ECHO GLOBAL LOGISTICS, INC. CONVERTIBLE SENIOR NOTES DUE 2020 UNDERWRITING AGREEMENT

Exhibit 1.2

 

EXECUTION VERSION

 

ECHO GLOBAL LOGISTICS, INC.

 

CONVERTIBLE SENIOR NOTES DUE 2020

 

UNDERWRITING AGREEMENT

 

April 29, 2015

 


 

April 29, 2015

 

To the Managers named in Schedule I hereto
for the Underwriters named in Schedule II hereto

 

Ladies and Gentlemen:

 

Echo Global Logistics, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the several underwriters named in Schedule II hereto (the “Underwriters”), for whom you are acting as managers (the “Managers”), $200,000,000 aggregate principal amount of its 2.50% Convertible Senior Notes due 2020 set forth in Schedule I hereto (the “Firm Securities”) to be issued pursuant to the provisions of an Indenture to be dated as of the Closing Date (as defined herein) (the “Base Indenture”) between the Company and U.S. Bank National Association, as trustee (the “Trustee”), and a First Supplemental Indenture to be dated as of the Closing Date (the “First Supplemental Indenture”) between the Company and the Trustee (the Base Indenture, as so amended and supplemented by the First Supplemental Indenture, the “Indenture”). The Company also proposes to issue and sell to the Underwriters not more than an additional $30,000,000 aggregate principal amount of its 2.50% Convertible Senior Notes due 2020 (the “Additional Securities”), if and to the extent that you, as Managers of the offering, shall have determined to exercise, on behalf of the Underwriters, the right to purchase such Additional Securities granted to the Underwriters in Section 2 hereof. The Firm Securities and the Additional Securities are hereinafter collectively referred to as the “Securities.”  The common stock, par value $0.0001 per share, of the Company is hereinafter referred to as the “Common Stock.” The Securities will be convertible into cash, shares of Common Stock (the “Underlying Securities”), or a combination of cash and the Underlying Securities, at the Company’s election, as set forth in the Indenture. If the firm or firms listed in Schedule II hereto include only the Managers listed in Schedule I hereto, then the terms “Underwriters” and “Managers” as used herein shall each be deemed to refer to such firm or firms.

 

Concurrently with the issuance of the Securities, the Company is offering, an aggregate of 5,000,000 shares of Common Stock (the “Firm Shares”) in an offering registered under the Securities Act of 1933, as amended (the “Securities Act”), by means of a prospectus supplement and related prospectus. The Firm Shares are being offered and sold by the Company to the several underwriters named in the underwriting agreement for such offering (the “Common Stock Underwriters”).  The Company also proposes to issue and sell to the several Common Stock Underwriters not more than an aggregate of 750,000 additional shares of Common Stock (the “Additional Shares”), if and to the extent that the representatives of the Common Stock Underwriters shall have determined to exercise, on behalf of the Common Stock Underwriters, the right to purchase Additional Shares pursuant to the option granted to the Common Stock Underwriters. The Firm Shares and the Additional Shares are hereinafter collectively

 


 

referred to as the “Shares.” The offering of the Securities is not conditioned on the offering of the Shares.

 

The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement, including a prospectus (the file number of which is set forth in Schedule I hereto), on Form S-3, relating to securities (the “Shelf Securities”), including the Securities and the Underlying Securities, to be issued from time to time by the Company.  The registration statement as amended to the date of this Agreement, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A or Rule 430B under the Securities Act, is hereinafter referred to as the “Registration Statement,” and the related prospectus covering the Shelf Securities dated April 14, 2015 in the form first used to confirm sales of the Securities (or in the form first made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Basic Prospectus.”  The Basic Prospectus, as supplemented by the prospectus supplement specifically relating to the Securities in the form first used to confirm sales of the Securities (or in the form first made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Prospectus,” and the term “preliminary prospectus” means any preliminary form of the Prospectus.  For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, “Time of Sale Prospectus” means the documents and pricing information set forth opposite the caption “Time of Sale Prospectus” in Schedule I hereto, and “broadly available road show” means a “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act that has been made available without restriction to any person.  As used herein, the terms “Registration Statement,” “Basic Prospectus,” “preliminary prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference therein as of the date hereof.  The terms “supplement,” “amendment,” and “amend” as used herein with respect to the Registration Statement, the Basic Prospectus, the Time of Sale Prospectus, any preliminary prospectus or the Prospectus shall include all documents subsequently filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are deemed to be incorporated by reference therein.

 

The proceeds of the offering will be used to finance a portion of the purchase price for the Company’s acquisition of Command Transportation, LLC (“Command,” and such acquisition, the “Acquisition”) pursuant to the that certain Unit Purchase Agreement, dated as of April 20, 2015 (the “Purchase Agreement”), by and among the Company, Command, the members of Command, Xxxx Xxxx, as the representative of the members of Command, and Xxxx Xxxx, in his individual capacity, as described in the “Use of Proceeds” section of the Time of Sale Prospectus and the Prospectus.

