EXHIBIT 1.1
5,000,000 SHARES
VOCUS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED DECEMBER __, 2005
TABLE OF CONTENTS
PAGE
1. Representations and Warranties of the Company and Certain of the Selling Stockholders........................2
1.1 Effective Registration Statement....................................................................2
1.2 Contents of Registration Statement..................................................................3
1.3 Due Incorporation...................................................................................4
1.4 Subsidiaries........................................................................................4
1.5 Underwriting Agreement..............................................................................4
1.6 Description of Capital Stock........................................................................4
1.7 Outstanding Securities..............................................................................5
1.8 Validly Issued Shares...............................................................................5
1.9 Nasdaq; Exchange Act Registration...................................................................5
1.10 No Conflict.........................................................................................5
1.11 No Material Adverse Effect..........................................................................5
1.12 Legal Proceedings; Statutes and Regulations.........................................................5
1.13 Contracts...........................................................................................6
1.14 Related Party Transactions..........................................................................6
1.15 Compliance with Securities Act......................................................................6
1.16 Not an Investment Company...........................................................................6
1.17 No Violation........................................................................................6
1.18 Compliance with Environmental Laws..................................................................6
1.19 No Environmental Costs..............................................................................7
1.20 No Registration Rights..............................................................................7
1.21 Absence of Material Charges.........................................................................7
1.22 Good Title to Properties............................................................................7
1.23 Intellectual Property Rights........................................................................7
1.24 No Labor Disputes...................................................................................8
1.25 Insurance...........................................................................................8
1.26 No Price Stabilization or Manipulation..............................................................8
1.27 Governmental Permits................................................................................8
1.28 Financial Statements................................................................................8
1.29 Contributions, Gifts and Other Payments.............................................................9
1.30 Audit Committee.....................................................................................9
1.31 Controls and Procedures.............................................................................9
1.32 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act..................................................................................9
1.33 Auditor Independence................................................................................9
1.34 Taxes..............................................................................................10
1.35 Brokers Fees.......................................................................................10
1.36 Directed Share Program.............................................................................10
1.37 Books and Records..................................................................................10
1.38 Company Not Ineligible Issuer......................................................................10
1.39 Permitted Free Writing Prospectuses................................................................11
1.40 No Issuer Free Writing Prospectuses................................................................11
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TABLE OF CONTENTS
(CONTINUED)
PAGE
2. Representations and Warranties of the Selling Stockholders..................................................11
2.1 Due Authorization..................................................................................11
2.2 Selling Stockholder Documents......................................................................11
2.3 No Conflict........................................................................................11
2.4 Validly Issued Shares..............................................................................12
2.5 Good Title to Shares...............................................................................12
2.6 Delivery of Common Shares..........................................................................12
2.7 No Registration Rights.............................................................................12
2.8 No Price Stabilization or Manipulation.............................................................12
2.9 No Free Writing Prospectuses.......................................................................12
2.10 Disclosure Made by Selling Stockholders............................................................12
3. Purchase and Sale Agreements................................................................................13
3.1 Firm Shares........................................................................................13
3.2 Additional Shares..................................................................................13
3.3 Market Standoff Provision..........................................................................13
3.4 Terms of Public Offering...........................................................................14
4. Payment and Delivery........................................................................................14
4.1 Firm Shares........................................................................................14
4.2 Additional Shares..................................................................................14
4.3 Delivery of Certificates...........................................................................14
5. Covenants of the Company....................................................................................14
5.1 Furnish Copies of Registration Statement and Prospectus............................................15
5.2 Notification of Amendments or Supplements..........................................................15
5.3 Filings of Amendments or Supplements...............................................................15
5.4 Blue Sky Laws......................................................................................15
5.5 Earnings Statement.................................................................................16
5.6 Use of Proceeds....................................................................................16
5.7 Transfer Agent.....................................................................................16
5.8 Reporting Obligations; Exchange Act Compliance.....................................................16
5.9 Public Communications..............................................................................16
5.10 Directed Share Program.............................................................................16
6. Conditions to the Underwriters' Obligations.................................................................16
6.1 Effective Registration Statement...................................................................16
6.2 Rule 462(b) Registration Statement.................................................................16
6.3 Representations and Warranties.....................................................................17
6.4 Prospectus Filed with Commission...................................................................17
6.5 No Stop Order......................................................................................17
6.6 Nasdaq.............................................................................................17
6.7 No NASD Objection..................................................................................17
6.8 No Material Adverse Effect.........................................................................17
6.9 Officer's Certificate..............................................................................17
6.10 Opinion of Company Counsel.........................................................................18
6.11 Opinion of Selling Stockholders Counsel............................................................18
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TABLE OF CONTENTS
