ORION MARINE GROUP, INC. 17,500,000 SHARES OF COMMON STOCK PURCHASE/PLACEMENT AGREEMENT May 9, 2007
Exhibit 10.2
Execution Copy
ORION MARINE GROUP, INC.
17,500,000 SHARES OF COMMON STOCK
PURCHASE/PLACEMENT AGREEMENT
May 9, 2007
PURCHASE/PLACEMENT AGREEMENT
May 9, 2007
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
ORION MARINE GROUP, INC., a Delaware corporation (the “Company”), proposes to issue
and sell to you, Friedman, Billings, Xxxxxx & Co., Inc. (“FBR”), as initial purchaser, a
number of shares of the Company’s common stock, par value $0.01 per share (the “Common
Stock”) equal to 17,500,000 shares less the number of Regulation D Shares sold in the Private
Placement (each as defined herein) (the “144A/Regulation S Shares”).
FBR will also act as the Company’s sole placement agent in connection with the Company’s offer
and sale to certain “Accredited Investors” (as such term is defined in Regulation D
(“Regulation D”) under the Securities Act of 1933, as amended (the “Securities
Act”) of (a) that number of shares of Common Stock equal to the difference between 17,500,000
shares and the number of 144A/Regulation S Shares (the “Regulation D Shares” and, together
with the 144A/Regulation S Shares, the “Initial Shares”), and (b) the Placed Option Shares
(as defined herein), as set forth in the Final Memorandum (as defined herein) under the headings
“Plan of Distribution” and “Private Placement.” The offer and sale of the shares described in the
first sentence of this paragraph (the “Private Placement Shares”) is referred to herein as
the “Private Placement.”
In addition, the Company proposes to grant to you the option described in Section 1(c) hereof
to purchase or place all or any part of 3,449,196 additional shares of Common Stock (the
“Option Shares” and, together with the Initial Shares, the “Shares”) solely to
cover additional allotments, if any.
The offer and sale of the Shares to you and to the Accredited Investors, respectively, will be
made without registration under the Securities Act and the rules and regulations thereunder (the
“Securities Act Regulations”), in reliance upon the exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof. You have advised the Company
that you will make offers and sales (“Exempt Resales”) of the 144A/Regulation S Shares
purchased by you hereunder and the Purchased Option Shares (as defined herein) (such shares
referred to collectively herein as “Resale Shares”) in accordance with Section 3 hereof on
the terms set forth in the Final Memorandum (as defined herein), as soon as you deem advisable
after this Agreement has been executed and delivered.
In connection with the offer and sale of the Shares, the Company (i) has prepared a
preliminary offering memorandum, subject to completion, dated April 12, 2007, and amendments or
supplements thereto (the “Preliminary Memorandum”), and (ii) a final offering memorandum,
dated the date hereof and as it may be amended or supplemented from time to time (the “Final
Memorandum”). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Company and the Shares. The Company
hereby confirms that it has authorized the use of the Preliminary Memorandum and the Final
Memorandum in connection with (i) the offering and resale of the Resale Shares by FBR and by all
dealers to whom Resale Shares may be sold and (ii) the Private Placement. Any references to the
Preliminary Memorandum or the Final Memorandum shall be deemed to include all exhibits and annexes
thereto.
It is understood and acknowledged that holders (including subsequent transferees) of the
Shares will have the registration rights set forth in the registration rights agreement between the
Company and FBR, which shall be in substantially the form attached hereto as Exhibit A and
dated as of the Closing Time (as defined herein) (the “Registration Rights Agreement”), for
so long as such securities constitute “Registrable Shares” (as defined in the Registration
Rights Agreement).
Pursuant to, and subject to the terms of, the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the “Commission”), under the
circumstances set forth therein, (i) a registration statement on Form S-1 under the Securities Act
for the initial public offering of Common Stock that includes the resale by holders of the
Registrable Shares and/or (ii) a shelf registration statement on Form S-1 or such other appropriate
form pursuant to Rule 415 under the Securities Act relating to the resale by holders of the
Registrable Shares, and to use its commercially reasonable efforts to cause any such registration
statement to be declared effective on the terms set forth in the Registration Rights Agreement.
The Company and FBR agree as follows:
1. Sale and Purchase.
(a) 144A/Regulation S Shares. Upon the basis of the warranties and representations and
other terms and conditions herein set forth, the Company agrees to issue and sell to FBR and
FBR agrees to purchase from the Company the 144A/Regulation S Shares at a purchase price of
$12.555 per share (the “144A/Regulation S Purchase Price”), reflecting an initial
purchaser’s discount of $0.945 per share.
(b) Regulation D Shares. The Company agrees to issue and sell the Regulation D Shares
and, to the extent that FBR exercises the option described in Section 1(c), the Placed
Option Shares, for which the Accredited Investors have subscribed pursuant to the terms and
conditions set forth in the subscription agreements substantially in the forms attached to
the Preliminary Memorandum as Annex III and Annex IV, as applicable (each a
“Subscription Agreement”). The Private Placement Shares will be sold by the Company
pursuant to this Agreement at a price of $13.50 per share (the “Regulation D Purchase
Price”). As compensation for the services to be provided by FBR in connection with the
Private Placement, the Company shall pay to FBR at each of the Closing Time and any
Secondary Closing Time (as defined herein), to the extent applicable, an amount equal to
$0.945 per Private Placement Share sold at such time (the “Placement Fee”).
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(c) Option Shares. Upon the basis of the representations and warranties and subject to
the other terms and conditions herein set forth, the Company hereby grants an option to FBR
to (i) purchase from the Company, as initial purchaser, up to an aggregate of 3,449,196,
Option Shares at the 144A/Regulation S Purchase Price per share (the “Purchased Option
Shares”); and (ii) place, as exclusive placement agent for the Company, up to that
number of Option Shares remaining, after subtracting any Purchased Option Shares with
respect to which FBR has exercised its option pursuant to clause (i), at the Regulation D
Purchase Price per share (the “Placed Option Shares”). The option granted hereby
will expire 30 days after the date hereof and may be exercised in whole or in part from time
to time in one or more installments, including at the Closing Time, only for the purpose of
covering additional allotments of Shares initially sold at the offering price set forth in
the Final Memorandum which may be made in connection with the offering and distribution of
the Initial Shares upon written notice by FBR to the Company setting forth (i) the number of
Option Shares as to which FBR is then exercising the option, (ii) the names and
denominations to which the Option Shares are to be delivered in book-entry form through the
facilities of The Depository Trust Company (“DTC”), (iii) the number of Option
Shares that will be Purchased Option Shares and the number of Option Shares that will be
Placed Option Shares, and (iv) the time and date of payment for and delivery of such Option
Shares in book-entry form. Any such time and date of delivery shall be determined by FBR,
but shall not be later than five full business days nor earlier than one full business day
after the exercise of said option, nor in any event prior to the Closing Time, unless
otherwise agreed in writing by FBR and the Company.
2. Payment and Delivery.
(a) 144A/Regulation S Shares. The closing of FBR’s purchase of the 144A/Regulation S
Shares shall be held at the office of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP, 000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, XX 00000 (unless another place shall be
agreed upon by FBR and the Company). At the closing, subject to the satisfaction or waiver
of the closing conditions set forth herein, FBR shall pay to the Company the aggregate
purchase price for the 144A/Regulation S Shares by wire transfer of immediately available
funds to an account previously designated by the Company in writing against delivery by the
Company of the 144A/Regulation S Shares to FBR for FBR’s account through the facilities of
DTC in such denominations and registered in such names as FBR shall specify. Such payment
and delivery shall be made at 10:00 a.m., New York City time, on the sixth business day
after the date hereof (unless another time, not later than ten business days after such
date, shall be agreed to by FBR and the Company). The time at which such payment and
delivery are actually made is hereinafter called the “Closing Time”.
(b) Regulation D Shares. At the Closing Time, subject to the satisfaction of the
closing conditions set forth herein, FBR shall pay to the Company the aggregate applicable
purchase price received by FBR prior to the Closing Time (net of any Placement Fee, if the
Placement Fee is withheld as provided in the immediately following paragraph) for the
Regulation D Shares (other than any Extended Regulation D Shares, as defined below) against
the Company’s delivery of the Regulation D Shares to FBR, as placement agent in
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respect of such shares, in book-entry form through the facilities of DTC for each such
Accredited Investor’s account. At FBR’s option, it may delay the placement of up to 3% of
Regulation D Shares (the “Extended Regulation D Shares”) for an additional five
business days after the Closing Time (the “Extended Regulation D Closing Date”) at
which time FBR shall cause Bank of New York, as escrow agent, to the extent it has available
funds transferred to it by Accredited Investors, to pay the Company the aggregate applicable
purchase price for the Extended Regulation D Shares placed by FBR (net of any Placement Fee,
if the Placement Fee is withheld as provided herein) against the Company’s delivery of the
Extended Regulation D Shares to the purchasers thereof, in book-entry form through the
facilities of DTC. Extended Regulation D Shares may only be placed with Accredited
Investors who have committed to purchase Regulation D Shares before the Closing Time. The
time at which payment and delivery on an Extended Regulation D Closing Date is actually made
is hereinafter sometimes called the “Extended Closing Time.”
At each of the Closing Time or any Extended Closing Time, unless FBR has withheld such
amount from the applicable purchase price paid by FBR to the Company with respect to the
Regulation D Shares placed by FBR on such date, the Company shall pay to FBR, by wire
transfer of immediately available funds to an account or accounts designated by FBR, any
Placement Fee amount payable with respect to the Regulation D Shares for which the Company
shall have received the purchase price.
(c) Option Shares. The closing of FBR’s purchase or placement of the Option Shares
shall occur from time to time at the office of Xxxxxx Xxxxxxx Xxxxx & Scarborough LLP, 000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, XX 00000 (unless another place shall be
agreed upon by FBR and the Company). On the applicable Secondary Closing Time (as defined
herein), subject to the satisfaction or waiver of the closing conditions set forth herein,
FBR shall pay to the Company the aggregate applicable purchase price for the Option Shares
then purchased or placed by FBR (net of any Placement Fee with respect to any Placed Option
Shares) by wire transfer of immediately available funds against the Company’s delivery of
the Option Shares. Such payment and delivery shall be made at 10:00 a.m., New York City
time, on each Secondary Closing Time. The Option Shares shall be delivered in book-entry
form through the facilities of DTC, in such names and in such denominations as FBR shall
specify. The time at which payment by FBR for and delivery by the Company of any Option
Shares are actually made is referred to herein as a “Secondary Closing Time.”
3. Offering of the Shares; Restrictions on Transfer.
(a) FBR represents and warrants to and agrees with the Company that (i) it has not
solicited and will not solicit any offer to buy, and has not and will not make any offer to
sell, the Shares by means of any form of general solicitation or general advertising (within
the meaning of Regulation D), and, with respect to Resale Shares sold in reliance on
Regulation S under the Securities Act (“Regulation S”), by means of any directed
selling efforts (within the meaning of Regulation S) in the United States; (ii) it has
solicited and will solicit offers to buy the Resale Shares only from, and has offered
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and will offer, sell and deliver the Resale Shares only to, (A) persons who it
reasonably believes to be “qualified institutional buyers” (as defined in Rule 144A under
the Securities Act) (“QIBs”) or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent, only when such
person has represented to it that each such account is a QIB to whom notice has been given
that such sale or delivery is being made in reliance on Rule 144A, and, in each case, in
transactions under Rule 144A and who provide to it a fully completed and executed
purchaser’s letter substantially in the form of Annex I to the Preliminary Memorandum or
Final Memorandum, and (B) persons (each a “Regulation S Purchaser”) to whom, and
under which circumstances, it reasonably believes offers and sales of Resale Shares may be
made without registration under the Securities Act in reliance on Regulation S thereunder,
and who provide to it a fully completed and executed purchaser’s letter substantially in the
form of Annex II to the Preliminary Memorandum or Final Memorandum (such persons specified
in clauses (A) and (B) being referred to herein as the “Eligible Purchasers”); and
(iii) as placement agent, it has solicited and will solicit offers to buy the Regulation D
Shares or the Placed Option Shares only from persons it reasonably believes are Accredited
Investors and it will deliver the Private Placement Shares only to Accredited Investors who,
in the case of those purchasing such Regulation D Shares or the Placed Option Shares only,
have provided to FBR and the Company a fully completed and executed Subscription Agreement
in the form of Annex III or Annex IV, as applicable, to the Preliminary Memorandum or Final
Memorandum.
(b) The Company represents and warrants to and agrees with FBR that it (together with
its affiliates) has not solicited and will not solicit any offer to buy, and it (together
with its affiliates) has not offered and will not offer to sell, the Shares by means of any
form of general solicitation or general advertising (within the meaning of Regulation D),
and it has solicited and will solicit offers to buy the Private Placement Shares only from,
and has offered and will offer, sell or deliver the Shares only to, Accredited Investors
(except for any solicitations made at meetings attended by both the Company and FBR, as to
which the Company makes no representation and is relying on the representation made by FBR
in Section 3(a)(iii) above). The Company also represents and warrants and agrees that it
will sell the Private Placement Shares only to persons that have provided to the Company a
fully completed and executed Subscription Agreement in the form of Annex III or Annex IV, as
applicable, to the Preliminary Memorandum or Final Memorandum.
(c) The Company represents and warrants to and agrees with FBR that, assuming the
accuracy of FBR’s representations and warranties and FBR’s compliance with its obligations
set forth in this Section 3, (i) none of the Company or any of its affiliates or any person
acting on behalf of it or its affiliates has engaged in, nor will any of them engage in, any
directed selling efforts (as that term is defined in Regulation S) with respect to the
Shares; and (ii) the Company or any of its affiliates, and any person acting on behalf of it
or its affiliates (in each case, other than FBR as to which no representation is made) have
complied, and will comply, with the offering restrictions requirement of Regulation S.
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(d) FBR represents and warrants that it has not offered or sold, nor will it offer or
sell, any Resale Shares in a jurisdiction outside of the United States except in material
compliance with all applicable laws, regulations and rules of those countries.
(e) Each of FBR and the Company represents and warrants to the other that no action is
being taken by it or is contemplated that would permit an offering or sale of the Shares or
possession or distribution of the Preliminary Memorandum or the Final Memorandum or any
other offering material relating to the Shares in any jurisdiction where, or in any other
circumstances in which, action for those purposes is required (other than in jurisdictions
where such action has been duly taken by counsel for FBR).
(f) FBR and the Company agree that FBR may arrange (i) for the private offer and sale
of a portion of the Resale Shares to a limited number of Eligible Purchasers (which may
include affiliates of FBR), and (ii) for the private offer and sale of the Private Placement
Shares by the Company to Accredited Investors (which may include affiliates of FBR), in each
case under restrictions and other circumstances designed to preclude a distribution of the
Shares that would require registration of the Shares under the Securities Act.
(g) FBR and the Company agree that the Shares may be resold or otherwise transferred by
the holders thereof only if the offer and sale of such Shares are registered under the
Securities Act or if an exemption from registration is available. FBR hereby establishes
and agrees that it has observed and will observe the following procedures in connection with
offers, sales and subsequent resales or other transfers of any Shares purchased or placed by
FBR:
(i) Sales only to Eligible Purchasers. Initial offers and sales of the
Resale Shares will be made only in Exempt Resales by FBR to investors that FBR
reasonably believes to be Eligible Purchasers and who have delivered to the Company
and FBR a fully completed and executed purchaser’s letter substantially in the form
of Annex I or II, as applicable, to the Preliminary Memorandum or Final Memorandum.
(ii) No general solicitation. The Shares will be offered only by
approaching prospective purchasers on an individual basis with whom FBR and/or the
Company has an existing relationship. No general solicitation or general
advertising within the meaning of Regulation D will be used in connection with the
offering of the Shares.
(iii) Restrictions on transfer. Each of the Preliminary Memorandum and
the Final Memorandum shall state that the offer and sale of the Shares have not been
and will not be registered (other than pursuant to the Registration Rights
Agreement) under the Securities Act, and that no resale or other transfer of any
Shares or any interest therein prior to the date that is two years (or such shorter
period as is prescribed by Rule 144(k) under the Securities Act as then in effect)
after the later of the original issuance of such Shares and the last date on which
the Company or any “affiliate” (as defined in Rule 144 under the Securities Act)
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of the Company was the owner of such Shares may be made by a purchaser of such
Shares except as follows:
(A) to the Company with its written consent,
(B) pursuant to a registration statement that has been declared
effective under the Securities Act,
(C) to a person who such purchaser reasonably believes is a QIB that
purchases such common stock for its own account or for the account of a QIB
to whom notice is given that the offer, sale, pledge or other transfer is
being made in reliance upon Rule 144A,
(D) pursuant to offers and sales to non-U.S. persons that occur outside
the United States within the meaning of Regulation S, with the consent of
the Company, or
(E) pursuant to any other available exemption from the registration
requirements of the Securities Act,
in each case in accordance with any applicable federal securities laws and the
securities laws of any state of the United States or other jurisdiction.
(h) FBR and the Company agree that each initial resale of Resale Shares by FBR (and
each purchase of Resale Shares from the Company by FBR) in accordance with this Section 3
shall be deemed to have been made on the basis of and in reliance on the representations,
warranties, covenants and agreements (including, without limitation, agreements with respect
to indemnification and contribution) of the Company herein contained.
(i) Upon original issuance thereof, and until such time as the same is no longer
required under the applicable requirements of the Securities Act, the global certificates
representing the Shares (and all securities issued in exchange therefore or in substitution
thereof) shall bear the following legend (in addition to any other legends that may be
required by DTC or deemed necessary by the Company to ensure compliance with the Securities
Act):
THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND THIS SECURITY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF ORION MARINE GROUP, INC.
(THE “COMPANY”), AND ITS AGENTS THAT, ABSENT AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT: (A) THIS SECURITY MAY BE OFFERED,
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RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) TO THE COMPANY OR A
SUBSIDIARY THEREOF, (II) TO A “QUALIFIED INSTITUTIONAL BUYER” PURSUANT TO RULE 144A,
(III) TO A PERSON WHO IS NOT A UNITED STATES PERSON IN AN “OFFSHORE” TRANSACTION
PURSUANT TO REGULATION S OR (IV) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION AS
PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, AS
CONFIRMED TO THE COMPANY BY AN OPINION OF COUNSEL IF REQUESTED, SUBJECT IN EACH OF
THE FOREGOING CASES TO COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
JURISDICTION. THE HOLDER OF THIS SECURITY ACKNOWLEDGES THAT THE COMPANY SHALL
REFUSE TO REGISTER ANY SALE OR TRANSFER OF THE SECURITY NOT MADE IN ACCORDANCE WITH
THE FOREGOING PROVISIONS.