 

1.                                      Representations and Warranties.  The Company represents and warrants to and agrees with each of the Underwriters that:

 

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(a)                                 The Registration Statement has become effective; no order preventing or suspending the use of the Registration Statement has been issued by the Commission.

 

(b)                                 (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Time of Sale Prospectus or the Prospectus complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (ii) each part of the Registration Statement, when such part became effective, did not contain, and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement as of the date hereof does not contain any 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, (iv) the Registration Statement and the Prospectus comply, and as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (v) the Time of Sale Prospectus does not, and at the time of each sale of the Securities in connection with the offering when the Prospectus is not yet available to prospective purchasers and at the Closing Date (as defined in Section 4), the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, will not, contain any 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, (vi) each broadly available road show, if any, when considered together with the Time of Sale Prospectus, does not contain any 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 and (vii) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any 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; provided, however, that this representation and warranty shall not apply to any statements or omissions in the Registration Statement, the Time of Sale Prospectus, the Prospectus or any road show materials made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives expressly for use therein or relate to that part of the Registration Statement that constitutes the Statement of Eligibility and Qualifications (Form T-1) under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).

 

(c)                                  The Company and each of its subsidiaries, taken as a whole, have not sustained since the date of the latest audited financial statements included in the Time of Sale Prospectus any material loss or interference with the business of the Company and its subsidiaries, taken as a whole, from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Time of Sale Prospectus; and, since the respective dates as of which information is given in the Time of Sale Prospectus, there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general

 

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affairs, executive officers of the Company, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Time of Sale Prospectus. To the knowledge of the Company, Command and its subsidiaries, taken as a whole, have not sustained since the date of the latest audited financial statements included in the Time of Sale Prospectus any material loss or interference with the business of Command and its subsidiaries, taken as a whole, from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Time of Sale Prospectus; and, to the knowledge of the Company, since the respective dates as of which information is given in the Time of Sale Prospectus, there has not been any change in the capital stock or long-term debt of Command or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of Command and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Time of Sale Prospectus.

 

(d)                                 Neither the Company nor any of its subsidiaries (and, to the knowledge of the Company, neither Command nor any of its subsidiaries) owns any real property.  The Company and its subsidiaries and, to the knowledge of the Company, Command and its subsidiaries, have good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described in the Time of Sale Prospectus and the Prospectus or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries or Command and its subsidiaries, as applicable; and any real property and buildings held under lease by the Company and its subsidiaries or, to the knowledge of the Company, by Command and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries or, to the knowledge of the Company, by Command and its subsidiaries.

 

(e)                                  The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own or lease its properties and to conduct its business as described in the Time of Sale Prospectus and the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the current or future condition, financial or otherwise, or on the earnings, business or operations of the Company and its subsidiaries, taken as a whole, both without and including giving pro forma effect to the Acquisition (a “Material Adverse Effect”).  Each subsidiary of the Company has been duly incorporated or formed and is validly existing as a corporation or other business entity in good standing under the laws of its jurisdiction of incorporation or formation.  To the knowledge of the Company, Command and each of its subsidiaries has been duly incorporated or formed and is validly existing

 

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as a corporation or other business entity in good standing under the laws of its jurisdiction of incorporation or formation with power and authority (corporate and other) to own or lease its properties and to conduct its business as described in the Time of Sale Prospectus and the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a have a material adverse effect on the current or future condition, financial or otherwise, or on the earnings, business or operations of Command and its subsidiaries, taken as a whole (a “Command MAE”).

 

(f)                                   This Agreement has been duly authorized, executed and delivered by the Company.

 

(g)                                  The Company has an authorized capitalization as set forth in the Time of Sale Prospectus and the Prospectus and all of the issued shares of Common Stock have been duly and validly authorized and issued and are fully paid and non-assessable and conform to the description of the Common Stock contained in the Time of Sale Prospectus and Prospectus.  All of the issued shares of capital stock or other ownership interests of each significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-X) of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims, except to the extent that such liens, encumbrances, equities or claim would not have a Material Adverse Effect.

 

(h)                                 The Securities to be issued and sold by the Company to the Underwriters hereunder have been duly and validly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and equitable principles of general applicability, and will be entitled to the benefits of the Indenture pursuant to which such Securities are to be issued, and the Securities and the Indenture will conform to the descriptions thereof contained in the Time of Sale Prospectus and the Prospectus.

 

(i)                                     The maximum number of Underlying Securities initially issuable upon conversion of the Securities (assuming the Company elects to issue and deliver solely Underlying Securities in respect of all conversions and including the maximum number of Underlying Securities that may be issued upon conversion of the Securities in connection with a “Make Whole Fundamental Change,” as such term is defined in the Indenture) (the “Maximum Number of Underlying Securities”) have been duly authorized and reserved and, when and to the extent issued upon conversion of the Securities in accordance with the terms of the Securities and the Indenture, will be validly issued, fully paid and non-assessable, and the issuance of any Underlying Securities will not be subject to any preemptive or similar rights.