(CONTINUED)
PAGE
6.12 Opinion of Underwriters Counsel....................................................................18
6.13 Accountant's Comfort Letter........................................................................18
6.14 Lock-Up Agreements.................................................................................18
6.15 Selling Stockholders Certificate...................................................................18
6.16 Selling Stockholder Documents......................................................................18
6.17 Additional Documents...............................................................................18
6.18 Legal Matters......................................................................................19
7. Expenses....................................................................................................19
8. Indemnity and Contribution..................................................................................20
8.1 Indemnification of the Underwriters................................................................20
8.2 Indemnification of Company by the Selling Stockholders.............................................20
8.3 Indemnification of Underwriters by Selling Stockholders............................................20
8.4 Indemnification by the Underwriters................................................................21
8.5 Indemnification Procedures.........................................................................21
8.6 Limitation of Selling Stockholder Liability........................................................22
8.7 Indemnification for Directed Share Program.........................................................22
8.8 Contribution Agreement.............................................................................23
8.9 Contribution Amounts...............................................................................23
8.10 Survival of Provisions.............................................................................23
9. Effectiveness...............................................................................................24
10. Termination.................................................................................................24
11. Defaulting Underwriters.....................................................................................24
12. Counterparts................................................................................................25
13. Headings; Table of Contents.................................................................................25
14. Notices.....................................................................................................25
15. Successors..................................................................................................26
16. Partial Unenforceability....................................................................................26
17. Governing Law...............................................................................................26
18. Consent to Jurisdiction.....................................................................................26
19. Failure of the Selling Stockholders to Sell and Deliver Shares..............................................26
20. Entire Agreement............................................................................................27
21. Amendments..................................................................................................27
22. Sophisticated Parties.......................................................................................27
Schedules
A List of Underwriters
B List of Selling Stockholders
C List of Issuer Free Writing Prospectus
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TABLE OF CONTENTS
(CONTINUED)
PAGE
D List of Company Selling Stockholders
E List of Investor Selling Stockholders
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Exhibits
A Form of Legal Opinion of Company Counsel
B Form of Legal Opinion of Selling Stockholders Counsel
C Form of Lock-Up Agreement
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December __, 2005
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
RBC Capital Markets Corporation
Wachovia Capital Markets, LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
As Representatives of the several Underwriters
c/o Thomas ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Introduction.
Vocus, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several underwriters named in Schedule A
hereto (the "UNDERWRITERS"), an aggregate of 5,000,000 shares of the common
stock, $0.01 par value per share, of the Company (the "FIRM SHARES").
Certain stockholders of the Company (the "SELLING STOCKHOLDERS") named in
Schedule B hereto severally propose to sell to the several Underwriters an
aggregate of 750,000 shares of its common stock, $0.01 par value per share (the
"ADDITIONAL SHARES"), with each Selling Stockholder selling the number of shares
set forth opposite such Selling Stockholder's name in Schedule B hereto, if and
to the extent that you shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES". The shares of common
stock, $0.01 par value per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"COMMON STOCK". The Company and the Selling Stockholders are hereinafter
sometimes collectively referred to as the "SELLERS". ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC,
RBC Capital Markets Corporation, Wachovia Capital Markets, LLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇
& Company, L.L.C. have agreed to act as representatives of the several
Underwriters (in such capacity, the "REPRESENTATIVES") in connection with the
offering and sale of the Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION"), in accordance with the provisions of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the applicable
rules and regulations thereunder, a registration statement on Form S-1 (file no.
333-125834), including a prospectus, relating to the Shares. The term
"REGISTRATION STATEMENT" as used herein means the registration statement
(including all financial schedules and exhibits) as amended at the time it
becomes effective or, if the registration statement became effective prior to
the execution of this Agreement, as supplemented or amended prior to the
execution of this Agreement and includes information (if any) contained in the
final prospectus filed with the Commission pursuant to Rule 424(b) of the rules
under the Securities Act and deemed to be part thereof at the time of
effectiveness pursuant to Rule 430A of the rules under the Securities Act. If it
is contemplated, at the time this Agreement is executed, that a post-effective
amendment to the Registration Statement will be filed and must be declared
effective before the offering of the Shares may commence, the term "REGISTRATION
STATEMENT" as used herein shall mean the Registration
Statement as amended by such post-effective amendment. If the Company has filed
or files on or after the date of this Agreement a registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462(b) REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule
462(b) Registration Statement. Any preliminary prospectus included in the
Registration Statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Securities Act is
hereinafter called a "PRELIMINARY PROSPECTUS". The term "STATUTORY PROSPECTUS"
shall mean any Preliminary Prospectus, as amended or supplemented, relating to
the Shares that is included in the Registration Statement immediately prior to
the Initial Sale Time (as defined herein), including any document incorporated
by reference therein. The term "PROSPECTUS" shall mean the final prospectus
relating to the Shares that is first filed pursuant to Rule 424(b) after the
effective date of the Registration Statement (the "EFFECTIVE DATE") or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Shares included in the Registration Statement at the
Effective Date. The term "ISSUER FREE WRITING PROSPECTUS" shall have the meaning
ascribed to it in Rule 433 under the Securities Act relating to the Shares, in
the form filed or required to be filed with the Commission or, if not required
to be filed, in the form retained in the Company's record pursuant to Rule
433(g) under the Securities Act. The term "DISCLOSURE PACKAGE" shall mean (i)
the Statutory Prospectus, (ii) the Issuer Free Writing Prospectus, if any,
identified in Schedule C hereto and (iii) any other free writing prospectus
defined in Rule 405 of the Securities Act that are required to be filed by the
Company with the Commission or retained by the Company under Rule 433 of the
Securities Act and that the parties hereto expressly agree to treat as part of
the Disclosure Package (the "OTHER FREE WRITING PROSPECTUS"). For purposes of
this Agreement, the "INITIAL SALE TIME" shall mean 5:00 p.m. (Eastern time) on
the date of this Agreement. All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a Preliminary Prospectus, the
Statutory Prospectus, the Prospectus, the Issuer Free Writing Prospectus, the
Other Free Writing Prospectus or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System ("▇▇▇▇▇").
