Exhibit 1.1
XXXXXXX HOLDINGS, INC.
6,250,000 Shares of Common Stock(1)
UNDERWRITING AGREEMENT
March [__], 2006
Xxxxxxx Xxxxx & Company, L.L.C.
As Representative of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. Xxxxxxx Holdings, Inc. ("COMPANY"), a
Delaware corporation, will have, upon the filing of an amendment to its Fourth
Amended and Restated Certificate of Incorporation (the "CHARTER AMENDMENT"), an
authorized capital stock consisting of 10,000,000 shares, $0.01 par value, of
Preferred Stock, of which no shares will be outstanding as of the First Closing
Date hereinafter defined, and 150,000,000 shares, $0.01 par value, of Common
Stock ("COMMON STOCK"), of which 18,141,306 shares will be outstanding as of the
First Closing Date hereinafter defined (excluding any shares of Common Stock
that may be issued upon exercise of options after the date of this Agreement).
The Company proposes to issue and sell 6,250,000 shares of its authorized but
unissued Common Stock ("FIRM SHARES") to the several underwriters named in
Schedule A as it may be amended by the Pricing Agreement hereinafter defined
("UNDERWRITERS"), who are acting severally and not jointly. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to
937,500 additional shares of Common Stock ("OPTION SHARES") as provided in
Section 4 hereof. The Firm Shares and, to the extent such option is exercised,
the Option Shares, are hereinafter collectively referred to as the "SHARES."
You have advised the Company that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon as you deem
advisable after the registration statement hereinafter referred to becomes
effective, if it has not yet become effective, and the Pricing Agreement
hereinafter defined has been executed and delivered.
The Company and the Underwriters agree that up to 312,500 of the
Shares to be purchased by the Underwriters (the "RESERVED SHARES") shall be
reserved for sale by the Underwriters to certain eligible employees and
independent loan review specialists of the Company (the "INVITEES"), as part of
the distribution of the Shares by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. ("NASD") and all other applicable laws,
rules and regulations. To the extent that any such Reserved Shares are not
orally confirmed for purchase by Invitees by the end of the first business day
after the date of this Agreement, such Reserved Shares may be offered to the
public by the Underwriters as part of the public offering contemplated hereby.
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(1) Plus an option to acquire up to 937,500 additional shares to cover
overallotments
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and the Representative, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form of
Exhibit A hereto (the "PRICING AGREEMENT"). The Pricing Agreement may take the
form of an exchange of any standard form of written telecommunication between
the Company and the Representative and shall specify such applicable information
as is indicated in Exhibit A hereto. The offering of the Shares will be governed
by this Agreement, as supplemented by the Pricing Agreement. From and after the
date of the execution and delivery of the Pricing Agreement, this Agreement
shall be deemed to incorporate the Pricing Agreement.
The Company hereby confirms its agreement with the Underwriters as
follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-129526) and a
related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("COMMISSION") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 ACT;" all references herein
to specific rules are rules promulgated under the 0000 Xxx); and the
Company has so prepared and has filed such amendments thereto, if any, and
such amended preliminary prospectuses as may have been required to the date
hereof and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. The Company will prepare and
file a prospectus pursuant to Rule 424(b) that discloses the information
previously omitted from the prospectus in reliance upon Rule 430A. To the
extent requested by the Representative, there have been or will promptly be
delivered to you three signed copies of such registration statement and
amendments, three copies of each exhibit filed therewith, and conformed
copies of such registration statement and amendments (but without exhibits)
and of the related preliminary prospectus or prospectuses and final forms
of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the time it
becomes effective and the prospectus constituting a part thereof (including
the information, if any, deemed to be part thereof pursuant to Rule
430A(b)), as from time to time amended or supplemented, are hereinafter
referred to as the "REGISTRATION STATEMENT" and the "PROSPECTUS,"
respectively, except that if any revised prospectus shall be provided to
the Underwriters by the Company for use in connection with the offering of
the Shares which differs from the Prospectus on file at the Commission at
the time the Registration Statement became or becomes effective (whether or
not such revised prospectus is required to be filed by the Company pursuant
to Rule 424(b)), the term Prospectus shall refer to such revised prospectus
from and after the time it was provided to the Underwriters for such use.
Any registration statement (including any amendment or supplement thereto
or information which is deemed part thereof) filed by the Company under
Rule 462(b) ("RULE 462(B) REGISTRATION STATEMENT") shall be deemed to be
part of the "Registration Statement" as defined herein, and any prospectus
(including any amendment or supplement thereto or information which is
deemed part thereof) included in such registration statement shall be
deemed to be part of the "Prospectus" as defined herein, as appropriate.
The Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder are hereinafter collectively
referred to as the "EXCHANGE ACT."
(b) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus, and each preliminary prospectus has
conformed in all material respects with the requirements of the 1933 Act
and, as of its date, has not included any untrue
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statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; and when the Registration Statement became
or becomes effective, and at all times subsequent thereto, up to the First
Closing Date or the Second Closing Date hereinafter defined, as the case
may be, the Registration Statement, including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, in all material respects conformed or will in all
material respects conform to the requirements of the 1933 Act, and neither
the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a
material fact or omitted or will omit to state a material fact, in the case
of the Registration Statement or any amendment or supplement thereto,
required to be stated therein or necessary to make the statements therein
not misleading and, in the case of the Prospectus, or any amendment or
supplement thereto, necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
As of the Applicable Time hereinafter defined, neither (x) the Issuer
General Use Free Writing Prospectus(es) hereinafter defined issued at or
prior to the Applicable Time and the Statutory Prospectus hereinafter
defined as of the Applicable Time, all being considered together
(collectively, the "DISCLOSURE PACKAGE"), nor (y) any individual Issuer
Limited Use Free Writing Prospectus hereinafter defined included any untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
As used in this Section 2(b) and elsewhere in this Agreement:
"APPLICABLE TIME" means [__]:00 P.M., Chicago Time, on March [__],
2006, or such other time as agreed by the Company and the Representative.