 

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(j)                                    The Indenture has been duly authorized by the Company and upon effectiveness of the Registration Statement and on the Closing Date and on the Option Closing Date (as defined below), as the case may be, the Indenture was and will be duly qualified under the Trust Indenture Act, as applicable, and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and equitable principles of general applicability.

 

(k)                                 The issue and sale of the Securities by the Company and the compliance by the Company with this Agreement, the Indenture and the Securities (including the issuance of the Maximum Number of Underlying Securities upon conversion of the Securities) and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, except for any such conflict, breach, violation or default that (individually or in the aggregate) would not have a Material Adverse Effect, nor will such action result in any violation of the provisions of the Certificate of Incorporation or By-laws of the Company or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities by the Company or the consummation by the Company of the transactions contemplated by this Agreement, the Indenture and the Securities (including the issuance of the Maximum Number of Underlying Securities upon conversion of the Securities), except the registration under the Act of the Securities and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Underwriters.

 

(l)                                     Neither the Company nor any of its subsidiaries (and to the knowledge of the Company, neither Command nor any of its subsidiaries) (i) is in violation of its Certificate of Incorporation or By-laws or other constitutive or organizational documents or (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except for any such default that (individually or in the aggregate) would not have a Material Adverse Effect or a Command MAE, as applicable.

 

(m)                             The statements set forth in the Time of Sale Prospectus and the Prospectus under the captions “Description of Capital Stock,” “Description of Notes” (other than the information under the caption “—Book Entry, Settlement and Clearance”), “Description of Other Indebtedness” and “The Command Acquisition,” insofar as they purport to

 

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describe the provisions of the laws and documents referred to therein, are accurate, complete and fair in all material respects.

 

(n)                                 There are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect; and, to the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. To the knowledge of the Company, there are no legal or governmental proceedings pending to which Command or any of its subsidiaries is a party or of which any property of Command or any of its subsidiaries is the subject which, if determined adversely to Command or any of its subsidiaries, would individually or in the aggregate have a Command MAE, and no such proceedings are threatened or contemplated by governmental authorities or threatened by others.

 

(o)                                 The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof, will not be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.

 

(p)                                 The Company is not an “ineligible issuer,” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act.

 

(q)                                 Each of (A) Ernst & Young LLP, who have certified certain financial statements of the Company and its subsidiaries, and (B) Xxxxx Xxxxxxx LLP, who have certified certain financial statements of Command and its subsidiaries, is an independent registered public accounting firm as required by the Securities Act and the rules and regulations of the Commission thereunder.

 

(r)                                    The financial statements (including the related notes thereto) of the Company and its consolidated subsidiaries and, to the knowledge of the Company, of Command and its consolidated subsidiaries included or incorporated by reference in the Time of Sale Prospectus and the Prospectus comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act and present fairly the financial position of the Company and its consolidated subsidiaries and, to the knowledge of the Company, of Command and its consolidated subsidiaries as of the dates indicated and the results of their respective operations and the changes in their respective cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis throughout the periods covered thereby; the other financial information included or incorporated by reference in the Time of Sale Prospectus and the Prospectus has been derived from the accounting records of the Company and its consolidated subsidiaries and, to the knowledge of the Company, of Command and its consolidated subsidiaries; and the pro forma financial information and the related notes thereto included or incorporated by reference in the Time of Sale Prospectus and the Prospectus have been prepared in accordance with the applicable requirements of the Securities Act and the Exchange Act, and the assumptions underlying such pro forma financial

 

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information are reasonable and are set forth in the Time of Sale Prospectus and the Prospectus.

 

(s)                                   The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that complies with the requirements of the Exchange Act and is sufficient to provide reasonable assurance that (1) transactions are executed in accordance with management’s general or specific authorizations; (2) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles and to maintain asset accountability; (3) access to assets is permitted only in accordance with management’s general or specific authorization; and (4) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  The Company’s internal control over financial reporting is effective in all material respects and the Company is not aware of any material weaknesses in its internal control over financial reporting.

 

(t)                                    Since the date of the latest audited financial statements included in the Time of Sale Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

(u)                                 The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective in all material respects.

 

(v)                                 The Purchase Agreement has been duly authorized by the Company and constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and equitable principles of general applicability. To the knowledge of the Company, the representations and warranties made by Command in the Purchase Agreement (after taking into account the exceptions to such representation and warranties set forth in the disclosure schedule accompanying the Purchase Agreement) were, when made or as of the date specified therein, true and correct; the Company is not aware of any fact or circumstance that has caused or would reasonably be expected to cause such representations and warranties to be untrue on or prior to the consummation of the Acquisition; and, to the Company’s knowledge, there has been no development that would reasonably be expected to have a Command MAE.

