Goldleaf Financial Solutions, Inc. (f/k/a Private Business, Inc.) Shares of Common Stock UNDERWRITING AGREEMENT
EXHIBIT 10.1
Goldleaf Financial Solutions, Inc.
(f/k/a Private Business, Inc.)
Shares of Common Stock
(f/k/a Private Business, Inc.)
Shares of Common Stock
October 4, 2006
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
as Representative of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
as Representative of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Goldleaf Financial Solutions, Inc. (f/k/a Private Business, Inc.), a Tennessee corporation
(the “Company”), confirms its agreement with each of the Underwriters listed on Schedule I hereto
(collectively, the “Underwriters”), for whom Friedman, Billings, Xxxxxx & Co., Inc. is acting as
representative (in such capacity, the “Representative”), with respect to (i) the sale by the
Company of 10,000,000 shares (the “Initial Shares”) of Common Stock, no par value share, of the
Company (the “Common Stock”), and the purchase by the Underwriters, acting severally and not
jointly, of the respective number of shares of Common Stock set forth opposite the names of the
Underwriters in Schedule I hereto, and (ii) the grant of the option described in Section 1(b)
hereof to purchase all or any part of 1,500,000 additional shares of Common Stock to cover
over-allotments (the “Option Shares”), if any, from the Company to the Underwriters, acting
severally and not jointly, in the respective numbers of shares of Common Stock set forth opposite
the names of each of the Underwriters listed in Schedule I hereto. The Initial Shares to be
purchased by the Underwriters and all or any part of the Option Shares subject to the option
described in Section 1(b) hereof are hereinafter called, collectively, the “Shares.”
The Company understands that the Underwriters propose to make a public offering of the Shares
as soon as the Underwriters deem advisable after this Underwriting Agreement (the “Agreement”) has
been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the “Commission”), a
registration statement on Form S-1 (No. 333-133542) including a related preliminary prospectus, for
the registration of the Shares under the Securities Act of 1933, as amended (the “Securities Act”),
and the rules and regulations thereunder (the “Securities Act Regulations”). The Company has
prepared and filed such amendments to
the registration statement and such amendments or supplements to the related preliminary
prospectus as may have been required to the date hereof, and will file such additional amendments
or supplements as may hereafter be required. The registration statement has been declared
effective under the Securities Act by the Commission. The registration statement, as amended at
the time it was declared effective by the Commission (and, if the Company files a post-effective
amendment to such registration statement which becomes effective prior to the Closing Time (as
defined below), such registration statement as so amended) and including all information deemed to
be a part of the registration statement pursuant to incorporation by reference, Rule 430A of the
Securities Act Regulations or otherwise, is hereinafter called the “Registration Statement.” Any
registration statement filed pursuant to Rule 462(b) of the Securities Act Regulations is
hereinafter called the “Rule 462(b) Registration Statement,” and after such filing the term
“Registration Statement” shall include the 462(b) Registration Statement. Each prospectus included
in the Registration Statement before it was declared effective by the Commission under the
Securities Act, and any preliminary form of prospectus filed with the Commission by the Company
with the consent of the Underwriters pursuant to Rule 424(a) of the Securities Act Regulations, is
hereinafter called the “Preliminary Prospectus.” The term “Prospectus” means the final prospectus,
as first filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Securities Act Regulations, and any amendments thereof or supplements thereto.
The Commission has not issued any order preventing or suspending the use of any Preliminary
Prospectus.
The term “Disclosure Package” means (i) the Preliminary Prospectus, as most recently amended
or supplemented immediately prior to the Initial Sale Time (as defined herein), (ii) the Issuer
Free Writing Prospectuses (as defined below), if any, identified in Schedule II hereto, and (iii)
any other Free Writing Prospectus (as defined below) that the parties hereto shall hereafter
expressly agree to treat as part of the Disclosure Package.
The term “Issuer Free Writing Prospectus” means any issuer free writing prospectus, as defined
in Rule 433 of the Securities Act Regulations. The term “Free Writing Prospectus” means any free
writing prospectus, as defined in Rule 405 of the Securities Act Regulations.
The Company and the Underwriters agree as follows:
| 1. | Sale and Purchase: |
(a) Initial Shares. Upon the basis of the warranties and representations and other terms and
conditions herein set forth, at the purchase price per share of Common Stock of $5.50, the Company
agrees to sell to the Underwriters the Initial Shares, and each Underwriter agrees, severally and
not jointly, to purchase from the Company the number of Initial Shares set forth in Schedule I
opposite such Underwriter’s name, plus any additional number of Initial Shares which such
Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof,
subject in each case, to such
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adjustments among the Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the warranties and representations and
other terms and conditions herein set forth, at the purchase price per share of Common Stock set
forth in paragraph (a) above, the Company hereby grants an option to the Underwriters, acting
severally and not jointly, to purchase from the Company, all or any part of the Option Shares, plus
any additional number of Option Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 8 hereof. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time within such 30-day
period only for the purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Shares upon notice by the Representative to the Company
setting forth the number of Option Shares as to which the several Underwriters are then exercising
the option and the time and date of payment and delivery for such Option Shares. Any such time and
date of delivery (an “Option Closing Time”) shall be determined by the Representative, but shall
not be later than three full business days (or earlier, without the prior written consent of the
Company, than two full business days) after the exercise of such option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all or any portion of
the Option Shares, the Company will sell that number of Option Shares then being purchased and each
of the Underwriters, acting severally and not jointly, will purchase that proportion of the total
number of Option Shares then being purchased which the number of Initial Shares set forth in
Schedule I opposite the name of such Underwriter bears to the total number of Initial Shares,
subject in each case to such adjustments among the Underwriters as the Representative in its sole
discretion shall make to eliminate any sales or purchases of fractional shares.
| 2. | Payment and Delivery |
(a) Initial Shares. The Initial Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such names as the
Representative may request upon at least forty-eight hours’ prior notice to the Company shall be
delivered by or on behalf of the Company to the Representative, including, at the option of the
Representative, through the facilities of The Depository Trust Company (“DTC”) for the account of
such Underwriter, against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified to the
Representative by the Company upon at least forty-eight hours’ prior notice. The Company will
cause the certificates representing the Initial Shares to be made available for checking and
packaging not later than 1:00 p.m. New York City time on the business day prior to the Closing Time
(as defined below) with respect thereto at the office of the Representative, 0000 00xx
Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or at the office of DTC or its designated custodian, as
the case may be (the “Designated Office”). The time and date of such delivery and payment shall be
9:30 a.m., New York City time, on the third (fourth, if the determination of the
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purchase price of
the Initial Shares occurs after 4:30 p.m., New York City time) business day after the date hereof
(unless another time and date shall be agreed to by the
Representative and the Company). The time and date at which such delivery and payment are
actually made is hereinafter called the “Closing Time.”
(b) Option Shares. Any Option Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such names as the
Representative may request upon at least forty-eight hours’ prior notice to the Company shall be
delivered by or on behalf of the Company to the Representative, including, at the option of the
Representative, through the facilities of DTC for the account of such Underwriter, against payment
by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Representative by the Company upon at least
forty-eight hours’ prior notice. The Company will cause the certificates representing the Option
Shares to be made available for checking and packaging at least twenty-four hours prior to the
Option Closing Time with respect thereto at the Designated Office. The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on the date specified by the
Representative in the notice given by the Representative to the Company of the Underwriters’
election to purchase such Option Shares or on such other time and date as the Company and the
Representative may agree upon in writing.