"ISSUER FREE WRITING PROSPECTUS" means any "issuer free writing
prospectus," as defined in Rule 433, relating to the Shares that (i) is
required to be filed with the Commission by the Company, (ii) is a "road
show for an offering that is a written communication" within the meaning of
Rule 433(d)(8)(i) whether or not required to be filed with the Commission
or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it
contains a description of the Shares or of the offering thereof that does
not reflect the final terms, in each case in the form filed or required to
be filed with the Commission or, if not required to be filed, in the form
required to be retained in the Company's records pursuant to Rule 433(g).
"ISSUER GENERAL USE FREE WRITING PROSPECTUS" means any Issuer Free
Writing Prospectus that is intended for general distribution to prospective
investors (other than a Bona Fide Electronic Road Show hereinafter
defined), as evidenced by its being specified in Schedule B hereto.
"ISSUER LIMITED USE FREE WRITING PROSPECTUS" means any Issuer Free
Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
"STATUTORY PROSPECTUS" as of any time means the prospectus relating to
the Shares that is included in the Registration Statement immediately prior
to that time.
The Company has made available a "BONA FIDE electronic road show," as
defined in Rule 433, in compliance with Rule 433(d)(8)(ii) (the "BONA FIDE
ELECTRONIC ROAD SHOW") such that no
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filing of any "road show" (as defined in Rule 433(h)) is required in
connection with the offering of the Shares.
Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Shares or until any earlier date that the Company notified or notifies the
Representative as described in Section 5(d), did not, does not and will not
include any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement or the Prospectus,
and any preliminary or other prospectus deemed to be a part thereof that
has not been superseded or modified.
Notwithstanding the foregoing, the representations and warranties of
the Company set forth in this Section 2(b) shall not apply to information
contained in or omitted from any preliminary prospectus, the Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter through the Representative specifically for use in the
preparation thereof.
At the time of filing the Registration Statement, any 462(b)
Registration Statement and any post-effective amendments thereto and at the
date of this Agreement, the Company was not and is not an "ineligible
issuer" as defined in Rule 405.
(c) The Company and its subsidiaries have been duly incorporated and
are validly existing as corporations in good standing under the laws of
their respective places of incorporation, with corporate power and
authority to own their properties and conduct their business as described
in the Prospectus; the Company and each of its subsidiaries are duly
qualified to do business as foreign corporations under the corporation law
of, and are in good standing as such in, each jurisdiction in which they
own or lease substantial properties, have an office, or in which
substantial business is conducted and such qualification is required except
in any such case where the failure to so qualify or be in good standing
would not have a material adverse effect upon the Company and its
subsidiaries taken as a whole; and no proceeding of which the Company has
knowledge has been instituted in any such jurisdiction, revoking, limiting
or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification.
(d) Except as disclosed in the Prospectus, the Company owns directly
or indirectly 100 percent of the issued and outstanding capital stock of
each of its subsidiaries, free and clear of any claims, liens, encumbrances
or security interests and all of such capital stock has been duly
authorized and validly issued and is fully paid and nonassessable.
(e) The issued and outstanding shares of capital stock of the Company
as set forth in the Prospectus have been duly authorized and validly
issued, are fully paid and nonassessable, and conform to the description
thereof contained in the Prospectus.
(f) The Shares have been duly authorized and when issued, delivered
and paid for pursuant to this Agreement, will be validly issued, fully paid
and nonassessable, and will conform to the description thereof contained in
the Prospectus.
(g) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and will not violate any provision of the Company's charter or
bylaws, after giving effect to the filing and effectiveness of the Charter
Amendment pursuant to Section 5(p), and will not result in the material
breach, or be
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in material contravention, of any provision of any agreement, franchise,
license, indenture, mortgage, deed of trust, or other instrument to which
the Company or any subsidiary is a party or by which the Company, any
subsidiary or the property of any of them may be bound or affected, or any
order, rule or regulation applicable to the Company or any subsidiary of
any court or regulatory body, administrative agency or other governmental
body having jurisdiction over the Company or any subsidiary or any of their
respective properties, or any order of any court or governmental agency or
authority entered in any proceeding to which the Company or any subsidiary
was or is now a party or by which it is bound. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body is required for the execution and
delivery of this Agreement or the Pricing Agreement or the consummation of
the transactions contemplated herein or therein, except for compliance with
the 1933 Act and blue sky laws applicable to the public offering of the
Shares by the several Underwriters and clearance of such offering with the
NASD. This Agreement has been duly executed and delivered by the Company.
(h) The accountants who have expressed their opinions with respect to
certain of the financial statements and schedules included in the
Registration Statement are independent accountants as required by the 1933
Act and such accountants are not in violation of the auditor independence
requirements of the Xxxxxxxx-Xxxxx Act of 2002 (the "XXXXXXXX-XXXXX ACT").
(i) The consolidated financial statements of the Company included in
the Registration Statement, the Disclosure Package and the Prospectus
present fairly in all material respects the consolidated financial position
of the Company as of the respective dates of such financial statements, and
the consolidated results of operations and cash flows of the Company for
the respective periods covered thereby, all in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein. The consolidated financial
statements of Xxxxxxx Services, Inc. ("XXXXXXX SERVICES") and Xxxxxxx Fixed
Income Services, Inc. (f/k/a The Murrayhill Company) ("CFIS") included in
the Registration Statement, the Disclosure Package and the Prospectus
present fairly in all material respects the consolidated financial position
of Xxxxxxx Services and CFIS, respectively, as of the respective dates of
such financial statements, and the consolidated results of operations and
cash flows of Xxxxxxx Services and CFIS, respectively, for the respective
periods covered thereby, all in conformity with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein.
The financial information set forth in the Prospectus under "Selected
Consolidated Financial Data" presents fairly in all material respects on
the basis stated in the Prospectus, the information set forth therein.