 

(w)                               The Company and its subsidiaries and, to the knowledge of the Company, Command and its subsidiaries own, possess, license, have other rights to use or can obtain on reasonable terms all patents, trademarks, service marks, trade names, copyrights, inventions, trade secrets, know-how, software, systems and technology and

 

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other intellectual property and all registrations of, and applications to register, any of the foregoing (collectively, the “Intellectual Property”) material to the conduct of their respective businesses as now conducted or as proposed in the Time of Sale Prospectus and the Prospectus to be conducted, except as would not reasonably be expected to have a Material Adverse Effect or a Command MAE.  Other than as set forth in the Time of Sale Prospectus and the Prospectus: (w) to the Company’s knowledge, there is no material infringement by third parties of any Intellectual Property; (x) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s or Command’s rights in or to any Intellectual Property owned by the Company or any of its subsidiaries or by Command or any of its subsidiaries (collectively, the “Owned Intellectual Property”), and the Company is unaware of any facts that would form a reasonable basis for any such claim, except such claims that, if the subject of an unfavorable decision, ruling or finding, could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect or a Command MAE; (y) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any Owned Intellectual Property, and the Company is unaware of any facts that would form a reasonable basis for any such claim, except such claims that, if the subject of an unfavorable decision, ruling or finding, could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect or a Command MAE; and (z) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes or otherwise violates any patent, trademark, copyright, trade secret or other intellectual property rights of others, and the Company is unaware of any facts that would form a reasonable basis for any such claim, except such claims that, if the subject of an unfavorable decision, ruling or finding, could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect or a Command MAE.

 

(x)                                 There are no persons with registration or other similar rights to have any Shelf Securities under the Registration Statement or included in the offering contemplated by this Agreement.

 

(y)                                 The Company and its subsidiaries and, to the knowledge of the Company, Command and its subsidiaries hold such licenses, certificates, consents, orders, approvals, permits and other authorizations from governmental authorities which are necessary to own or lease, as the case may be, and to operate their respective properties and to carry on their respective businesses as presently conducted, except for such licenses, certificates, consents, orders, approvals, permits or other authorizations the failure to hold could not reasonably be expected to have a Material Adverse Effect or a Command MAE, as applicable; the Company and its subsidiaries and, to the knowledge of the Company, Command and its subsidiaries have fulfilled and performed all obligations necessary to maintain such licenses, certificates, consents, orders, approvals, permits and other authorizations, except where the failure to so fulfill or perform such obligations could not reasonably be expected to have a Material Adverse Effect or a Command MAE.  Except as disclosed in the Time of Sale Prospectus and Prospectus, there is no pending or, to the Company’s knowledge, threatened, action, suit, proceeding or investigation (and, to the Company’s knowledge, no facts exist which the Company believes could reasonably be

 

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the basis for any such action, suit, proceeding or investigation) relating to the revocation, termination or suspension of any such license, certificate, consent, order, approval, permit or other authorization, which, if the subject of an unfavorable decision, ruling or finding, could reasonably be expected to have a Material Adverse Effect or a Command MAE.

 

(z)                                  All United States federal income tax returns of the Company and its subsidiaries and, to the knowledge of the Company, of Command and its subsidiaries required by law to be filed have been filed and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. The Company and its subsidiaries and, to the knowledge of the Company, Command and its subsidiaries have filed all other tax returns that are required to have been filed by them pursuant to applicable foreign, state, local or other law, and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company and its subsidiaries or Command and its subsidiaries, as the case may be, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. The charges, accruals and reserves on the books of the Company and, to the knowledge of the Company, the books of Command in respect of any income and corporation tax liability for any years not finally determined are adequate to meet any assessments or re-assessments for additional income tax for any years not finally determined.

 

(aa)                          The Company and its subsidiaries and, to the knowledge of the Company, Command and its subsidiaries carry or are entitled to the benefits of insurance, with reputable insurers, in such amounts and covering such risks as are prudent and customary in the businesses in which they are engaged, and all such insurance is in full force and effect.  The Company has no reason to believe that it or any of its subsidiaries will not be able (A) to renew its existing insurance coverage as and when such policies expire or (B) to obtain comparable coverage from similar insurers as may be necessary or appropriate to conduct its business as now conducted at a cost that would not have a Material Adverse Effect.  Neither the Company nor any of its subsidiaries has been denied any insurance coverage which it has sought or for which it has applied.

 

(bb)                          None of the Company or any of its subsidiaries or, to the knowledge of the Company, Command or any of its subsidiaries, or any director, officer, agent, employee or controlled affiliate of the Company or any of its subsidiaries or Command or any of its subsidiaries 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 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, its subsidiaries and, to the knowledge of the Company, its controlled affiliates and Command and its subsidiaries and their controlled affiliates have conducted their businesses in compliance with the FCPA and

 

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have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(cc)                            The operations of the Company and its subsidiaries and, to the knowledge of the Company, of Command and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the applicable money laundering statutes of jurisdictions where the Company and its subsidiaries and Command and its subsidiaries conduct business, and 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”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or, to the knowledge of the Company, Command or any of its subsidiaries, with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

(dd)                          None of the Company or any of its subsidiaries or, to the knowledge of the Company, Command or any of its subsidiaries, or any director, officer, agent, employee or controlled affiliate of the Company or any of its subsidiaries or Command or any of its subsidiaries is currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S. 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, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

2.                                      Agreements to Sell and Purchase.  The Company hereby agrees to sell to the several Underwriters, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from the Company the respective principal amount of Firm Securities set forth in Schedule II hereto opposite its name at the purchase price set forth in Schedule I hereto (the “Purchase Price”).