As part of the offering contemplated by this Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Partners LLC has agreed to reserve out of the Shares set forth opposite its name
on Schedule A to this Agreement, up to 250,000 Shares, for sale to parties
designated by the Company (collectively, "PARTICIPANTS"), as set forth in the
Registration Statement, the Statutory Prospectus and the Prospectus under the
heading "UNDERWRITING" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold by
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC pursuant to the Directed Share Program (the "DIRECTED
SHARES") will be sold by ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC pursuant to this Agreement
at the public offering price. Any Directed Shares not orally confirmed for
purchase by any Participants by the end of the first business day after the date
on which this Agreement is executed will be offered to the public by ▇▇▇▇▇▇
▇▇▇▇▇▇ Partners LLC as set forth in the Registration Statement, the Statutory
Prospectus and the Prospectus.
1. Representations and Warranties of the Company and Certain of the
Selling Stockholders. The Company and each of the Selling Stockholders listed on
Schedule D (the "COMPANY SELLING STOCKHOLDERS") jointly and severally represent
and warrant to and agree with each of the Underwriters that:
1.1 Effective Registration Statement. Based on advice from the
Commission, the Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of the
Company, threatened by the Commission.
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1.2 Contents of Registration Statement
(A). (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement, the Statutory Prospectus and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, and (iii) the Statutory Prospectus and
the Prospectus do not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement, the Statutory Prospectus
or the Prospectus based upon information relating to any Underwriter set forth
in the section of the Registration Statement, the Statutory Prospectus or the
Prospectus captioned "Underwriting" that was furnished to the Company in writing
by such Underwriter through you expressly for use therein and (iv) the
statistical and market-related data included in the Registration Statement,
Statutory Prospectus and the Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate. With respect to the
exception set forth at clause (iii) the Company acknowledges that the only
information furnished in writing by the Underwriters for use in the Registration
Statement or the Prospectus is the statements specifically relating to (a) the
aggregate number of Firm Shares that the Underwriters have severally agreed to
purchase contained in the first paragraph under the section captioned
"Underwriting" in the Registration Statement and the Prospectus, (b) the
concession and reallowance figures contained in the paragraph captioned
"Commissions and Discounts" under the section caption "Underwriting" in the
Registration Statement and the Prospectus, and (c) stabilizing and passive
market making activities under the paragraph captioned "Short Sales, Stabilizing
Transactions and Penalty Bids" under the section captioned "Underwriting" in the
Registration Statement and the Prospectus.
(B). As of the Initial Sale Time, the Disclosure Package did not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The preceding sentence does not
apply to statements in or omissions from the Disclosure Package based upon and
in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by and
Underwriter consists of the information described as such in Section 1.2(A)
hereof. No statement of material fact included in the Prospectus has been
omitted from the Disclosure Package available at the Initial Sale Time and no
statement of material fact included in the Disclosure Package available at the
Initial Sale Time that is required to be included in the Prospectus has been
omitted therefrom.
(C). Each Issuer Free Writing Prospectus, as of its issue date and
at all subsequent times through the completion of the public offer and sale of
the Shares or until any earlier date of which the Company notified or notifies
the Representatives as described in the next sentence, did not, does not and
will not include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement, including any
document incorporated by reference therein that has not been superseded or
modified. If at any time following issuance of an Issuer Free Writing
Prospectus, there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus conflicted or would conflict with the
information then contained in the Registration Statement or included or would
include an untrue statement of a material fact or omitted or would omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances prevailing at that
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subsequent time, not misleading, (i) the Company has promptly notified or will
promptly notify the Representatives and (ii) the Company has promptly amended or
will promptly amend or supplement such Issuer Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or omission. The foregoing
sentences do not apply to statements in or omissions from any Issuer Free
Writing Prospectus based upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in Section 1.2(A) hereof.
1.3 Due Incorporation. The Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property and to
conduct its business as described in the Registration Statement, the Disclosure
Package and the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing individually
or in the aggregate, would not have a material adverse effect on the condition
(financial or otherwise), results of operations, stockholders' equity,
properties, business or prospects of the Company and its subsidiaries, taken as
a whole (a "MATERIAL ADVERSE EFFECT").
1.4 Subsidiaries. Each subsidiary of the Company has been duly
incorporated or organized, is validly existing as a corporation or other legal
entity in good standing (or the foreign equivalent thereof) under the laws of
the jurisdiction of its incorporation or organization, has the power and
authority to own, lease and operate its property and to conduct its business as
described in the Registration Statement, the Disclosure Package and the
Prospectus and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership, leasing
or operation of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not result in a
Material Adverse Effect. All of the issued shares of capital stock or other
equity interests of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly
by the Company or through its wholly-owned subsidiaries, free and clear of all
liens, encumbrances, equities or claims. There is no outstanding option, right
or agreement of any kind relating to the issuance, sale or transfer of any
capital stock or other equity securities of the subsidiaries to any person or
entity except the Company, and none of the outstanding shares of capital stock
or other equity interests of any subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such subsidiary. Except
for its subsidiaries, the Company owns no beneficial interest, directly or
indirectly, in any corporation, partnership, joint venture or other business
entity.