4. Representations and Warranties of the Company.
The Company hereby represents and warrants to FBR that:
(a) the Preliminary Memorandum did not, as of its date, contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; the
Preliminary Memorandum on April 12, 2007, and as amended and supplemented (the
“Applicable Time”), together with the pricing terms as set forth in Section 1(a) and
(b) of this Agreement, and the information set forth on Schedule A (collectively, the
“Disclosure Package”) did not, as of the Applicable Time, contain an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not
misleading; and the Final Memorandum will not, as of its date, at the Closing Time and each
Extended Closing Time (if any) and each Secondary Closing Time (if any), contain an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall not apply to any
statement in or omission from the Disclosure Package or Final Memorandum made in reliance
upon and in conformity with information furnished to the Company in writing by FBR expressly
for use therein (that information being limited to that described in the last sentence of
Section 8(b) hereof);
(b) the Preliminary Memorandum included, as of its date, and the Final Memorandum will
include, as of its date, and will include at the Closing Time, Extended Closing Time (if
any) and at each Secondary Closing Time (if any), the information required by Rule 144A,
Regulation S and Regulation D;
(c) the Company is a corporation duly organized and validly existing and in good
standing under the laws of the State of Delaware, with requisite corporate power and
authority to own, lease or operate its properties and to conduct its business as described
in the
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Disclosure Package and the Final Memorandum and to execute and deliver this Agreement
and the Registration Rights Agreement, and to consummate the transactions contemplated
hereby (including the issuance, sale and delivery of the Shares) and thereby;
(d) each corporation, association, partnership or other business entity of which more
than 50% of the total voting power entitled to vote in the election of directors, managers,
general partners, or trustees thereof is controlled, directly or indirectly, by the Company
(each, a “Subsidiary”) is a legal entity duly organized and validly existing and in good
standing under the laws of its respective jurisdiction of organization, with requisite power
and authority to own, lease or operate its properties and to conduct its business as
described in the Disclosure Package and the Final Memorandum;
(e) the Disclosure Package and the Final Memorandum under the caption “Capitalization,”
at the date indicated and at the Closing Time, Extended Closing Time (if any) and the
Secondary Closing Time (if any), accurately describe the duly authorized capital stock of
the Company after giving effect to the adjustments set forth thereunder; all of the issued
and outstanding shares of capital stock of the Company and each Subsidiary have been duly
and validly authorized and issued and are fully paid and non-assessable, and have been
issued and sold in compliance with all applicable federal, state, foreign and local
securities laws and the laws of the jurisdiction of incorporation of the Company or such
Subsidiary, as applicable, and have not been issued in violation of or subject to any
preemptive right or other similar right of stockholders arising by operation of law, under
the certificate of incorporation or bylaws, or other governing document of the Company or
such Subsidiary, as applicable, under any agreement to which the Company or such Subsidiary,
as applicable, is a party or otherwise; all of the capital stock, partnership interests or
membership interests of any of the Company’s Subsidiaries are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or claims; except as
disclosed in the Disclosure Package and the Final Memorandum, there are no outstanding (i)
securities or obligations of the Company convertible into or exchangeable for any capital
stock of the Company or capital stock, partnership interests or membership interests of any
of its Subsidiaries, (ii) warrants, rights or options to subscribe for or purchase from the
Company or any such Subsidiary any such capital stock, partnership interest, or membership
interest or any such convertible or exchangeable securities or obligations or (iii)
obligations of the Company or any such Subsidiary to issue or sell any shares of capital
stock, partnership interest, or membership interest, any such convertible or exchangeable
securities or obligation, or any such warrants, rights or options;
(f) the Shares have been duly authorized for issuance, sale and delivery pursuant to
this Agreement and, when issued and delivered by the Company against payment therefore in
accordance with the terms of this Agreement, will be duly and validly issued and fully paid
and nonassessable, free and clear of any pledge, lien, encumbrance, security interest or
other claim, and the issuance, sale and delivery of the Shares by the Company are not
subject to any preemptive right, co-sale right, registration right, right of first refusal
or other similar right of stockholders arising by operation of law, under the certificate of
incorporation or bylaws of the Company, under any agreement to which the Company is a party
or otherwise, other than as provided for in the
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Registration Rights Agreement; the Shares satisfy the requirements set forth in Rule
144A under the Securities Act;
(g) each of the Company and the Subsidiaries is duly qualified or licensed by, and is
in good standing in, each jurisdiction in which it conducts its business, or in which it
owns or leases property or maintains an office and in which such qualification or licensing
is necessary and in which the failure, individually or in the aggregate, to be so qualified
or licensed could reasonably be expected to have a material adverse effect on the business,
condition (financial or otherwise), results of operations or prospects of the Company and
the Subsidiaries taken as a whole (a “Material Adverse Effect”);
(h) each of the Company and the Subsidiaries has legal, valid and defensible title to
all assets and properties reflected as owned by them in the Disclosure Package and the Final
Memorandum (whether through fee ownership, mineral estates or similar rights of ownership),
with title investigations having been carried out by or on behalf of such person in
accordance with reasonable practice in the industries and in the areas in which the Company
and the Subsidiaries operate, and good and marketable title to substantially all other real
and personal property reflected as assets owned by them in the Disclosure Package and the
Final Memorandum, 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
Disclosure Package and the Final Memorandum or as could not reasonably be expected to have a
Material Adverse Effect; and any real property or personal property held under lease by the
Company or any Subsidiary is held under a lease that is valid, existing and enforceable by
the Company or such Subsidiary, with such exceptions as are disclosed in the Disclosure
Package and the Final Memorandum or as could not reasonably be expected to have a Material
Adverse Effect, and neither the Company nor any Subsidiary has received any notice of any
material claim of any sort that has been asserted by anyone adverse to the rights of the
Company or such Subsidiary under any such lease;
(i) each of the Company and the Subsidiaries owns or possesses such licenses or other
rights to use all patents, trademarks, service marks, trade names, copyrights, software and
design licenses, trade secrets, manufacturing processes, other intangible property rights
and know-how (collectively “Intellectual Property”), as are necessary to entitle the
Company to conduct the Company’s or such Subsidiary’s business described in the Disclosure
Package and the Final Memorandum, and neither the Company nor any such Subsidiary has
received written notice of any infringement of or conflict with (and the Company does not
know of any such infringement of or conflict with) asserted rights of others with respect to
any Intellectual Property which would reasonably be expected to have a Material Adverse
Effect;
(j) neither the Company nor any Subsidiary has violated, or received notice of any
violation with respect to, any law, rule, regulation, order, decree or judgment applicable
to it or its business, including those relating to transactions with affiliates,
environmental, safety or similar laws, federal or state laws relating to discrimination in
the hiring, promotion or pay of employees, federal or state wages and hours law or the rules
and regulations promulgated thereunder, except for those violations that would not
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reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect;
(k) none of the Company, any Subsidiary or, to the Company’s knowledge, any officer,
director, agent or employee purporting to act on behalf of the Company or any Subsidiary,
has at any time, directly or indirectly, (i) made any contributions to any candidate for
political office, or failed to disclose fully any such contributions, 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 (including the Foreign Corrupt Practices Act of 1977,
as amended (the “FCPA”)), (iii) engaged in any transactions or maintained any bank account
on behalf of the Company or a Subsidiary or used any corporate funds except for
transactions, bank accounts and funds which have been and are reflected in the normally
maintained books and records of the Company and each Subsidiary, (iv) violated any provision
of the FCPA, or (v) made any other unlawful payment;
(l) except as otherwise disclosed in both the Disclosure Package and the Final
Memorandum, there are no outstanding loans or advances or guarantees of indebtedness by the
Company or any Subsidiary to or for the benefit of any of the executive officers, directors,
affiliates or representatives of the Company or any Subsidiary or any of the members of the
families of any of them;
(m) except with respect to FBR, the Company has not incurred any liability for any
finder’s fees or similar payments in connection with the transactions contemplated hereby;
(n) neither the Company nor any Subsidiary is in breach of, or in default under (nor
has any event occurred which with notice, lapse of time, or both would constitute a breach
of, or default under) its certificate of incorporation, bylaws, or other organizational
documents (collectively, the “Charter Documents”) or in the performance or
observance of any obligation, agreement, covenant or condition contained in any contract,
license, indenture, mortgage, deed of trust, bank 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, except where such breaches and
defaults not relating to the charter documents which could not reasonably be expected to
have a Material Adverse Effect;
(o) the execution, delivery and performance by the Company of this Agreement, and the
Registration Rights Agreement, and the issuance, sale and delivery of the Shares by the
Company, the Company’s use of the proceeds from the sale of the Shares as described in the
Disclosure Package and Final Memorandum and the consummation by the Company of the
transactions contemplated hereby and thereby, and compliance by the Company with the terms
and provisions hereunder and thereunder will not conflict with, or result in any breach of
or constitute a default under (nor constitute any event which with notice, lapse of time, or
both would constitute a breach of, or default under), (i) any provision of the Charter
Documents of the Company or any
-11-
Subsidiary, (ii) any provision of any contract, license, indenture, mortgage, deed of
trust, bank loan or credit agreement or other agreement or instrument to which the Company
or any Subsidiary is a party or by which it or its respective properties may be bound or
affected, or (iii) any constitution, act, statute, law, treaty, rule, code, ordinance,
regulation, standard, directive or official interpretation of, or judgment, injunction,
order, decision, decree, license, permit, consent or authorization (each a “Legal
Requirement”) issued by, the U.S. government or any state, local or foreign government,
court, administrative agency or commission or other governmental agency, authority or
instrumentality, domestic or foreign, of competent jurisdiction (each a “Governmental
Authority”) applicable to the Company or any Subsidiary , except in the case of clauses (ii)
or (iii) for such conflicts, breaches or defaults which have been validly waived or would
not reasonably be expected to have a Material Adverse Effect; and except in the case of
clause (iii), compliance with Blue Sky laws (state and foreign) in respect of the issuance,
sale and delivery of the Shares;
(p) this Agreement has been duly authorized, executed and delivered by the Company and
constitutes a legal, valid and binding agreement of the Company, is enforceable in
accordance with its terms, and the Registration Rights Agreement has been duly authorized by
the Company and at the Closing Time will have been duly executed and delivered by the
Company and will constitute a legal, valid and binding agreement of the Company enforceable
in accordance with its terms, except in each case as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ rights
generally, and by general principles of equity, and except to the extent that the
indemnification provisions hereof or thereof may be limited by federal or state securities
laws and public policy considerations in respect thereof;
(q) the Shares, this Agreement, and the Registration Rights Agreement conform in all
material respects to the descriptions thereof contained in both the Disclosure Package and
the Final Memorandum;
(r) assuming the accuracy of FBR’s representations and warranties set forth in Section
3 of this Agreement and that the purchasers who buy the Resale Shares in Exempt Resales are
Eligible Purchasers, no approval, authorization, consent or order of or filing with any
Governmental Authority is required in connection with the execution, delivery and
performance by the Company of this Agreement or the Registration Rights Agreement, or the
consummation by the Company of the transactions contemplated hereby and thereby, or the
issuance, sale and delivery of the Shares as contemplated hereby, other than (i) such as
have been obtained or made, or will have been obtained or made at the Closing Time,
including any necessary Xxxx-Xxxxx-Xxxxxx Act filings, (ii) any necessary qualification
under the securities or blue sky laws of the various jurisdictions in which the Shares are
being offered or placed by FBR, (iii) with or by federal or state securities regulatory
authorities in connection with or pursuant to the Registration Rights Agreement, including
without limitation the filing of the registration statement(s) required thereby with the
Commission, and (iv) the filing of a Form D with the Commission and with the applicable
state regulatory authorities;
-12-
(s) each of the Company and the Subsidiaries has all necessary licenses, permits,
certificates, authorizations, consents and approvals and has made all necessary filings
required under any Requirement of Law (collectively, “Authorizations”), and has
obtained all necessary Authorizations from other persons required in order to conduct its
respective business as described in both the Disclosure Package and the Final Memorandum,
except to the extent that any failure to have any such Authorizations, to make any such
filings or to obtain any such Authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; the Company and the Subsidiaries
have complied in all material respects with the terms of the necessary Authorizations and
there are not pending modifications, amendments or revocations of the Authorizations that
would have a Material Adverse Effect; the Company and each Subsidiary have paid all fees due
to Governmental Authorities pursuant to the Authorizations, except to the extent that any
failure to pay any such fees would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; all reports required to be filed in connection
with the Authorizations have been timely filed and are accurate and complete, except to the
extent that any failure to file a complete and accurate report in a timely manner would not
reasonably be expected, individually, or in the aggregate, to have a Material Adverse
Effect; true and correct copies of the Authorizations and all amendments thereto to the date
hereof have been made available to FBR; none of the Company or any of its Subsidiaries is in
violation of, or in default under, any such Authorizations or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to the Company,
the effect of which could reasonably be expected to have a Material Adverse Effect;
(t) there is no outstanding judgment, order, writ, injunction, decree or award of any
Governmental Authority or arbitrator affecting the businesses of the Company or any
Subsidiary which questions the validity of any action taken or to be taken pursuant to this
Agreement or in which it is sought to restrain or prohibit or to obtain damages or other
relief in connection with this Agreement;
(u) both the Disclosure Package and the Final Memorandum contain accurate summaries of
all material contracts, agreements, instruments and other documents of the Company and the
Subsidiaries that would be required to be described in a prospectus included in a
registration statement on Form S-1 under the Securities Act; the copies of all contracts,
agreements, instruments and other documents (including Authorizations and all amendments or
waivers relating to any of the foregoing) that have been previously furnished to FBR or its
counsel are complete and genuine and include all material collateral and supplemental
agreements thereto;
(v) other than as set forth in both the Disclosure Package and the Final Memorandum and
except as to matters that have been previously disclosed to FBR that would not reasonably be
expected to result in a Material Adverse Effect, there are no actions, suits, arbitrations,
claims, proceedings, inquiries or investigations pending or, to the Company’s knowledge,
threatened against the Company or any Subsidiary, or any of their respective properties, or
to the Company’s knowledge, directors, officers or affiliates at law or in equity, or before
or by any Governmental Authority; other than FBR, the Company has not authorized anyone to
make any representations regarding the
-13-
offer and sale of the Shares, or regarding the Company and its Subsidiaries in
connection therewith; the Company has not received notice of any order or decree preventing
the use of the Disclosure Package or the Final Memorandum or any amendment or supplement
thereto, and no order asserting that the transactions contemplated by this Agreement are
subject to the registration requirements of the Securities Act, has been issued and, to the
Company’s knowledge, no proceeding for that purpose has commenced or is pending or is
contemplated;
(w) no securities of the Company of the same class (within the meaning of Rule 144A
under the Securities Act) as the Shares are listed on a national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or quoted in a U.S. automated inter-dealer quotation system;
(x) subsequent to the Applicable Time, and except as may be otherwise stated in both
the Disclosure Package and the Final Memorandum, there has not been (i) any event,
circumstance or change that has, or could reasonably be expected to have, a Material Adverse
Effect, (ii) any transaction, other than in the ordinary course of business, which is
material to the Company and the Subsidiaries taken as a whole, contemplated or entered into
by the Company or any Subsidiary, (iii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any Subsidiary, other than in the ordinary course of
business, which is material to the Company and the Subsidiaries taken as a whole, or (iv)
any dividend or distribution of any kind declared, paid or made by the Company on any class
of its capital stock, or any purchase by the Company of any of its outstanding capital
stock;
(y) neither the Company nor any of the Subsidiaries is, nor upon the sale of the Shares
as contemplated herein and the application of the net proceeds therefrom as described in
both the Disclosure Package and the Final Memorandum under the caption “Use of Proceeds,”
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);
(z) there are no persons with registration or other similar rights to have any
securities registered by the Company under the Securities Act other than pursuant to the
Registration Rights Agreement;
(aa) other than as explicitly set forth herein, the Company has not relied upon FBR or
legal counsel for FBR for any legal, tax or accounting advice in connection with the
offering and sale of the Shares;
(bb) each of the independent directors named in the Disclosure Package and the Final
Memorandum has not within the last five years been employed by or affiliated, directly or
indirectly, with the Company, whether by ownership of, ownership interest in, employment by,
any material business or professional relationship with, or serving as an officer or
director of, the Company or any of its affiliates;
-14-
(cc) in connection with the offering of the Shares, neither the Company or any of its
Subsidiaries, nor any of its affiliates (as defined in Section 501(b) of Regulation D) has,
whether directly or through any agent or person acting on its behalf (other than FBR): (i)
offered Common Stock of the Company or any other securities convertible into or exchangeable
or exercisable for such Common Stock in a manner in violation of the Securities Act or the
rules and regulations thereunder, (ii) distributed any other offering material in connection
with the offer and sale of the Shares, other than as described in both the Disclosure
Package and the Final Memorandum, or (iii) sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of any security (as defined in the Securities Act) which
is or will be integrated with the offering and sale of the Shares in a manner that would
require the registration of the Shares under the Securities Act;
(dd) none of the Company, any of its Subsidiaries nor any of their respective
affiliates (i) is required to register as a “broker” or “dealer” in accordance with the
provisions of the Exchange Act or the rules and regulations thereunder, or (ii) directly, or
indirectly through one or more intermediaries, controls or has any other association with
(within the meaning of Article 1 of the Bylaws of the National Association of Securities
Dealers, Inc. (the “NASD”)) any member firm of the NASD;
(ee) none of the Company, any of its Subsidiaries or any of its directors, officers,
representatives or affiliates have taken, directly or indirectly, any action intended, or
which might reasonably be expected, to cause or result, under the Securities Act, the
Exchange Act or otherwise, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the Shares;
(ff) each of the Company and the Subsidiaries carries, or is covered by, insurance
(issued by insurers of recognized financial responsibility to the best knowledge of the
Company) in such amounts and covering such risks as is appropriate for the conduct of their
respective businesses and the value of the assets to be held by them upon the consummation
of the transactions contemplated by both the Disclosure Package and the Final Memorandum and
as is customary for companies engaged in businesses similar to the business of the Company
or such Subsidiary, all of which insurance is in full force and effect;
(gg) the financial statements, including the notes thereto, included in both the
Disclosure Package and the Final Memorandum fairly present the financial condition of the
Company and its consolidated Subsidiaries as of the respective dates thereof, and the
results of their operations for the periods then ended, correctly reflect and disclose all
extraordinary items required by U.S. generally accepted accounting principles to be so
reflected or disclosed, and have been prepared in conformity with U.S. generally accepted
accounting principles applied on a consistent basis;
(hh) Xxxxx Xxxxxxxx LLP, who has certified certain consolidated financial statements
and supporting schedules included in the Disclosure Package and the Final Memorandum, whose
reports with respect to such consolidated financial statements and supporting schedules are
included in the Disclosure Package and the Final Memorandum
-15-
and who have delivered the comfort letters referred to in Section 6(b) hereof, are, and
were during the periods covered by their reports, independent certified public accountants
with respect to the Company within the meaning of Rule 101 of the American Institute of
Certified Public Accountants’ (“AICPA”) Code of Professional Conduct and its interpretations
and rulings.