| 3. | Representations and Warranties of the Company: |
The Company represents and warrants to the Underwriters as of the date hereof, the Initial
Sale Time (as defined below), as of the Closing Time and as of any Option Closing Time (if
applicable), and agrees with each Underwriter, that:
(a) the Company has an authorized capitalization as set forth in both the Prospectus and the
Disclosure Package; the outstanding shares of capital stock of the Company and each corporate
subsidiary of the Company have been duly and validly authorized and issued and are fully paid and
non-assessable; the outstanding member interests of each subsidiary of the Company that is a
limited liability company have been issued in accordance with the operating agreement of such
limited liability company (each corporate and limited liability company subsidiary of the Company
is sometimes referred to in this Agreement individually as a “Subsidiary” and collectively with all
of the other Subsidiaries as the “Subsidiaries”); all of the outstanding shares of capital stock or
member interests, as applicable, of the Subsidiaries are directly or indirectly owned of record and
beneficially by the Company; except as disclosed in both the Prospectus and the Disclosure Package,
there are no outstanding (i) securities or obligations of the Company or any of the Subsidiaries
convertible into or exchangeable for any capital stock or other equity interests of the Company or
any such Subsidiary, (ii) warrants, rights or options to subscribe for or purchase from the Company
or any such Subsidiary any such capital stock or other equity interests or any such convertible or
exchangeable securities or obligations, or (iii) obligations of the Company or any such Subsidiary
to issue any
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shares of capital stock or other equity interests, any such convertible or
exchangeable securities or obligation, or any such warrants, rights or options;
(b) each of the Company and the Subsidiaries (all of which are named in Exhibit 21 to the
Registration Statement) has been duly incorporated or organized and is validly existing as a
corporation or limited liability company in good standing under the
laws of its respective jurisdiction of incorporation or organization with full corporate or
limited liability company power and authority to own its respective properties and to conduct its
respective businesses as described in each of the Registration Statement, the Prospectus and the
Disclosure Package, and, in the case of the Company, to execute and deliver this Agreement and to
consummate the transactions contemplated herein;
(c) the Company and all of the Subsidiaries are duly qualified or licensed and are in good
standing in each jurisdiction in which they conduct their respective businesses or in which they
own or lease real property or otherwise maintain an office and in which the failure, individually
or in the aggregate, to be so qualified or licensed would reasonably be expected to have a material
adverse effect on the assets, business, operations, earnings, prospects, properties or condition
(financial or otherwise), present or prospective, of the Company and the Subsidiaries taken as a
whole, (any such effect or change, where the context so requires, is hereinafter called a “Material
Adverse Effect” or “Material Adverse Change”); no Subsidiary is prohibited or restricted, directly
or indirectly, from paying dividends to the Company, or from making any other distribution with
respect to such Subsidiary’s capital stock or member interests or from repaying to the Company or
any other Subsidiary any amounts which may from time to time become due under any loans or advances
to such Subsidiary from the Company or such other Subsidiary, or from transferring any such
Subsidiary’s property or assets to the Company or to any other Subsidiary; other than as disclosed
in both the Prospectus and the Disclosure Package, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any other corporation or any ownership
interest in any partnership, joint venture or other association;
(d) the Company and the Subsidiaries are in compliance with all applicable laws, rules,
regulations, orders, decrees and judgments, including those relating to transactions with
affiliates, except for such non-compliance that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(e) neither the Company nor any Subsidiary is in breach of or in default under (nor has any
event occurred which with or without notice or lapse of time would constitute a breach of, a
default under or require a mandatory repayment under (other than any mandatory repayment disclosed
in both the Prospectus and the Disclosure Package), its respective organizational documents, or in
the performance or observance of any obligation, agreement, covenant or condition contained in any
license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or
instrument to which the Company or any Subsidiary is a party or by which any of them or their
respective properties is bound, except for such breaches or defaults that would not,
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individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(f) the execution, delivery and performance of this Agreement, and consummation of the
transactions contemplated herein will not (A) conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with or without notice or lapse of time
would constitute a breach of, a default under or require a mandatory repayment under (other than
any mandatory repayment disclosed in both the
Prospectus and the Disclosure Package) under, (i) any provision of the organizational
documents of the Company or any Subsidiary, (ii) any provision of any license, indenture, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument to which the Company or
any Subsidiary is a party or by which any of them or their respective properties may be bound or
affected, or (iii) any federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any Subsidiary, except in the case of clauses (ii)
and (iii) for such breaches or defaults which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; or (B) result in the creation or
imposition of any lien, charge, claim or encumbrance upon any property or asset of the Company or
any Subsidiary, except where such creation or imposition would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(g) this Agreement has been duly authorized, executed and delivered by the Company and is a
legal, valid and binding agreement of the Company enforceable in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general equitable principles, and except to the extent that the
indemnification and contribution provisions of Section 9 hereof may be limited by applicable laws
and public policy considerations in respect thereof;
(h) no approval, authorization, consent or order of or filing with any federal, state, local
or foreign governmental or regulatory commission, board, body, authority or agency is required in
connection with the Company’s execution, delivery and performance of this Agreement, its
consummation of the transactions contemplated herein, and its sale and delivery of the Shares,
other than (A) such as have been obtained, or will have been obtained at the Closing Time or the
relevant Option Closing Time, as the case may be, under the Securities Act and the Securities
Exchange Act of 1934 (the “Exchange Act”), (B) such approvals as have been obtained in connection
with the approval of the listing of the Shares on the Nasdaq Global Market (the “Nasdaq”), subject
to official notice of issuance, (C) any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Shares are being offered by the Underwriters, and
(D) any such approvals, authorizations, consents, orders or filings of which the failure to obtain
would not reasonably be expected to have a Material Adverse Effect;
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(i) each of the Company and the Subsidiaries has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings required under any federal, state, local
or foreign law, regulation or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, required in order to conduct their respective businesses as described
in both the Prospectus and the Disclosure Package, except to the extent that any failure to have
any such licenses, authorizations, consents or approvals, to make any such filings or to obtain any
such authorizations, consents or approvals would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect; neither the Company nor any of the Subsidiaries has
failed to obtain any accreditation or certification that is required by any applicable law from any
governmental agency or authority to provide the products and services that it
currently provides or that it proposes to provide as set forth in both the Prospectus and the
Disclosure Package, except where failure to obtain any such accreditation or certification would
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
neither the Company nor any of the Subsidiaries is in violation of, in default under, or has
received any notice regarding a possible violation, default or revocation of any such license,
authorization, consent or approval or any federal, state, local or foreign law, regulation or rule
or any decree, order or judgment applicable to the Company or any of the Subsidiaries the effect of
which would reasonably be expected to have a Material Adverse Effect; and no such license,
authorization, consent or approval contains a materially burdensome restriction that is not
adequately disclosed in both the Prospectus and the Disclosure Package;
(j) each of the Registration Statement and any Rule 462(b) Registration Statement has become
effective under the Securities Act, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated or threatened by the Commission;
(k) the Preliminary Prospectus when filed and the Registration Statement as of each effective
date and as of the date hereof complied or will comply, and the Prospectus and any further
amendments or supplements to the Registration Statement, the Preliminary Prospectus or the
Prospectus will, when they become effective or are filed with the Commission, as the case may be,
comply, in all material respects with the requirements of the Securities Act and the Securities Act
Regulations;
(l) the Registration Statement, as of its effective date and as of the date hereof, did not,
does not 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 not misleading; and
the Preliminary Prospectus does not, and the Prospectus or any amendment or supplement thereto will
not, as of the applicable filing date, the date hereof and at the Closing Time and on each Option
Closing Time (if applicable), contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances under
which
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they were made, not misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in or omitted from the Registration
Statement, the Preliminary Prospectus or the Prospectus in reliance upon and in conformity with the
information concerning the Underwriters and furnished in writing by or on behalf of the
Underwriters through the Representative to the Company expressly for use therein (that information
being limited to that described in the last sentence of the first paragraph of Section 9(b)
hereof);
(m) as of 6:00 pm (Eastern time) on the date of this Agreement (the “Initial Sale Time”), the
Disclosure Package did not, and at the time of each sale of Shares and at the Closing Time and each
Option Closing Time, the Disclosure Package will not, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they
were made, not misleading; as of its issue date or date of first use and at all subsequent
times through the Initial Sale Time, each Issuer Free Writing Prospectus did not, and at the time
of each sale of Shares and at the Closing Time and each Option Closing Time, each such Issuer Free
Writing Prospectus will not, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company makes no warranty
or representation with respect to any statement contained in or omitted from the Disclosure Package
in reliance upon and in conformity with the information concerning the Underwriters and furnished
in writing by or on behalf of the Underwriters through the Representative to the Company expressly
for use therein (that information being limited to that described in the last sentence of the first
paragraph of Section 9(b) hereof);
(n) the Company is subject to the reporting requirements of either Section 13 or Section 15(d)
of the Exchange Act and has filed all reports and other materials required to be filed by Sections
13(a), 14 or 15(d) of the Exchange Act with the Commission on the Electronic Data Gathering
Analysis and Retrieval System (“XXXXX”) system and, except as described in the Prospectus and the
Disclosure Package, has otherwise complied with the provisions of the Exchange Act, and the rules
and regulations thereunder (the “Exchange Act Regulations”);
(o) 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 did not, does not and will not
include any information that conflicted, conflicts or will conflict with the information contained
in the Registration Statement, including any document incorporated by reference therein that has
not been superceded or modified;
(p) the Company is eligible to use Free Writing Prospectuses in connection with this offering
pursuant to Rules 164, 405 and 433 under the Securities Act; any Free Writing Prospectus that the