The pro forma financial statements and other pro forma information
included in the Registration Statement, the Disclosure Package and the
Prospectus present fairly in all material respects the information shown
therein, have been prepared in accordance with generally accepted
accounting principles and the Commission's rules and guidelines with
respect to pro forma financial statements and other pro forma information,
have been properly compiled on the pro forma basis described therein, and,
in the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
under the circumstances.
All disclosures contained in the Registration Statement, the
Disclosure Package and the Prospectus regarding "non-GAAP financial
measures" (as such term is defined by the
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Commission's rules and regulations) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the 1933 Act, to the
extent applicable.
(j) Neither the Company nor any subsidiary is in violation of its
charter or in default under any consent decree, or in default with respect
to any material provision of any lease, loan agreement, franchise, license,
permit or other contract obligation to which it is a party; and, to the
Company's knowledge, there does not exist any state of facts which
constitutes an event of default as defined in such documents or which, with
notice or lapse of time or both, would constitute such an event of default,
in each case, except for defaults which neither singly nor in the aggregate
are material to the Company and its subsidiaries taken as a whole.
(k) There are no material legal or governmental proceedings pending,
or to the Company's knowledge, threatened to which the Company or any
subsidiary is or may be a party or of which material property owned or
leased by the Company or any subsidiary is or may be the subject, or
related to environmental or discrimination matters which are not disclosed
in the Prospectus, or which question the validity of this Agreement or the
Pricing Agreement or any action taken or to be taken pursuant hereto or
thereto.
(l) There are no holders of securities of the Company having rights to
registration thereof or preemptive rights to purchase Common Stock except
as disclosed in the Prospectus. All holders of registration or preemptive
rights have waived such rights with respect to the offering being made by
the Prospectus.
(m) The Company and each of its subsidiaries have good and marketable
title to all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except
those, if any, reflected in such financial statements (or elsewhere in the
Prospectus) or which are not material to the Company and its subsidiaries
taken as a whole. The Company and each of its subsidiaries hold their
respective leased properties which are material to the Company and its
subsidiaries taken as a whole under valid and binding leases.
(n) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement, the Disclosure Package and the
Prospectus, and except as contemplated by the Prospectus, the Company and
its subsidiaries, taken as a whole, have not incurred any material
liabilities or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and there has
not been any material adverse change in their condition (financial or
otherwise) or results of operations nor any material change in their
capital stock, short-term debt or long-term debt.
(p) There is no material document of a character required to be
described in the Registration Statement, the Disclosure Package or the
Prospectus or to be filed as an exhibit to the Registration Statement which
is not described or filed as required.
(q) The Company together with its subsidiaries owns and possesses all
right, title and interest in and to, or has duly licensed from third
parties, all patents, patent rights, trade secrets, inventions, know-how,
trademarks, trade names, copyrights, service marks and other proprietary
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rights ("TRADE RIGHTS") material to the business of the Company and each of
its subsidiaries taken as a whole. Neither the Company nor any of its
subsidiaries has received any notice of infringement, misappropriation or
conflict from any third party as to such material Trade Rights which has
not been resolved or disposed of and neither the Company nor any of its
subsidiaries has infringed, misappropriated or otherwise conflicted with
material Trade Rights of any third parties, which infringement,
misappropriation or conflict would have a material adverse effect upon the
condition (financial or otherwise) or results of operations of the Company
and its subsidiaries taken as a whole.
(r) The conduct of the business of the Company and each of its
subsidiaries is in compliance in all respects with applicable federal,
state, local and foreign laws and regulations, except where the failure to
be in compliance would not have a material adverse effect upon the
condition (financial or otherwise) or results of operations of the Company
and its subsidiaries taken as a whole.
(s) All offers and sales of the Company's capital stock during the
six-month period preceding the date hereof were at all relevant times
exempt from the registration requirements of the 1933 Act and were duly
registered with or the subject of an available exemption from the
registration requirements of the applicable federal, state and local
securities or blue sky laws.
(t) The Company has filed all necessary federal, state and local
income and franchise tax returns required to be filed through the date
hereof (taking into account any permitted extensions) and has paid all
taxes shown as due thereon, and there is no tax deficiency that has been,
or to the knowledge of the Company might be, asserted against the Company
or any of its properties or assets that would or could be expected to have
a material adverse affect upon the condition (financial or otherwise) or
results of operations of the Company and its subsidiaries taken as a whole.
(u) The Company has filed a registration statement pursuant to Section
12(g) of the Exchange Act to register the Common Stock thereunder, has
filed an application to list the Shares on the Nasdaq National Market, and
has received notification that the listing has been approved, subject to
notice of issuance or sale of the Shares, as the case may be.
(v) The Company has established and maintains disclosure controls and
procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act)
and such controls and procedures are effective in all material respects in
ensuring that material information relating to the Company, including its
subsidiaries, is made known to the principal executive officer and the
principal financial officer.
(w) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) amounts reflected on the Company's
consolidated balance sheet for assets are compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(x) The Company is not, and does not intend to conduct its business in
a manner in which it would become, an "investment company" as defined in
Section 3(a) of the Investment Company Act of 1940, as amended ("INVESTMENT
COMPANY ACT").
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(y) No transaction has occurred between or among the Company and any
of its officers or directors, stockholders or any affiliate or affiliates
of any such officer or director or stockholder that is required to be
described in and is not described in the Registration Statement and the
Prospectus.
(z) The Company's board of directors has validly appointed an audit
committee whose composition satisfies the requirements of Rule 4350(d)(2)
of the Rules of the National Association of Securities Dealers, Inc. (the
"NASD RULES"), and the board of directors or the audit committee has
adopted a charter that satisfies the requirements of Rule 4350(d)(1) of the
NASD Rules.
(aa) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in
the Prospectus. All policies of insurance and fidelity or surety bonds
insuring the Company, its subsidiaries and their respective businesses,
assets, employees, officers and directors are in full force and effect; the
Company and its subsidiaries are in compliance with the terms of such
policies and instruments in all material respects.