(ii) Xxxxxx and Xxxxxx, L.L.P., who has audited the consolidated financial statements
of Orion Marine Holdings, Inc. (the “Predecessor”) for the years ended and as of December
31, 2002 and 2003 and the consolidated financial statements of the Company for the quarter
ended and as of December 31, 2004 are, and were during the periods covered by their reports,
independent certified public accountants with respect to the Predecessor and the Company
within the meaning of Rule 101 of the AICPA’s Code of Professional Conduct and its
interpretations and rulings.
(jj) any certificate signed by any officer of the Company delivered to FBR or to
counsel for FBR pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to FBR as to the matters covered thereby;
(kk) the forms of the certificates used to evidence the Common Stock comply in all
material respects with all applicable statutory requirements and with any applicable
requirements of the Charter Documents of the Company;
(ll) except where such failure to file or pay an assessment or lien would not in the
aggregate reasonably be expected to have a Material Adverse Effect or where such matters are
the result of a pending bona fide dispute with taxing authorities, (i) each of the Company
and the Subsidiaries has accurately prepared and timely filed any and all federal, state,
foreign and other tax returns that are required to be filed by it, if any, and has paid or
made provision for the payment of all taxes, assessments, governmental or other similar
charges, including without limitation, all sales and use taxes and all taxes which the
Company or such Subsidiary is obligated to withhold from amounts owing to employees,
creditors and third parties, with respect to the periods covered by such tax returns
(whether or not such amounts are shown as due on any tax return), (ii) no deficiency
assessment with respect to a proposed adjustment of the Company’s or any Subsidiary’s
federal, state, local or foreign taxes is pending or, to the best of the Company’s
knowledge, threatened; (iii) since the date of the most recent audited consolidated
financial statements, neither the Company nor any Subsidiary has incurred any liability for
taxes other than in the ordinary course of its business; and (iv) there is no tax lien,
whether imposed by any federal, state, foreign or other taxing authority, outstanding
against the assets, properties or business of the Company or any Subsidiary;
(mm) except as described in both the Disclosure Package and the Final Memorandum or as
would not in the aggregate reasonably be expected to have a Material Adverse Effect, (i)
neither the Company nor any Subsidiary is in violation of any Legal Requirement or rule of
common law or any judicial or administrative interpretation thereof, relating to pollution
or protection of human health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), natural resources or
wildlife, including, without limitation, laws and regulations
-16-
relating to the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum products,
asbestos-containing materials or mold (collectively, “Hazardous Materials”) or to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) each of
the Company and the Subsidiaries has all permits, authorizations and approvals required
under any applicable Environmental Laws to conduct their respective businesses and are each
in compliance with their requirements, (iii) there are no pending or, to the Company’s
knowledge, threatened administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any Subsidiary, and (iv) to the
Company’s knowledge, there are no events or circumstances that would reasonably be expected
to form the basis of an order for investigation, clean-up or remediation, or an action, suit
or proceeding by any private party or Governmental Authority, against or affecting the
Company or any Subsidiary relating to Hazardous Materials or any Environmental Laws; and (v)
neither the Company nor any Subsidiary anticipates material capital expenditures relating to
Environmental Laws or changes in processes or operations relating to any Environmental Laws;
(nn) 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 which are
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;
(oo) the Company and each of the Subsidiaries maintain 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;
(pp) the Company and each of the Subsidiaries are in compliance 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
-17-
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 and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such qualification;
(qq) the operations of the Company and its Subsidiaries and, to the Company’s
knowledge, its affiliates 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, the Bank Secrecy Act, as amended, the United and Strengthening of America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT
Act) of 2001, as 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 Authority (collectively, the “Money
Laundering Laws”), except for any such non-compliance as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, and no action, suit
or proceeding by or before any Governmental Authority 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;
(rr) 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;
(ss) there are no existing or, to the Company’s knowledge, threatened, labor disputes
with the employees of the Company or any of the Subsidiaries which would, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect;
(tt) except as otherwise disclosed in both the Disclosure Package and the Final
Memorandum, neither the Company nor any Subsidiary has any off-balance sheet transactions,
arrangements, obligations (including contingent obligations), or any other similar
relationships with unconsolidated entities or other persons;
(uu) each of the Company and its Subsidiaries, and, to the Company’s knowledge, each of
their affiliates and 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, to the Company’s
knowledge, threatened between the Company or any of its
-18-
Subsidiaries and any Governmental Authority under any Export or 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, The Trading with the Enemy Act, the International Emergency
Economic Powers Act, and sanctions regulations issued pursuant to those statutory
authorities prohibiting unlicensed transactions (including exports of services, data, or
goods) with sanctioned countries or entities, 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;
(vv) to the Company’s knowledge, there have been no allegations of any violations of
export control rules by the Company or any of its Subsidiaries, including allegations by any
Governmental Authority, and no investigations of any export control matters of the Company
or its Subsidiaries by any Governmental Authority;
(ww) the Company has complied, and will use its commercially reasonable efforts to
comply, with the citizenship requirements of certain U.S. maritime laws, including the
Foreign Dredge Act of 1906, as amended, the Merchant Marine Act of 1920, as amended (also
known as the “Xxxxx Act”), and the U.S. vessel documentation laws, as amended (also know as
the “Vessel Documentation Act”), prohibiting foreign ownership or control of persons engaged
in transporting merchandise or passengers or dredging in the navigable waters of the U.S.
(xx) 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;
(yy) no relationship, direct or indirect, exists between or among the Company or any of
the Subsidiaries on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company or any of the Subsidiaries on the other hand, which would be
required by the Securities Act and the Securities Act Regulations to be described in a
prospectus included in a registration statement on Form S-1 under the Securities Act, which
is not so described in both the Disclosure Package and the Final Memorandum;
(zz) assuming the performance by FBR of its obligations as set forth herein, it is not
necessary in connection with the offer, sale and deliver of the Shares in the manner
contemplated by this Agreement to register the Shares under the Securities Act;
(aaa) each of the Company and the Subsidiaries has complied in all material respects
with all Legal Requirements governing or applicable to its Government Contracts and
Government Bids, each as hereinafter defined, including the material terms and conditions of
all such Government Contracts and Government Bids; to the
-19-
Company’s knowledge, each Government Contract performed or being performed by the
Company or any Subsidiary was legally and properly awarded to the Company or such Subsidiary
and, if performance is ongoing, each Government Contract is currently valid; neither the
Company nor any Subsidiary has, in obtaining or performing any Government Contract, violated
any laws, regulations, rules, directives, requirements or procedures of any Governmental
Authority or any other applicable Legal Requirement that could reasonably be expected to
have a Material Adverse Effect; there exist (i) no outstanding claims (including, but not
limited to, termination settlement proposals), contracting officer’s final decisions,
requests for equitable adjustment or other contractual action(s) for relief against the
Company or any Subsidiary, by a Governmental Authority or by any prime contractor,
subcontractor or other person, arising under or relating to any Government Contract or
Government Bid, and (ii) no disputes between the Company or any Subsidiary and any
Governmental Authority or between the Company or any Subsidiary and any prime contractor,
subcontractor or other person, arising under or relating to any Government Contract or
Government Bid that could reasonably be expected to have a Material Adverse Effect; neither
the Company nor any Subsidiary has an interest in any pending or potential claim, request
for equitable adjustment, action, litigation or appeal under the Contract Disputes Act of
1978, as amended, and/or under or related to the disputes clause of any contract against any
Governmental Authority or involving any prime contractor or subcontractor; for the purposes
of this paragraph, (A) “Government Contract” means any prime contract, subcontract,
teaming agreement, joint venture, basic ordering agreement, pricing agreement, letter
contract, grant, cooperative agreement, or other mutually binding legal agreement between
the Company or any Subsidiary and (x) any Governmental Authority, (y) any prime contractor
of any Governmental Authority, or (z) any subcontractor of any Governmental Authority;
provided that a task order, purchase order or delivery order under a Government Contract
shall not constitute a separate Government Contract for purposes of this definition, but
shall be part of the Government Contract to which it relates and (B) “Government
Bid” shall mean any written quotations, bids or proposals that, if accepted, would bind
the Company or any Subsidiary to perform the resultant Government Contract.
5. Certain Covenants of the Company.
The Company hereby agrees with FBR:
(a) to furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offer and sale under the securities or blue sky laws of such
states and other jurisdictions as FBR may designate or as required for the Private Placement
and to maintain such qualifications in effect as long as required by such laws for the
distribution of the Shares and for the Exempt Resales of the Resale Shares; provided,
however, that the Company shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of, or subject itself to taxation as doing
business in, any such state or other jurisdiction (except service of process with respect to
the offering and sale of the Shares);
-20-
(b) to prepare the Final Memorandum in a form approved by FBR and to furnish promptly
(and with respect to the initial delivery of such Final Memorandum, not later than 10:00
a.m. (New York City time) on the first business day following the execution and delivery of
this Agreement) to FBR or to purchasers upon the direction of FBR as many copies of the
Final Memorandum (and any amendments or supplements thereto) as FBR may reasonably request
for the purposes contemplated by this Agreement;
(c) to advise FBR promptly, confirming such advice in writing, of: (i) the happening of
any event known to the Company within the time during which the Final Memorandum shall (in
the view of FBR) be required to be distributed by FBR in connection with an Exempt Resale
(and FBR hereby agrees to notify the Company in writing when the foregoing time period has
ended) which, in the judgment of the Company, would require the making of any change in the
Final Memorandum then being used so that the Final Memorandum would not include an untrue
statement of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they are made, not misleading;
and (ii) the receipt of any notification with respect to the modification, rescission,
withdrawal or suspension of the qualification of the Shares, or of any exemption from such
qualification or from registration 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 any
Governmental Authority should issue any such order, to make every reasonable effort to
obtain the lifting or removal of such order as soon as possible;
(d) to furnish to FBR for a period of two years from the Closing Time, (i) copies of
all annual, quarterly and current reports supplied to holders of the Shares, (ii) copies of
all reports filed by the Company with the Commission, and (iii) such other information as
FBR may reasonably request regarding the Company; provided, however, that the Company shall
not be required to furnish to FBR any information that is made publicly available by filing
electronically with the Commission;
(e) not to amend or supplement the Final Memorandum prior to the Closing Time or any
Secondary Closing Time unless FBR shall previously have been advised thereof and shall have
consented thereto or not have reasonably objected thereto (for legal reasons) in writing
within a reasonable time after being furnished a copy thereof;
(f) during any period in the two years (or such shorter period as may then be
applicable under the Securities Act regarding the holding period for securities under Rule
144(k) under the Securities Act or any successor rule) after the Closing Time in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act to furnish, upon request,
to any holder of such Shares the information (“Rule 144A Information”) specified in
Rule l44A(d)(4) under the Securities Act and any additional information (“PORTAL
Information”) required by the National Association of Securities Dealers, Inc.
Portal SM Market (“PORTAL”), and any such Rule l44A Information
and Portal Information will not, at the date thereof, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not misleading;
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(g) to apply the net proceeds from the sale of the Shares in the manner set forth under
the caption “Use of Proceeds” in both the Disclosure Package and the Final Memorandum;
(h) that neither the Company nor any of its affiliates (as defined in Section 501(b) of
Regulation D) will, whether directly or through any agent or person acting on its behalf
(other than FBR): (i) offer Common Stock of the Company or any other securities convertible
into or exchangeable or exercisable for such Common Stock in a manner in violation of the
Securities Act or the rules and regulations thereunder, (ii) distribute any other offering
material in connection with the offer and sale of the Shares, other than as described in
both the Disclosure Package and the Final Memorandum, or (iii) sell, offer for sale, solicit
offers to buy or otherwise negotiate in respect of any security (as defined in the
Securities Act), any of which will be integrated with the offering and sale of the Shares in
a manner that would require the registration under the Securities Act of the sale to FBR or
the Eligible Purchasers of the Resale Shares or to the Accredited Investors of the Private
Placement Shares;
(i) that none of the Company, its Subsidiaries or any of its affiliates will take,
directly or indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the Shares;
(j) that, except as permitted by the Securities Act, neither the Company nor any of its
affiliates will distribute any offering materials in connection with Exempt Resales;
(k) to pay all expenses, fees and taxes (other than taxes based on income or sales) in
connection with (i) the preparation of both the Disclosure Package and the Final Memorandum,
and any amendments or supplements thereto, and the printing and furnishing of copies of each
thereof to FBR (including costs of mailing and shipment), (ii) the preparation, issuance,
sale and delivery of the Shares, including any stock or other transfer taxes or duties
payable upon the sale of the Resale Shares to FBR, (iii) the printing of this Agreement and
any dealer agreements, and the reproduction and/or printing and furnishing of copies of each
thereof to dealers (including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state laws and the determination of their eligibility for
investment under state law as aforesaid (including any filing fees), and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to FBR and to
dealers, (v) the designation of the Shares as PORTAL-eligible securities by PORTAL, (vi) all
fees and disbursements of counsel and accountants for the Company, (vii) the fees and
expenses of any transfer agent or registrar for the Common Stock, (viii) costs of background
investigations, (ix) the costs and expenses of FBR and the Company incurred in connection
with the marketing of the Shares, including all “out of pocket” expenses, roadshow costs
(regardless of the form in which the roadshow is conducted) and expenses, and expenses of
Company personnel, including but not limited to commercial or charter air travel, local
hotel accommodations and transportation, and (x) performance of the Company’s other
obligations hereunder, but excluding from all of the above the fees and disbursements of
FBR’s legal counsel; provided however, the Company will pay all fees and disbursements
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of FBR’s legal counsel related to clause (iv) above and the Registration Expenses as
described in the Registration Rights Agreement.
(l) to use reasonable efforts in cooperation with FBR to obtain permission for the
Shares (other than Shares offered and sold in accordance with Regulation S) to be eligible
for clearance and settlement through DTC, and for the Shares sold in accordance with
Regulation S to be eligible for clearance and settlement through the Euroclear System and
Clearstream Banking, société anonyme, Luxembourg;
(m) in connection with Resale Shares offered and sold in an offshore transaction (as
defined in Regulation S), not to register any transfer of such Resale Shares not made in
accordance with the provisions of Regulation S and not, except in accordance with the
provisions of Regulation S, if applicable, to issue any such Resale Shares in the form of
definitive securities;
(n) to furnish to FBR, during the period referred to in clause (i) of Section 5(c), not
fewer than two business days before filing with the Commission, a copy of the most current
draft at such time of any document proposed to be filed with the Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act;
(o) to refrain during the period (i) commencing on the date of this Agreement until 180
days after the Closing Date, (ii) from the date the registration statement to be filed
pursuant to the Registration Rights Agreement is declared effective until 60 days
thereafter, and (iii) from the effective date of any registration statement relating to an
initial public offering of the Company’s common stock and ending on the date that is 180
days after the effective date of such registration statement, without the prior written
consent of FBR (which consent may be withheld or delayed in FBR’s sole discretion), from (i)
offering, pledging, selling, contracting to sell, selling any option or contract to
purchase, purchasing any option or contract to sell, granting any option, right or warrant
for the sale of, lending or otherwise disposing of or transferring, directly or indirectly,
any equity securities of the Company or any securities convertible into or exercisable or
exchangeable for equity securities of the Company, or filing any registration statement
under the Securities Act with respect to any of the foregoing, or (ii) entering into any
swap or other arrangement that transfers, in whole or in part, directly or indirectly, any
of the economic consequences of ownership of equity securities of the Company, whether any
such transaction described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall
not apply to (i) the Shares to be sold hereunder, (ii) the registration and sale of the
Shares in accordance with the terms of the Registration Rights Agreement, (iii) any shares
of Common Stock issued by the Company upon the exercise of an option outstanding on the date
hereof and referred to in both the Disclosure Package and the Final Memorandum, or (iv) such
issuances of options or grants of restricted stock under the Company’s stock option and
incentive plans as described in both the Disclosure Package and the Final Memorandum;
(p) to reimburse FBR for all its reasonable and documented out-of-pocket expenses
relating to the transactions contemplated hereby, including the reasonable
-23-
fees and disbursements of its legal counsel if the closing does not occur for any of
the following reasons: (i) breach by the Company of a representation and warranty or
covenant set forth herein; (ii) failure of the condition set forth in Section 6(e) hereof to
be fulfilled; (iii) failure by the Company, one of its officers or directors, or its counsel
or accountants to make a delivery under Section 6 hereof for a reason other than an event
that arises between the date hereof and the Closing Time that is beyond the reasonable
control of the Company or the person making such delivery; or (iv) FBR’s termination of this
Agreement pursuant to Section 7(ii), 7(iii), 7(iv) or 7(v) hereof.
(q) that, from and after the Closing Time, the Company shall have in place and maintain
a system of internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain 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;
(r) that the Company will conduct its affairs in such a manner so as to ensure that the
Company will not be an “investment company;” and
(s) that, as soon as reasonably practicable following completion of the transactions
contemplated hereunder, to use commercially reasonable efforts to cause the Company’s board
of directors to approve any changes to the corporate governance policies and procedures that
may be required by law prior to filing any registration statement with the Commission.
6. Conditions of FBR’s Obligations. The obligations of FBR hereunder are
subject to (w) the accuracy of the representations and warranties on the part of the
Company on the date hereof, at the Closing Time, each Extended Closing Time and each
Secondary Closing Time, (x) the accuracy of the statements of the Company’s officers made
in any certificate pursuant to the provisions hereof as of the date of such certificate,
(y) the performance by the Company of all of their respective covenants and other
obligations hereunder and (z) the following other conditions:
(a) The Company shall furnish to FBR at the Closing Time an opinion of Xxxxxx & Xxxxxx
L.L.P., counsel for the Company, addressed to FBR and dated the Closing Time, in form and
substance satisfactory to FBR, covering the matters set forth on Exhibit B hereto.
Such opinion shall indicate that it is being rendered to FBR at the request of the Company.
(b) FBR shall have received from Xxxxx Xxxxxxxx LLP the following “comfort” letters:
(i) a letter with respect to and as of the date of the Preliminary Memorandum; (ii) a letter
with respect to and as of the date of any amendment or supplement to the Preliminary
Memorandum; (iii) a letter with respect to the Final
-24-
Memorandum as of the date hereof; and (iv) a “bring down” letter relating to the
matters covered in the letters referred to in (i) and (ii) as of the time of pricing of the
Shares; and (v) a “bring down” letter relating to the matters covered in the letters
referred to in (iii) as of the Closing Time. Each such letter shall be addressed to FBR and
shall be in form and substance satisfactory to FBR.