 

On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to sell to the Underwriters the Additional Securities, and the Underwriters shall have the right to purchase, severally and not jointly, up to the aggregate principal amount of Additional Securities set forth in Schedule I hereto at the Purchase Price.  You may exercise this right on behalf of the Underwriters in whole or from time to time in part by giving written notice not later than 30 days after the date of this Agreement.  Any exercise notice shall specify the principal amount of Additional Securities to be purchased by the Underwriters and the date on which such Additional Securities are to be purchased.  Each purchase date must be at least one business day after the written notice is given and may not be earlier than the closing date for the Firm Securities nor later than ten business days after the date of such notice.  Additional Securities may be purchased as provided in Section 4 hereof solely for the purpose of covering sales in excess of the principal amount of Firm Securities.  On each day, if any, that Additional Securities are to be purchased (an “Option Closing

 

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Date”), each Underwriter agrees, severally and not jointly, to purchase the principal amount of Additional Securities (subject to such adjustments to eliminate denominations of less than $1,000 as you may determine) that bears the same proportion to the aggregate principal amount of Additional Securities to be purchased on such Option Closing Date as the principal amount of Firm Securities set forth in Schedule II hereto opposite the name of such Underwriter bears to the aggregate principal amount of Firm Securities.

 

3.                                      Public Offering.  The Company is advised by you that the Underwriters propose to make a public offering of their respective portions of the Securities as soon after the Registration Statement and this Agreement have become effective as in your judgment is advisable.  The Company is further advised by you that the Securities are to be offered to the public upon the terms set forth in the Prospectus.

 

4.                                      Payment and Delivery.  Payment for the Firm Securities shall be made to the Company in Federal or other funds immediately available in New York City on the closing date and time set forth in Schedule I hereto, or at such other time on the same or such other date, not later than the fifth business day after the date of such notice, as may be designated in writing by you.  The time and date of such payment are hereinafter referred to as the “Closing Date.”

 

Payment for any Additional Securities shall be made to the Company in Federal or other funds immediately available in New York City on the date specified in the corresponding notice described in Section 2 or at such other time on the same or on such other date, in any event not later than the tenth business day after the date of such notice, as may be designated in writing by you.

 

The Firm Securities and the Additional Securities shall be registered in such names and in such denominations as you shall request in writing not later than one full business day prior to the Closing Date or the applicable Option Closing Date, as the case may be, for the respective accounts of the several Underwriters, with any transfer taxes payable in connection with the transfer of the Securities to the Underwriters duly paid, against payment of the Purchase Price therefor.

 

5.                                      Conditions to the Underwriters’ Obligations.  The several obligations of the Underwriters are subject to the following conditions:

 

(a)                                 Subsequent to the execution and delivery of this Agreement and prior to the Closing Date:

 

(i)                 there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of the Exchange Act; and

 

(ii)              there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the

 

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earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus as of the date of this Agreement that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Securities on the terms and in the manner contemplated in the Time of Sale Prospectus.

 

(b)                                 The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in Section 5(a)(i) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.

 

The officer signing and delivering such certificate may rely upon his or her knowledge as to proceedings threatened.

 

(c)                                  The Underwriters shall have received on the Closing Date an opinion of Winston & Xxxxxx LLP, outside counsel for the Company, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters to the effect set forth in Annex A hereto.

 

(d)                                 The Underwriters shall have received on the Closing Date an opinion of Xxxxx Xxxx & Xxxxxxxx LLP, counsel for the Underwriters, dated the Closing Date, in form and substance satisfactory to the Underwriters.

 

The opinion of counsel for the Company described in Section 5(c) above shall be rendered to the Underwriters at the request of the Company and shall so state therein.

 

(e)                                  The Underwriters shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the Underwriters, from each of Ernst & Young LLP, independent public accountants for the Company, and Xxxxx Xxxxxxx LLP, independent public accountants for Command, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that the letter delivered on the Closing Date shall use a “cut-off date” not earlier than the date hereof.

 

(f)                                   The Maximum Number of Underlying Securities shall have been approved for listing, subject to notice of issuance, on The NASDAQ Global Market (“NASDAQ”), and evidence shall have been provided to the Managers.

 

(g)                                  The “lock-up” agreements, each substantially in the form of Exhibit A hereto, between you and each of the executive officers and directors of the Company relating to sales and certain other dispositions of shares of Common Stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date.