Company is required to file pursuant to Rule 433(d) under the Securities Act Regulations has been,
or will be, filed with the Commission in accordance with the requirements of the Securities Act and
the Securities Act Regulations; and each
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Free Writing Prospectus that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act Regulations or that was prepared
by or on behalf of or used by the Company complies or will comply in all material respects with the
requirements of the Securities Act and the Securities Act Regulations;
(q) except for the Issuer Free Writing Prospectuses identified in Schedule II hereto, and any
electronic road show relating to the public offering of shares contemplated herein, the Company has
not prepared, used or referred to, and will not, without the prior consent of the Representative,
prepare, use or refer to, any Free Writing Prospectus;
(r) the Preliminary Prospectus, the Prospectus and any Issuer Free Writing Prospectus (to the
extent any such Issuer Free Writing Prospectus was required to be filed with the Commission)
delivered to the Underwriters for use in connection with the public offering of the Shares
contemplated herein have been and will be identical to the versions
of such documents transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T;
(s) the Company filed the Registration Statement with the Commission before using any Issuer
Free Writing Prospectus; and each Issuer Free Writing Prospectus was preceded or accompanied by the
most recent Preliminary Prospectus satisfying the requirements of Section 10 under the Securities
Act, which Preliminary Prospectus included an estimated price range;
(t) there are no actions, suits, proceedings, inquiries or investigations pending or, to the
knowledge of the Company, threatened in writing against the Company or any Subsidiary or any of
their respective officers and directors or to which the properties, assets or rights of any such
entity are subject, at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority, arbitral panel or agency which could
result in a judgment, decree, award or order having a Material Adverse Effect;
(u) the financial statements, including the notes thereto, included in each of the
Registration Statement, the Prospectus and the Disclosure Package present fairly the consolidated
financial position of the entities to which such financial statements relate (the “Covered
Entities”) as of the dates indicated and the consolidated results of operations and changes in
financial position and cash flows of the Covered Entities for the periods specified; such financial
statements have been prepared in conformity with generally accepted accounting principles as
applied in the United States and on a consistent basis during the periods involved and in
accordance with Regulation S-X promulgated by the Commission; provided, however, that the interim
statements that are unaudited are subject to normal year-end adjustments and do not contain certain
footnotes required by generally accepted accounting principles; the financial statement schedules
included in the Registration Statement and the amounts in both the Prospectus and the Disclosure
Package under the captions “Prospectus Summary — Summary Consolidated Financial Data” and “Selected
Consolidated Financial Data” fairly present the
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information shown therein and have been compiled on
a basis consistent with the financial statements included in each of the Registration Statement,
the Prospectus and the Disclosure Package; no other financial statements or supporting schedules
are required to be included in the Registration Statement, the Prospectus or the Disclosure
Package; the unaudited pro forma financial information (including the related notes) included in
each of the Registration Statement, the Prospectus and the Disclosure Package complies as to form
in all material respects with the applicable accounting requirements of the Securities Act and the
Securities Act Regulations, and management of the Company believes that the assumptions underlying
the pro forma adjustments are reasonable; such pro forma adjustments have been properly applied to
the historical amounts in the compilation of the information and such information fairly presents
with respect to the Company and the Subsidiaries, the financial position, results of operations and
other information purported to be shown therein at the respective dates and for the respective
periods specified; and no other pro forma financial information is required to be included in the
Registration Statement, the Prospectus or the Disclosure Package;
(v) Xxxxx Xxxxxxxx LLP and Ernst & Young LLP, whose reports on the consolidated financial
statements of the Company and the Subsidiaries are filed with the Commission as part of each of the
Registration Statement, the Prospectus and the Disclosure Package or are incorporated by reference
therein, are, and were during the periods covered by their reports, independent public accountants
as required by the Securities Act and the Securities Act Regulations and are registered with the
Public Company Accounting Oversight Board;
(w) subsequent to the respective dates as of which information is given in each of the
Registration Statement, the Prospectus and the Disclosure Package, and except as may be otherwise
stated in such documents, there has not been (A) any Material Adverse Change or any development
that would reasonably be expected to result in a Material Adverse Change, whether or not arising in
the ordinary course of business, (B) any transaction not in the ordinary course of business that is
material to the Company and the Subsidiaries taken as a whole, contemplated or entered into by the
Company or any of the Subsidiaries, (C) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any Subsidiary not in the ordinary course of business that is
material to the Company and Subsidiaries taken as a whole or (D) any dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital stock other than
payments in kind as dividends on preferred stock as contemplated therein;
(x) the Shares conform in all material respects to the description thereof contained in the
Registration Statement, the Prospectus and the Disclosure Package;
(y) except as disclosed in both the Prospectus and the Disclosure Package, there are no
persons with registration or other similar rights to have any equity or debt securities, including
securities which are convertible into or exchangeable for equity securities, registered pursuant to
the Registration Statement or otherwise registered by the Company under the Securities Act, except
for those registration or similar rights which
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have been waived or do not apply with respect to the
offering contemplated by this Agreement, all of which registration or similar rights are fairly
summarized in both the Prospectus and the Disclosure Package;
(z) the Shares have been duly authorized and, when issued and duly delivered against payment
therefor as contemplated by this Agreement, will be validly issued, fully paid and non-assessable,
free and clear of any pledge, lien, encumbrance, security interest or other claim, and the issuance
and sale of the Shares by the Company is not subject to preemptive or other similar rights arising
by operation of law, under the organizational documents of the Company or under any agreement to
which the Company or any Subsidiary is a party or otherwise, except such rights with which the
Company has properly complied or such rights as have been waived;
(aa) the Shares have been approved for listing on the Nasdaq, subject to official notice of
issuance; the Company has taken or will take all necessary actions to ensure that, as of the
Closing Time or within applicable grace periods thereafter, it will be in compliance with all
applicable corporate governance requirements set forth in the National Association of Securities
Dealers, Inc. (the “NASD”) Nasdaq Marketplace Rules that are then in effect and is taking such
steps as are necessary to ensure that it will be in compliance with other applicable corporate
governance requirements set forth in the NASD’s Nasdaq Marketplace Rules standards not currently in
effect upon the effectiveness of such requirements;
(bb) the Company has not taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to facilitate the sale or
resale of the Shares;
(cc) neither the Company nor any of its Subsidiaries (i) is required to register as a “broker”
or “dealer” in accordance with the provisions of the Exchange Act or the Exchange Act Regulations,
or (ii) directly, or indirectly through one or more intermediaries, controls or has any other
association or affiliation with (within the meaning of Article I of the By-laws of the NASD) any
member firm of the NASD;
(dd) any certificate signed by any officer of the Company or any Subsidiary, on behalf of the
Company or any Subsidiary, delivered to the Representative or to counsel for the Underwriters
pursuant to or in connection with this Agreement shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby;
(ee) the form of certificate used to evidence the Common Stock complies in all material
respects with all applicable statutory requirements, with any applicable requirements of the
organizational documents of the Company and the requirements of Nasdaq;
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(ff) the Company and the Subsidiaries have good and marketable title in fee simple to all real
property, if any, owned by them, and good title to all personal property owned by them, in each
case free and clear of all liens, security interests, pledges, charges, encumbrances, mortgages and
defects, except such as are disclosed in both the Prospectus and the Disclosure Package or such as
do not materially and adversely affect the value of such property and do not materially interfere
with the use made or, as described in the Registration Statement, proposed to be made of such
property by the Company and the Subsidiaries; and any real property and buildings held under lease
by the Company or any Subsidiary are held under valid, existing and enforceable leases, with such
exceptions as are disclosed in both the Prospectus and the Disclosure Package or are not material
and do not interfere with the use made or, as described in the Registration Statement, proposed to
be made of such property and buildings by the Company or such Subsidiary;
(gg) the descriptions in each of the Registration Statement, the Prospectus and the Disclosure
Package of the legal or governmental proceedings, contracts, leases and other legal documents
therein described present fairly the information required to be shown, and there are no legal or
governmental proceedings, contracts, leases, or other documents of a character required to be
described in the Registration Statement, the Prospectus or the Disclosure Package or to be filed as
exhibits to the Registration Statement that are not described or filed as required; all agreements
between the Company or any of the Subsidiaries and third parties expressly referenced in both the
Prospectus and the Disclosure Package are legal, valid and binding obligations of the Company or
one or more of the Subsidiaries, enforceable in accordance with their respective terms, except to
the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and by general equitable principles;
(hh) the Company and each Subsidiary owns, possesses, licenses or has other rights to use, on
reasonable terms, all patents, patent applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how
and other intellectual property (collectively, the “Intellectual Property”) reasonably necessary
for the conduct of the Company and each Subsidiary’s business as now conducted or as proposed in
the Prospectus to be conducted and (i) to the Company’s knowledge, there is no material
infringement by third parties of any such Intellectual Property owned by or exclusively licensed to
the Company or any Subsidiary; (ii) there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others challenging the Company or any Subsidiary’s rights in
or to any such Intellectual Property, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (iii) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging the validity or scope of
Intellectual Property owned by or exclusively licensed to the Company or any Subsidiary, and the
Company is unaware of any facts which would form a reasonable basis for any such claim which could
have a Material Adverse Effect; (iv)
-12-
there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others that the Company or any Subsidiary infringes, or
otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a reasonable basis for
concluding that any such claim will be asserted, or if asserted, would be successful, or if
successfully asserted, could have a Material Adverse Effect; (v) the Company and the Subsidiaries
do not in the conduct of their business as now or proposed to be conducted as described in both the
Prospectus and the Disclosure Package infringe or conflict with any right or patent of any third
party, or any discovery, invention, product or process which is the subject of a patent application
filed by any third party, known to the Company or any of the Subsidiaries, which such infringement
or conflict is reasonably likely to result in a Material Adverse Change; (vi) there is no U.S.
