|||
| Name: | |||
| Title: | |||
D-4