 

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(h)                                 The several obligations of the Underwriters to purchase Additional Securities hereunder are subject to the delivery to you on the applicable Option Closing Date of the following:

 

(i)                  a certificate, dated the Option Closing Date and signed by an executive officer of the Company, confirming that the certificate delivered on the Closing Date pursuant to Section 5(b) hereof remains true and correct as of such Option Closing Date;

 

(ii)               an opinion of Winston & Xxxxxx LLP, outside counsel for the Company, dated the Option Closing Date, relating to the Additional Securities to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(c) hereof;

 

(iii)            an opinion of Xxxxx Xxxx & Xxxxxxxx LLP, counsel for the Underwriters, dated the Option Closing Date, relating to the Additional Securities to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(d) hereof;

 

(iv)           letters dated the Option Closing Date, in form and substance satisfactory to the Underwriters, from each of Ernst & Young LLP and Xxxxx Xxxxxxx LLP, independent public accountants, substantially in the same form and substance as the letters furnished to the Underwriters pursuant to Section 5(e) hereof; provided that the letters delivered on the Option Closing Date shall use a “cut-off date” not earlier than three business days prior to such Option Closing Date; and

 

(v)              such other documents as you may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional Securities to be sold on such Option Closing Date and other matters related to the issuance of such Additional Securities.

 

6.                                      Covenants of the Company.  The Company covenants with each Underwriter as follows:

 

(a)                                 To furnish to you, without charge, a signed copy of the Registration Statement (including exhibits thereto and documents incorporated by reference therein) and to deliver to each of the Underwriters during the period mentioned in Section 6(e) or 6(f) below, as many copies of the Time of Sale Prospectus, the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement as you may reasonably request.

 

(b)                                 Before amending or supplementing the Registration Statement, the Time of Sale Prospectus or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which you reasonably object, and to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule.

 

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(c)                                  To furnish to you a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed free writing prospectus to which you reasonably object.

 

(d)                                 Not to take any action that would result in an Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of such Underwriter that such Underwriter otherwise would not have been required to file thereunder.

 

(e)                                  If the Time of Sale Prospectus is being used to solicit offers to buy the Securities at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the reasonable opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law.

 

(f)                                   If, during such period after the first date of the public offering of the Securities as in the reasonable opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, not misleading, or if, in the reasonable opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Securities may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law.

 

(g)                                  To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request; provided that in

 

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no event shall the Company or any of its subsidiaries be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now subject or to subject itself to taxation in excess of a nominal amount in respect of doing business in any jurisdiction.

 

(h)                                 To make generally available to the Company’s security holders and to you as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder.

 

(i)                                     Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel and the Company’s accountants in connection with the registration and delivery of the Securities under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing, all printing costs associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the Securities to the Underwriters, including any transfer or other taxes payable thereon, (iii) the reasonable cost of printing or producing any Blue Sky or legal investment memorandum in connection with the offer and sale of the Securities under state securities laws and all expenses in connection with the qualification of the Securities for offer and sale under state securities laws as provided in Section 6(g) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky or legal investment memorandum, (iv) all filing fees and the reasonable fees and disbursements of counsel to the Underwriters incurred in connection with the review and qualification of the offering of the Securities by the Financial Industry Regulatory Authority, if any (provided that the fees and disbursement of counsel to the Underwriters incurred pursuant to subsection (iii) and (iv) shall not exceed $40,000), (v) all costs and expenses incident to listing the Maximum Number of Underlying Securities on NASDAQ, (vi) the cost of printing certificates representing the Securities, (vii) the costs and charges of the Trustee, any transfer agent, registrar or depositary, (viii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic road show, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants, group luncheons and conference rooms, and fifty percent (50%) of the cost of any aircraft chartered in connection with the road show (the remaining 50% of the cost of such aircraft to be paid

 

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by the Underwriters), (v) the document production charges and expenses associated with printing this Agreement and (vi) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section.  It is understood, however, that except as provided in this Section, Section 8 entitled “Indemnity and Contribution” and the last paragraph of Section 10 below, the Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel, transfer taxes payable on resale of any of the Securities by them and any advertising expenses connected with any offers they may make.

 

(j)                                    If the Company is no longer eligible to use the Registration Statement or the Registration Statement is no longer effective at any time prior to the date on which all the Securities have been sold by the Underwriters, to file a new shelf registration statement and to take any other action necessary to permit the public offering of the Securities to continue without interruption; references herein to the Registration Statement shall include any such new registration statement that is declared effective by the Commission.

 

(k)                                 To prepare a final term sheet relating to the offering of the Securities, containing only information that describes the final terms of the Securities or the offering and the concurrent offering of Shares (if applicable) in a form consented to by the Managers, and to file such final term sheet within the period required by Rule 433(d)(5)(ii) under the Securities Act following the date the final terms have been established for the offering of the Securities.

 

(l)                                     To have the Maximum Number of Underlying Securities approved for listing, subject only to notice of issuance, on NASDAQ on or prior to the Closing Date and to use best efforts to maintain the listing of the Maximum Number of Underlying Securities on NASDAQ.

 

(m)                             To reserve and keep available at all times, free of preemptive rights, the Maximum Number of Underlying Securities.