(bb) The Company has taken all necessary actions to ensure that, upon
the effectiveness of the Registration Statement, it will be in compliance
in all material respects with all provisions of the Xxxxxxxx-Xxxxx Act and
all rules and regulations promulgated thereunder or implementing the
provisions thereof that are then in effect and which the Company is
required to comply with as of the effectiveness of the Registration
Statement, and is actively taking steps to ensure that it will be in
compliance in all material respects with other provisions of the
Xxxxxxxx-Xxxxx Act not currently in effect, upon the effectiveness of such
provisions, or which will become applicable to the Company at all times
after the effectiveness of the Registration Statement.
(cc) No consent, approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained, is
required in connection with the offering of the Reserved Shares in any
jurisdiction where the Reserved Shares are being offered. The Company has
not offered, or caused the Underwriters to offer, any Reserved Shares with
the specific intent to unlawfully influence (i) a customer or supplier of
the Company or any of its subsidiaries to alter the customer's or
supplier's level or type of business with the Company or any of its
subsidiaries or (ii) a trade journalist or publication to write or publish
favorable information about the Company or its products.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representative, on behalf of the several Underwriters, represents and warrants
to the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering and (b) in all paragraphs under "Underwriting" in the Prospectus,
except paragraphs 7, 16 and 17 thereof, was furnished to the Company by and on
behalf of the Underwriters for use in connection with the preparation of the
Registration Statement and is correct and complete in all material respects.
SECTION 4. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters named in Schedule A hereto, and the Underwriters agree, severally
and not jointly, to purchase the Firm Shares from the Company at the price per
share set forth in the Pricing Agreement. The obligation of each Underwriter to
the Company shall be
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to purchase from the Company that number of full shares which (as nearly as
practicable, as determined by you) bears to 6,250,000, the same proportion as
the number of Shares set forth opposite the name of such Underwriter in Schedule
A hereto bears to the total number of Firm Shares to be purchased by all
Underwriters under this Agreement. The initial public offering price and the
purchase price shall be set forth in the Pricing Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted
under Rule 15c6-1 under the Exchange Act, (or the third business day if required
under Rule 15c6-1 under the Exchange Act or unless postponed in accordance with
the provisions of Section 12) following the date the Registration Statement
becomes effective (or, if the Company has elected to rely upon Rule 430A, the
fourth business day, if permitted under Rule 15c6-1 under the Exchange Act, (or
the third business day if required under Rule 15c6-1 under the Exchange Act)
after execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Representative and
the Company, the Company will deliver to you at the offices of counsel for the
Underwriters or through the facilities of The Depository Trust Company for the
accounts of the several Underwriters, certificates representing the Firm Shares
to be sold by it, against payment of the purchase price therefor by delivery of
federal or other immediately available funds, by wire transfer or otherwise, to
the Company. Such time of delivery and payment is herein referred to as the
"FIRST CLOSING DATE." The certificates for the Firm Shares so to be delivered
will be in such denominations and registered in such names as you request by
notice to the Company prior to 10:00 A.M., Chicago Time, on the second business
day preceding the First Closing Date, and will be made available at the
Company's expense for checking and packaging by the Representative at 10:00
A.M., Chicago Time, on the business day preceding the First Closing Date.
Payment for the Firm Shares so to be delivered shall be made at the time and in
the manner described above at the offices of counsel for the Underwriters.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 937,500 Option
Shares, at the same purchase price per share to be paid for the Firm Shares, for
use solely in covering any overallotments made by the Underwriters in the sale
and distribution of the Firm Shares. The option granted hereunder may be
exercised at any time (but not more than once) within 30 days after the date of
the initial public offering upon notice by you to the Company setting forth the
aggregate number of Option Shares as to which the Underwriters are exercising
the option, the names and denominations in which the certificates for such
shares are to be registered and the time and place at which such certificates
will be delivered. Such time of delivery (which may not be earlier than the
First Closing Date), being herein referred to as the "SECOND CLOSING DATE,"
shall be determined by you, but if at any time other than the First Closing
Date, shall not be earlier than three nor later than 10 full business days after
delivery of such notice of exercise. The number of Option Shares to be purchased
by each Underwriter shall be determined by multiplying the number of Option
Shares to be sold by a fraction, the numerator of which is the number of Firm
Shares to be purchased by such Underwriter as set forth opposite its name in
Schedule A and the denominator of which is the total number of Firm Shares
(subject to such adjustments to eliminate any fractional share purchases as you
in your absolute discretion may make). Certificates for the Option Shares will
be made available at the Company's expense for checking and packaging at 10:00
A.M., Chicago Time, on the first full business day preceding the Second Closing
Date. The manner of payment for and delivery of the Option Shares shall be the
same as for the Firm Shares as specified in the preceding paragraph.
You have advised the Company that each Underwriter has authorized you
to accept delivery of its Shares, to make payment and to receipt therefor. You,
individually and not as the Representative of the Underwriters, may make payment
for any Shares to be purchased by any Underwriter whose funds shall not have
been received by you by the First Closing Date or the Second
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Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any obligation hereunder.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and agrees
that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose or of any examination pursuant to Section 8(e)
of the 1933 Act concerning the Registration Statement and if the Company
becomes the subject of a proceeding under Section 8A of the 1933 Act in
connection with the offering of the Shares, and will also advise you
promptly of any request of the Commission for amendment or supplement of
the Registration Statement, of any preliminary prospectus or of the
Prospectus, or for additional information.
(b) The Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement (including any
post-effective amendment) or any Rule 462(b) Registration Statement or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use by the Underwriters in connection with
the offering of the Shares which differs from the prospectus on file at the
Commission at the time the Registration Statement became or becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b)) and will furnish you with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which you or counsel for the
Underwriters shall reasonably object.
(c) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
include an untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) to comply with
the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; and, in case any Underwriter is required to deliver
a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the 1933 Act.