(c) (i) FBR shall have received at the Closing Time a favorable opinion of Xxxxxx
Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP, counsel for FBR, dated the Closing Time, in form and
substance satisfactory to FBR and (ii) the Company shall have received at the Closing Time a
favorable opinion of Xxxxxx & Xxxxxx L.L.P., counsel to the Company, dated as of the date of
the Closing Time, relating to certain legal matters in connection with the entry into naked
total return swaps by certain investors as described in Exhibit C attached hereto.
(d) Prior to the Closing Time, any Extended Closing Time or any Secondary Closing Time,
(i) no 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, shall have occurred and (ii) both the Disclosure Package and the Final Memorandum
and all amendments or supplements thereto, or modifications thereof, if any, shall not
contain an untrue statement of material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they are made,
not misleading.
(e) Between the time of execution of this Agreement and the Closing Time, any Extended
Closing Time or any Secondary Closing Time, (i) no event, circumstance or change
constituting a Material Adverse Effect shall have occurred or become known, (ii) no
transaction which is material to the Company and its Subsidiaries, taken as a whole, shall
have been entered into by the Company or any of its Subsidiaries that has not been fully and
accurately disclosed in both the Disclosure Package and the Final Memorandum, or any
amendment or supplement thereto; and (iii) no order or decree preventing the use of any of
the Preliminary Memorandum or the Final Memorandum, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the registration requirements of
the Securities Act shall have been issued.
(f) The Company shall have delivered to FBR a certificate, executed by the secretary of
the Company and dated as of the Closing Time, as to (i) the resolutions adopted by the
Company’s board of directors in form and substance reasonably acceptable to FBR, (ii) the
Company’s certificate of incorporation, as amended and (iii) the Company’s bylaws, as
amended, each as in effect at the Closing Time.
(g) The Company shall have delivered to FBR a certificate, executed by its chief
executive officer and chief financial officer to the effect that the representations and
warranties of the Company set forth in this Agreement shall be true and correct as of the
Closing Time as though made on and as of such date (except to the extent that such
representations and warranties speak as of another date, in which case such representations
and warranties shall be true and correct as of such other date), the conditions set forth in
subsections (d) and (e) of this Section 6 shall have been satisfied and be true and correct
as
-25-
of the Closing Time, and the Company shall have complied with all covenants and
agreements and satisfied all conditions on its part to be performed or satisfied under this
Agreement at or prior to the Closing Time.
(h) On or before the Closing Time, FBR shall have received the Registration Rights
Agreement executed by the Company and such agreement shall be in full force and effect.
(i) At the time of execution and delivery of this Agreement, FBR shall have received
from each of the officers and directors and certain existing stockholders of the Company a
written agreement (a “Lock-up Agreement”) in substantially the form attached hereto
as Exhibit D.
(j) The Company shall have obtained and delivered to FBR a copy of (i) all executed
consents required under the relevant leases and contracts, (ii) any approvals under the
credit facility, and (iii) any approvals under the Xxxx-Xxxxx-Xxxxxx Act.
(k) At each Extended Closing Time and Secondary Closing Time, FBR shall have received:
(i) certificates, dated as of each Extended Closing Time or Secondary Closing
Time, of the Company, substantially to the same effect as the certificates delivered
at the Closing Time pursuant to subsections (f) and (g), of this Section 6, subject
to any exceptions that, in the reasonable judgment of FBR, are not material.
(ii) the opinion of Xxxxxx & Xxxxxx L.L.P., in form and substance satisfactory
to FBR, dated as of each Secondary Closing Time relating to the Regulation D Shares
or the Option Shares, as applicable, and otherwise substantially to the same effect
as the opinions required by subsection (a) of this Section 6.
(iii) a “bring down” “comfort” letter from Xxxxx Xxxxxxxx LLP in form and
substance satisfactory to FBR, dated as of each Secondary Closing Time,
substantially the same in scope and substance as the letter furnished to FBR
pursuant to subsection (b)(iv) and subsection (b)(v) of this Section 6, except that
the “specified date” in the letter furnished pursuant to this subsection (k)(iii)
shall be a date not more than five days prior to such Secondary Closing Time.
In the event that any “comfort” letter referred to in subsection (b) of this
Section 6 or this subsection (k)(iii) sets forth any such changes, decreases or
increases that, in the reasonable discretion of FBR, are likely to result in a
Material Adverse Effect, it shall be a further condition to the obligations of FBR
that such letters shall be accompanied by a written explanation of the Company as to
the significance thereof, unless FBR deems such explanation unnecessary. References
to the Preliminary Memorandum, the Disclosure Package and/or Final Memorandum with
respect to any “comfort” letter referred to in this Section 6 shall include any
amendment or supplement thereto at the date of such letter.
-26-
(iv) the opinion of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP, dated as of each
Secondary Closing Time, relating to the Regulation D Shares or the Option Shares, as
applicable, and otherwise to the same effect as the opinion required by subsection
(c) of this Section 6.
(l) The Company shall have furnished to FBR such other documents and certificates as to
the accuracy and completeness of any statement in both the Disclosure Package and the Final
Memorandum or any amendment or supplement thereto, and any additional matters as FBR may
reasonably request, as of the Closing Time or any Secondary Closing Time, or as FBR may
reasonably request.
(m) The Shares to be resold by FBR to QIBs pursuant to Rule 144A under the Securities
Act shall have been designated as PORTAL-eligible securities by PORTAL.
(n) Each Subscription Agreement shall remain in full force and effect and no event
shall have occurred giving any party the right to terminate any Subscription Agreement
pursuant to the terms thereof; provided that, in the event a Subscription Agreement is no
longer in full force and effect, FBR shall use its commercially reasonable efforts to
reallocate the shares covered by such Subscription Agreement to investors who subscribed for
additional Shares under Subscription Agreements that are in full force and effect.
(o) The Company shall have received the opinion of Xxxxxx & Xxxxxx L.L.P. dated as of
each Secondary Closing Time to the same effect as the opinion required by subsection (c)(ii)
of this Section 6.
7. Termination. The obligations of FBR hereunder shall be subject to
termination in the absolute discretion of FBR, at any time prior to the Closing Time or any
Secondary Closing Time, if (i) any of the conditions specified in Section 6 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, (ii) trading in
securities in general on any exchange or national quotation system shall have been
suspended or minimum prices shall have been established on such exchange or quotation
system, (iii) there has been a material disruption in the securities settlement, payment or
clearance services in the United States, (iv) a banking moratorium shall have been declared
either by the United States or New York State authorities, or (v) if the United States
shall have declared war in accordance with its constitutional processes or there shall have
occurred any material outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic, political or other conditions of
such magnitude in its effect on the financial markets of the United States as, in the
judgment of FBR, to make it impracticable to market the Shares.
If FBR elects to terminate this Agreement as provided in this Section 7, the Company shall be
notified promptly by letter or fax.
If the sale to FBR of the Resale Shares, as contemplated by this Agreement, is not carried out
by FBR for any reason permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, (i)
-27-
the Company shall not be under any obligation or liability to FBR under this Agreement (except
to the extent provided in Sections 5(k), 5(p) and 8 hereof), and (ii) FBR shall be under no
obligation or liability to the Company under this Agreement (except to the extent provided in
Section 8 hereof).
8. Indemnity.
(a) The Company agrees to indemnify, defend and hold harmless FBR and its affiliates,
and their respective directors, officers, representatives and agents, and any person who
controls FBR within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any loss, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, FBR or any such controlling
person may incur under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, expense, liability or claim arises out of or is based upon (i) any untrue statement or
alleged untrue statement made by the Company herein, (ii) any breach by the Company of any
covenant set forth herein, or (iii) any untrue statement or alleged untrue statement of a
material fact contained in the Disclosure Package or the Final Memorandum, or arises out of
or is based upon any omission or alleged omission to state a material fact necessary to make
the statements made therein, in the light of the circumstances under which they were made,
not misleading, except insofar as any such loss, expense, liability or claim arises out of
or is based upon any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing by FBR to the Company
expressly for use in such Preliminary Memorandum, the Disclosure Package or Final Memorandum
(that information being limited to that described in the last sentence of Section 8(b)
hereof).
(b) FBR agrees to indemnify, defend and hold harmless the Company and its directors and
officers 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 or claim (including the reasonable cost of investigation) which, jointly or
severally, the Company or any such person may incur under the Securities Act, the Exchange
Act or otherwise, insofar as such loss, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact contained in
and made in reliance upon and in conformity with information furnished in writing by FBR to
the Company expressly for use in the Preliminary Memorandum, the Disclosure Package or Final
Memorandum (or in any amendment or supplement thereof by the Company), such information
being limited to the following: information provided by FBR to the Company as disclosed in
the paragraph on the cover page immediately preceding FBR’s name at the bottom of the page
and the second, seventh (solely with respect to the fourth sentence) and eighth paragraphs
of the section entitled “Plan of Distribution” in the Disclosure Package and the Final
Memorandum.
(c) If any action is brought against any person or entity (each an “Indemnified
Party”), in respect of which indemnity may be sought pursuant to Section 8(a) or (b)
above, the Indemnified Party shall promptly notify the party obligated to provide such
indemnity
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(each an “Indemnifying Party”) in writing of the institution of such action and
the Indemnifying Party shall assume the defense of such action, including the employment of
counsel and payment of expenses; provided that the failure so to notify the Indemnifying
Party will not relieve the Indemnifying Party from any liability which the Indemnifying
Party may have to any Indemnified Party unless and to the extent the Indemnifying Party did
not otherwise know of such action and such failure results in the forfeiture by the
Indemnifying Party of rights and defenses that would have had material value in the defense.
The Indemnified Party(ies) 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 the
Indemnified Party unless the employment of such counsel shall have been authorized in
writing by the Indemnifying Party in connection with the defense of such action or the
Indemnifying Party shall not have employed counsel to have charge of the defense of such
action within a reasonable time or such Indemnified Party(ies) shall have reasonably
concluded (based on the advice of counsel) that counsel selected by the Indemnifying Party
has an actual conflict of interest or there may be defenses available to the Indemnified
Party(ies) which are different from or additional to those available to the Indemnifying
Party (in which case the Indemnifying Party shall not have the right to direct the defense
of such action on behalf of the Indemnified Party(ies)), in any of which events such fees
and expenses shall be borne by the Indemnifying Party and paid as incurred (it being
understood, however, that the Indemnifying Party shall not be liable for the fees and
expenses of more than one separate firm of counsel (in addition to local counsel) for the
Indemnified Party in any one action or series of related actions in the same jurisdiction
representing the Indemnified Parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Indemnifying Party shall not be liable for
any settlement of any such claim or action effected without its written consent. The
Indemnifying Party shall have the right to settle any such claim or action for itself and
any Indemnified Party so long as the Indemnifying Party pays any settlement payment and such
settlement (i) includes a complete and unconditional release of the Indemnified Party from
all losses, expenses, claims, damages, injunctions, liability and other obligations with
respect to any claims that are the subject matter of such action 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 the Indemnified Party.
(d) If the indemnification provided for in this Section 8 is unavailable to an
Indemnified Party under subsections (a) and (b) of this Section 8 in respect of any losses,
expenses, liabilities 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 or
claims (i) in such proportion as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and FBR, on the other hand, from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company, on the one hand, and of FBR, on
the other hand, in connection with the statements or omissions which resulted in such
losses, expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand, and FBR, on
the other hand, shall be deemed to be in the same proportion as the total
-29-
proceeds from the offering (net of initial purchaser discounts, commissions and
placement fees, but before deducting expenses) received by the Company bear to the discounts
and commissions received by FBR. The relative fault of the Company, on the one hand, and of
FBR, on the other hand, 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 FBR 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.
(e) The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to in
subsection (d) above. Notwithstanding the provisions of this Xxxxxxx 0, XXX shall not be
required to contribute any amount in excess of the sum of (i) the aggregate amount of any
Placement Fee actually received by FBR with respect to the Regulation D Shares and the
Placed Option Shares and (ii) the aggregate amount of FBR’s discount on the 144A/Regulation
S Shares and the Purchased Option Shares (as described in the Final Memorandum). 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.
(f) The indemnity and contribution agreements contained in this Section 8 and the
covenants, warranties and representations of the Company contained in this Agreement shall
remain in full force and effect regardless of any investigation made by or on behalf of FBR
or its affiliates, or their respective directors, officers, representatives and agents, or
any person who controls FBR within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, or by or on behalf of the Company or their respective
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. Each party to this
Agreement agrees promptly to notify the other party of the commencement of any litigation or
proceeding against it and, in the case of the Company, against any of their respective
officers and directors, in connection with the sale and delivery of the Shares, or in
connection with the both the Disclosure Package and/or Final Memorandum.
9. Notices. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing delivered by facsimile (with receipt confirmed),
overnight courier or registered or certified mail, return receipt requested, or by telegram
and:
(a) if to FBR, shall be sufficient in all respects if delivered or sent to Friedman,
Billings, Xxxxxx & Co., Inc., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
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Attention: Compliance Department, (facsimile: 703-312-9698); with a copy to Xxxxxx
Xxxxxxx Xxxxx & Scarborough LLP, 000 Xxxxxxxxxxxx Xxxxxx, X.X. Xxxxx 000, Xxxxxxxxxx, XX
00000, Attention: Xxxxxxxx X. Xxxxxxx (facsimile: 202-712-2856); and
(b) if to the Company, shall be sufficient in all respects if delivered to the Company
at the offices of the Company at 00000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: Chief
Financial Officer (facsimile: (000) 000-0000); with a copy to Xxxxxx & Xxxxxx L.L.P., First
City Tower, 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention: Xxxxx X.
Xxxxxx (facsimile: (000) 000-0000).
10. Duties. Nothing in this Agreement shall be deemed to create a
partnership, joint venture or agency relationship between the parties. FBR undertakes to
perform such duties and obligations only as expressly set forth herein. Such duties and
obligations of FBR with respect to the Shares shall be determined solely by the express
provisions of this Agreement, and FBR 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 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 FBR, 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 FBR is and has
been acting solely as a principal and is not the financial advisor, agent or fiduciary of
the Company or its affiliates, stockholders, creditors or employees or any other party;
(iii) FBR has not assumed and will not 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 FBR has advised or is
currently advising the Company on other matters); and (iv) FBR and its affiliates may be
engaged in a broad range of transactions that involve interests that differ from those of
the Company and that FBR has no obligation to disclose any of such interests. The Company
acknowledges that FBR disclaims any implied duties (including any fiduciary duty),
covenants or obligations arising from its 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 FBR with respect to any
breach or alleged breach of agency or fiduciary duty.
11. GOVERNING LAW; HEADINGS. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
STATE. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
-31-
12. Parties at Interest. The Agreement herein set forth has been and is made
solely for the benefit of FBR and the Company and the controlling persons, directors and
officers referred to in Section 8 hereof, and their respective successors, assigns,
executors and administrators. No other person, partnership, association or corporation
(including a purchaser, in its capacity as such, from FBR) shall acquire or have any right
under or by virtue of this Agreement.
13. Counterparts. This Agreement may be signed by the parties in
counterparts, which together shall constitute one and the same agreement among the parties.
[SIGNATURE PAGE FOLLOWS]
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If the foregoing correctly sets forth the understanding among the Company and FBR, please
so indicate in the space provided below for the purpose, whereupon this letter shall constitute a
binding agreement between the Company and FBR.
| Very truly yours, ORION MARINE GROUP, INC. |
||||
| By: | /s/ J. Xxxxxxx Xxxxxxx | |||
| Name: | J. Xxxxxxx Xxxxxxx | |||
| Title: | President & CEO | |||
[SIGNATURE PAGE TO PURCHASE/PLACEMENT AGREEMENT]
| Accepted and agreed to as of the date first above written: FRIEDMAN, BILLINGS, XXXXXX & CO., INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxx | |||
| Title: | Senior Managing Director | |||
[SIGNATURE PAGE TO PURCHASE/PLACEMENT AGREEMENT]
SCHEDULE A
Offering Price |
$ | 13.500000 | ||
Offering Size: |
17,500,000 | |||
Green Shoe Granted: |
3,449,196 | |||
Total: |
20,949,196 | |||
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is made and entered into as of [n], 2007, by and between Orion Marine Group, Inc., a Delaware corporation (together with any
successor entity thereto, the “Company”), and Friedman, Billings, Xxxxxx & Co., Inc., a Delaware
corporation (“FBR”), for the benefit of FBR, the purchasers of the Company’s common stock, $0.01
par value per share, as participants (“Participants”) in the private placement by the Company of
shares of its common stock, and the direct and indirect transferees of FBR, and each of the
Participants.
This Agreement is made pursuant to the Purchase/Placement Agreement (the “Purchase/Placement
Agreement”), dated as of [n], 2007, by and between the Company and FBR in connection with
the purchase and sale or placement of an aggregate of 17,500,000 shares of the Company’s common
stock (plus an additional 3,449,169 shares to cover additional allotments, if any). In order to
induce FBR to enter into the Purchase/Placement Agreement, the Company has agreed to provide the
registration rights provided for in this Agreement to FBR, the Participants, and their respective
direct and indirect transferees. The execution of this Agreement is a condition to the closing of
the transactions contemplated by the Purchase/Placement Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following meanings:
Accredited Investor Shares: Shares initially sold by the Company to “accredited investors”
(within the meaning of Rule 501(a) promulgated under the Securities Act) as Participants.
Affiliate: As to any specified Person, (i) any Person directly or indirectly owning,
controlling or holding, with power to vote, ten percent or more of the outstanding voting
securities of such other Person, (ii) any Person, ten percent or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held, with power to vote, by such other
Person, (iii) any Person directly or indirectly controlling, controlled by or under common control
with such other Person, (iv) any executive officer, director, trustee or general partner of such
Person and (v) any legal entity for which such Person acts as an executive officer, director,
trustee or general partner. An indirect relationship shall include circumstances in which a
Person’s spouse, children, parents, siblings or mother, father, sister- or brother-in-law is or has
been associated with a Person.
Agreement: As defined in the preamble.
Board of Directors: As defined in Section 5(a) hereof.
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Business Day: With respect to any act to be performed hereunder, each Monday, Tuesday,
Wednesday, Thursday and Friday that is not a day on which banking institutions in New York, New
York or other applicable places where such act is to occur are authorized or obligated by
applicable law, regulation or executive order to close.
Closing Date: [n], 2007 or such other time or such other date as FBR and the Company
may agree.
Commission: The Securities and Exchange Commission.
Common Stock: The common stock, $0.01 par value per share, of the Company.
Company: As defined in the preamble.
Controlling Person: As defined in Section 6(a) hereof.
End of Suspension Notice: As defined in Section 5(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated by the Commission pursuant thereto.
FBR: As defined in the preamble.
Holder: Each record owner of any Registrable Shares from time to time, including FBR and its
Affiliates.