1.5
Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Company, and is a valid and binding agreement of
the Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
1.6 Description of Capital Stock. The authorized capital stock of
the Company conforms as to legal matters to the description thereof contained in
the Registration Statement, the Disclosure Package and the Prospectus, and as of
the date thereof, the Company had authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Registration Statement, the
Statutory Prospectus and the Prospectus.
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1.7 Outstanding Securities. The shares of Common Stock (including
the Shares to be sold by the Selling Stockholders) outstanding prior to the
issuance of the Shares to be sold by the Company have been duly authorized and
are validly issued, fully paid and nonassessable. The shares of Common Stock
outstanding prior to the issuance of the Shares to be sold by the Company are
not subject to preemptive or similar rights to subscribe for or to purchase or
acquire any shares of Common Stock of the Company or any of its subsidiaries or
any such rights pursuant to its certificate of incorporation or bylaws (each, as
amended) or any agreement or instrument to or by which the Company or any of its
subsidiaries is a party or bound. Except as disclosed in the Registration
Statement, the Statutory Prospectus and the Prospectus, the Company has not sold
or issued any securities during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or
S of, the Securities Act, other than shares issued pursuant to employee benefit
plans, qualified stock option plans or other employee compensation plans or
pursuant to outstanding options, rights or warrants described in the
Registration Statement, the Statutory Prospectus and the Prospectus.
1.8 Validly Issued Shares. The Shares to be sold by the Company have
been duly authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and nonassessable, and the
issuance of such Shares will not be subject to any preemptive or similar rights
to subscribe for or to purchase or acquire any shares of Common Stock of the
Company or any of its subsidiaries or any such rights pursuant to its
certificate of incorporation or bylaws or any agreement or instrument to or by
which the Company or any of its subsidiaries is a party or bound.
1.9 Nasdaq; Exchange Act Registration. The Shares have been duly
authorized for quotation on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") National Market System, subject to official
notice of issuance. A registration statement has been filed on Form 8-A pursuant
to Section 12 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), which complies in all material respects with the Exchange Act. The
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or the
quotation of the Common Stock on the Nasdaq National Market System, nor has the
Company received any notification that the Commission or the Nasdaq National
Market is contemplating terminating such registration or quotation.
1.10 No Conflict. The execution and delivery by the Company of, and
the performance by the Company of its obligations under, this Agreement will not
contravene any provision of applicable law or the certificate of incorporation
or bylaws (each, as amended) of the Company or (with or without notice or lapse
of time or both) any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Shares.
1.11 No Material Adverse Effect. There has not occurred any Material
Adverse Effect, or any development involving a prospective Material Adverse
Effect, from that set forth in each of the Disclosure Package and the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement).
1.12 Legal Proceedings; Statutes and Regulations. There are no legal
or governmental proceedings pending or, to the knowledge of the Company,
threatened to which the Company or any of its
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subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject that are required to be described in the
Registration Statement, the Statutory Prospectus or the Prospectus and are not
so described or any statutes or regulations that are required to be described in
the Registration Statement, the Statutory Prospectus or the Prospectus and are
not described as required.
1.13 Contracts. There are no contracts or other documents that are
required to be described in the Registration Statement, the Statutory Prospectus
and Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or the applicable rules and regulations thereunder that have not
been described in the Registration Statement, the Statutory Prospectus and the
Prospectus or filed as exhibits to the Registration Statement.
1.14 Related Party Transactions. No relationship, direct or
indirect, exists between or among the Company, on the one hand, and the
directors, officers, stockholders, customers or suppliers of the Company, on the
other hand, which is required to be described in the Registration Statement, the
Statutory Prospectus and the Prospectus and which is not so described. There are
no outstanding loans, advances or guarantees of indebtedness by the Company to
or for the benefit of any of the officers or directors of the Company or any of
their respective family members, except as disclosed in the Registration
Statement, the Statutory Prospectus and the Prospectus.
1.15 Compliance with Securities Act. Each Preliminary Prospectus
filed as part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
1.16 Not an Investment Company. The Company is not and, after giving
effect to the offering and sale of the Shares and the application of the
proceeds thereof as described in the Registration Statement, the Disclosure
Package and the Prospectus, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
1.17 No Violation. The Company is not in violation of its
certificate of incorporation or bylaws (each, as amended), and is not in
default, nor any event has occurred which with notice or lapse of time or both
would constitute a default, in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound, or
any license, permit, judgment, decree, order, statute, rule or regulation to
which it or any of its properties or its business, or a subsidiary or its
properties or business, may be subject, which would result in a Material Adverse
Effect.
1.18 Compliance with Environmental Laws. The Company and its
subsidiaries (i) are in compliance with any and all applicable foreign, federal,
state and local laws, orders, rules, regulations, directives, decrees and
judgments relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, individually or in the aggregate, result in a
Material Adverse Effect.
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1.19 No Environmental Costs. There are no costs or liabilities
associated with Environmental Laws (including, without limitation, any capital
or operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties) which would, individually or in the aggregate, result in a
Material Adverse Effect.