patent known to the Company or any of the Subsidiaries which contains claims that interfere with
the issued claims of any Intellectual Property owned by or exclusively licensed to the Company or
any Subsidiary; (vii) there is no art of which the Company or any Subsidiary is aware that may
render any U.S. patent held by the Company or any Subsidiary invalid or any U.S. patent application
held by the Company or any Subsidiary unpatentable which has not been disclosed, or will not be
disclosed in the required time period, to the U.S. Patent and Trademark Office; (viii) other than
security interests and liens in favor of Bank of America, N.A., the Company’s senior lender, no
liens exist in the U.S. Patent and Trademark Office with respect to any Intellectual Property owned
by the Company or any Subsidiary and no other liens are perfected under the Uniform Commercial Code
against the Company or any Subsidiary with respect to any Intellectual Property owned by the
Company or any Subsidiary and (ix) the Company and each Subsidiary has paid or will pay all
maintenance and issue fees that are due or will be due, within the required time period, and has
claimed small entity status only as appropriate;
(ii) (x) the Company has established and maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the Exchange Act), which (i) are designed to ensure that
material information relating to the Company, including its
consolidated subsidiaries, is made known to the Company’s principal executive officer and its
principal financial officer by others within those entities, particularly during the periods in
which the periodic reports required under the Exchange Act are being prepared, (ii) have been
evaluated for effectiveness as of the end of the last fiscal period covered by the Registration
Statement, and (iii) as of the date of this Agreement, are effective in all material respects to
perform the functions for which they were established, and (y) the Company is not aware of (a) any
significant deficiency or material weakness in the design or operation of its internal controls
over financial reporting that is reasonably likely to adversely affect the Company’s ability to
record, process, summarize and report financial information to management and the Company’s board
of directors, or (b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal control over financial reporting;
and (z) since the most recent evaluation of the Company’s disclosure controls and procedures
described above, there have been no significant changes in internal control
over financial
-13-
reporting or in other factors that could significantly affect internal control over financial
reporting;
(jj) each of the Company and the Subsidiaries 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 as applied in the United States 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;
(kk) except as described in the Prospectus and the Disclosure Package, there are no material
off-balance sheet transactions (as defined in Item 303(a)(4) of Regulation S-K), arrangements,
obligations (including contingent obligations), or any other relationships with unconsolidated
entities or other persons, that may have a material current or future effect on the Company’s, or
any Subsidiary’s, financial condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources or significant components of revenues or
expenses;
(ll) except as would not reasonably be expected to result in a Material Adverse Effect, each
of the Company and the Subsidiaries has filed on a timely basis all necessary federal, state, local
and foreign income and franchise tax returns required to be filed through the date hereof and have
paid all taxes shown as due thereon; and no tax deficiency has been asserted against any such
entity, nor does any such entity know of any tax deficiency that is likely to be asserted against
any such entity which, if determined adversely to any such entity, would reasonably be expected to
have a Material Adverse Effect; all tax liabilities are adequately provided for on the respective
books of such entities;
(mm) each of the Company and the Subsidiaries maintains insurance (issued by insurers of
recognized financial responsibility) of the types and in the amounts generally deemed adequate for
their respective businesses and consistent with insurance coverage
maintained by similar companies in similar businesses, including, but not limited to,
insurance covering real and personal property owned or leased by the Company and the Subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect;
(nn) neither the Company nor any of the Subsidiaries is in violation, or has received notice
of any violation with respect to, any applicable environmental, safety or similar law applicable to
the business of the Company or any of the Subsidiaries; the Company and the Subsidiaries have
received all permits, licenses or other approvals required of them under applicable federal and
state occupational safety and health and environmental laws and regulations to conduct their
respective businesses, and the Company and the Subsidiaries are in compliance with all terms and
conditions of any
-14-
such permit, license or approval, except any such violation of law or regulation,
failure to receive required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change;
(oo) neither the Company nor any Subsidiary is in violation of or has received notice of any
violation with respect to any federal or state law relating to discrimination in the hiring,
promotion or pay of employees, nor any applicable federal or state wages and hours law, the
violation of any of which could have a Material Adverse Effect;
(pp) the Company and each of the Subsidiaries are in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder (“ERISA”); no
“reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company or any of the Subsidiaries would have any liability; the
Company and each of the Subsidiaries have not incurred and do not expect to incur liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or
(ii) Section 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (“Code”); and each “pension plan” for which
the Company and each of its Subsidiaries would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would reasonably be expected to cause the loss of
such qualification;
(qq) neither the Company nor any of the Subsidiaries nor, to the Company’s knowledge, any
officer or director purporting to act on behalf of the Company or any of the Subsidiaries has at
any time (i) made any contributions to any candidate for political office, or failed to disclose
fully any such contributions, in each case in violation of law, (ii) made any payment to any state,
federal or foreign governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed by applicable law, or (iii) engaged in
any transactions, maintained any bank account or used any corporate funds except for transactions,
bank accounts and funds that have been and are reflected in the normally maintained books and
records of the Company and the Subsidiaries;
(rr) except as otherwise disclosed in both the Prospectus and the Disclosure Package, there
are no outstanding loans, extensions of credit or advances or guarantees of indebtedness by the
Company or any of the Subsidiaries to or for the benefit of any of the officers or directors of the
Company or any of the Subsidiaries or any of the members of the families of any of them;
(ss) neither the Company nor any of the Subsidiaries nor, to the knowledge of the Company, any
employee or agent of the Company or any of the Subsidiaries, has made any payment of funds of the
Company or of any Subsidiary or received or retained
-15-
any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the Prospectus or the Disclosure Package;
(tt) the Shares and the shares of Common Stock to be issued in connection with the Lightyear
recapitalization (as described in both the Prospectus and the Disclosure Package) will be issued
and sold in compliance with (i) all applicable federal and state securities laws, (ii) the
Tennessee Business Corporation Act, and (iii) the requirements of Nasdaq;
(uu) in connection with this offering, the Company has not offered and will not offer its
Common Stock or any other securities convertible into or exchangeable or exercisable for Common
Stock in a manner in violation of the Securities Act; except as described in the Prospectus and the
Disclosure Package and as has been duly waived, the Company has not issued any of its Common Stock
or any other securities convertible into or exchangeable or exercisable for Common Stock that is
(x) required to be registered under the Securities Act or (y) required to be integrated for
purposes of the Securities Act or Securities Act Regulations with the sale of the Shares and the
offering of the Shares by the Underwriters, as contemplated by this Agreement; the Company has not,
prior to the date hereof, made any other offer or sale of securities that is required to be
integrated with this offering; and the Company has not distributed and will not distribute any
offering material in connection with the offer and sale of the Shares except for the Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus or the Registration Statement;
(vv) the Company has complied and will comply with all the provisions of Florida Statutes,
Section 517.075 (Chapter 92-198, Laws of Florida); and neither the Company nor any of the
Subsidiaries or affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba;
(ww) the Company has not incurred any liability for any finder’s fees or similar payments in
connection with the transactions herein contemplated;
(xx) the minute books of the Company and each of its Subsidiaries have been made available to
the Underwriters and counsel for the Underwriters, and such books (i) contain a summary of all
meetings and actions of the board of directors (including each committee thereof) and shareholders
of the Company and such Subsidiary since the later of the time of its respective formation and
January 1, 2003 through the date of the latest meeting and action and (ii) accurately in all
material respects reflect all resolutions adopted at such meetings or actions referred to in such
minutes;
(yy) no forward-looking statement (within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Prospectus or the Disclosure Package has been
made or reaffirmed without a reasonable basis or has been disclosed other than in good faith;
-16-
(zz) no relationship, direct or indirect, exists between or among the Company or any of the
Subsidiaries on the one hand, and the directors, officers, shareholders, customers or suppliers of
the Company or any of the Subsidiaries on the other hand, that is required by the Securities Act
and the Securities Act Regulations to be described in the Registration Statement, the Prospectus or
the Disclosure Package, which is not so described;
(aaa) neither the Company nor any of the Subsidiaries is, and after giving effect to the
offering and sale of the Shares will be, an “investment company” or an entity “controlled” by an
“investment company”, as such terms are defined in the Investment Company Act of 1940, as amended
(the “Investment Company Act”);
(bbb) no labor disputes with the employees of the Company or any of the Subsidiaries are
existing or, to the knowledge of the Company, are threatened in writing, that would, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(ccc) the Company and the Subsidiaries are, and at the Closing Time and each Option Closing
Time will be, in compliance in all material respects with the applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”) and the rules and regulations promulgated
thereunder;
(ddd) the Company (i) complies with the Privacy Statements (as defined below) as applicable to
any given set of personal information collected by the Company from Individuals (as defined below),
(ii) complies in all material respects with all applicable federal, state, local and foreign laws
and regulations regarding the collection, retention, use, transfer or disclosure of personal
information and (iii) takes reasonable measures to protect and maintain the confidential nature of
the personal information provided to the Company by Individuals in accordance with the terms of the
applicable Privacy Statements; to the Company’s knowledge, no claims or controversies have arisen
regarding the Privacy Statements or the implementation thereof; as used herein, “Privacy
Statements” means, collectively, any and all of the Company’s privacy statements and policies
published on Company websites or products or otherwise made available by the Company regarding the
collection, retention, use and distribution of the personal information of individuals, including,
without limitation, from visitors or users of any Company websites or products (“Individuals”);
(eee) the Company’s email direct marketing activities have not violated, in any material
respect, the CAN SPAM Act or any other federal or state law or regulation applicable to electronic
direct marketing;
(fff) none of the Company nor any of the Subsidiaries or, to the knowledge of the Company, any
director, officer, agent or employee of such entities is aware of or has
taken any action, directly or indirectly, that would result in a violation by such persons of
the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder
(the “FCPA”), including, without limitation, making use of the mails or any
-17-
means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as such term is defined
in the FCPA) or any foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA and the Company and the Subsidiaries and, to the
knowledge of the Company, their affiliates have conducted their businesses in compliance with the
FCPA;
(ggg) neither the Company nor any of its Subsidiaries, nor, to the Company’s knowledge, any
director, officer, agent or employee of, or other person associated with or acting on behalf of,
the Company, has violated the Bank Secrecy Act, as amended, the Uniting and Strengthening of
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA
PATRIOT ACT) of 2001 or the rules and regulations promulgated under any such law or any successor
law;
(hhh) 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 Control
Act of 1986, as amended, any other 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 for any such non-compliance as would not, singly or in the aggregate, result in a Material
Adverse Change, 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 it Subsidiaries, or, to the
Company’s knowledge, any of its affiliates, with respect to the Money Laundering Laws is pending
or, to the Company’s knowledge, threatened;
(iii) each of the Company and its Subsidiaries, and, to the Company’s knowledge, any director,
officer, agent or employee of, or other person associated with or acting on behalf of, the Company
has acted at all times in compliance in all material respects with applicable Export and Import
Laws (as defined below) and there are no claims, complaints, charges, investigations or proceedings
pending or expected or, to the knowledge of the Company, threatened between the Company or any of
its Subsidiaries and any governmental authority under any Export and Import Laws. The term “Export
and Import Laws” means the Arms Export Control Act, the International Traffic in Arms Regulations,
the Export Administration Act of 1979, as amended, the Export Administration Regulations, and all
other laws and regulations of the United States government regulating the provision of services to
non-U.S. parties or the export and import of articles or information from and to the United States
of America, and all similar laws and regulations of any foreign government regulating the provision
of services to parties not of the foreign country or the export and import of articles and
information from and to the foreign country to parties not of the foreign country; and
-18-
(jjj) neither the Company nor any of its Subsidiaries, nor, to the Company’s knowledge, any of
its affiliates or any director, officer, agent or employee of, or other person associated with or
acting on behalf of, the Company, is currently subject to any United States sanctions administered
by the Office of Foreign Assets Control of the United States Treasury Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any Subsidiary, partner or joint venturer or other person
or entity, for the purpose of financing the activities of any person currently subject to any
United States sanctions administered by OFAC.