Indemnified Party: As defined in Section 6(c) hereof.
Indemnifying Party: As defined in Section 6(c) hereof.
IPO Registration Statement: As defined in Section 2(b) hereof.
Issuer Free Writing Prospectus: As defined in Section 2(c) hereof.
Liabilities: As defined in Section 6(a) hereof.
NASD: The National Association of Securities Dealers, Inc.
No Objections Letter: As defined in Section 4(t) hereof.
Participants: As defined in the preamble.
Person: An individual, partnership, corporation, trust, unincorporated organization,
government or agency or political subdivision thereof, or any other legal entity.
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Proceeding: An action, claim, suit or proceeding (including without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or, to the knowledge
of the Person subject thereto, threatened.
Prospectus: The prospectus included in any Registration Statement, including any preliminary
prospectus at the “time of sale” within the meaning of Rule 159 under the Securities Act and all
other amendments and supplements to any such prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by reference, if any, in such
prospectus.
Purchase/Placement Agreement: As defined in the preamble.
Purchaser Indemnitee: As defined in Section 6(a) hereof.
Registrable Shares: The Rule 144A Shares, the Accredited Investor Shares and the Regulation S
Shares, upon original issuance thereof, and at all times subsequent thereto, including upon the
transfer thereof by the original holder or any subsequent holder (provided, in each case that the
transferee has duly completed, executed and delivered a Transferee Letter in the form specified in
the offering memorandum for the initial issuance of such shares) and any shares or other securities
issued in respect of such Registrable Shares by reason of or in connection with any stock dividend,
stock distribution, stock split, purchase in any rights offering or in connection with any exchange
for or replacement of such Registrable Shares or any combination of shares, recapitalization,
merger or consolidation, or any other equity securities issued pursuant to any other pro rata
distribution with respect to the Common Stock, until, in the case of any such Rule 144A Share,
Accredited Investor Share or Regulation S Share, the earliest to occur of (i) the date on which the
resale of such share has been registered pursuant to the Securities Act and it has been disposed of
in accordance with the Registration Statement relating to it, (ii) the date on which either it has
been transferred pursuant to Rule 144 (or any similar provision then in effect) or is saleable
pursuant to Rule 144(k) promulgated by the Commission pursuant to the Securities Act or (iii) the
date on which it is sold to the Company.
Registration Default: As defined in Section 2(f) hereof.
Registration Expenses: Any and all expenses incident to the Company’s performance of or
compliance with this Agreement and certain expenses incident to FBR’s performance of or compliance
with this Agreement, including, and, with respect to the expenses incident to the Company’s
performance, without limitation: (i) all Commission, securities exchange, NASD registration,
listing, inclusion and filing fees; (ii) all fees and expenses incurred in connection with
compliance with international, federal or state securities or blue sky laws (including, without
limitation, any registration, listing and filing fees and reasonable fees and disbursements of
counsel in connection with blue sky qualification of any of the Registrable Shares and the
preparation of a blue sky memorandum and compliance with the rules of the NASD); (iii) all expenses
in preparing or assisting in preparing, word processing, duplicating, printing, delivering and
distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements, certificates and any other documents relating
to the performance under and compliance with this Agreement; (iv) all fees and expenses incurred in
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connection with the listing or inclusion of any of the Registrable Shares on any securities
exchange or The Nasdaq Stock Market, Inc.® pursuant to Section 4(n) of this Agreement; (v) the fees
and disbursements of counsel for the Company and of the independent registered public accounting
firm of the Company (including, without limitation, the expenses of any special audit and “cold
comfort” letters required by or incident to the performance of this Agreement); (vi) reasonable
fees and disbursements of Xxxxxx Xxxxxxx Xxxxx & Scarborough, LLP, or one such other counsel,
reasonably acceptable to the Company, for the Holders, selected by the Holders holding a majority
of the Registrable Shares (such counsel, “Selling Holders’ Counsel”); and (vii) any fees and
disbursements customarily paid in issues and sales of securities (including the fees and expenses
of any experts retained by the Company in connection with any Registration Statement); provided,
however, that Registration Expenses shall exclude brokers’ or underwriters’ discounts and
commissions, if any, relating to the sale or disposition of Registrable Shares by a Holder.
Registration Statement: Any registration statement of the Company that covers the resale of
Registrable Shares pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
Regulation S: Regulation S (Rules 901-905) promulgated by the Commission under the Securities
Act, as such rules may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission as a replacement thereto having substantially the same effect as such
regulation.
Regulation S Shares: Shares initially resold by FBR pursuant to the Purchase/Placement
Agreement to “non-U.S. persons” (in accordance with Regulation S) in an “offshore transaction” (in
accordance with Regulation S).
Rule 144: Rule 144 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 144A: Rule 144A promulgated by the Commission pursuant to the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 144A Shares: Shares initially resold by FBR pursuant to the Purchase/Placement Agreement
to “qualified institutional buyers” (as such term is defined in Rule 144A).
Rule 158: Rule 158 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 159: Rule 159 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
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Rule 405: Rule 405 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 415: Rule 415 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 424: Rule 424 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 429: Rule 429 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 433: Rule 433 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Securities Act: The Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder.
Shares: The shares of Common Stock being offered and sold pursuant to the terms and
conditions of the Purchase/Placement Agreement.
Shelf Registration Statement: As defined in Section 2(a) hereof.
Suspension Event: As defined in Section 5(b) hereof.
Suspension Notice: As defined in Section 5(b) hereof.
Underwritten Offering: A sale of securities of the Company to an underwriter or underwriters
for re-offering to the public.
2. Registration Rights
(a) Mandatory Shelf Registration. As set forth in Section 4 hereof, the Company agrees to
file with the Commission as soon as reasonably practicable following the date of this Agreement
(but in no event later than the date that is 120 days after the date of this Agreement) a shelf
Registration Statement on Form S-1 or such other form under the Securities Act then available to
the Company providing for the resale of any Registrable Shares pursuant to Rule 415 from time to
time by the Holders (a “Shelf Registration Statement”). The Company shall use its commercially
reasonable efforts to cause such Shelf Registration Statement to be declared effective
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by the Commission as soon as reasonably practicable. Any Shelf Registration Statement shall
provide for the resale from time to time, and pursuant to any method or combination of methods
legally available (including, without limitation, an Underwritten Offering, a direct sale to
purchasers or a sale through brokers or agents, which may include sales over the internet) by the
Holders of any and all Registrable Shares.
(b) IPO Registration. If the Company proposes to file a registration statement on Form S-1 or
such other form under the Securities Act providing for the initial public offering of shares of
Common Stock (the “IPO Registration Statement”), the Company will notify in writing each Holder of
the filing, within the ten (10) Business Days after the filing thereof, and afford each Holder an
opportunity by the time designated in the notice to include in the IPO Registration Statement all
or any part of the Registrable Shares then held by such Holder. Each Holder desiring to include in
the IPO Registration Statement all or part of the Registrable Shares held by such Holder shall,
within twenty (20) days after receipt of the above-described notice from the Company, so notify the
Company in writing, and in such notice shall inform the Company of the number of Registrable Shares
such Holder wishes to include in the IPO Registration Statement. Any election by any Holder to
include any Registrable Shares in the IPO Registration Statement will not affect the inclusion of
such Registrable Shares in the Shelf Registration Statement until such Registrable Shares have been
sold under the IPO Registration Statement.
(i) Right to Terminate IPO Registration. The Company shall have the right to terminate
or withdraw the IPO Registration Statement initiated by it referred to in this Section 2(b)
prior to the effectiveness of such registration whether or not any Holder has elected to
include Registrable Shares in such registration.
(ii) Selection of Underwriter. The Company shall have the sole right to select the
managing underwriter(s) for its initial public offering, regardless of whether any
Registrable Securities are included in the IPO Registration Statement or otherwise.
(iii) Shelf Registration not Impacted by IPO Registration Statement. The Company’s
obligation to file the Shelf Registration Statement pursuant to Section 2(a) hereof shall
not be affected by the filing or effectiveness of the IPO Registration Statement.
(c) Issuer Free Writing Prospectus. The Company represents and agrees that, unless it obtains
the prior consent of Holders of a majority of the Registrable Shares that are registered under a
Registration Statement at such time or the consent of the managing underwriter in connection with
any Underwritten Offering of Registrable Shares, and each Holder represents and agrees that, unless
it obtains the prior consent of the Company and any such underwriter, it will not make any offer
relating to the Shares that would constitute an “issuer free writing prospectus,” as defined in
Rule 433 (an “Issuer Free Writing Prospectus”), or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed with the Commission. The Company
represents that any Issuer Free Writing Prospectus prepared by it will not include any information
that conflicts with the information contained in any Registration Statement or the related
Prospectus and, any Issuer Free Writing Prospectus, when taken together with the information in
such Registration Statement and the related Prospectus, will not include any untrue
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statement of a material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading.
(d) Underwriting. The Company shall advise all Holders of the underwriter for the
Underwritten Offering proposed under the IPO Registration Statement. The right of any such
Holder’s Registrable Shares to be included in the IPO Registration Statement pursuant to Section
2(b) shall be conditioned upon such Holder’s participation in such underwriting and the inclusion
of such Holder’s Registrable Shares in the underwriting to the extent provided herein. All Holders
proposing to distribute their Registrable Shares through such underwriting shall enter into an
underwriting agreement in customary form with the managing underwriter(s) selected for such
underwriting and complete and execute any questionnaires, powers of attorney, indemnities, custody
agreements, securities escrow agreements and other documents reasonably required under the terms of
such underwriting, and furnish to the Company such information as the Company may reasonably
request in writing for inclusion in the Registration Statement; provided, however, that no Holder
shall be required to make any representations or warranties to or agreements with the Company or
the underwriters other than representations, warranties or agreements regarding such Holder and
such Holder’s intended method of distribution and any other representation required by law or
reasonably requested by the underwriters. Notwithstanding any other provision of this Agreement,
if the managing underwriter(s) determine(s) in good faith that marketing factors require a
limitation on the number of shares to be included, then the managing underwriter(s) may exclude
shares (including Registrable Shares) from the IPO Registration Statement and Underwritten
Offering, and any shares included in such IPO Registration Statement and Underwritten Offering
shall be allocated first, to the Company, and second, to each of the Holders requesting inclusion
of their Registrable Shares in such IPO Registration Statement (on a pro rata basis based on the
total number of Registrable Shares then held by each such Holder who is requesting inclusion);
provided, however, that the number of Registrable Shares to be included in the IPO Registration
Statement shall not be reduced unless all other securities of the Company held by (i) officers,
directors, other employees of the Company and consultants; and (ii) other holders of the Company’s
capital stock with registration rights that are inferior (with respect to such reduction) to the
registration rights of the Holders set forth herein, are first entirely excluded from the
underwriting and registration; provided, further, however, that Holders of Registrable Shares shall
be permitted to include Registrable Shares comprising at least 25% of the total securities included
in the Underwritten Offering proposed under the IPO Registration Statement.
By electing to include the Registrable Shares in the IPO Registration Statement, the Holder of
such Registrable Shares shall be deemed to have agreed not to effect any public sale or
distribution of securities of the Company of the same or similar class or classes of the securities
included in the IPO Registration Statement or any securities convertible into or exchangeable or
exercisable for such securities, including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act, during such periods as reasonably requested (but in no event for a period longer
than thirty (30) days prior to and one hundred eighty (180) days following the effective date of
the IPO Registration Statement) by the representatives of the underwriters, if an Underwritten
Offering, or by the Company in any other registration.
If any Holder disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the managing underwriter(s),
A-7
delivered at least ten (10) Business Days prior to the effective date of the IPO Registration
Statement. Any Registrable Shares excluded or withdrawn from such underwriting shall be excluded
and withdrawn from the registration.
(e) Expenses. The Company shall pay all Registration Expenses in connection with the
registration of the Registrable Shares pursuant to this Agreement. Each Holder participating in a
registration pursuant to this Section 2 shall bear such Holder’s proportionate share (based on the
total number of Registrable Shares sold in such registration) of all discounts and commissions
payable to underwriters or brokers in connection with a registration of Registrable Shares pursuant
to this Agreement.
(f) Executive Bonuses. If the Company does not file a Registration Statement registering the
resale of the Accredited Investor Shares, the Rule 144A Shares, and the Regulation S Shares within
120 days after the Closing Date, other than as a result of the Commission being unable to accept
such filings (a “Registration Default”), then, for each day the Registration Default continues,
each of J. Xxxxxxx Xxxxxxx, President, Chief Executive Officer and Chief Operating Officer and Xxxx
X. Xxxxxxxx, Chief Financial Officer and Secretary, shall forfeit 1.0% of any bonus that would
otherwise become payable to him in the 2007 fiscal year after the date of this Agreement (or to
which he became entitled as a result of performance during the 2007 fiscal year) but excluding any
amounts payable under the Transaction Bonus Agreements dated April 2, 2007, whether under an
employment agreement with the Company, a bonus plan or any other bonus arrangement, including any
bonus compensation for which payment would otherwise be deferred until after 2007. No bonuses,
compensation, awards, equity compensation or other amounts shall be payable or granted in lieu of
or to make such President, Chief Executive Officer and Chief Operating Officer or Chief Financial
Officer and Secretary whole for any such forfeited bonuses.
3. Rules 144 and 144A Reporting
With a view to making available the benefits of certain rules and regulations of the
Commission that may at any time permit the sale of the Registrable Shares to the public without
registration, the Company agrees to:
(a) use commercially reasonable efforts to make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities Act, at all times after the
effective date of the first registration statement under the Securities Act filed by the Company
for an offering of its securities to the general public;
(b) use commercially reasonable efforts to file with the Commission in a timely manner all
reports and other documents required to be filed by the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting requirements);
(c) so long as a Holder owns any Registrable Shares, if the Company is not required to file
reports and other documents under the Securities Act and the Exchange Act, it will make available
other information as required by, and so long as necessary to permit sales of Registrable
A-8
Shares pursuant to, Rule 144A and, commencing at such time as sales are permitted under Rule 144,
Rule 144, and in any event shall make available (either by mailing a copy thereof, by posting on
the Company’s website, or by press release) to each Holder a copy of:
(i) the Company’s annual consolidated financial statements (including at least balance
sheets, statements of profit and loss, statements of stockholders’ equity and statements of
cash flows) prepared in accordance with generally accepted accounting principles in the
U.S., accompanied by an audit report of the Company’s independent accountants, no later than
ninety (90) days after the end of each fiscal year of the Company; and
(ii) the Company’s unaudited quarterly financial statements (including at least balance
sheets, statements of profit and loss, statements of stockholders’ equity and statements of
cash flows) prepared in a manner substantially consistent with the preparation of the
Company’s annual financial statements, no later than forty-five (45) days after the end of
each fiscal quarter of the Company;
The Company shall hold, a reasonable time after the availability of such financial statements and
upon reasonable notice to the Holders and FBR (either by mail, by posting on the Company’s website,
or by press release), a quarterly investor conference call to discuss such financial statements,
which call will also include an opportunity for the Holders to ask questions of management with
regard to such financial statements, and will also cooperate with, and make management reasonably
available to, FBR personnel in connection with making Company information available to investors;
and
(d) at any time after it has become subject to the reporting requirements of the Exchange Act,
so long as a Holder owns any Registrable Shares, to furnish to the Holder promptly upon request (i)
a written statement by the Company as to its compliance with the reporting requirements of Rule 144
(at any time after ninety (90) days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of
the Company, and (iii) such other reports and documents of the Company, and take such further
actions, as a Holder may reasonably request in availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such Registrable Shares without registration.