(d) If at any time following the issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus conflicted or would conflict with
the information contained in the Registration Statement or included or
would include an untrue statement of a material fact or omitted or would
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances, prevailing at that subsequent time, not
misleading, the Company will promptly notify the Representative and will
promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or
omission.
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(e) As soon as practicable after the end of the fiscal year ending
December 31, 2006, the Company will make generally available to its
security holders an earnings statement (which need not be audited) covering
a period of at least 12 months beginning after the effective date of the
Registration Statement, which will satisfy the provisions of the last
paragraph of Section 11(a) of the 1933 Act.
(f) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, copies of the
Registration Statement, the Prospectus, any Permitted Free Writing
Prospectus hereinafter defined, each preliminary prospectus and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as you may reasonably request, for the
purposes contemplated by the 1933 Act.
(g) The Company will cooperate with the Underwriters in qualifying or
registering the Shares for sale under the blue sky laws of such
jurisdictions as you designate, and will continue such qualifications in
effect so long as reasonably required for the distribution of the Shares.
The Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any such jurisdiction where
it is not currently qualified or where it would be subject to taxation as a
foreign corporation.
(h) During the period of five years hereafter, the Company will
furnish you and each of the other Underwriters upon request with a copy (i)
as soon as practicable after the filing thereof, of each report filed by
the Company with the Commission, any securities exchange or the NASD; (ii)
as soon as practicable after the release thereof, of each material press
release in respect of the Company; and (iii) as soon as available, of each
report of the Company mailed to stockholders.
(i) The Company will use the net proceeds received by it from the sale
of the Shares being sold by it in the manner specified in the Prospectus.
(j) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A, then immediately following the execution of the Pricing Agreement,
the Company will prepare, and file or transmit for filing with the
Commission in accordance with such Rule 430A and Rule 424(b), copies of an
amended Prospectus, or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including an amended Prospectus),
containing all information so omitted. If required, the Company will
prepare and file, or transmit for filing, a Rule 462(b) Registration
Statement not later than the date of the execution of the Pricing
Agreement. If a Rule 462(b) Registration Statement is filed, the Company
shall make payment of, or arrange for payment of, the additional
registration fee owing to the Commission required by Rule 111.
(k) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National Market
and will file with the Commission in a timely manner all reports on Form SR
required by Rule 463 and will furnish you copies of any such reports as
soon as practicable after the filing thereof; and the Company and its
subsidiaries will comply in all material respects with all applicable
provisions of the Xxxxxxxx-Xxxxx Act.
(l) The Company and its subsidiaries will maintain such controls and
other procedures, including without limitation those required by the
Xxxxxxxx-Xxxxx Act and the applicable regulations thereunder, that are
designed to ensure that information required to be
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disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Commission's rules and forms, including
without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is accumulated and communicated to
the Company's management, including its principal executive officer and its
principal financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure, to
ensure that material information relating to Company, including its
subsidiaries, is made known to them by others within those entities.
(m) The Company and its subsidiaries will maintain a system of
internal accounting controls designed 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 accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) amounts reflected on the
Company's consolidated balance sheet for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(n) The Company agrees not to, directly or indirectly, (i) offer, sell
(including "short" selling), assign, transfer, encumber, pledge, contract
to sell, grant an option to purchase, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of any shares of Common Stock or securities convertible
or exchangeable into, or exercisable for, Common Stock held of record or
beneficially owned (within the meaning of Rule 13d-3 under the Exchange
Act); or (ii) enter any swap or other arrangement that transfers all or a
portion of the economic consequences associated with the ownership of any
Common Stock (except, in each case, Common Stock sold pursuant to this
Agreement or issued pursuant to currently outstanding options, warrants or
convertible securities and except for options to be granted under existing
stock option plans) without the prior written consent of Xxxxxxx Xxxxx &
Company, L.L.C. for a period of 180 days after this Agreement becomes
effective (the "LOCK-UP PERIOD"); PROVIDED, HOWEVER, that if (1) during the
last 17 days of the initial Lock-Up Period, the Company releases earnings
results or material news or a material event relating to the Company occurs
or (2) prior to the expiration of the initial Lock-Up Period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the initial Lock-Up Period, then in either
case the Lock-Up Period will be extended until the expiration of the 18-day
period beginning on the date of release of the earnings results or the
occurrence of the material news or material event, as applicable, unless
Xxxxxxx Xxxxx & Company, L.L.C. waives, in writing, such extension. The
Company has obtained similar agreements from each of its officers and
directors and current stockholders and optionholders and agrees not to
waive or fail to enforce any such agreement (it being hereby acknowledged
by the Underwriters that they have requested such enforcement).
Notwithstanding the foregoing, during the Lock-Up Period, the Company may
issue a number of shares of Common Stock with a value of up to an aggregate
of $25.0 million in connection with one or more acquisitions by the
Company, provided in each case that each recipient of such shares of Common
Stock executes an agreement reasonably satisfactory to Xxxxxxx Xxxxx &
Company, L.L.C. to be subject to the foregoing restrictions in respect of
such shares of Common Stock for the duration of the Lock-Up Period. The per
share value of the Common Stock issued in connection with any such
acquisition by the Company shall be equal to the average closing price of
the Common Stock over the five consecutive trading days immediately prior
to the public announcement of such acquisition.
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(o) The Company hereby agrees that it will ensure that the Reserved
Shares will be restricted as required by the NASD or the NASD rules from
sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of this Agreement. The Underwriters will notify
the Company as to which persons will need to be so restricted and the
Company's obligations under this Section 5(o) will extend only to such
persons. At the request of the Underwriters, the Company will direct the
transfer agent to place a stop transfer restriction upon such securities
for such period of time. Should the Company release, or seek to release,
from such restrictions any of the Reserved Shares, the Company agrees to
reimburse the Underwriters for any reasonable expenses (including, without
limitation, legal expenses) they incur in connection with such release.