 

The Company also covenants with each Underwriter that, without the prior written consent of the Manager identified in Schedule I with the authorization to release this lock-up on behalf of the Underwriters, it will not, during the restricted period set forth in Schedule I hereto (the “Restricted Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise or (3) file any registration statement with the Commission relating to the offering of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (other than a registration statement on Form S-8 or a successor form).  The foregoing sentence shall

 

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not apply to (a) the Securities to be sold hereunder and any Underlying Securities upon conversion thereof, (b) the issuance by the Company of the Shares, (c) the issuance of up to $15,000,000 in shares of Common Stock and $10,000,000 in shares of restricted Common Stock issued as partial consideration for the Acquisition; provided that the recipients of the foregoing Common Stock and restricted Common Stock will be subject to restrictions on transfer substantially similar to those set forth in this Section 6(m) during the Restricted Period and the Company will not waive or amend such transfer restrictions such that the restrictions on transfer would be materially less restrictive than those described in this Section 6(m) during the Restricted Period, (d) the issuance by the Company of shares of Common Stock upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof of which the Underwriters have been advised in writing, (e) the grant of options or the issuance by the Company of shares of Common Stock or options pursuant to any incentive compensation plan in effect on the date hereof, (f) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Common Stock, provided that (i) such plan does not provide for the transfer of Common Stock during the Restricted Period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by the Company regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of Common Stock may be made under such plan during the Restricted Period, and (g) shares of Common Stock of the Company issued in connection with a transaction with an unaffiliated third party that includes a bona fide commercial relationship with the Company (including joint ventures, marketing or distribution arrangements, collaboration agreements or intellectual property license agreements) or an acquisition of the business, stock or assets of such unaffiliated third party, provided that (x) the aggregate number of shares of Common Stock issued pursuant to this clause (g) during the restricted period shall not exceed 5% of the total number of shares of Common Stock issued and outstanding immediately following the Closing Date and (y) prior to the issuance of any shares of Common Stock pursuant to this clause (g) during the Restricted Period, the recipient of such shares of Common Stock shall sign and deliver a lock-up agreement substantially in the form of the lock-up letters described in Section 5(f).

 

7.                                      Covenants of the Underwriters.  Each Underwriter severally covenants with the Company not to take any action that would result in the Company being required to file with the Commission under Rule 433(d) a free writing prospectus prepared by or on behalf of such Underwriter that otherwise would not be required to be filed by the Company thereunder, but for the action of the Underwriter.

 

8.                                      Indemnity and Contribution.  (a) The Company agrees to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary

 

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prospectus, the Time of Sale Prospectus or any amendment or supplement thereto, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act, any “road show” as defined in Rule 433(h) under the Securities Act (a “road show”), or the Prospectus or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities that arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein.

 

(b)                                 Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Underwriter, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through you expressly for use in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus, road show, or the Prospectus or any amendment or supplement thereto.

 

(c)                                  In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b), such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonably incurred fees and disbursements of such counsel related to such proceeding.  In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed in writing to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonably incurred fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such reasonably incurred fees and expenses shall be reimbursed as they are incurred.  Such firm shall be designated in writing by the Manager authorized to appoint counsel under this Section set forth in Schedule I hereto, in the case of parties indemnified pursuant to Section 8(a), and by the Company, in the case of parties indemnified pursuant to Section 8(b).  The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there

 

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be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment.   Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement.  No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (i) includes an full and unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding, and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

(d)                                 To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities or (ii) if the allocation provided by clause 8(d)(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 8(d)(i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Securities (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriters bear to the aggregate public offering price of the Securities set forth in the Prospectus.  The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Underwriters’ respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective principal amount of Securities they have purchased hereunder, and not joint.

 

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(e)                                  The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 8(d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in Section 8(d) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  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 remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

 

(f)                                   The indemnity and contribution provisions contained in this Section 8 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter, any person controlling any Underwriter or any affiliate of any Underwriter or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Securities.

 

9.                                      Termination.  The Underwriters may terminate this Agreement by notice given by you to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of The New York Stock Exchange, the NYSE MKT or the NASDAQ Global Market, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a material disruption in securities settlement, payment or clearance services in the United States shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by Federal or New York State authorities or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Securities on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectus.

 

10.                               Effectiveness; Defaulting Underwriters.  This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.

 

21


 

If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Securities that it has or they have agreed to purchase hereunder on such date, and the aggregate principal amount of Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of the Securities to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the principal amount of Firm Securities set forth opposite their respective names in Schedule II bears to the aggregate principal amount of Firm Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the principal amount of Securities that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an amount in excess of one-ninth of such principal amount of Securities without the written consent of such Underwriter.  If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm Securities and the aggregate principal amount of Firm Securities with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Firm Securities to be purchased on such date, and arrangements satisfactory to you and the Company for the purchase of such Firm Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company.  In any such case either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement, in the Time of Sale Prospectus, in the Prospectus or in any other documents or arrangements may be effected.  If, on an Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional Securities and the aggregate principal amount of Additional Securities with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Additional Securities to be purchased on such Option Closing Date, the non-defaulting Underwriters shall have the option to (i) terminate their obligation hereunder to purchase the Additional Securities to be sold on such Option Closing Date or (ii) purchase not less than the principal amount of Additional Securities that such non-defaulting Underwriters would have been obligated to purchase in the absence of such default.  Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

 

If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder.

 

22


 

11.                               Entire Agreement.  (a) This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the Securities, represents the entire agreement between the Company and the Underwriters with respect to the preparation of any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the purchase and sale of the Securities.