1.20 No Registration Rights. There are no contracts, agreements or
understandings between the Company and any person or entity granting such person
or entity the right, contractually or otherwise, to require the Company to file
a registration statement under the Securities Act with respect to any securities
of the Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement other than as described
in the Registration Statement, the Statutory Prospectus and the Prospectus or as
have been waived in writing in connection with the offering contemplated hereby.
1.21 Absence of Material Charges. Subsequent to the respective dates
as of which information is given in the Registration Statement, the Statutory
Prospectus and the Prospectus, (i) the Company and its subsidiaries have not
incurred any material liability or obligation, direct or contingent, nor entered
into any material transaction not in the ordinary course of business; (ii)
except as disclosed in the Registration Statement, the Statutory Prospectus and
the Prospectus, neither the Company nor its subsidiaries has purchased any of
the Company's outstanding capital stock, nor declared, paid or otherwise made
any dividend or distribution of any kind on the Company's capital stock; and
(iii) there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company and its subsidiaries, except in each case
as described in the Registration Statement, the Statutory Prospectus and the
Prospectus.
1.22 Good Title to Properties. The Company and its subsidiaries do
not own any real property. The Company and its subsidiaries have good and valid
title to all personal property owned by them which is material to the business
of the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Registration
Statement, Statutory Prospectus and the Prospectus or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries.
1.23 Intellectual Property Rights. The Company and its subsidiaries
own or possess, or can acquire on commercially reasonable terms, legally
enforceable rights to use all trademarks, service marks, trade names, domain
names, copyrights, patents, patent rights, inventions, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), and other intellectual property rights
(collectively, the "INTELLECTUAL PROPERTY") as are necessary for the conduct of
its or their respective businesses as described in the Registration Statement,
the Statutory Prospectus and the Prospectus, except where failure to own,
possess or acquire such rights would not result in a Material Adverse Effect.
Except as described in the Registration Statement, Statutory Prospectus and the
Prospectus, (i) to the knowledge of the Company, there is no infringement,
misappropriation or violation by third parties of any such Intellectual
Property; (ii) there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others challenging the Company's
or any of its subsidiaries' rights in or to any such Intellectual Property;
(iii) the Intellectual Property owned by the Company and its subsidiaries and to
the knowledge of the Company, the Intellectual Property licensed to the Company
and its subsidiaries has not been adjudged invalid or unenforceable, in whole or
in part, and there is no pending or threatened action,
-7-
suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property; (iv) there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others against the
Company or any of its subsidiaries that the Company or any of its subsidiaries
infringes, misappropriates or otherwise violates any Intellectual Property or
other proprietary rights of others, and neither the Company nor any of its
subsidiaries has received any written notice of such claim; and (v) to the
Company's knowledge, no employee of the Company or any of its subsidiaries is
the subject of any claim or proceeding involving a violation of any term of any
employment contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement, nondisclosure
agreement or any restrictive covenant to or with a former employer where the
basis of such violation relates to such employee's employment with the Company
or any of the Company's subsidiaries or actions undertaken by the employee while
employed with the Company or any of the Company's subsidiaries, except, in each
case, for any instances which would not, individually or in the aggregate,
result in a Material Adverse Effect.
1.24 No Labor Disputes. No material labor dispute with the employees
of the Company or any of its subsidiaries exists, or, to the knowledge of the
Company, is imminent; and the Company is not aware of any existing, threatened
or imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could have a Material Adverse
Effect.
1.25 Insurance. The Company and its subsidiaries are insured by the
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; and neither the Company nor any of its subsidiaries has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
have a Material Adverse Effect.
1.26 No Price Stabilization or Manipulation. The Company has not
taken, directly or indirectly, any action designed to or that could reasonably
be expected to cause or result in any stabilization or manipulation of the price
of the Shares.
1.27 Governmental Permits. The Company and its subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
business, except where the failure to possess such certificate, authorization or
permit would not, individually or in the aggregate, have a Material Adverse
Effect. Neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, individually or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
1.28 Financial Statements. The financial statements of the Company
and its subsidiaries and the financial statements of Gnossos Software, Inc.
included in the Registration Statement, the Statutory Prospectus and the
Prospectus, together with related schedules and notes, comply as to form in all
material respects with the requirements of Regulation S-X under the Securities
Act and present fairly in all material respects the financial position of the
Company and the Company's consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the Company
and the Company's consolidated subsidiaries for the periods specified; and such
financial statements and related schedules and notes thereto, and the unaudited
financial information filed with the Commission as part of the Registration
Statement, the Statutory Prospectus and the Prospectus, have been prepared in
conformity with generally accepted accounting principles, consistently applied
throughout the periods involved. The summary and selected financial data
included in the Registration Statement, the Statutory Prospectus and the
Prospectus
-8-
present fairly in all material respects the information shown therein as at the
respective dates and for the respective periods specified and have been
presented on a basis consistent with the consolidated financial statements set
forth in the Registration Statement, the Statutory Prospectus and the Prospectus
and other financial information.
1.29 Contributions, Gifts and Other Payments. Neither the Company,
its subsidiaries, nor any other person associated with or acting on behalf of
the Company or its subsidiaries, including without limitation any director,
officer, agent or employee of the Company or its subsidiaries has, directly or
indirectly, while acting on behalf of the Company or its subsidiaries (i) used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds, (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended or (iv) made
any other unlawful payment.