(p) The Company will file and cause to become effective the Charter
Amendment on or prior to the First Closing Date.
SECTION 6. COVENANTS OF THE COMPANY AND THE UNDERWRITERS. The Company
represents and agrees that, unless it obtains the prior consent of the
Representative, and each Underwriter, severally and not jointly, represents and
agrees that, unless it obtains the prior consent of the Company and the
Representative, 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, or that would otherwise constitute a "free writing prospectus," as
defined in Rule 405, required to be filed with the Commission. Any such free
writing prospectus consented to by the Representative or by the Company and the
Representative, as the case may be, is hereinafter referred to as a "PERMITTED
FREE WRITING PROSPECTUS." The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an "issuer free
writing prospectus," as defined in Rule 433, and has complied and will comply
with the requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely filing with the Commission where required,
legending and record-keeping.
SECTION 7. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as to
all of its provisions or is terminated, the Company agrees to pay (i) all costs,
fees and expenses (other than legal fees and disbursements of counsel for the
Underwriters and the expenses incurred by the Underwriters) incurred in
connection with the performance of the Company's obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the preparation,
printing, filing and distribution (including electronic delivery) of the
Registration Statement, each preliminary prospectus, any Permitted Free Writing
Prospectus and the Prospectus (including all exhibits and financial statements)
and all amendments and supplements provided for herein, this Agreement, the
Pricing Agreement and a blue sky memorandum, (ii) all costs, fees and expenses
(including reasonable legal fees and disbursements of counsel for the
Underwriters) incurred by the Underwriters in connection with qualifying or
registering all or any part of the Shares for offer and sale under blue sky
laws, including the preparation of a blue sky memorandum relating to the Shares
and clearance of such offering with the NASD; (iii) all fees and expenses of the
Company's transfer agent, printing of the certificates for the Shares and all
transfer taxes, if any, with respect to the sale and delivery of the Shares to
the several Underwriters; (iv) all costs, fees and expenses (including
reasonable legal fees of counsel for the Underwriters) incurred by the
Underwriters in connection with matters related to the Reserved Shares which are
designated by the Company for sale to Invitees; and (v) all costs, fees and
expenses (including without limitation any damages or other amounts payable in
connection with legal or contractual liability) associated with the reforming of
any contracts for sale of the Shares made by the Underwriters caused by a breach
of the representation contained in the second paragraph of Section 2(b). It is
understood, however, that, except as provided in this Section 7, Section 9,
Section 11 and Section 14 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel (except as
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set forth above), stock transfer taxes on the resale of any Shares by them and
any expenses relating to the publishing of "tombstone" advertisements.
SECTION 8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
the Company herein set forth as of the date hereof and as of the First Closing
Date or the Second Closing Date, as the case may be, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 1:00 P.M.,
Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 1:00 P.M., Chicago Time, on the third full business day
following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company or you, shall be contemplated by the
Commission. If the Company has elected to rely upon Rule 430A, the
information concerning the initial public offering price of the Shares and
price-related information shall have been transmitted to the Commission for
filing pursuant to Rule 424(b) in the manner and within the prescribed time
period (without reliance on Rule 424(b)(8)) and the Company will provide
evidence satisfactory to the Representative of such timely filing (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rules 430A
and 424(b)). If a Rule 462(b) Registration Statement is required, such
Registration Statement shall have been transmitted to the Commission for
filing and become effective within the prescribed time period and, prior to
the First Closing Date, the Company shall have provided evidence of such
filing and effectiveness in accordance with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky
laws of such states as shall have been specified by the Representative.
(c) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form of
the certificates representing the Shares, the execution and delivery of
this Agreement and the Pricing Agreement, and all corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement, the Disclosure Package and the Prospectus (except financial
statements) shall have been approved by counsel for the Underwriters
exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement, the Disclosure Package or the Prospectus or any amendment or
supplement thereto, contains an untrue statement of fact, which, in the
opinion of counsel for the Underwriters, is material or omits to state a
fact which, in the opinion of such counsel, is material and is required to
be stated therein or necessary to make the statements therein not
misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its subsidiaries, whether or not arising in the ordinary
course of business, which, in the judgment of the Representative, makes it
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impractical or inadvisable to proceed with the public offering or purchase
of the Shares as contemplated hereby.
(f) There shall have been furnished to you, as Representative of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
(i) An opinion of Xxxxxxx Procter LLP, counsel for the Company,
addressed to the Underwriters and dated the First Closing Date or the
Second Closing Date, as the case may be, in form and substance
reasonably satisfactory to the Representative, and the Company shall
have furnished to such counsel such documents and shall have exhibited
to them such papers and records as they request for the purpose of
enabling them to pass upon such matters.
(ii) Such opinion or opinions of Sidley Austin LLP, counsel for
the Underwriters, dated the First Closing Date or the Second Closing
Date, as the case may be, with respect to the incorporation of the
Company, the validity of the Shares, the Registration Statement, the
Disclosure Package and the Prospectus and other related matters as you
may reasonably require, and the Company shall have furnished to such
counsel such documents and shall have exhibited to them such papers
and records as they request for the purpose of enabling them to pass
upon such matters.
(iii) A certificate of the chief executive officer and the
principal financial officer of the Company, dated the First Closing
Date or the Second Closing Date, as the case may be, to the effect
that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of
the date of this Agreement and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such
Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary
prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the best
knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated under
the 1933 Act.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and
warranty of the Company as to the facts required in the
immediately foregoing clauses (1) and (2) of this subparagraph to
be set forth in said certificate.
(iv) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may be,
there shall be delivered to you a letter addressed to you, as
Representative of the Underwriters, from Xxxxx Xxxxxxxx LLP,
independent accountants, the first one to be dated the date of the
Pricing Agreement, the second one to be dated the First Closing Date
and the third one (in the event of a second closing) to be dated the
Second Closing Date, in form and substance
-15-
reasonably satisfactory to you. There shall not have been any change
or decrease specified in the letters referred to in this subparagraph
which makes it impractical or inadvisable in the judgment of the
Representative to proceed with the public offering or purchase of the
Shares as contemplated hereby.