 

(b)                                 The Company acknowledges that in connection with the offering of the Securities: (i) the Underwriters have acted at arm’s length, are not agents of, and owe no fiduciary duties to, the Company or any other person, (ii) the Underwriters owe the Company only those duties and obligations set forth in this Agreement and prior written agreements (to the extent not superseded by this Agreement), if any, and (iii) the Underwriters may have interests that differ from those of the Company.  The Company waives to the full extent permitted by applicable law any claims it may have against the Underwriters arising from an alleged breach of fiduciary duty in connection with the offering of the Securities.

 

12.                               Counterparts.  This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

13.                               Applicable Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.

 

14.                               Headings.  The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.

 

15.                               Notices.  All communications hereunder shall be in writing and effective only upon receipt and if to the Underwriters shall be delivered, mailed or sent to you at the address set forth in Schedule I hereto; and if to the Company shall be delivered, mailed or sent to the address set forth in Schedule I hereto.

 

[Signature Page Follows]

 

23


 

 

Very truly yours,

 

 

 

ECHO GLOBAL LOGISTICS, INC.

 

 

 

 

 

By:

/s/ Xxxxx X. Xxxxxx

 

 

Name:

Xxxxx X. Xxxxxx

 

 

Title:

President / Chief Operating Officer

 

Accepted as of the date hereof

 

 

 

Xxxxxx Xxxxxxx & Co. LLC

Credit Suisse Securities (USA) LLC

 

 

 

Acting severally on behalf of themselves and the several

 

 

Underwriters named in Schedule II hereto.

 

 

 

 

 

By:

Xxxxxx Xxxxxxx & Co. LLC

 

 

 

 

 

By:

/s/ Xxxxxx Xxxxxxxxx

 

 

 

Name:

Xxxxxx Xxxxxxxxx

 

 

Title:

Executive Director

 

 

 

 

 

By:

Credit Suisse Securities (USA) LLC

 

 

 

 

 

By:

Xxxx X. Xxxxxx

 

 

 

Name:

Xxxx X. Xxxxxx

 

 

Title:

Director

 

 

[Signature Page to Underwriting Agreement]

 

24


 

SCHEDULE I

 

Managers:

 

Xxxxxx Xxxxxxx & Co. LLC

Credit Suisse Securities (USA) LLC

 

 

 

Managers authorized to jointly release lock-up under Section 6(l):

 

Xxxxxx Xxxxxxx & Co. LLC

Credit Suisse Securities (USA) LLC

 

 

 

Manager authorized to appoint counsel under Section 8(c):

 

Xxxxxx Xxxxxxx & Co. LLC

 

 

 

Registration Statement File No.:

 

333-202317

 

 

 

Time of Sale Prospectus

 

1.                                      Prospectus dated April 14, 2015 relating to the Shelf Securities

 

2.                                      The preliminary prospectus supplement dated April 27, 2015 relating to the Securities

 

3.                                      The free writing prospectus dated April 29, 2015 relating to the Securities, attached as Exhibit B hereto

 

 

 

Lock-up Restricted Period:

 

The period ending 90 days after the date of the final prospectus supplement relating to the Securities

 

 

 

Securities to be purchased:

 

2.50% Convertible Senior Notes due 2020

 

 

 

Aggregate Principal Amount of Firm Securities:

 

$200,000,000

 

 

 

Aggregate Principal Amount of Additional Securities:

 

$30,000,000

 

 

 

Purchase Price:

 

97.00% of the aggregate principal amount of the Firm Securities

 

 

 

Initial Public Offering Price:

 

100.00% of the aggregate principal amount of the Firm Securities

 

 

 

Selling Concession:

 

60 bps

 

 

 

Reallowance:

 

None

 

 

 

Closing Date and Time:

 

May 5, 2015 10:00 a.m.

 

I-1


 

Closing Location:

 

Xxxxx Xxxx & Xxxxxxxx LLP

000 Xxxxxxxxx Xxxxxx

Xxx Xxxx, Xxx Xxxx 00000

 

 

 

Address for Notices to Underwriters:

 

Xxxxxx Xxxxxxx & Co. LLC

0000 Xxxxxxxx

Xxx Xxxx, Xxx Xxxx 00000

Attention: GCM Syndicate Desk, with a copy to the Legal Department

 

 

 

Address for Notices to the Company:

 

To the address of the Company set forth in the Registration Statement

Attention: Xxxxxxx X. Xxxxxxxx, Chief Executive Officer

 

With copies to Winston & Xxxxxx LLP

00 Xxxx Xxxxxx Xxxxx

Xxxxxxx, Xxxxxxxx 00000

Attention: Xxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxxxx

 

I-2


 

SCHEDULE II

 

Underwriter

 

Principal Amount of Firm
Securities To Be
Purchased

 

Xxxxxx Xxxxxxx & Co. LLC

 

$

90,000,000

 

Credit Suisse Securities (USA) LLC

 

$

90,000,000

 

PNC Capital Markets LLC

 

$

20,000,000

 

Total

 

$

200,000,000

 

 

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Filed: May 5th, 2015
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