1.30 Audit Committee. The Company's board of directors has validly
appointed an audit committee whose composition satisfies the requirements of the
Exchange Act, the rules and regulations of the Commission adopted thereunder and
Rules 4200 and 4350 of the rules of the National Association of Securities
Dealers (the "NASD"). The Company's audit committee has adopted a charter that
satisfies the Exchange Act, the rules and regulations of the Commission adopted
thereunder and Rules 4200 and 4350 of the NASD Rules.
1.31 Controls and Procedures. The Company and each of its
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 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.
Management of the Company is currently designing, refining and documenting
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and
15d-15) for the Company that are being designed to ensure that (i) information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission's rules and forms and (ii)
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is accumulated and communicated to the
Company's management, including its principal executive and principal financial
officers, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure. It is the Company's management's
intention to become fully compliant in all respects with all applicable laws,
and related rules and regulations of the Commission, regarding disclosure
controls and procedures on or before the date on which such laws, rules or
regulations become applicable to the Company
1.32 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company is in compliance with all
currently effective provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules
and regulations promulgated thereunder (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT") that are
applicable, or will be applicable as of the date of payment for and delivery of
the Firm Shares pursuant hereto, to the Company.
1.33 Auditor Independence. Ernst & Young LLP, which has expressed
its opinion with respect to the financial statements and schedules filed as a
part of the Registration Statement and included in the Registration Statement,
the Statutory Prospectus and the Prospectus, is and, during the periods covered
by
-9-
their reports, was an independent public accounting firm within the meaning of
Article 2-01 of Regulation S-X under the Securities Act and the rules and
regulations promulgated thereunder, to the knowledge of the Company, such
accountants are not in violation of the auditor independence requirements of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and the rules and regulations promulgated thereunder, set
forth in Section 10A of the Exchange Act.
1.34 Taxes. Each of the Company and its subsidiaries has filed all
federal, state, local and foreign tax returns and tax forms required to be
filed, except where the failure to file would not have a Material Adverse
Effect. Such returns and forms are complete and correct in all material
respects. All payroll withholdings required to be made by the Company and its
subsidiaries with respect to employees have been made. There have been no tax
deficiencies asserted or, to the knowledge of the Company, threatened against
the Company or its subsidiaries that could, individually or in the aggregate,
result in a Material Adverse Effect.
1.35 Brokers Fees. There are no contracts, agreements or
understandings between the Company and any person that would give rise to a
valid claim against the Company or any of the Underwriters for a brokerage
commission, finder's fee or other like payment in connection with the
transactions contemplated herein, the Registration Statement, the Disclosure
Package and the Prospectus or in any contracts, agreements, understandings,
payments, arrangements or issuances with respect to the Company or any of its
officers, directors, stockholders, employees or affiliates that may affect the
Underwriters' compensation as determined by the NASD.
1.36 Directed Share Program. The Company represents and warrants to
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC that (i) the Registration Statement, the Prospectus,
the Disclosure Package and any Preliminary Prospectus comply, and any further
amendments or supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus, the Disclosure
Package or any Preliminary Prospectus, as amended or supplemented, if
applicable, are distributed in connection with the Directed Share Program, (ii)
no authorization, approval, consent, license, order, registration or
qualification of or with any government, governmental instrumentality or court,
other than such as have been obtained, is necessary under the securities laws
and regulations of foreign jurisdictions in which the Directed Shares are
offered outside the United States and (iii) neither the Company nor any other
person associated with or acting on behalf of the Company, including without
limitation any director, officer, agent or employee of the Company, has offered
or caused the Underwriters to offer any of the Shares to any person pursuant to
the Directed Share Program with the specific intent to unlawfully influence a
customer or supplier of the Company to alter the customer's or supplier's level
or type of business with the Company or a trade journalist or publication to
write or public favorable information about the Company or its products.
1.37 Books and Records. The minute books of the Company and each of
its subsidiaries have been made available to the Underwriters and counsel for
the Underwriters, and such books (i) contain a complete summary of all meetings
and actions of the board of directors or comparable body (including each
committee thereof) of the Company and each of its subsidiaries since the time of
its respective incorporation or formation through the date of the latest meeting
and action and (ii) accurately reflect all transactions referred to in such
minutes.
1.38 Company Not Ineligible Issuer. (i) At the time of filing the
Registration Statement and (ii) as of the date of the execution and delivery of
this Agreement (with such date being used as the determination date for purposes
of this clause (ii)), the Company was not and is not an Ineligible Issuer (as
defined in Rule 405 of the Securities Act).
-10-
1.39 Permitted Free Writing Prospectuses. The Company has not made,
and will not make, without the prior written consent of the Representatives, any
offer relating to the Shares that would constitute an Issuer Free Writing
Prospectus or that would otherwise constitute a "free writing prospectus" (as
defined in Rule 405 of the Securities Act) required to be filed by the Company
with the Commission or retained by the Company under Rule 433 of the Securities
Act; provided that the prior written consent of the Representatives hereto shall
be deemed to have been given in respect of the Issuer Free Writing Prospectuses
included in Schedule C hereto. Any such free writing prospectus consented to by
the Representatives is hereinafter referred to as a "Permitted Free Writing
Prospectus". The Company agrees that (i) it has treated and will treat, as the
case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus, and (ii) has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 of the Securities Act applicable to any
Permitted Free Writing Prospectus, including in respect of timely filing with
the Commission, legending and record keeping.