(v) Such further certificates and documents as you may
reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Sidley Austin LLP, counsel for the Underwriters, which approval shall not be
unreasonably withheld. The Company shall furnish you with such manually signed
or conformed copies of such opinions, certificates, letters and documents as you
request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification to the Company
without liability on the part of any Underwriter or the Company, except for the
expenses to be paid or reimbursed by the Company pursuant to Sections 7 and 9
hereof and except to the extent provided in Section 11 hereof.
SECTION 9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, unless such
failure to satisfy such condition or to comply with any provision hereof is due
to the default or omission of any Underwriter, the Company agrees to reimburse
you and the other Underwriters upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
reasonably incurred by you and them in connection with the proposed purchase and
the sale of the Shares. Any such termination shall be without liability of any
party to any other party except that the provisions of this Section 9, Section 7
and Section 11 shall at all times be effective and shall apply.
SECTION 10. EFFECTIVENESS OF REGISTRATION STATEMENT. You and the
Company will use your and its best efforts to cause the Registration Statement
to become effective, if it has not yet become effective, and to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
SECTION 11. INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the 1933 Act or the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the 1933 Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including the information
deemed to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A, any preliminary prospectus, any Issuer Free Writing
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact, in the case of the Registration Statement or any amendment or
supplement thereto, required to be stated therein or necessary to make the
statements therein not misleading and, in the case of any preliminary
prospectus, any Issuer Free Writing Prospectus, the Prospectus, or any amendment
or supplement thereto, necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and will reimburse
each
-16-
Underwriter and each such controlling person for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any preliminary prospectus,
any Issuer Free Writing Prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representative, specifically for use therein. In addition to its other
obligations under this Section 11(a), the Company agrees that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 11(a), it will
reimburse the Underwriters on a monthly basis for all reasonable legal and other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Company's obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the 1933 Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company, or any such director, officer or controlling
person may become subject under the 1933 Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, any preliminary prospectus, any Issuer Free Writing
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact, in the case of the Registration Statement or any amendment or
supplement thereto, required to be stated therein or necessary to make the
statements therein not misleading and, in the case of any preliminary
prospectus, any Issuer Free Writing Prospectus, the Prospectus, or any amendment
or supplement thereto, necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, any Issuer Free Writing Prospectus, the
Prospectus, or any amendment or supplement thereto in reliance upon and in
conformity with Section 3 of this Agreement or any other written information
furnished to the Company by such Underwriter through the Representative
specifically for use in the preparation thereof; and will reimburse any legal or
other expenses reasonably incurred by the Company, or any such director, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action. In addition to their other obligations
under this Section 11(b), the Underwriters agree that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 11(b), they will
reimburse the Company on a monthly basis for all reasonable legal and other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. This indemnity agreement will be in addition to
any liability which such Underwriter may otherwise have.
-17-
(c) Promptly after receipt by an indemnified party under this Section
11 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party under
this Section 11, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 11 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representative in the case of paragraph (a)
representing all indemnified parties not having different or additional defenses
or potential conflicting interest among themselves who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability arising out
of such proceeding.
(d) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party under paragraphs (a) or (b) hereof in
respect of any losses, claims, damages or liabilities referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Underwriters from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Company and the Underwriters shall be deemed to be in the same proportion in the
case of the Company, as the total price paid to the Company for the Shares by
the Underwriters (net of underwriting discount but before deducting expenses),
and in the case of the Underwriters as the underwriting discount received by
them bears to the total of such amounts paid to the Company and received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to
-18-
state a material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any action or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 11(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 11(d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 11(d) are several in proportion to their respective
underwriting commitments and not joint.
(e) In connection with the offer and sale of the Reserved Shares, the
Company agrees to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of the 1933 Act or the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become subject
under the 1933 Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of the
Company) (i) arising out of the violation of any applicable laws or regulations
of foreign jurisdictions where Reserved Shares have been offered; (ii) arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any prospectus wrapper or other material prepared by or with the
consent of the Company for distribution to Invitees in connection with the
offering of the Reserved Shares or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; or (iii) arising out
of or based upon the failure of any Invitee to pay for and accept delivery of
Reserved Shares which have been orally confirmed for purchase by any Invitee by
the end of the first business day after the date of this Agreement.
(f) The provisions of this Section 11 shall survive any termination of
this Agreement.
SECTION 12. DEFAULT OF UNDERWRITERS. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Shares
hereunder, and of each Underwriter to purchase the Shares hereunder, that,
except as hereinafter in this paragraph provided, each of the Underwriters shall
purchase and pay for all Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representative of all such Shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Shares hereunder on the First Closing Date and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10 percent of the total number of
Shares which the Underwriters are obligated to purchase on the First Closing
Date, the Representative may make arrangements satisfactory to the Company for
the purchase of such Shares by other persons, including any of the Underwriters,
but if no such arrangements are made by such date the nondefaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Shares which such defaulting Underwriters agreed but
failed to purchase on such date. If any Underwriter or Underwriters so default
-19-
and the aggregate number of Shares with respect to which such default or
defaults occur is more than the above percentage and arrangements satisfactory
to the Representative and the Company for the purchase of such Shares by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any nondefaulting Underwriter or the
Company, except for the expenses to be paid by the Company pursuant to Section 7
hereof and except to the extent provided in Section 11 hereof.