4. Registration Procedures
In connection with the obligations of the Company with respect to any registration pursuant to
this Agreement, the Company shall use its commercially reasonable efforts to effect or cause to be
effected the registration of the Registrable Shares under the Securities Act to permit the sale of
such Registrable Shares by the Holder or Holders in accordance with the Holder’s or Holders’
intended method or methods of distribution, and the Company shall:
(a) notify FBR and Selling Holders’ Counsel, in writing, at least ten (10) Business Days prior
to filing a Registration Statement, of its intention to file a Registration Statement with
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the Commission and, at least five (5) Business Days prior to filing, provide a copy of the
Registration Statement to FBR, its counsel and Selling Holders’ Counsel for review and comment;
prepare and file with the Commission, as specified in this Agreement, a Registration Statement(s),
which Registration Statement(s) shall (x) comply as to form in all material respects with the
requirements of the applicable form and include all financial statements required by the Commission
to be filed therewith and (y) be reasonably acceptable to FBR, its counsel and Selling Holders’
Counsel; notify FBR and Selling Holders’ Counsel in writing, at least five (5) Business Days prior
to filing of any amendment or supplement to such Registration Statement and, at least three (3)
Business Days prior to filing, provide a copy of such amendment or supplement to FBR, its counsel
and Selling Holders’ Counsel for review and comment; promptly following receipt from the
Commission, provide to FBR, its counsel and Selling Holders’ Counsel copies of any comments made by
the staff of the Commission relating to such Registration Statement and of the Company’s responses
thereto for review and comment; and use its commercially reasonable efforts to cause such
Registration Statement to become effective as soon as practicable after filing and to remain
effective, subject to Section 5 hereof, until the earlier of (i) such time as all Registrable
Shares covered thereby have been sold in accordance with the intended distribution of such
Registrable Shares, (ii) there are no Registrable Shares outstanding or (iii) the second
anniversary of the initial effective date of such Registration Statement (subject to extension as
provided in Section 5(c) hereof); provided, however, that the Company shall not be required to
cause the IPO Registration Statement to remain effective for any period longer than ninety (90)
days following the effective date of the IPO Registration Statement (subject to extension as
provided in Section 5(c) hereof); provided, further, that if the Company has an effective Shelf
Registration Statement on Form S-1 under the Securities Act and becomes eligible to use Form S-3 or
such other short-form registration statement form under the Securities Act, the Company may, upon
twenty (20) Business Days prior written notice to all Holders, register any Registrable Shares
registered but not yet distributed under the effective Shelf Registration Statement on such a
short-form Shelf Registration Statement and, once the short-form Shelf Registration Statement is
declared effective, de-register such shares under the previous Registration Statement or transfer
the filing fees from the previous Registration Statement (such transfer pursuant to Rule 429, if
applicable) unless any Holder registered under the initial Shelf Registration Statement notifies
the Company within fifteen (15) Business Days of receipt of the Company notice that such a
registration under a new Registration Statement and de-registration of the initial Shelf
Registration Statement would interfere with its distribution of Registrable Shares already in
progress;
(b) subject to Section 4(i) hereof, (i) prepare and file with the Commission such amendments
and post-effective amendments to each such Registration Statement as may be necessary to keep such
Registration Statement effective for the period described in Section 4(a) hereof; (ii) cause each
Prospectus contained therein to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 or any similar rule that may be adopted under the
Securities Act; and (iii) comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by each Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the selling Holders thereof;
(c) furnish to the Holders, without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and such other
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documents as such Holder may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Shares; the Company consents to the use of such Prospectus,
including each preliminary Prospectus, by the Holders, if any, in connection with the offering and
sale of the Registrable Shares covered by any such Prospectus;
(d) use its commercially reasonable efforts to register or qualify, or obtain exemption from
registration or qualification for, all Registrable Shares by the time the applicable Registration
Statement is declared effective by the Commission under all applicable state securities or “blue
sky” laws of such jurisdictions as FBR or any Holder of Registrable Shares covered by a
Registration Statement shall reasonably request in writing, keep each such registration or
qualification or exemption effective during the period such Registration Statement is required to
be kept effective pursuant to Section 4(a) and do any and all other acts and things that may be
reasonably necessary to enable such Holder to consummate the disposition in each such jurisdiction
of such Registrable Shares owned by such Holder; provided, however, that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction or to register as a broker or
dealer in such jurisdiction where it would not otherwise be required to qualify but for this
Section 4(d) and except as may be required by the Securities Act, (ii) subject itself to taxation
in any such jurisdiction, or (iii) submit to the general service of process in any such
jurisdiction;
(e) use its commercially reasonable efforts to cause all Registrable Shares covered by such
Registration Statement to be registered and approved by such other governmental agencies or
authorities as may be necessary to enable the Holders thereof to consummate the disposition of such
Registrable Shares;
(f) (i) notify FBR and each Holder promptly and, if requested by FBR or any Holder, confirm
such advice in writing (1) when a Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective, (2) of the issuance by the
Commission or any state securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose, (3) of any request by
the Commission or any other federal, state or foreign governmental authority for (A) amendments or
supplements to a Registration Statement or related Prospectus or (B) additional information and (4)
of the happening of any event during the period a Registration Statement is effective as a result
of which such Registration Statement or the related Prospectus or any document incorporated by
reference therein contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein not misleading
(which information shall be accompanied by an instruction to suspend the use of the Prospectus
until the requisite changes have been made) and (ii) at the request of any such Holder, promptly to
furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such
Prospectus as may be necessary so that, as thereafter delivered to the purchaser of such
securities, such Prospectus shall 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 not
misleading;
(g) except as provided in Section 5, make every reasonable effort to avoid the issuance of, or
if issued, to obtain the withdrawal of, any order enjoining or suspending the use or effectiveness
of a Registration Statement or suspending of the qualification (or exemption from
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qualification) of any of the Registrable Shares for sale in any jurisdiction, as promptly as
practicable;
(h) upon written request, furnish to each requesting Holder of Registrable Shares, without
charge, at least one conformed copy of each Registration Statement and any post-effective amendment
or supplement thereto (without documents incorporated therein by reference or exhibits thereto,
unless requested);
(i) except as provided in Section 5, upon the occurrence of any event contemplated by Section
4(f)(i)(4) hereof, use its commercially reasonable efforts to promptly prepare a supplement or
post-effective amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Shares, such Prospectus 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, in the light of the circumstances under which they were
made, not misleading;
(j) if requested by the representative of the underwriters, if any, or any Holders of
Registrable Shares being sold in connection with such offering, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information as the representative of the
underwriters, if any, or such Holders indicate relates to them or that they reasonably request be
included therein and (ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or post-effective amendment; provided,
however, that the Company shall not be required to prepare or file a Prospectus supplement or post
effective amendment to name additional selling stockholders therein more than once in any thirty
(30) day period;
(k) in the case of an Underwritten Offering, use its commercially reasonable efforts to
furnish to the underwriters a signed counterpart, addressed to the underwriters, of: (i) an opinion
of counsel for the Company, dated the date of each closing under the underwriting agreement,
reasonably satisfactory to the underwriters; and (ii) a “comfort” letter, dated the effective date
of such Registration Statement and the date of each closing under the underwriting agreement,
signed by the independent public accountants who have certified the Company’s financial statements
included in such Registration Statement, covering substantially the same matters with respect to
such Registration Statement (and the Prospectus included therein) and with respect to events
subsequent to the date of such financial statements, as are customarily covered in accountants’
letters delivered to underwriters in underwritten public offerings of securities and such other
financial matters as the underwriters may reasonably request;
(l) enter into customary agreements (including in the case of an Underwritten Offering, an
underwriting agreement in customary form) and take all other action in connection therewith in
order to expedite or facilitate the distribution of the Registrable Shares included in such
Registration Statement and, in the case of an Underwritten Offering, make representations and
warranties to the underwriters in such form and scope as are customarily made by issuers to
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underwriters in underwritten offerings and confirm the same to the extent customary if and when
requested;
(m) make available for inspection by representatives of the Holders and the representative of
any underwriters participating in any disposition pursuant to a Registration Statement and any
special counsel or accountants retained by such Holders or underwriters, all financial and other
records, pertinent corporate documents and properties of the Company and cause the respective
officers, directors and employees of the Company to supply all information reasonably requested by
any such representatives, the representative of the underwriters, counsel thereto or accountants in
connection with a Registration Statement; provided, however, that such records, documents or
information that the Company determines, in good faith, to be confidential and notifies such
representatives, representative of the underwriters, counsel thereto or accountants are
confidential shall not be disclosed by the representatives, representative of the underwriters,
counsel thereto or accountants unless (i) the disclosure of such records, documents or information
is necessary to avoid or correct a misstatement or omission in a Registration Statement or
Prospectus, (ii) the release of such records, documents or information is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, or (iii) such records, documents or
information have been generally made available to the public;
(n) use its commercially reasonable efforts (including, without limitation, seeking to cure
any deficiencies cited by the exchange or market in the Company’s listing or inclusion application)
to list or include all Registrable Shares on the New York Stock Exchange or the Nasdaq Global
Market;
(o) prepare and file in a timely manner all documents and reports required by the Exchange Act
and, to the extent the Company’s obligation to file such reports pursuant to Section 15(d) of the
Exchange Act expires prior to the expiration of the effectiveness period of the Registration
Statement as required by Section 4(a) hereof, the Company shall register the Registrable Shares
under the Exchange Act and shall maintain such registration through the effectiveness period
required by Section 4(a) hereof;
(p) provide a CUSIP number for all Registrable Shares, not later than the effective date of
the Registration Statement;
(q) (i) otherwise use its commercially reasonable efforts to comply with all applicable rules
and regulations of the Commission, (ii) make generally available to its stockholders, as soon as
reasonably practicable, earnings statements covering at least 12 months that satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 (or any similar rule promulgated under the
Securities Act) thereunder, but in no event later than ninety (90) days after the end of each
fiscal year of the Company and (iii) not file any Registration Statement or Prospectus or amendment
or supplement to such Registration Statement or Prospectus to which any Holder of Registrable
Shares covered by any Registration Statement shall have reasonably objected on the grounds that
such Registration Statement or Prospectus or amendment or supplement does not comply in all
material respects with the requirements of the Securities Act, such Holder having been furnished
with a copy thereof at least two (2) Business Days prior to the filing thereof;
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(r) provide and cause to be maintained a registrar and transfer agent for all Registrable
Shares covered by any Registration Statement from and after a date not later than the effective
date of such Registration Statement;
(s) in connection with any sale or transfer of the Registrable Shares (whether or not pursuant
to a Registration Statement) that will result in the securities being delivered no longer being
Registrable Shares, cooperate with the Holders and the representative of the underwriters, if any,
to facilitate the timely preparation and delivery of certificates representing the Registrable
Shares to be sold, which certificates shall not bear any restrictive transfer legends and to enable
such Registrable Shares to be in such denominations and registered in such names as the
representative of the underwriters, if any, or the Holders may request at least two (2) Business
Days prior to any sale of the Registrable Shares;
(t) in connection with the initial filing of a Shelf Registration Statement and each amendment
thereto with the Commission pursuant to Section 2(a) hereof, cooperate with FBR in connection with
the filing with the NASD of all forms and information required or requested by the NASD in order to
obtain written confirmation from the NASD that the NASD does not object to the fairness and
reasonableness of the underwriting terms and arrangements (or any deemed underwriting terms and
arrangements) (each such written confirmation, a “No Objections Letter”) relating to the resale of
Registrable Shares pursuant to the Shelf Registration Statement, including, without limitation,
information provided to the NASD through its COBRADesk system, and pay all reasonable costs, fees
and expenses incident to the NASD’s review of the Shelf Registration Statement and the related
underwriting terms and arrangements, including, without limitation, all filing fees associated with
any filings or submissions to the NASD and the legal expenses, filing fees and other disbursements
of FBR and any other NASD member that is the holder of, or is affiliated or associated with an
owner of, Registrable Shares included in the Shelf Registration Statement (including in connection
with any initial or subsequent member filing);
(u) in connection with the initial filing of a Shelf Registration Statement and each amendment
thereto with the Commission pursuant to Section 2(a) hereof, provide to FBR and its
representatives, the opportunity to conduct due diligence, including, without limitation, an
inquiry of the Company’s financial and other records, and make available members of its management
for questions regarding information which FBR may request in order to fulfill any due diligence
obligation on its part; and
(v) upon effectiveness of the first Registration Statement filed under this Agreement, take
such actions and make such filings as are necessary to effect the registration of the Common Stock
under the Exchange Act simultaneously with or immediately following the effectiveness of the
Registration Statement.
The Company may require the Holders to furnish to the Company such information regarding the
proposed distribution by such Holder of such Registrable Shares as the Company may from time to
time reasonably request in writing or as shall be required to effect the registration of the
Registrable Shares, and no Holder shall be entitled to be named as a selling stockholder in any
Registration Statement and no Holder shall be entitled to use the Prospectus forming a part thereof
if such Holder does not provide such information to the Company. Each Holder further
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agrees to furnish promptly to the Company in writing all information required from time to time to
make the information previously furnished by such Holder not misleading.
Each Holder agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 4(f)(i)(3)(A) or 4(f)(i)(4) hereof, such Holder will
immediately discontinue disposition of Registrable Shares pursuant to a Registration Statement
until such Holder’s receipt of the copies of the supplemented or amended Prospectus. If so
directed by the Company, such Holder will deliver to the Company (at the expense of the Company)
all copies in its possession, other than permanent file copies then in such Holder’s possession, of
the Prospectus covering such Registrable Shares current at the time of receipt of such notice.
5. Black-Out Period
(a) Subject to the provisions of this Section 5 and a good faith determination by a majority
of the independent members of the board of directors of the Company (the “Board of Directors”) that
it is in the best interests of the Company to suspend the use of the Registration Statement,
following the effectiveness of a Registration Statement (and the filings with any international,
federal or state securities commissions), the Company, by written notice to FBR and the Holders,
may direct the Holders to suspend sales of the Registrable Shares pursuant to a Registration
Statement for such times as the Company reasonably may determine is necessary and advisable (but in
no event for more than an aggregate of ninety (90) days in any rolling twelve (12) month period
commencing on the Closing Date or more than sixty (60) days in any rolling ninety (90) day period,
except as a result of a review of any post effective amendment by the Commission prior to declaring
any post effective amendment to the Registration Statement effective; provided the Company has used
all commercially reasonable efforts to cause such post effective amendment to be declared
effective), if any of the following events shall occur: (i) the representative of the underwriters
of an Underwritten Offering of primary shares by the Company has advised the Company that the sale
of Registrable Shares pursuant to the Registration Statement would have a material adverse effect
on the Company’s primary offering; (ii) the majority of the independent members of the Board of
Directors of the Company shall have determined in good faith that (A) the offer or sale of any
Registrable Shares would materially impede, delay or interfere with any proposed financing, offer
or sale of securities, acquisition, merger, tender offer, business combination, corporate
reorganization or other significant transaction involving the Company, (B) after the advice of
counsel, the sale of Registrable Shares pursuant to the Registration Statement would require
disclosure of non-public material information not otherwise required to be disclosed under
applicable law, and (C) (x) the Company has a bona fide business purpose for preserving the
confidentiality of such transaction or information, (y) disclosure would have a material adverse
effect on the Company or the Company’s ability to consummate such transaction, or (z) renders the
Company unable to comply with Commission requirements, in each case under circumstances that would
make it impractical or inadvisable to cause the Registration Statement (or such filings) to become
effective or to promptly amend or supplement the Registration Statement on a post-effective basis,
as applicable; or (iii) the majority of the independent members of the Board of Directors of the
Company shall have determined in good faith, after the advice of counsel, that it is required by
law, rule or regulation or that it is in the best interests of the
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Company to supplement the Registration Statement or file a post-effective amendment to the
Registration Statement in order to incorporate information into the Registration Statement for the
purpose of (1) including in the Registration Statement any prospectus required under Section
10(a)(3) of the Securities Act; (2) reflecting in the prospectus included in the Registration
Statement any facts or events arising after the effective date of the Registration Statement (or of
the most recent post-effective amendment) that, individually or in the aggregate, represents a
fundamental change in the information set forth therein; or (3) including in the prospectus
included in the Registration Statement any material information with respect to the plan of
distribution not disclosed in the Registration Statement or any material change to such
information. Upon the occurrence of any such suspension, the Company shall use commercially
reasonable efforts to cause the Registration Statement to become effective or to promptly amend or
supplement the Registration Statement on a post-effective basis or to take such action as is
necessary to make resumed use of the Registration Statement compatible with the Company’s best
interests, as applicable, so as to permit the Holders to resume sales of the Registrable Shares as
soon as possible.
(b) In the case of an event that causes the Company to suspend the use of a Registration
Statement (a “Suspension Event”), the Company shall give written notice (a “Suspension Notice”) to
FBR and the Holders to suspend sales of the Registrable Shares and such notice shall state
generally the basis for the notice and that such suspension shall continue only for so long as the
Suspension Event or its effect is continuing and the Company is using commercially reasonable
efforts and taking all reasonable steps to terminate suspension of the use of the Registration
Statement as promptly as possible. The Holders shall not effect any sales of the Registrable
Shares pursuant to such Registration Statement (or such filings) at any time after it has received
a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice (as
defined below). If so directed by the Company, each Holder will deliver to the Company (at the
expense of the Company) all copies other than permanent file copies then in such Holder’s
possession of the Prospectus covering the Registrable Shares at the time of receipt of the
Suspension Notice. The Holders may recommence effecting sales of the Registrable Shares pursuant
to the Registration Statement (or such filings) following further notice to such effect (an “End of
Suspension Notice”) from the Company, which End of Suspension Notice shall be given by the Company
to the Holders and FBR in the manner described above promptly following the conclusion of any
Suspension Event and its effect.
(c) Notwithstanding any provision herein to the contrary, if the Company shall give a
Suspension Notice pursuant to this Section 5, the Company agrees that it shall extend the period of
time during which the applicable Registration Statement shall be maintained effective pursuant to
this Agreement by the number of days during the period from the date of receipt by the Holders of
the Suspension Notice to and including the date of receipt by the Holders of the End of Suspension
Notice and copies of the supplemented or amended Prospectus necessary to resume sales.
6. Indemnification and Contribution
(a) The Company agrees to indemnify and hold harmless (i) each Holder of Registrable Shares
and any underwriter (as determined in the Securities Act) for such Holder (including, if
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xxxxxxxxxx, XXX), (xx) each Person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act) any such Person described in clause (i) (any
of the Persons referred to in this clause (ii) being hereinafter referred to as a “Controlling
Person”), and (iii) the respective officers, directors, partners, employees, representatives and
agents of any such Person or any Controlling Person (any Person referred to in clause (i), (ii) or
(iii) above may hereinafter be referred to as a “Purchaser Indemnitee”), to the fullest extent
lawful, from and against any and all losses, claims, damages, judgments, actions, out-of-pocket
expenses, and other liabilities (the “Liabilities”), including without limitation and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing or defending any claim
or action, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any Purchaser Indemnitee,
joint or several, directly or indirectly related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto), any Prospectus (or any amendment or supplement
thereto) or any Issuer Free Writing Prospectus prepared by the Company (or any amendment or
supplement thereto), or any preliminary Prospectus or any other document used to sell the Shares,
or any omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as such Liabilities arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Purchaser Indemnitee furnished to the Company or any
underwriter in writing by such Purchaser Indemnitee expressly for use therein. The Company shall
notify the Holders promptly of the institution, threat or assertion of any claim, proceeding
(including any governmental investigation), or litigation of which it shall have become aware in
connection with the matters addressed by this Agreement which involves the Company or a Purchaser
Indemnitee. The indemnity provided for herein shall remain in full force and effect regardless of
any investigation made by or on behalf of any Purchaser Indemnitee.
(b) In connection with any Registration Statement in which a Holder of Registrable Shares is
participating, such Holder agrees, severally and not jointly, to indemnify and hold harmless the
Company, each Person who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act and the respective partners, directors, officers, members,
representatives, employees and agents of such Person or Controlling Person to the same extent as
the foregoing indemnity from the Company to each Purchaser Indemnitee, but only with reference to
untrue statements or omissions or alleged untrue statements or omissions made in reliance upon and
in strict conformity with information relating to such Holder furnished to the Company in writing
by such Holder expressly for use in such Registration Statement (or any amendment thereto),
Prospectus (or any amendment or supplement thereto), Issuer Free Writing Prospectus (or any
amendment or supplement thereto) or any preliminary Prospectus. Absent gross negligence or willful
misconduct, the liability of any Holder pursuant to this paragraph shall in no event exceed the net
proceeds received by such Holder from sales of Registrable Shares pursuant to such Registration
Statement (or any amendment thereto), Prospectus (or any amendment or supplement thereto), Issuer
Free Writing Prospectus (or any amendment or supplement thereto) or any preliminary Prospectus.