1.40 No Issuer Free Writing Prospectuses. Except as set forth in
Schedule C hereto, the Company has not prepared or had prepared, and will not
prepare, any Issuer Free Writing Prospectus, and has not distributed and will
not distribute any written materials in connection with the offer or sale of the
Shares.
2. Representations and Warranties of the Selling Stockholders.
(A). Each of the Selling Stockholders represents and warrants to and
agrees with each of the Underwriters that:
2.1 Due Authorization. This Agreement has been duly authorized,
executed and delivered by or on behalf of such Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
2.2 Selling Stockholder Documents. The Custody Agreement and the
Power of Attorney have been duly authorized, executed and delivered by such
Selling Stockholder and are valid and binding agreements of such Selling
Stockholder enforceable in accordance with their respective terms, except as
rights to indemnification thereunder may be limited by applicable law and except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
2.3 No Conflict. The execution and delivery by such Selling
Stockholder of, and the performance by such Selling Stockholder of its
obligations under, this Agreement, the Custody Agreement signed by such Selling
Stockholder and Wachovia Bank, National Association, as Custodian, relating to
the deposit of the Shares to be sold by such Selling Stockholder (the "CUSTODY
AGREEMENT") and the Power of Attorney appointing certain individuals as such
Selling Stockholder's attorneys-in-fact to the extent set forth therein,
relating to the transactions contemplated hereby and by the Registration
Statement (the "POWER OF ATTORNEY") will not contravene any provision of
applicable law, or the certificate of incorporation or bylaws of such Selling
Stockholder or any equivalent constituent documents (if such Selling Stockholder
is a corporation, company, partnership or other entity), or any agreement or
other instrument binding upon such Selling Stockholder or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over such
Selling Stockholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by such Selling
-11-
Stockholder of its obligations under this Agreement or the Custody Agreement or
Power of Attorney of such Selling Stockholder, except such as may be required by
the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares.
2.4 Validly Issued Shares. The Shares to be sold by such Selling
Stockholder pursuant to this Agreement have been duly authorized and are validly
issued, fully paid and non-assessable.
2.5 Good Title to Shares. Such Selling Stockholder has, and on the
Option Closing Date will have, valid title to the Shares to be sold by such
Selling Stockholder and the legal right and power, and all authorization and
approval required by law, to enter into this Agreement, the Custody Agreement
and the Power of Attorney and to sell, transfer and deliver the Shares to be
sold by such Selling Stockholder.
2.6 Delivery of Common Shares. Delivery of the Shares to be sold by
such Selling Stockholder pursuant to this Agreement will pass title to such
Shares free and clear of any security interests, claims, liens, equities and
other encumbrances.
2.7 No Registration Rights. Such Selling Stockholder does not have
any registration or other similar rights to have any equity or debt securities
registered for sale by the Company under the Registration Statement or included
in the offering contemplated by this Agreement, other than as described in the
Registration Statement, Statutory Prospectus and the Prospectus and as have been
waived in writing in connection with the offering contemplated hereby.
2.8 No Price Stabilization or Manipulation. Such Selling Stockholder
has not taken and will not 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 Common Stock to facilitate the sale or resale
of the Shares.
2.9 No Free Writing Prospectuses. Such Selling Stockholder has not
prepared or had prepared on its behalf or used or referred to, and will not
prepare or have prepared on its behalf or use or refer to, any free writing
prospectus defined in Rule 405 of the Securities Act and required to be filed by
the Company with the Commission or retained by the Company under Rule 433 of the
Securities Act (the "SELLING STOCKHOLDER FREE WRITING PROSPECTUS"), and has not
distributed and will not distribute any written materials in connection with the
offer or sale of the Shares.
2.10 Disclosure Made by Selling Stockholders. All information
furnished by or on behalf of such Selling Stockholder in writing expressly for
use in the Registration Statement, the Disclosure Package, the Prospectus or any
Selling Stockholder Free Writing Prospectus or any amendment or supplement
thereto used by the Company or any Underwriter, as the case may be, was, as of
the Initial Sale Time and on the Closing Date, and on Option Closing Date will
be, true, correct and complete in all material respects, and did not as of the
Initial Sale Time, and on the Closing Date and the Option Closing Date will not,
contain any untrue statement of a material fact or omit to state any material
fact required to be made or necessary to make such information not misleading.
(B). Each of the Selling Stockholders listed on Schedule E hereto
(the "INVESTOR SELLING STOCKHOLDERS") represents and warrants to the best of its
knowledge with each of the Underwriters that (i) the Registration Statement,
when it became effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Statutory Prospectus and the
Prospectus do not contain and, as amended or supplemented, if applicable, will
not contain any untrue
-12-
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in the Registration
Statement, the Statutory Prospectus or the Prospectus based upon information
relating to any Underwriter set forth in the section of the Registration
Statement, the Statutory Prospectus or the Prospectus captioned "Underwriting"
that was furnished to the Company in writing by such Underwriter through you
expressly for use therein.
3. Purchase and Sale Agreements
3.1 Firm Shares.The Company hereby agrees to sell to the several
Underwriters, and each Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase from the Company at $______ a share (the "PURCHASE PRICE")
the number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) set forth in Schedule A hereto opposite the name of
such Underwriter.