In the event that Shares to which a default relates are to be
purchased by the nondefaulting Underwriters or by another party or parties, the
Representative or the Company shall have the right to postpone the First Closing
Date for not more than seven business days in order that the necessary changes
in the Registration Statement, Prospectus and any other documents, as well as
any other arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
SECTION 13. EFFECTIVE DATE. This Agreement shall become effective
immediately as to Sections 7, 9, 11 and 14 and as to all other provisions at
10:00 A.M., Chicago Time, on the day following the date upon which the Pricing
Agreement is executed and delivered, unless such a day is a Saturday, Sunday or
holiday (and in that event this Agreement shall become effective at such hour on
the business day next succeeding such Saturday, Sunday or holiday); but this
Agreement shall nevertheless become effective at such earlier time after the
Pricing Agreement is executed and delivered as you may determine on and by
notice to the Company or by release of any Shares for sale to the public. For
the purposes of this Section, the Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Shares or upon the release by you of telegrams (i) advising
Underwriters that the Shares are released for public offering, or (ii) offering
the Shares for sale to securities dealers, whichever may occur first.
SECTION 14. TERMINATION. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
or by you by notice to the Company at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company to any
Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 7 hereof and except to the extent provided in Section 11 hereof) or
of any Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 4, if exercised, may be
cancelled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange or the Nasdaq National Market
shall have been suspended or minimum prices shall have been established on
such exchange or market, or (ii) a banking moratorium shall have been
declared by Illinois, New York, or United States authorities, or (iii)
there shall have been any change in financial markets or in political,
economic or financial conditions which, in the opinion of the
Representative, either renders it impracticable or inadvisable to proceed
with the offering and sale of the Shares on the terms set forth in the
Prospectus or materially and adversely affects the market for the Shares,
or (iv) there shall have been an outbreak of major armed hostilities
between the United States and any foreign power or terrorist organization
which in the opinion of the Representative makes it impractical or
inadvisable to offer or sell the Shares. Any termination pursuant to this
paragraph (b) shall be without liability on the part of any Underwriter to
the Company or on the part of the
-20-
Company to any Underwriter (except for expenses to be paid or reimbursed
pursuant to Section 7 hereof and except to the extent provided in Section
11 hereof).
SECTION 15. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, principals, members, officers or
directors or any controlling person, and will survive delivery of and payment
for the Shares sold hereunder.
SECTION 16. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o Xxxxxxx Xxxxx & Company, L.L.C., 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, with a copy to Xxxxx X. Xxxxxxxxx, c/o Xxxxxx Xxxxxx
LLP, Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; if sent to the Company
will be mailed, delivered or telegraphed and confirmed to the Company at its
corporate headquarters with a copy to Xxxxxxx X. Xxxxxx, x/x Xxxxxxx Xxxxxxx
XXX, Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
SECTION 17. NO ADVISORY OR FIDUCIARY RELATIONSHIP. The Company
acknowledges and agrees that (a) the purchase and sale of the Shares pursuant to
this Agreement, including the determination of the initial public offering price
of the Shares and any related discounts and commissions, is an arm's-length
commercial transaction between the Company, on the one hand, and the several
Underwriters, on the other hand, (b) in connection with the offering of the
Shares contemplated by this Agreement and the process leading to such
transaction each Underwriter is and has been acting solely as a principal and is
not the agent or fiduciary of the Company or its stockholders, creditors,
employees or any other party, (c) no Underwriter has assumed or will assume an
advisory or fiduciary responsibility in favor of the Company with respect to the
offering of the Shares contemplated by this Agreement or the process leading
thereto (irrespective of whether such Underwriter has advised or is currently
advising the Company on other matters) and no Underwriter has any obligation to
the Company with respect to the offering of the Shares contemplated by this
Agreement except the obligations expressly set forth in this Agreement, (d) the
Underwriters and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company and
(e) the Underwriters have not provided any legal, accounting, regulatory or tax
advice with respect to the offering of the Shares contemplated by this Agreement
and the Company has consulted its own legal, accounting, regulatory and tax
advisors to the extent it deemed appropriate.
SECTION 18. SUCCESSORS. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal representatives and assigns, and to the benefit
of the officers and directors and controlling persons referred to in Section 11,
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchase.
SECTION 19. REPRESENTATION OF UNDERWRITERS. You will act as
Representative for the several Underwriters in connection with this offering,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
SECTION 20. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
-21-
SECTION 21. APPLICABLE LAW. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
-22-
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters including you, all in accordance with its terms.
Very truly yours,
XXXXXXX HOLDINGS, INC.
By:
------------------------
Name:
Title:
-23-
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
Acting as Representative of the
several Underwriters named in
Schedule A.
By: Xxxxxxx Xxxxx & Company, L.L.C.
By:
------------------------------------
Principal
-24-
SCHEDULE A
Number of
Firm Shares
Underwriter to be Purchased
----------- ---------------
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxx Xxxxxxx & Co.
SunTrust Capital Markets, Inc.
JMP Securities LLC
America's Growth Capital, LLC
TOTAL
---------
A-1
SCHEDULE B
Issuer General Use Free Writing Prospectuses
B-1
EXHIBIT A
XXXXXXX HOLDINGS, INC.
6,250,000 Shares Common Stock(2)
PRICING AGREEMENT
March [__], 2006
XXXXXXX XXXXX & COMPANY, L.L.C.
As Representative of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated March [__], 2006
(the "UNDERWRITING AGREEMENT") relating to the sale by the Company and the
purchase by the several Underwriters for whom Xxxxxxx Xxxxx & Company, L.L.C. is
acting as representative (the "REPRESENTATIVE"), of the above Shares. All terms
herein shall have the definitions contained in the Underwriting Agreement except
as otherwise defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company
agrees with the Representative as follows:
1. The initial public offering price per share for the Shares shall
be $__________.
2. The purchase price per share for the Shares to be paid by the
several Underwriters shall be $_____________, being an amount equal to the
initial public offering price set forth above less $____________ per share.
Schedule A is amended as follows:
----------
(2) Plus an option to acquire up to 937,500 additional shares to cover
overallotments
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters, including you, all in accordance with its terms.
Very truly yours,
XXXXXXX HOLDINGS, INC.
By:
---------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
Acting as Representative of the
several Underwriters named in
Schedule A.
By: Xxxxxxx Xxxxx & Company, L.L.C.
By:
-----------------------------------
Principal