4. Certain Covenants of the Company:
The Company hereby agrees with each Underwriter:
(a) to furnish such information as may be required and otherwise to cooperate in qualifying
the Shares for offering and sale under the securities or blue sky laws of such jurisdictions (both
domestic and foreign) as the Representative may designate and to maintain such qualifications in
effect as long as requested by the Representative for the distribution of the Shares, provided that
the Company shall not be required to qualify as a foreign corporation or to consent to the service
of process under the laws of any such jurisdiction (except service of process with respect to the
offering and sale of the Shares);
(b) if, at the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be declared effective before the offering
of the Shares may commence, the Company will endeavor to cause such post-effective amendment to
become effective as soon as possible and will advise the Representative promptly and, if requested
by the Representative, will confirm such advice in writing, when such post-effective amendment has
become effective
(c) to prepare the Prospectus in a form approved by the Underwriters and file such Prospectus
with the Commission pursuant to Rule 424(b) under the Securities Act not later than 10:00 a.m. (New
York City time), on the day following the execution and delivery of this Agreement or on such other
day as the parties may mutually agree and to furnish promptly (and with respect to the initial
delivery of such Prospectus, not later than 10:00 a.m. (New York City time) on the day following
the execution and delivery of this Agreement or on such other day as the parties may mutually agree
to the Underwriters copies of the Prospectus (or of the Prospectus as amended or supplemented if
the Company shall have made any amendments or supplements thereto after the effective date of the
Registration Statement) in such quantities and at such locations as the Underwriters may reasonably
request for the purposes contemplated by the Securities Act Regulations, which Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be identical to the version
transmitted to the Commission for filing via XXXXX, except to the extent permitted by Regulation
S-T;
(d) to advise the Representative promptly and (if requested by the Representative) to confirm
such advice in writing, when the Registration Statement has
-19-
become effective and when any
post-effective amendment thereto becomes effective under the Securities Act Regulations;
(e) to furnish a copy of each proposed Free Writing Prospectus to the Representative and
counsel for the Underwriters and obtain the consent of the Representative prior to referring to,
using or filing with the Commission any Free Writing Prospectus pursuant to Rule 433(d) under the
Securities Act, other than the Issuer Free Writing Prospectuses, if any, identified in Schedule II
hereto;
(f) to comply with the requirements of Rules 164 and 433 of the Securities Act Regulations
applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission,
legending and record keeping, as applicable;
(g) to advise the Representative immediately, confirming such advice in writing, of (i) the
receipt of any comments from, or any request by, the Commission for amendments or supplements to
the Registration Statement, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing
Prospectus, or for additional information with respect thereto, (ii) the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of the Preliminary Prospectus, the Prospectus or any Issuer Free
Writing Prospectus, or of the suspension of the qualification of the Shares for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes
and, if the Commission or any other government agency or authority should issue any such order, to
make every reasonable effort to obtain the lifting or removal of such order as soon as possible,
(iii) any examination pursuant to Section 8(e) of the Securities Act concerning the Registration
Statement, or (iv) if the Company becomes subject to a proceeding under Section 8A of the
Securities Act in connection with the public offering of Shares contemplated herein; to advise the
Representative promptly of any proposal to amend or supplement the Registration Statement, the
Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus and to file no such
amendment or supplement to which the Representative shall reasonably object in writing;
(h) to furnish to the Underwriters for a period of two years from the date of this Agreement
(i) as soon as available, copies of all annual, quarterly and current reports or other
communications supplied to holders of shares of Common Stock, and (ii) as soon as practicable after
the filing thereof, copies of all reports filed by the Company with the Commission, the NASD or any
securities exchange (provided that the filing of same with XXXXX or any successor system of the
Commission shall be deemed to satisfy the obligation to furnish any material required to be
furnished hereunder);
(i) to advise the Underwriters promptly of the happening of any event or development known to
the Company within the time during which a Prospectus relating to the Shares (or in lieu thereof
the notice referred to in Rule 173(a) under the Securities Act Regulations) is required to be
delivered under the Securities Act Regulations which, in the judgment of the Company or in the
reasonable opinion of the Representative or counsel for the Underwriters, (i) would require the
making of any change in the
-20-
Prospectus or the Disclosure Package so that the Prospectus or the
Disclosure Package would not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, (ii) as a result of which
any Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration
Statement relating to the Shares, or (iii) if it is necessary at any time to amend or supplement
the Prospectus or the Disclosure Package to comply with any law and, during such time, to promptly
prepare and furnish to the Underwriters copies of the proposed amendment or supplement before
filing any such amendment or supplement with the Commission and thereafter promptly furnish at the
Company’s own expense to the Underwriters and to dealers, copies in such quantities and at such
locations as the Representative may from time to time reasonably request of an appropriate
amendment or supplement to the Prospectus or the Disclosure Package so that the Prospectus or the
Disclosure Package as so amended or supplemented will not, in the light of the circumstances when
it (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act Regulations)
is so delivered, be misleading or , in the case of any Issuer Free Writing Prospectus, conflict
with the information contained in the Registration Statement, or so that the Prospectus or the
Disclosure Package will comply with the law;
(j) to file promptly with the Commission any amendment or supplement to the Registration
Statement, any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus that
may, in the judgment of the Company or the Representative, be required by the Securities Act or
requested by the Commission;
(k) prior to filing with the Commission any amendment or supplement to the Registration
Statement, any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus, to
furnish a copy thereof to the Representative and counsel for the Underwriters and obtain the
consent of the Representative to the filing, which consent will not be unreasonably withheld;
(l) to furnish promptly to the Representative a signed copy of the Registration Statement, as
initially filed with the Commission, and of all amendments or supplements thereto (including all
exhibits filed therewith or incorporated by reference therein) and such number of conformed copies
of the foregoing as the Representative may reasonably request;
(m) to apply the net proceeds of the sale of the Shares in accordance with its statements
under the caption “Use of Proceeds” in the Prospectus and the Disclosure Package;
(n) to make generally available to its security holders and to deliver to the Representative
as soon as practicable, but in any event not later than the end of the fiscal quarter first
occurring after the first anniversary of the effective date of the Registration Statement an
earnings statement complying with the provisions of Section 11(a) of the Securities Act (in form,
at the option of the Company, complying with the provisions of
-21-
Rule 158 of the Securities Act
Regulations,) covering a period of 12 months beginning after the effective date of the Registration
Statement;
(o) to use its reasonable best efforts to maintain the listing of the Shares on the Nasdaq and
to file with the Nasdaq all documents and notices required by the Nasdaq of companies that have
securities that are traded and quotations for which are reported by the Nasdaq;
(p) to take all necessary actions to ensure that, upon and at all times after Nasdaq shall
have approved the Shares for listing, it will be in compliance with all applicable corporate
governance requirements set forth in the Nasdaq Marketplace Rules that are then in effect and, with
respect to other applicable corporate governance requirements set forth in the Nasdaq Marketplace
Rules not currently in effect, the Company is taking such steps to ensure that it will be in
compliance with such requirements upon and all times after the effectiveness thereof;
(q) to take all necessary actions to ensure that, upon and at all times after the
effectiveness of the Registration Statement, it will be in compliance with all applicable
provisions of the Xxxxxxxx-Xxxxx Act and all rules and regulations promulgated thereunder or
implementing the provisions thereof that are then in effect and, with respect to other applicable
provisions of the Xxxxxxxx-Xxxxx Act not currently in effect, the Company is taking such steps to
ensure that it will be in compliance with such requirements upon and at all times after the
effectiveness thereof;
(r) to maintain, at its expense, a registrar and transfer agent for the Shares;
(s) to refrain, from the date hereof until 180 days after the date of the Prospectus (the
“Lock-Up Period”), without the prior written consent of the Representative, from, directly or
indirectly, (i) offering, selling, agreeing to offer or selling, soliciting offers to purchase,
granting any call option or purchasing any put option with respect to, pledging, borrowing or
otherwise disposing of any Common Stock, any other equity security of the Company or any of its
subsidiaries and any security convertible into, or exercisable or exchangeable for, any Common
Stock or other such equity security (whether the Company now owns or hereafter acquires such Common
Stock or other security) (“Relevant Securities”), and (ii) establishing or increasing any “put
equivalent position” or liquidating or decreasing any “call equivalent position” with respect to
any Relevant Security (in each case within the meaning of Section 16 of the Exchange Act and the
Exchange Act Regulations), or otherwise entering into any swap, derivative or other transaction or
arrangement that transfers to another, in whole or in part, any economic consequences of ownership
of any Relevant Security, whether or not such transaction is to be settled by delivery of Relevant
Securities, other securities, cash or other consideration; provided, however, that restrictions
described in clauses (i) and (ii) do not apply to: (a) the establishment of a trading plan pursuant
to the Exchange Act or Rule 10b5-1 promulgated thereunder, provided that no transfers occur under
such plan during the Lock-Up Period; (b) transfers of shares of Common Stock as a gift or for no
consideration, provided that each donee agrees to be subject to the restrictions described
-22-
in