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(c) If any suit, action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against any Person in respect of which indemnity may
be sought pursuant to paragraph (a) or (b) above, such Person (the “Indemnified Party”) shall
promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”) in
writing of the commencement thereof (but the failure to so notify an Indemnifying Party shall not
relieve it from any liability which it may have under this Section 6, except to the extent the
Indemnifying Party is materially prejudiced by the failure to give notice), 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
reasonably designate in such proceeding and shall pay the reasonable fees and expenses actually
incurred by such counsel related to such proceeding. Notwithstanding the foregoing, 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 contrary,
(ii) the Indemnifying Party failed within a reasonable time after notice of commencement of the
action to assume the defense and employ counsel reasonably satisfactory to the Indemnified Party,
(iii) the Indemnifying Party and its counsel do not actively and vigorously pursue the defense of
such action or (iv) the named parties to any such action (including any impleaded parties) include
both such Indemnified Party and Indemnifying Party, or any Affiliate of the Indemnifying Party, and
such Indemnified Party shall have been reasonably advised by counsel that, either (x) there may be
one or more legal defenses available to it which are different from or additional to those
available to the Indemnifying Party or such Affiliate of the Indemnifying Party or (y) a conflict
may exist between such Indemnified Party and the Indemnifying Party or such Affiliate of the
Indemnifying Party (in which case the Indemnifying Party shall not have the right to assume nor
direct the defense of such action on behalf of such Indemnified Party; it being understood,
however, that the Indemnifying Party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all such Indemnified Parties, which firm
shall be designated in writing by those Indemnified Parties who sold a majority of the Registrable
Shares sold by all such Indemnified Parties and any such separate firm for the Company, the
directors, the officers and such control Persons of the Company as shall be designated in writing
by the Company). The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, which consent shall not be unreasonably withheld, but if
settled with such consent or if there is a final judgment for the plaintiff, the Indemnifying Party
agrees to indemnify any Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraphs (a) and (b) of this Section 6 is for any
reason held to be unavailable to an Indemnified Party in respect of any Liabilities referred to
therein (other than by reason of the exceptions provided therein) or is insufficient to hold
harmless
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a party indemnified thereunder, then each Indemnifying Party under such paragraphs, 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 Liabilities (i) in such proportion as is appropriate to
reflect the relative benefits of the Indemnified Party on the one hand and the Indemnifying
Party(ies) on the other in connection with the statements or omissions that resulted in such
Liabilities, or (ii) if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Indemnifying Party(ies) and the Indemnified
Party, as well as any other relevant equitable considerations. The relative fault of the Company
on the one hand and any Purchaser Indemnitees on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
Company or by such Purchaser Indemnitees and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The parties agree that it would not be just and equitable if contribution pursuant to this
Section 6 were determined by pro rata allocation (even if such Indemnified Parties 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 paragraph 6(d) above. The amount paid or payable by an
Indemnified Party as a result of any Liabilities referred to paragraph 6(d) shall be deemed to
include, subject to the limitations set forth above, any reasonable legal or other expenses
actually incurred by such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, in no event shall a Purchaser
Indemnitee be required to contribute any amount in excess of the amount by which the net proceeds
received by such Purchaser Indemnitee from sales of Registrable Shares exceeds the amount of any
damages that such Purchaser Indemnitee has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. For purposes of this Section 6, each
Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act) FBR or a Holder of Registrable Shares shall have the same rights to
contribution as FBR or such Holder, as the case may be, and each Person, if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act) the
Company, and each officer, director, partner, employee, representative, agent or manager of the
Company shall have the same rights to contribution as the Company. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may be made against
another party or parties, notify each party or parties from whom contribution may be sought, but
the omission to so notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this Section 6 or
otherwise, except to the extent that any party is materially prejudiced by the failure to give
notice. 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.
(f) The indemnity and contribution agreements contained in this Section 6 will be in addition
to any liability which the Indemnifying Parties may otherwise have to the Indemnified Parties
referred to above. The Purchaser Indemnitee’s obligations to contribute pursuant to this
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Section 6 are several in proportion to the respective number of Shares sold by each of the
Purchaser Indemnitees hereunder and not joint.
7. Market Stand-off Agreement
Each Holder hereby agrees that it shall not, to the extent requested by the Company or an
underwriter of securities of the Company, directly or indirectly sell, offer to sell (including
without limitation any short sale), grant any option or otherwise transfer or dispose of any
Registrable Shares or other shares of Common Stock of the Company or any securities convertible
into or exchangeable or exercisable for shares of Common Stock of the Company then owned by such
Holder (other than to donees or partners of the Holder who agree to be similarly bound) for a
period of sixty (60) days following the effective date of an IPO Registration Statement of the
Company filed under the Securities Act; provided, however, that:
(a) the restrictions above shall not apply to Registrable Shares sold pursuant to the IPO
Registration Statement;
(b) all executive officers and directors of the Company then holding shares of Common Stock of
the Company or securities convertible into or exchangeable or exercisable for shares of Common
Stock of the Company enter into agreements that are no less restrictive;
(c) the Holders shall be allowed any concession or proportionate release allowed to any
officer or director that entered into agreements that are no less restrictive (with such proportion
being determined by dividing the number of shares being released with respect to such officer or
director by the total number of issued and outstanding shares held by such officer or director);
provided, that nothing in this Section 7(c) shall be construed as a right to proportionate release
for the executive officers and directors of the Company upon the expiration of the sixty (60) day
period applicable to all Holders other than the executive officers and directors of the Company;
and
(d) this Section 7 shall not be applicable if a Shelf Registration Statement of the Company
filed under the Securities Act has been declared effective prior to the filing of an IPO
Registration Statement.
In order to enforce the foregoing covenant, the Company shall have the right to place
restrictive legends on the certificates representing the securities subject to this Section 7 and
to impose stop transfer instructions with respect to the Registrable Shares and such other
securities of each Holder (and the securities of every other Person subject to the foregoing
restriction) until the end of such period.
8. Termination of the Company’s Obligation
The Company shall have no obligation pursuant to this Agreement with respect to any
Registrable Shares proposed to be sold by a Holder in a registration pursuant to this Agreement if,
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in the opinion of counsel to the Company, all such Registrable Shares proposed to be sold by a
Holder may be sold in a three month period without registration under the Securities Act pursuant
to Rule 144 under the Securities Act.
9. Limitations on Subsequent Registration Rights
From and after the date of this Agreement, the Company shall not, without the prior written
consent of Holders beneficially owning not less than a majority of the then outstanding Registrable
Shares (provided, however, that for purposes of this Section 9, Registrable Shares that are owned,
directly or indirectly, by an Affiliate of the Company shall not be deemed to be outstanding),
enter into any agreement with any holder or prospective holder of any securities of the Company
that would allow such holder or prospective holder (a) to include such securities in any
Registration Statement filed pursuant to the terms hereof, unless, under the terms of such
agreement, such holder or prospective holder may include such securities in any such registration
only to the extent that the inclusion of its securities will not reduce the amount of Registrable
Shares of the Holders that is included, or (b) to have its securities registered on a registration
statement that could be declared effective prior to, or within one hundred eighty (180) days of,
the effective date of any Registration Statement filed pursuant to this Agreement.
10. Miscellaneous
(a) Remedies. In the event of a breach by the Company of any of its obligations under this
Agreement, each Holder, in addition to being entitled to exercise all rights provided herein or, in
the case of FBR, in the Purchase/Placement Agreement, or granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this Agreement. Subject to
Section 6, the Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further
agree that, in the event of any action for specific performance in respect of such breach, it shall
waive the defense that a remedy at law would be adequate.
(b) Amendments and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, without the written consent of the Company
and Holders beneficially owning not less than a majority of the then outstanding Registrable
Shares; provided, however, that for purposes of this Section 10(b), Registrable Shares that are
owned, directly or indirectly, by an Affiliate of the Company shall not be deemed to be
outstanding. No amendment shall be deemed effective unless it applies uniformly to all Holders.
Notwithstanding the foregoing, a waiver or consent to or departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of a Holder whose securities are being
sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders may be given by such Holder; provided that the
provisions of this sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence.
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(c) Notices. All notices and other communications, provided for or permitted hereunder, shall
be made in writing and delivered by facsimile (with receipt confirmed), overnight courier or
registered or certified mail, return receipt requested, or by telegram:
(i) if to a Holder, at the most current address given by the transfer agent and
registrar of the Shares to the Company; and
(ii) if to the Company, at the offices of the Company at 00000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxx 00000, Attention: Chief Financial Officer; (facsimile: 713-852-6350); with a copy to
Xxxxxx & Xxxxxx L.L.P., The Terrace 7, 0000 Xxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
Attention Xxxx X. Xxx (facsimile: 512-236-3340).
(iii) if to FBR, at the offices of FBR at 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxx, Esq. (facsimile 703-469-1140); with a copy
(which shall not constitute notice) to Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP, 000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxxx X.
Xxxxxxx, Esq. (facsimile 202-712-2856).
(d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto, including, without limitation and without
the need for an express assignment or assumption, subsequent Holders. The Company agrees that the
Holders shall be third party beneficiaries to the agreements made hereunder by FBR and the Company,
and each Holder shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights hereunder; provided, however, that
such Holder fulfills all of its obligations hereunder.
(e) Counterparts. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE COURT IN THE STATE OF NEW YORK OR ANY FEDERAL
COURT SITTING IN NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
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VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(h) Severability. If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall
use their commercially reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties hereto that
they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
(i) Entire Agreement. This Agreement, together with the Purchase/Placement Agreement, is
intended by the parties hereto as a final expression of their agreement, and is intended to be a
complete and exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein.
(j) Registrable Shares Held by the Company or its Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Shares is required hereunder,
Registrable Shares held by the Company or its Affiliates shall not be counted in determining
whether such consent or approval was given by the Holders of such required percentage.
(k) Adjustment for Stock Splits, etc. Wherever in this Agreement there is a reference to a
specific number of shares, then upon the occurrence of any subdivision, combination, or stock
dividend of such shares, the specific number of shares so referenced in this Agreement shall
automatically be proportionally adjusted to reflect the effect on the outstanding shares of such
class or series of stock by such subdivision, combination, or stock dividend.
(l) Survival. This Agreement is intended to survive the consummation of the transactions
contemplated by the Purchase/Placement Agreement. The indemnification and contribution obligations
under Section 6 of this Agreement shall survive the termination of the Company’s obligations under
Section 2 of this Agreement.
(m) Attorneys’ Fees. In any action or proceeding brought to enforce any provision of this
Agreement, or where any provision hereof is validly asserted as a defense, the prevailing party, as
determined by the court, shall be entitled to recover its reasonable attorneys’ fees in addition to
any other available remedy.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| ORION MARINE GROUP, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| FRIEDMAN, BILLINGS, XXXXXX & CO., INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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EXHIBIT B
SUBSTANCE OF OPINION OF COMPANY COUNSEL
May ___, 2007
Xxxxxxxx, Xxxxxxxx Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
0000 Xxxxxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Orion Marine Group, Inc.—Common Stock Offering
Ladies and Gentlemen:
We have acted as counsel to Orion Marine Group, Inc., a Delaware corporation (the “Company”),
in connection with the purchase by you as initial purchaser and the placement by you as Placement
Agent (“FBR”) of an aggregate of 19,044,724 shares (the “Shares”) of the common stock, par value
$.01 per share, of the Company (the “Common Stock”), from the Company pursuant to the
Purchase/Placement Agreement dated May 2, 2007, by and between the Company and you (the
“Purchase/Placement Agreement”). This opinion letter is being delivered to you pursuant to Section
6(a) of the Purchase/Placement Agreement. Capitalized terms used but not defined herein have the
meanings given to them in the Purchase/Placement Agreement.
In such capacity, we have examined copies of:
the Preliminary Offering Memorandum, dated April 12, 2007 (the “Preliminary Memorandum”);
the Final Offering Memorandum, dated May 2, 2007 (the “Final Memorandum”);
the Purchase/Placement Agreement;
the Registration Rights Agreement, dated the date hereof, by and between the Company and FBR
(the “Registration Rights Agreement”);
the Purchaser’s Letters and Subscription Agreements completed by the purchasers who buy the
Shares or Resale Shares (the “Purchasers”) in substantially the forms included as Annexes I through
IV in the Final Memorandum and accepted by the Company (collectively, the “Subscription
Agreements”);
a specimen of the certificates evidencing the Shares;
a copy of the Amended and Restated Certificate of Incorporation of the Company (the
“Certificate of Incorporation”), as filed with the Secretary of State of the State of Delaware on
May ___, 2007 and certified by the Secretary of State of the State of Delaware as of a recent date
and a copy of the Certificate of Incorporation of the Company, as filed with the Secretary of
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State of the State of Delaware on October 12, 2004 and certified by the Secretary of State of
the State of Delaware on such date, and Certificate of Amendment to Certificate of Incorporation of
the Company as filed with the Secretary of State of the State of Delaware on March 22, 2005 and
certified by the Secretary of State of the State of Delaware on such date (as amended, the “Old
Certificate of Incorporation”);
a copy of the Amended and Restated Bylaws of the Company (the “Bylaws”), certified by the
Secretary of the Company to be a true copy thereof;
a copy of the Articles of Incorporation of Orion Marine Group, Inc., a Texas corporation (the
“OMG Certificate”), as filed with the Secretary of State of the State of Texas on April 9, 2003 and
certified by the Secretary of State of the State of Texas as of a recent date;
a copy of the Bylaws of Orion Marine Group, Inc., a Texas corporation (the “OMG Bylaws”),
certified by the Secretary of the Company to be a true copy thereof;
a copy of the Articles of Organization of OCGP, LLC, a Texas limited liability company (the
“OCGP LLC Articles”), as filed with the Secretary of State of the State of Texas on June 30, 2003
and certified by the Secretary of State of the State of Texas as of a recent date;
a copy of the Regulations dated June 30, 2003 of OCGP, LLC, a Texas limited liability company
(the “OCGP Regulations”), certified by the Secretary of the Company to be a true copy thereof;
a copy of the Certificate of Limited Partnership of Orion Construction, L.P., a Texas limited
partnership (the “Orion Construction LP Certificate”), as filed with the Secretary of State of the
State of Texas on June 30, 2003 and certified by the Secretary of State of the State of Texas as of
a recent date;
a copy of the Agreement of Limited Partnership dated June 30, 2003 of Orion Construction,
L.P., a Texas limited partnership (the “Orion Construction LP Agreement”), certified by the
Secretary of the Company to be a true copy thereof;
a copy of the Articles of Organization of KFMSGP, LLC, a Texas limited liability company (the
“KFMSGP LLC Certificate”), as filed with the Secretary of State of the State of Texas on June 30,
2003 and certified by the Secretary of State of the State of Texas as of a recent date;
a copy of the Regulations dated June 30, 2003 of KFMSGP, LLC, a Texas limited liability
company (the “KFMSGP Regulations”), certified by the Secretary of the Company to be a true copy
thereof;
a copy of the Certificate of Limited Partnership of King Xxxxxx Marine Service LP, a Texas
limited partnership (the “King Xxxxxx XX Certificate”), as filed with the Secretary of State of the
State of Texas on July 2, 2003 and certified by the Secretary of State of the State of Texas as of
a recent date;
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a copy of the Agreement of Limited Partnership June 30, 2003 of King Xxxxxx Marine Service LP,
a Texas limited partnership (the “King Xxxxxx XX Agreement”), certified by the Secretary of the
Company to be a true copy thereof;
a copy of a certificate from the Secretary of State of the State of Texas as to the foreign
qualification of the Company;
unanimous written consents and certified resolutions of the Board of Directors of the Company
relating to the authorization of the Purchase/Placement Agreement and sale of the Shares and the
Registration Rights Agreement; the records of corporate, limited liability company or limited
partnership action, as applicable, of the Company; Orion Marine Group, Inc., OCGP, LLC, Orion
Construction, L.P., KFMSGP, LLC and King Xxxxxx Marine Service LP; stock ledgers and ownership
records of the Company, Orion Marine Group, Inc., OCGP, LLC, Orion Construction, L.P., KFMSGP, LLC
and King Xxxxxx Marine Service LP; in each case that were presented to us by the Company; and the
documents expressly described on Annex A attached hereto;
reports, dated as of recent dates, prepared by CT Corporation System purporting to describe
all financing statements on file as of the dates thereof in the office of the Secretary of State of
the State of Delaware, the Secretary of State of the State of Texas, the Secretary of State of the
State of Nevada or the Secretary of State of the State of Florida, as applicable, naming the
Company; Orion Marine Group, Inc.; OCLP, LLC; OCGP, LLC; Orion Construction LP; Xxxxxxx Marine
Construction, Inc.; KFMSLP, LLC; KFMSGP, LLC; King Xxxxxx Marine Service, LP; or X. Xxxxxx
Construction, LLC, or any of them, as debtors; and
copies of the Indemnification Agreements, as amended, by and between the Company and each of
the Company’s directors.
I. In rendering the opinions expressed below, we have assumed (i) the legal capacity
of all natural persons, (ii) the genuineness of all signatures, (iii) the authority of all
persons signing each of the Purchase/Placement Agreement and the Registration Rights
Agreement on behalf of the parties to such documents (other than the Company), (iv) the
authenticity of all documents submitted to us as originals, and (v) the conformity to
authentic original documents of all documents submitted to us as copies. We have also
assumed that (x) the Purchase/Placement Agreement and the Registration Rights Agreement are
valid and binding agreements of the party or parties thereto other than the Company and (y)
any laws other than Applicable Law (as defined below) do not affect the terms of such
agreements. As to facts material to the opinions expressed herein, we have made no
independent investigation of such facts and have relied, to the extent we deem such
reliance proper, upon certificates of public officials and officers or other
representatives of the Company and of Orion Marine Group, Inc.; OCLP, LLC; OCGP, LLC; Orion
Construction LP; Xxxxxxx Marine Construction, Inc.; KFMSLP, LLC; KFMSGP, LLC; King Xxxxxx
Marine Service LP; and X. Xxxxxx Construction, LLC (each, a “Subsidiary” and together, the
“Subsidiaries”). We have also assumed, without any independent inquiry or investigation,
the truth and accuracy of the representations and
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warranties of the Company and FBR included in the Purchase/Placement Agreement,
insofar as such representations and warranties are as to factual matters.
As to matters with respect to which an opinion herein is stated to be “to our knowledge”,
“known to us” or words of similar effect, we have not undertaken any independent examination of
facts or the records of any court, tribunal or other body, but have based our opinion in sole
reliance upon a certificate of an officer of the Company and upon matters of which attorneys in our
Firm who have devoted substantial time to this matter have actual knowledge.