clauses (i) and (ii) above; (c) tenders of shares of Common Stock made in response to a bona fide
third party takeover bid made to all holders of shares of Common Stock or any other acquisition
transaction whereby all or substantially all of the shares of Common Stock are acquired by a third
party; (d) the sale of shares of Common Stock by the Company to the Underwriters; (e) the issuance
of shares of Common Stock upon the exercise of stock options; (f) the grant of stock options and
other stock-based awards pursuant to the Company’s stock incentive plans and the filing of a
registration statement on Form S-8
relating to Common Stock issued or issuable pursuant to stock options outstanding on the date
hereof and Common Stock and other stock-based awards issued or issuable pursuant to the Company’s
stock incentive plans; (g) transactions effected in accordance with the Lightyear recapitalization
described in the Prospectus and the Disclosure Package; or (h) the issuance by the Company of
shares of Common Stock in connection with any mergers or other acquisition transactions, provided
that the total number of shares of Common Stock issued pursuant to the foregoing does not exceed
20% of the total number of shares of Common Stock outstanding immediately after the Closing Time
and that each acquirer of shares of Common Stock so issued agrees to be subject to the restrictions
described in clauses (i) and (ii) above; and in addition, if (1) during the last 17 days of
the Lock-Up Period, (A) the Company releases earnings results or (B) material news or a material
event relating to the Company occurs, or (2) before the expiration of the Lock-Up Period, the
Company announces that it will release earnings results during the 16-day period following the last
day of the Lock-Up Period, then in each case the Lock-Up Period will be extended, and the
restrictions imposed by this Agreement shall continue to apply, until the expiration of the 18-day
period beginning on the date of the release of the earnings results or the occurrence of material
news or a material event relating to the Company, as the case may be, unless the Representative
waives, in writing, such extension;
(t) not to, and to use its reasonable best efforts to cause its officers and directors not to,
(i) take, directly or indirectly prior to termination of the underwriting syndicate contemplated by
this Agreement, any action designed to stabilize or manipulate the price of any security of the
Company, or which may cause or result in, or which might in the future reasonably be expected to
cause or result in, the stabilization or manipulation of the price of any security of the Company,
to facilitate the sale or resale of any of the Shares, (ii) sell, bid for, purchase or pay anyone
any compensation for soliciting purchases of the Shares or (iii) pay or agree to pay to any person
(other than the Underwriters) any compensation for soliciting any order to purchase any other
securities of the Company;
(u) to cause each of the persons listed on Schedule III hereto to furnish to the
Representative, prior to the Initial Sale Time, a letter, substantially in the form of Exhibit A
hereto (the “Lock-Up Letter Agreement”);
(v) if, at any time during the 90-day period after the date of the Prospectus, any rumor,
publication or event relating to or affecting the Company shall occur as a result of which, in the
reasonable opinion of the Representative, the market price of the Common Stock has been or is
likely to be materially affected (regardless of whether such
-23-
rumor, publication or event
necessitates a supplement to or amendment of the Prospectus) and after written notice from the
Representative advising the Company to the effect set forth above, to forthwith prepare, consult
with the Representative concerning the substance of, and disseminate a press release or other
public statement, reasonably satisfactory to the Representative, responding to or commenting on
such rumor, publication or event; and
(w) that the Company will comply with all of the provisions of any undertakings in the
Registration Statement.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, including expenses, fees and taxes in connection with
(i) the preparation and filing of the Registration Statement, each Preliminary Prospectus, the
Prospectus, any Issuer Free Writing Prospectus and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to dealers (including
costs of mailing and shipment), (ii) the preparation, issuance and delivery of the certificates for
the Shares to the Underwriters, including any stock or other transfer taxes or duties payable upon
the sale of the Shares to the Underwriters, (iii) the printing of this Agreement and any dealer
agreements and furnishing of copies of each to the Underwriters and to dealers (including costs of
mailing and shipment), (iv) the qualification of the Shares for offering and sale under state laws
that the Company and the Representative have mutually agreed are appropriate and the determination
of their eligibility for investment under state law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel for the Underwriters), assuming that the Common
Stock is approved for listing on the Nasdaq and the printing and furnishing of copies of any blue
sky surveys or legal investment surveys to the Underwriters and to dealers (provided, however, that
the aggregate expenses and fees in connection with this subsection (iv) and subsection (v) below
shall not exceed $15,000 without the prior written consent of the Company, which consent will not
be unreasonably withheld), (v) filing for review of the public offering of the Shares by the NASD
(excluding the legal fees and other disbursements of counsel for the Underwriters relating
thereto), (vi) the fees and expenses of any transfer agent or registrar for the Shares and
miscellaneous expenses referred to in the Registration Statement, (vii) the fees and expenses
incurred in connection with the approval for listing of the Shares on the Nasdaq, (viii) fees and
expenses incurred in connection with making road show presentations with respect to the offering of
the Shares, other than the fees and expenses of the underwriters relating thereto, and (ix) the
performance of the Company’s other obligations hereunder. Upon the request of the Representative,
the Company will provide funds in advance for filing fees.
-24-
(b) Except as provided in subsections (a)(iv), the Underwriters will pay their own
out-of-pocket expenses in connection with the performance of their activities under this Agreement,
including, but not limited to, costs such as printing, facsimile, courier service, direct computer
expenses, accommodations and travel, fees and expenses of the Underwriters’ outside legal counsel
and any other advisors, accountants, appraisers, etc. (other than the reasonable and actual fees
and expenses of counsel with respect to state securities or blue sky laws, all of which shall be
reimbursed by the Company pursuant to, and subject to the limit provided in subsection (a)(iv)
above).
6. Conditions of the Underwriters’ Obligations:
The obligations of the Underwriters hereunder to purchase Shares at the Closing Time or on
each Option Closing Time, as applicable, are subject to the accuracy of the representations and
warranties on the part of the Company hereunder on the date hereof and at the Closing Time and on
each Option Closing Time, as applicable, the performance by the Company of its obligations
hereunder and to the satisfaction of the following further conditions at the Closing Time or on
each Option Closing Time, as applicable:
(a) The Company shall furnish to the Underwriters at the Closing Time and on each Option
Closing Time (i) an opinion of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP, counsel for the Company and
the Subsidiaries, addressed to the Underwriters and dated the Closing Time and each Option Closing
Time, as applicable, and (ii) an opinion of Xxxxxxx Xxxxxx Xxxx Xxxxxxx & Manner, P.C., counsel for
the Company and the Subsidiaries, addressed to the Underwriters and dated the Closing Time and each
Option Closing Time, as applicable, each in form and substance satisfactory to Pillsbury Xxxxxxxx
Xxxx Xxxxxxx LLP, counsel for the Underwriters to the effect set forth substantially in Exhibit B.
(b) On the date of this Agreement and at the Closing Time and each Option Closing Time (if
applicable), the Representative shall have received from Xxxxx Xxxxxxxx LLP, Ernst & Young LLP and
Xxxxxxxx Xxxx & Co., LLP, respectively, letters dated the respective dates of delivery thereof and
addressed to the Representative, in form and substance satisfactory to the Representative,
containing statements and information of the type specified in AU Section 634 “Letters for
Underwriters and Certain other Requesting Parties” issued by the American Institute of Certified
Public Accountants with respect to the financial statements, including any pro forma financial
statements, and certain financial information of the Company and the Subsidiaries included in the
Registration Statement, the Prospectus and the Disclosure Package, and such other matters
customarily covered by comfort letters issued in connection with registered public offerings;
provided, that the letters delivered at the Closing Time and each Option Closing Time (if
applicable) shall use a “cut-off” date no more than three business days prior to such Closing Time
or such Option Closing Time, as the case may be.
In the event that the letters referred to above set forth any changes in indebtedness,
decreases in total assets or retained earnings or increases in borrowings, it
-25-
shall be a further
condition to the obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the Representative deems
such explanation unnecessary, and (B) such changes, decreases or increases do not, in the sole
judgment of the Representative, make it impractical or inadvisable to proceed with the purchase and
delivery of the Shares as contemplated by the Registration Statement.
(c) The Representative shall have received at the Closing Time and on each Option Closing Time
the favorable opinion of Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP,
dated the Closing Time or such Option Closing Time, addressed to the Representative and in
form and substance satisfactory to the Representative.
(d) The Registration Statement shall have become effective not later than 5:00 p.m., New York
City time, on the date of this Agreement, or such later time and date as the Representative shall
approve.
(e) No amendment or supplement to the Registration Statement, the Prospectus or any document
in the Disclosure Package shall have been filed to which the Underwriters shall have objected in
writing.
(f) Prior to the Closing Time and each Option Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement or any order preventing or suspending the use of the
Prospectus or any document in the Disclosure Package shall have been issued, and no proceedings for
such purpose shall have been initiated or threatened, by the Commission, and no suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or the initiation or
threatening of any proceedings for any of such purposes, has occurred; (ii) all requests for
additional information on the part of the Commission shall have been complied with to the
reasonable satisfaction of the Representative; (iii) the Registration Statement shall not contain
an untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and (iv) the Prospectus and the
Disclosure Package shall not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(g) All filings with the Commission required by Rule 424 under the Securities Act to have been
filed by the Closing Time shall have been made within the applicable time period prescribed for
such filing by such Rule.
(h) Between the time of execution of this Agreement and the Closing Time or the relevant
Option Closing Time there shall not have been any Material Adverse Change or any prospective
Material Adverse Change, and (ii) no transaction which is material and unfavorable to the Company
shall have been entered into by the Company or any of the Subsidiaries, in each case, which in the
Representative’s sole judgment, makes it impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Registration Statement.
-26-
(i) The Shares shall have been approved for listing on the Nasdaq Global Market, subject to
official notice of issuance.
(j) The NASD shall not have raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(k) The Representative shall have received Lock-Up Letter Agreements contemplated by Section 4
of this Agreement and such Lock-Up Letter Agreements shall be in full force and effect.
(l) The Company will, at the Closing Time and on each Option Closing Time, deliver to the
Underwriters a certificate of the Company signed on its behalf by its Chief Executive Officer or
Chief Financial Officer, to the effect that:
(i) the representations and warranties of the Company in this Agreement are
true and correct, as if made on and as of the Closing Time or any Option Closing
Time, as applicable, 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 the Closing Time or any Option Closing Time, as applicable;
(ii) no stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment thereto has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the Securities Act;
(iii) the signers of such certificate have carefully examined the Registration
Statement, the Prospectus, the Disclosure Package, any amendment or supplement
thereto, and this Agreement, and that when the Registration Statement became
effective and at all times subsequent thereto up to the Closing Time or any Option
Closing Time, as applicable, the Registration Statement and the Prospectus and the
Preliminary Prospectus, and any amendments or supplements thereto, contained all
material information required to be included therein by the Securities Act or the
Exchange Act and the applicable rules and regulations of the Commission thereunder,
as the case may be, and in all material respects conformed to the requirements of
the Securities Act or the Exchange Act and the applicable rules and regulations of
the Commission thereunder, as the case may be; the Registration Statement and any
amendments thereto, did not and, as of the Closing Time or any Option Closing Time,
as applicable, does not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus and the Disclosure Package,
and any amendments or supplements thereto, did not and as of the Closing Time or
any Option Closing Time, as applicable, do not include any untrue statement of a
material fact or omit to state a
-27-
material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and, since the effective date of the
Registration Statement, there has occurred no event required to be set forth in an
amendment or supplement to the Prospectus or the Disclosure Package which has not
been so set
forth (provided, however, that the Company shall make no warranty or
representation with respect to any statement contained in or omitted from the
Registration Statement, the Preliminary Prospectus or the Prospectus in reliance
upon and in conformity with the information concerning the Underwriters and
furnished in writing by or on behalf of the Underwriters through the Representative
to the Company expressly for use therein (that information being limited to that
described in the last sentence of the first paragraph of Section 9(b) hereof)); and
(iv) subsequent to the respective dates as of which information is given in
the Registration Statement, the Prospectus and the Disclosure Package, there has
not been (a) any Material Adverse Change, (b) any transaction that is material to
the Company and the Subsidiaries considered as one enterprise, except transactions
entered into in the ordinary course of business, (c) any obligation, direct or
contingent, that is material to the Company and the Subsidiaries considered as one
enterprise, incurred by the Company or the Subsidiaries, except obligations
incurred in the ordinary course of business, (d) any change in the capital stock or
outstanding indebtedness of the Company or any Subsidiary that is material to the
Company and the Subsidiaries considered as one enterprise, (e) any dividend or
distribution of any kind declared, paid or made on the capital stock of the Company
or any Subsidiary, or (f) any loss or damage (whether or not insured) to the
property of the Company or any Subsidiary which has been sustained or will have
been sustained which has a Material Adverse Effect.
(m) The Company shall have furnished to the Underwriters such other documents and certificates
as to the accuracy and completeness of any statement in the Registration Statement, the Prospectus
and the Disclosure Package, the representations, warranties and statements of the Company contained
herein, and the performance by the Company of its covenants contained herein, and the fulfillment
of any conditions contained herein, as of the Closing Time or any Option Closing Time, as the
Underwriters may reasonably request.
7. Termination:
The obligations of the several Underwriters hereunder shall be subject to termination in the
absolute discretion of the Representative, at any time prior to the Closing Time or any Option
Closing Time, (i) if any of the conditions specified in Section 6 shall not have been fulfilled
when and as required by this Agreement to be
-28-
fulfilled, or (ii) if there has been since the
respective dates as of which information is given in the Registration Statement, the Prospectus or
the Disclosure Package, any Material Adverse Change, or any development involving a prospective
Material Adverse Change, or material change in management of the Company or any Subsidiary, whether
or not arising in the ordinary course of business, or (iii) if there has occurred any outbreak or
escalation
of hostilities or other national or international calamity or crisis or change in economic,
political or other conditions, the effect of which on the United States or international financial
markets is such as to make it, in the judgment of the Representative, impracticable to market the
Shares or enforce contracts for the sale of the Shares, or (iv) if trading in any securities of the
Company has been suspended by the Commission or by Nasdaq, or if trading generally on the New York
Stock Exchange or on the Nasdaq has been suspended (including an automatic halt in trading pursuant
to market-decline triggers, other than those in which solely program trading is temporarily
halted), or limitations on prices for trading (other than limitations on hours or numbers of days
of trading) have been fixed, or maximum ranges for prices for securities have been required, by
such exchange or the NASD or by order of the Commission or any other governmental authority, or (v)
if there has been any downgrade in the rating of any of the Company’s debt securities or preferred
stock by any “nationally recognized statistical rating organization” (as defined for purposes of
Rule 436(g) under the Securities Act), or (vi) any federal, state, local or foreign statute,
regulation, rule or order of any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated which, in the reasonable opinion of the Representative, materially
adversely affects or will materially adversely affect the business or operations of the Company, or
(vii) any action has been taken by any federal, state, local or foreign government or agency in
respect of its monetary or fiscal affairs which, in the reasonable opinion of the Representative,
could reasonably be expected to have a material adverse effect on the securities markets in the
United States.
If the Representative elects to terminate this Agreement as provided in this Section 7, the
Company and the Underwriters shall be notified promptly by telephone, promptly confirmed by
facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement or if such sale is
not carried out because the Company shall be unable to comply in all material respects with any of
the terms of this Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the Underwriters shall be
under no obligation or liability to the Company under this Agreement (except to the extent provided
in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters’ Commitments:
If any Underwriter shall default at the Closing Time or on any Option Closing Time in its
obligation to take up and pay for the Shares to be purchased by it under this
-29-
Agreement on such
date, the Representative shall have the right, within 36 hours after such default, to make
arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Shares which such Underwriter shall have agreed but
failed to take up and pay for (the “Defaulted Shares”). Absent the completion of such arrangements
within such 36-hour period, (i) if the total
number of Defaulted Shares does not exceed 10% of the total number of Shares to be purchased
on such date, each non-defaulting Underwriter shall take up and pay for (in addition to the number
of Shares which it is otherwise obligated to purchase on such date pursuant to this Agreement) the
portion of the total number of Shares agreed to be purchased by the defaulting Underwriter on such
date in the proportion that its underwriting obligations hereunder bears to the underwriting
obligations of all non-defaulting Underwriters; and (ii) if the total number of Defaulted Shares
exceeds 10% of such total number of Shares to be purchased on such date, the Representative may
terminate this Agreement by notice to the Company, without liability of any party to any other
party except that the provisions of Sections 5 and 9 hereof shall at all times be effective and
shall survive such termination; provided, however, that nothing herein will relieve a defaulting
Underwriter from liability for its default.
Without relieving any defaulting Underwriter from its obligations hereunder, the Company
agrees with the non-defaulting Underwriters that it will not sell any Shares hereunder on such date
unless all of the Shares to be purchased on such date are purchased on such date by the
Underwriters (or by substituted Underwriters selected by the Representative with the approval of
the Company or selected by the Company with the approval of the Representative).
If a new Underwriter or Underwriters are substituted for a defaulting Underwriter in
accordance with the foregoing provision, the Company or the non-defaulting Underwriters shall have
the right to postpone the Closing Time or the relevant Option Closing Time for a period not
exceeding five business days in order that any necessary changes in the Registration Statement and
Prospectus and other documents may be effected.
The term “Underwriter” as used in this Agreement shall refer to and include any Underwriter
substituted under this Section 8 with the same effect as if such substituted Underwriter had
originally been named in this Agreement.
9. Indemnity and Contribution by the Company and the Underwriters:
(a) The Company agrees to indemnify, defend and hold harmless each Underwriter and any person
who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and the respective directors, officers, employees and agents of each
Underwriter from and against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, any such Underwriter or controlling
person may incur under the Securities Act, the Exchange Act or otherwise, insofar as such loss,
expense, liability, damage or claim arises out of or is based upon (A) any breach of any
representation, warranty or
-30-
covenant of the Company contained herein, (B) any failure on the part
of the Company to comply with any applicable law, rule or regulation relating to the offering of
securities being made pursuant to the Prospectus, (C) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any amendment), any Issuer
Free Writing Prospectus that the Company has filed or was required to file with the
Commission, or the Prospectus (the term Prospectus for the purpose of this Section 9 being
deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), (D) any application or other document, or any amendment or supplement
thereto, executed by the Company or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction (domestic or foreign) in order to qualify the Shares under the
securities or blue sky laws thereof or filed with the Commission or any securities association or
securities exchange (each an “Application”), (E) any omission or alleged omission to state a
material fact required to be stated in any such Registration Statement, or necessary to make the
statements therein not misleading, (F) any omission or alleged omission from any such Issuer Free
Writing Prospectus, Prospectus or any Application of a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
(G) any untrue statement or alleged untrue statement of any material fact contained in any audio or
visual materials used in connection with the marketing of the Shares, including, without
limitation, slides, videos, films and tape recordings; except in the case of (C), (E) and (F) above
only insofar as any such loss, expense, liability, damage or claim arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission of a material fact
contained in and in conformity with information furnished in writing by the Underwriters through
the Representative to the Company expressly for use in such Registration Statement, Prospectus or
Application. The indemnity agreement set forth in this Section 9(a) shall be in addition to any
liability which the Company may otherwise have.