Based on the foregoing and subject to the assumptions, qualifications, limitations and
exceptions hereinafter set forth, we are of the opinion that:
(a) The Company is duly incorporated and validly existing as a corporation and is in
good standing under the laws of the State of Delaware, with all corporate power and
authority to own, lease or operate its current property and to conduct its business as
described in the Preliminary Memorandum and Final Memorandum, and to execute, deliver and
perform its obligations under the Purchase/Placement Agreement and the Registration Rights
Agreement;
(b) The execution, delivery and performance by the Company of each of the
Purchase/Placement Agreement and the Registration Rights Agreement have been duly authorized
by all necessary corporate action of the Company and each of the Purchase/Placement
Agreement and the Registration Rights Agreement has been duly executed and delivered on
behalf of the Company;
(c) The authorized capital stock of the Company is as set forth under the caption
“Capitalization” in the Preliminary Memorandum and Final Memorandum; all of the issued and
outstanding shares of capital stock of the Company have been duly authorized and validly
issued, to our knowledge are fully paid and non-assessable, and were not issued in violation
of or subject to any preemptive right or other similar right of stockholders arising under
the Delaware General Corporation Law, or the Certificate of Incorporation or Bylaws of the
Company or, to our knowledge, under any agreement to which the Company is a party;
(d) The issuance and sale of the Shares have been duly authorized by all necessary
corporate action of the Company and, when issued in accordance with the provisions of the
Purchase/Placement Agreement against payment therefor of the consideration set forth
therein, the Shares will be validly issued, fully paid and non-assessable; the issuance,
sale and delivery of the Shares by the Company is not subject to any preemptive right,
co-sale right, registration right, right of first refusal or other similar right of
stockholders arising under the Delaware General Corporation Law, or the Certificate of
Incorporation or Bylaws of the Company or, to our knowledge, under any agreement to which
the Company is a party, other than the Registration Rights Agreement; the form of
certificate evidencing the Shares complies with the requirements of the Delaware General
Corporation Law; the Shares satisfy the requirements set forth in Rule 144A(d)(3) under the
Securities Act;
(e) The execution, delivery and performance by the Company of each of the
Purchase/Placement Agreement and the Registration Rights Agreement, the issuance, sale and
delivery of the Shares by the Company, the repurchase by the Company of (x) all outstanding
shares of preferred stock of the Company and (y) 16,031,394 outstanding shares of Common
Stock of the Company with a portion of the net proceeds received by the Company from the
sale of the Shares as described in the Final Memorandum, the consummation by the Company of
the transactions contemplated by each of the Purchase/Placement Agreement and the
Registration Rights Agreement, and compliance by the Company with the terms and provisions
thereunder, will
B-4
not (i) result in any violation of any provision of the Certificate of Incorporation or
Bylaws of the Company, (ii) result in any breach of or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would constitute a breach of,
or default under) any provision of any agreement set forth on Annex A, (iii) result
in any violation by the Company of any Applicable Law (as defined below) or (iv) result in
any violation of any judgment, order, writ or decree known to us and to which the Company is
subject, except in the case of clauses (ii), (iii) and (iv) for such
breaches, defaults or violations that would not reasonably be expected to have a Material
Adverse Effect; provided, however, that we express no opinion with respect
to federal or state securities laws or other antifraud laws under this paragraph
(e);
(f) Each of the Subsidiaries is validly existing as a legal entity and in good standing
under the laws of its jurisdiction of organization, with all requisite corporate, limited
liability or limited partnership, as the case may be, power and authority to own, lease or
operate its current property and to conduct its business as described in the Preliminary
Memorandum and Final Memorandum;
(g) The Company is duly qualified and is in good standing as a foreign corporation in
the State of Texas;
(h) All of the outstanding equity interests of Orion Marine Group, Inc., OCGP, LLC,
Orion Construction, L.P., KFMSGP, LLC, and King Xxxxxx Marine Service LC have been duly
authorized and validly issued, to our knowledge are fully paid (as required, in the case of
OCGP, LLC, by the OCGP Regulations, in the case of Orion Construction LP, by the Orion
Construction LP Agreement, in the case of KFMSGP, LLC, by the KFMSGP Regulations, and in the
case of King Xxxxxx Marine Service LP, by the King Xxxxxx XX Agreement) and non-assessable
(except as such non-assessability may be affected by the Texas Limited Liability Company
Act, as amended (the “Texas LLC Act”), or by the Texas Revised Limited Partnership Act, as
amended (the “Texas LP Act”)), and are owned by the Company or another Subsidiary free and
clear of any pledge, security interests, liens, encumbrances, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial Code of the State of
Texas naming such Subsidiary as debtor is on file in the office of the Secretary of State of
the States of Texas, or (B) otherwise known to us, without independent investigation, other
than (x) those arising under that certain Loan Agreement dated as of October 14, 2004, among
the Company and each of the financial institutions which is or may from time to time become
a party thereto and Amegy Bank National Association, a national banking association
(formerly known as Southwest Bank of Texas N.A.), as agent, as amended by First Amendment to
Loan Agreement dated as of December 3, 2004, Second Amendment to Loan Agreement dated as of
November 17, 2005 and Third Amendment to Loan Agreement dated as of March 23, 2007 (as
amended, the “Loan Agreement”), and (y) those created by or arising under the Texas LLC Act
or the Texas LP Act;
(i) Assuming (i) the accuracy of the representations and warranties of, and compliance
with agreements by, the Company and FBR set forth in the Purchase/Placement Agreement, and
(ii) that the purchasers who buy the Resale Shares in Exempt Resales are Eligible
Purchasers, (A) the sale of the Resale Shares to FBR by the Company, (B) the Exempt Resales
and (C) the sale of the Private Placement Shares to Accredited Investors by the Company, in
each case in compliance with and as contemplated under the Purchase/Placement Agreement, are
exempt from the registration requirements of the Securities Act;
(j) Assuming (x) the accuracy of the representations and warranties of, and compliance
with agreements by, the Company and FBR set forth in the Purchase/Placement
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Agreement and (y) that the purchasers who buy the Resale Shares in Exempt Resales are
Eligible Purchasers, no Governmental Approval (as defined below) is required in connection
with (i) the execution, delivery and performance by the Company of the Purchase/Placement
Agreement and the Registration Rights Agreement, (ii) the consummation by the Company of the
transactions contemplated thereby, or (iii) the issuance, sale and delivery of the Shares as
contemplated thereby, other than (A) such as have been obtained or made, (B) any necessary
Governmental Approvals under the securities or Blue Sky laws of the various jurisdictions in
which the Resale Shares are being offered by FBR or the Private Placement Shares are being
offered by the Company, as to which we do not express any opinion, (C) any with or by
federal or state securities regulatory authorities in connection with or pursuant to the
Registration Rights Agreement, including without limitation the filing of the registration
statement(s) required thereby with the Commission, and (D) the filing of a Form D with the
Commission and appropriate state regulatory agencies;
(k) The information in the Preliminary Memorandum and Final Memorandum under the
captions “Business–Government Regulations,” “Description of Capital Stock,” “Shares Eligible
For Future Sale,” “ERISA Considerations,” and “Material U.S. Federal Tax Considerations to
Non-U.S. Holders,” insofar as it purports to be summaries of the principal provisions of
documents referenced therein, matters of law or legal conclusions, has been reviewed by us
and is correct in all material respects. The description of the Registration Rights
Agreement contained in the Preliminary Memorandum and Final Memorandum, insofar as it
purports to be a summary of the principal provisions thereof, is accurate in all material
respects;
(l) Neither the Company nor any of its Subsidiaries is, nor upon the sale of the Shares
as contemplated in the Purchase/Placement Agreement and the timely application of the net
proceeds therefrom as described in the Preliminary Memorandum and Final Memorandum under the
caption “Use of Proceeds,” will be, an “investment company” (as such term is defined in the
Investment Company Act of 1940, as amended);
(m) Except as disclosed in the Preliminary Memorandum and/or Final Memorandum, there
are no persons with registration or other similar rights to have any securities registered
by the Company or any of the Subsidiaries under the Securities Act arising by operation of
Applicable Law, under the Certificate of Incorporation or Bylaws of the Company or, to our
knowledge, under any agreement to which the Company is a party or to which its property is
subject, other than pursuant to the Registration Rights Agreement; and
(n) Assuming the accuracy of the representations and warranties of the Purchasers
contained in the Subscription Agreements, the Company is not, nor upon the sale of the
Shares as contemplated in the Purchase/Placement Agreement will be, in violation of the
foreign ownership restrictions contemplated by the Foreign Dredge Act of 1906, 46 U.S.C.
section 55109, as amended, the Merchant Marine Act of 1920, 46 U.S.C. section 55101, et
seq., as amended, or the U.S. vessel documentation laws set forth in 46 U.S.C. section
12101, et seq., as amended.
II. The opinions set forth above are subject in all respects to the following:
1. In rendering the opinions expressed in paragraphs (a), (f) and
(g) above with respect to the good standing and foreign qualification of the Company
and the Subsidiaries, we have relied solely on certificates of public officials, which
certificates are being delivered to you on the date hereof.
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2. In rendering the opinions expressed in paragraphs (c) and (h) above
to the effect that securities are fully paid, we have relied upon a certificate of an
officer of the Company with respect to the full payment of consideration by the stockholders
for the issued and outstanding capital stock of the Company and by the Company or another
Subsidiary for the equity interests in the applicable Subsidiaries.
3. In rendering the opinion expressed in paragraph (e) above concerning the
absence of a breach of contract, we have made no examination of, and express no opinion with
respect to, any financial, accounting or similar covenant or provision contained in any
agreement or instrument set forth on Annex A.
4. The opinions expressed herein are limited to matters arising under the laws of the
State of Texas, the Delaware General Corporation Law and the federal laws of the United
States of America, in each case as currently in effect (the “Applicable Law”).
“Governmental Approval” means any consent, approval, license, authorization or validation
of, or filing, recording or registration with, any Governmental Authority pursuant to any
Applicable Law. “Governmental Authority” means any United States federal or State of Texas
governmental body or authority. We express no opinion herein as to any laws other than the
Applicable Law (subject to the limitations set forth below), and we express no opinion with
respect to the application or effect of any other laws.
5. To the extent that any opinion herein relates to compliance with law (including
Applicable Law) or Governmental Approvals, our opinion is limited to laws, rules and
regulations which in our experience are normally applicable to transactions of the type
provided for in the Purchase/Placement Agreement and does not include, and we express no
opinion with regard to, and the term “Applicable Law” shall not include, (a) antitrust or
trade regulation laws, (b) tax laws, rules and regulations, (c) environmental, laws, rules
and regulations, (d) zoning, land use and other laws, rules and regulations of local
jurisdictions, (e) labor, employee rights and benefits, including the Employment Retirement
Security Act of 1974, as amended, (f) SBIA Laws, or (g) state or federal securities laws
(except to the limited extent stated in paragraphs (i) and (j) above).
We express no opinion as to any matter other than as expressly set forth above, and no opinion
on any other matter may be inferred or implied herefrom. The opinions expressed herein are given
as of the date hereof, and we undertake no, and hereby disclaim any, obligation to advise you of
any change in any matter set forth herein.
We are furnishing this opinion letter to you solely for your benefit in connection with the
purchase by you as initial purchaser and the placement by you as Placement Agent of the Shares
pursuant to the Purchase/Placement Agreement. This opinion letter may not be relied upon by any
other person or for any other purpose or circulated, quoted or otherwise referred to without our
prior written consent.
Very truly yours,
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ANNEX A
1. Loan Agreement.
2. General Agreement of Indemnity dated October 29, 2004 entered into by the Company, Orion Marine
Group, Inc., Orion Construction, L.P., King Xxxxxx Marine Service LP, Xxxxxxx Marine Construction,
Inc., OCGP, LLC, OCLP, LLC, KFMSGP, LLC and KFMSLP, LLC in favor of Liberty Mutual Insurance
Company on behalf of itself and any other company that is part of or added to the Liberty Mutual
Group, severally not jointly, and for which Liberty Mutual Surety underwrites surety business.
3. General Agreement of Indemnity entered into by the Company, ERCON Corporation, Xxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxxx and Xxxxx Xxxxxx in favor of Liberty Mutual Insurance Company on behalf of itself
and any other company that is part of or added to the Liberty Mutual Group, severally not jointly,
and for which Liberty Mutual Surety underwrites surety business.
B-8
EXHIBIT C
DESCRIPTION OF MATTERS TO BE OPINED TO BY XXXXXX & XXXXXX L.L.P.
PURSUANT TO SECTION 6(c)(ii)
PURSUANT TO SECTION 6(c)(ii)
The opinion to be delivered to the Company pursuant to Section 6(c)(ii) will opine favorably
as to the following matters under applicable U.S. maritime law:
(i) that the U.S. citizen stockholder reference party to a naked total return swap should not
be deemed a non-U.S. citizen with respect to the Company’s stock, and
(ii) that the Company’s stock held of record by a U.S. citizen stockholder party to a naked
total return swap should not be deemed to be held by a non-U.S. citizen counterparty.
For purposes of the opinion, a naked total return swap is a total return swap, with the
following general parameters:
(i) the reference assets of the swap are a fixed number of Shares (the “Reference Shares”);
(ii) the contract does not contain any provisions requiring the reference party to own the
Reference Shares or to retain ownership of the Reference Shares;
(iii) the contract does not contain any requirement for delivery of the Reference Shares at
the end of the swap period (or at any other time);
(iv) the contract does not subject the Reference Shares to any trust or fiduciary obligations
in favor of the counter party; and
(v) the counter party cannot exercise any voting power control, directly or indirectly,
through any contract or otherwise, over the Reference Shares.
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EXHIBIT D
FORM OF LOCK-UP AGREEMENT
[n], 2007
Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
0000 Xxxxxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
The undersigned understands and agrees as follows:
1. Friedman, Billings, Xxxxxx & Co., Inc. (“FBR”) proposes to enter into a
Purchase/Placement Agreement (the “Agreement”) with Orion Marine Group, Inc., a Delaware
corporation (the “Company”), providing for (a) the initial purchase by FBR of shares of the
Company’s common stock, $0.01 par value per share, and the resale of such shares by FBR to certain
eligible purchasers, (b) the direct sale by the Company of shares of its common stock to certain
accredited investors, and (c) an option for FBR to purchase or place additional shares of the
Company’s common stock either for resale by FBR to certain eligible purchasers or for direct sale
by the Company to certain accredited investors (all of such shares of the Company’s common stock
are collectively referred to as the “Shares” and the transactions referred to in (a), (b)
and (c) above are collectively referred to as the “Offering”), in each case, in
transactions exempt from the registration requirements of the Securities Act of 1933, as amended
(the “Securities Act”). This lock-up letter agreement (the “Lock-up Agreement”) is
being delivered to you in connection with the Offering and shall become effective only upon
consummation of the Offering.
2. In connection with the Offering and pursuant to the terms of a registration rights
agreement to be entered into in connection with the closing of the Offering, the Company has agreed
to file with the Securities and Exchange Commission a registration statement providing for the
resale of the Shares under the Securities Act (the “Resale Registration Statement”).
3. In order to induce FBR to act as the initial purchaser and placement agent in connection
with the Offering and in recognition of the benefit that the Offering will confer upon the
undersigned and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by the undersigned, the undersigned hereby agrees that, without the prior
written consent of FBR (which consent may be withheld or delayed in FBR’s sole discretion), he, she
or it will refrain for a period (a) beginning on the date of the Agreement and ending (and
including) the date that is 180 days after the date of the closing of the Offering, (b) from the
date the Resale Registration Statement that is filed pursuant to the registration rights agreement
is declared effective and ending (and including) the date that is 180 days after the effective date
of the Resale Registration Statement, and (c) from the date any registration statement relating to
an initial public offering of our common stock is declared effective and ending (and including) the
date that is 180 days thereafter (each a “Lock-up Period”), except as otherwise provided
herein, from (i) offering, pledging, selling, contracting to sell, selling any
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option or contract to purchase, purchasing any option or contract to sell, granting any
option, right or warrant for the sale of, lending or otherwise disposing of or transferring,
directly or indirectly, any equity securities of the Company, or any securities convertible into or
exercisable or exchangeable for equity securities of the Company, or (ii) entering into any swap or
other arrangement that transfers to another, in whole or in part, directly or indirectly, any of
the economic consequences of ownership of any equity securities of the Company, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery of shares of the
common stock of the Company or such other securities, in cash or otherwise.
Notwithstanding the foregoing, subject to applicable securities laws and the restrictions
contained in the Company’s charter, the undersigned may transfer any securities of the Company
(including, without limitation, common stock) as follows: (i) pursuant to the exercise and issuance
of options; (ii) as a bona fide gift or gifts, provided that the donee or donees thereof agree in
writing to be bound by the restrictions set forth herein; (iii) to any trust for the direct or
indirect benefit of the undersigned or the immediate family of the undersigned, provided that the
trustee of the trust agrees in writing to be bound by the restrictions set forth herein; (iv) as a
distribution to the beneficial owners of the undersigned, provided that such beneficial owners
agree in writing to be bound by the restrictions set forth herein; (v) as required under any of the
Company’s benefit plans; (vi) as required by participants in the Company’s benefit plans to
reimburse or pay U.S. federal income tax and withholding obligations in connection with the vesting
of restricted common stock grants; (vii) as collateral for any bona fide loan, provided that the
lender agrees in writing to be bound by the restrictions set forth herein; (viii) with respect to
sales of securities acquired after the initial closing of the Offering in the open market; (ix) to
third parties as consideration for acquisitions, provided that such third parties agree in writing
to be bound by the restrictions set forth herein; (x) in connection with awards under the Company’s
benefit plans; (xi) pursuant to an initial public offering of the Company’s common stock; and (xii)
to other executive officers and directors and shareholders of the Company. For purposes of this
agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more
remote than first cousin.
For the avoidance of doubt, nothing shall prevent the undersigned from, or restrict the
ability of the undersigned to, (i) purchase the Company’s common stock on the open market or (ii)
exercise any options or other convertible securities granted under any benefit plan of the Company.
4. The undersigned hereby authorizes the Company during any Lock-up Period to cause any
transfer agent for the securities covered by this Lock-up Agreement (the “Relevant
Securities”) to decline to transfer, and to note stop transfer restrictions on the stock
register and other records relating to, Relevant Securities for which the undersigned is the record
holder and, in the case of Relevant Securities for which the undersigned is the beneficial but not
the record holder, agrees during any Lock-up Period to cause the record holder to cause the
relevant transfer agent to decline to transfer, and to note stop transfer restrictions on the stock
register and other records relating to, such Relevant Securities. The undersigned hereby further
agrees that, without the prior written consent of FBR, during any Lock-up Period the undersigned
(x) will not file or participate in the filing with the Securities and Exchange Commission of any
registration statement, or circulate or participate in the circulation of any preliminary or final
prospectus or other disclosure document with respect to any proposed offering or sale of a Relevant
Security
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and (y) will not exercise any rights the undersigned may have to require registration with the
Securities and Exchange Commission of any proposed offering or sale of a Relevant Security.
5. The undersigned acknowledges that FBR is relying on the agreements of the undersigned set
forth herein in making its decision to enter into the Agreement and to continue its efforts in
connection with the Offering.
6. This Lock-up Agreement shall be governed by and construed in accordance with the laws of
the State of New York without regard to principles of conflict of laws.
7. This Lock-up Agreement may be executed in one or more counterparts and delivered by
facsimile, each of which shall be deemed to be an original but all of which shall constitute one
and the same agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Lock-up Agreement and that this Lock-up Agreement constitutes the
legal, valid and binding obligation of the undersigned, enforceable in accordance with its terms.
Upon request, the undersigned will execute any additional documents reasonably necessary in
connection with enforcement hereof. Any obligations of the undersigned shall be binding upon the
successors and assigns of the undersigned from the date first above written.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned has executed this Lock-up Agreement, or caused this
Lock-up Agreement to be executed, as of the date first written above.
| Very truly yours, | ||||
| Title: | ||||
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