If any action is brought against an Underwriter or controlling person in respect of which
indemnity may be sought against the Company pursuant to subsection (a) above, such Underwriter
shall promptly notify the Company in writing of the institution of such action, and the Company
shall assume the defense of such action, including the employment of counsel and payment of
expenses; provided, however, that any failure or delay to so notify the Company will not relieve
the Company of any obligation hereunder, except to the extent that its ability to defend is
actually impaired by such failure or delay. Such Underwriter or controlling person shall have the
right to employ its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company in connection with
the defense of such action, or the Company shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or parties shall have
reasonably concluded (based on the advice of counsel) that there may be defenses available to it or
them which are different from or additional to those available to the Company (in which case the
Company shall not have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such
-31-
fees and expenses shall be borne by the Company and
paid as incurred (it being understood, however, that the Company shall not be liable for the
expenses of more than one separate firm of attorneys for the Underwriters or controlling persons in
any one action or series of related actions in the same jurisdiction (other than local counsel in
any such jurisdiction) representing the indemnified parties who are parties to such action).
Anything in this
paragraph to the contrary notwithstanding, the Company shall not be liable for any settlement
of any such claim or action effected without its consent.
(b) Each Underwriter agrees, severally and not jointly, to indemnify, defend and hold harmless
the Company, the Company’s directors, the Company’s officers that signed the Registration
Statement, and any person who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) which the Company may incur under
the Securities Act, the Exchange Act or otherwise, insofar as such loss, expense, liability, damage
or claim arises out of or is based upon (A) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment), any Issuer Free Writing
Prospectus that the Company has filed or was required to file with the Commission, or the
Prospectus, or any Application, (B) any omission or alleged omission to state a material fact
required to be stated in any such Registration Statement, or necessary to make the statements
therein not misleading, or (C) any omission or alleged omission from any such Issuer Free Writing
Prospectus, Prospectus or any Application of a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, but in each
case only insofar as such untrue statement or alleged untrue statement or omission or alleged
omission was made in such Registration Statement, Issuer Free Writing Prospectus, Prospectus or
Application in reliance upon and in conformity with information furnished in writing by the
Underwriters through the Representative to the Company expressly for use therein. The following
statements under the caption “Underwriting” beginning on page 99 of the Preliminary Prospectus: (i)
the first two sentences of the third paragraph on page 99, (ii) the sixth paragraph on page 100 of
the Preliminary Prospectus beginning with “The representative of the underwriters may engage...”
until and including the last bullet of that paragraph ending with “...at which a stabilizing bid is
made.” on page 101 of the Preliminary Prospectus and (iii) the last three paragraphs on page 101 of
the Preliminary Prospectus (and the corresponding sections of the Disclosure Package and the
Prospectus, to the extent such statements relate to the Underwriters) constitute the only
information furnished by or on behalf of any Underwriter through the Representative to the Company
for purposes of Section 3(l) and Section 3(m) and this Section 9.
If any action is brought against the Company in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Company or such person shall
promptly notify the Representative in writing of the institution of such action and the
Representative, on behalf of the Underwriters, shall assume the defense of such action, including
the employment of counsel and payment of expenses. The Company or such person shall have the right
to employ its own counsel in any such case,
-32-
but the fees and expenses of such counsel shall be at
the expense of the Company or such person unless the employment of such counsel shall have been
authorized in writing by the Representative in connection with the defense of such action or the
Representative shall not have employed counsel to have charge of the defense of such action within
a reasonable time or such indemnified party or parties shall have reasonably concluded
(based on the advice of counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Underwriters (in which case the
Representative shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses shall be borne by such
Underwriter and paid as incurred (it being understood, however, that the Underwriters shall not be
liable for the expenses of more than one separate firm of attorneys in any one action or series of
related actions in the same jurisdiction (other than local counsel in any such jurisdiction)
representing the indemnified parties who are parties to such action). Anything in this paragraph
to the contrary notwithstanding, no Underwriter shall be liable for any settlement of any such
claim or action effected without the written consent of the Representative.
(c) If the indemnification provided for in this Section 9 is unavailable or insufficient to
hold harmless an indemnified party under subsections (a), (b) and (c) of this Section 9 in respect
of any losses, expenses, liabilities, damages or claims 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, expenses, liabilities,
damages or claims (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 (but only
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 of the Underwriters in connection with the
statements or omissions which resulted in such losses, expenses, liabilities, damages or claims, as
well as any other relevant equitable considerations. The relative benefits received by the Company
and the Underwriters shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting expenses) received by
the Company bear to the underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company and of the Underwriters shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission relates to information supplied by the Company or by the Underwriters
and the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a result of the
losses, 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 claim or action.
(d) 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
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(even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in subsection (c)(i) and,
if applicable, subsection (c)(ii), above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased
by such Underwriter. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant
to this Section 9 are several in proportion to their respective underwriting commitments and not
joint.
10. Survival:
The indemnity and contribution agreements contained in Section 9 and the covenants, warranties
and representations of the Company contained in Sections 3, 4 and 5 of this Agreement shall remain
in full force and effect regardless of any investigation made by or on behalf of any Underwriter,
or any person who controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, and the respective directors, officers, employees and agents of
each Underwriter or by or on behalf of the Company, its directors and officers, or any person who
controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the sale and delivery of the
Shares. The Company and each Underwriter agree promptly to notify the others of the commencement
of any litigation or proceeding against it and, in the case of the Company, against any of the
Company’s officers and directors, in connection with the sale and delivery of the Shares, or in
connection with the Registration Statement or Prospectus.
11. Duties:
Nothing in this Agreement shall be deemed to create a partnership, joint venture or agency
relationship between the parties. The Underwriters undertake to perform such duties and
obligations only as expressly set forth herein. Such duties and obligations of the Underwriters
with respect to the Shares shall be determined solely by the express provisions of this Agreement,
and the Underwriters shall not be liable except for the performance of such duties and obligations
with respect to the Shares as are specifically set forth in this Agreement. The Company
acknowledges and agrees that: (i) the purchase and sale of the Shares pursuant to this Agreement,
including the determination of the 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, and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement; (ii) in connection with each transaction contemplated hereby and
the process leading to such transaction each Underwriter is and has been acting solely as a
principal and is not the financial advisor, agent or fiduciary of
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the Company or its affiliates,
shareholders, creditors or employees or any other party; (iii) no Underwriter has assumed or will
assume an advisory, agency or fiduciary responsibility in favor of the Company with respect to any
of the transactions contemplated hereby or the process leading thereto (irrespective of whether
such Underwriter has advised or is currently advising the Company on other matters); and (iv) the
several 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 that the several Underwriters have no obligation to
disclose any of such interests. The Company acknowledges that the Underwriters disclaim any
implied duties (including any fiduciary duty), covenants or obligations arising from the
Underwriters’ performance of the duties and obligations expressly set forth herein. The Company
hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may
have against the several Underwriters with respect to any breach or alleged breach of agency or
fiduciary duty.
12. Notices:
Except as otherwise herein provided, all statements, requests, notices and agreements shall be
in writing or by telegram and, if to the Underwriters, shall be sufficient in all respects if
delivered to Friedman, Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx
00000, Attention: Syndicate Department; if to the Company, shall be sufficient in all respects if
delivered to the Company at the offices of the Company at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Chief Executive Officer.
13. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The section headings in
this Agreement have been inserted as a matter of convenience of reference and are not a part of
this Agreement.
14. Parties at Interest:
The Agreement herein set forth has been and is made solely for the benefit of the
Underwriters, the Company and the controlling persons, directors and officers referred to in
Sections 9 and 10 hereof, and their respective successors, assigns, executors and administrators.
No other person, partnership, association or corporation (including a purchaser, as such purchaser,
from any of the Underwriters) shall acquire or have any right under or by virtue of this Agreement.
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15. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts which together shall constitute
one and the same agreement among the parties. A facsimile signature shall constitute an original
signature for all purposes.
[Remainder of Page Intentionally Left Blank]
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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
Agreement shall constitute a binding agreement among the Company and the Underwriters.
| Very truly yours, | ||||||
| GOLDLEAF FINANCIAL SOLUTIONS, INC. | ||||||
| By: | /S/ G. Xxxx Xxxxx
|
|||||
| Title: Chief Executive Officer | ||||||
Accepted and agreed to as
of the date first above written:
of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By:
|
/S/ Xxxxx X. Xxxxxxxxx
|
|||
| Title: Senior Managing Director |
For itself and as Representative of the other
Underwriters named on Schedule I hereto.
Underwriters named on Schedule I hereto.
[Signature Page to the Underwriting Agreement]
Schedule I
| Number of Initial | ||||
| Underwriter | Shares to be Purchased | |||
Friedman, Billings, Xxxxxx & Co., Inc. |
7,500,000 | |||
JMP Securities LLC |
1,500,000 | |||
X.X. Xxxxxxxx & Co. |
1,000,000 | |||
Total |
10,000,000 | |||
S-1