3.2 Additional Shares. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and conditions,
the Selling Stockholders agree to sell to the Underwriters the Additional
Shares, and the Underwriters shall have a one-time right to purchase, severally
and not jointly, up to 750,000 Additional Shares at the Purchase Price. If you,
on behalf of the Underwriters, elect to exercise such option, you shall so
notify the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as the Attorney-In-Fact for the Selling
Stockholders, in writing not later than thirty (30) days after the date of this
Agreement, which notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such Shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten (10) business days after
the date of such notice. Additional Shares may be purchased as provided in
Section 4 hereof solely for the purpose of covering over- allotments made in
connection with the offering of the Firm Shares. If any Additional Shares are to
be purchased, each Underwriter agrees, severally and not jointly, to purchase
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
total number of Additional Shares to be purchased as the number of Firm Shares
set forth in Schedule A hereto opposite the name of such Underwriter bears to
the total number of Firm Shares.
3.3 Market Standoff Provision. Each Seller hereby agrees that,
without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC, it will not,
during the period ending 180 days after the date of the Prospectus (the
"RESTRICTED PERIOD"), (i) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (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 (A) the Shares to be sold hereunder, (B) the
issuance by the Company of shares of Common Stock upon the exercise of options
or warrants or the conversion of a security outstanding on the date hereof and
which is described in the Registration Statement and Prospectus, (C)
transactions by any person other than the Company relating to shares of Common
Stock or other securities acquired in open market transactions after the
completion of the offering of the Shares, (D) the grant of options or the
issuance of shares of Common Stock under the Company's stock option plans, (E)
the filing of any registration statement on Form S-8 in respect of any employee
benefit plan described in the Registration Statement, the Statutory Prospectus
and Prospectus, and (F) the issuance by the Company of shares of Common Stock
having a value of up to
-13-
$10,000,000 pursuant to an acquisition or merger transaction. In addition, each
Selling Stockholder agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇ Partners LLC, it will not, during the Restricted Period, make any demand
for, or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable for
Common Stock. Notwithstanding the foregoing, if (1) during the last eighteen
(18) days of the Restricted Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs or (2) prior to
the expiration of the Restricted Period the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the Restricted Period, the restrictions imposed by this Section 3.3 shall
continue to apply until the expiration of the 19-day period beginning on the
issuance of the earnings release or the occurrence of the material news or
material event, as applicable, unless ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC waives, in
writing, such extension.
3.4 Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Sellers
are further advised by you that the Shares are to be offered to the public
initially at a price of $________ per Share (the "PUBLIC OFFERING PRICE") and to
certain dealers selected by you at a price that represents a selling concession
of not more than $________ per Share below the Public Offering Price, and that
any Underwriter may allow, and such dealers may re-allow, a selling concession,
not in excess of $________ per Share, to any Underwriter or to certain other
dealers.
4. Payment and Delivery
4.1 Firm Shares. Payment for the Firm Shares to be sold by the
Company shall be made to the Company in immediately available funds against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., Eastern Standard Time, on December ____, 2005, or at
such other time on the same or such other date, not later than _________, 2005,
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE".
4.2 Additional Shares. Payment for any Additional Shares shall
be made to each Selling Stockholder in immediately available funds in
New York
City against delivery of such Additional Shares for the respective accounts of
the several Underwriters at 10:00 a.m.,
New York City time, on the date
specified in the notice described in Section 3.2 or at such other time on the
same or on such other date, in any event not later than _______, 2005, as shall
be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE".
4.3 Delivery of Certificates. Certificates for the Firm Shares
and Additional Shares shall be in definitive form and registered in such names
and in such denominations as you shall request in writing not later than one (1)
full business day prior to the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and Additional Shares
shall be delivered to you on the Closing Date or the Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
5. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
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5.1 Furnish Copies of Registration Statement and Prospectus.
To furnish to you, without charge, three signed copies of the Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without exhibits
thereto) and to furnish to you in
New York City, without charge, prior to 10:00
a.m.
New York City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 5.3 below, as many copies
of each of the Preliminary Prospectus, the Disclosure Package, the Prospectus
and any supplements and amendments thereto or to the Registration Statement as
you may reasonably request.
5.2 Notification of Amendments or Supplements. Before amending
or supplementing the Registration Statement, the Disclosure Package or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such rule. In addition, during the Prospectus Delivery
Period (as defined in Section 5.3), the Company will promptly advise the
Representatives (i) of any communications (written or oral) with the Commission
with regard to the Registration Statement, the Disclosure Package, the
Prospectus, any amendments or supplements of the Registration Statement or the
Disclosure Package, the Prospectus or any other matters in connection with the
offering of the Shares; (ii) of any filings made by the Company with the
Commission in connection with the offering of the Shares; (iii) when any
amendment to the Registration Statement relating to the Shares shall have become
effective, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt by the
Company of any notification with respect to the suspension of the approval of
the Shares for quotation in the Nasdaq National Market or qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its commercially reasonable
best efforts to prevent the issuance or invocation of any such stop order or
suspension and, if any such stop order or suspension is so issued or invoked, to
obtain as soon as possible the withdrawal or removal thereof.
5.3 Filings of Amendments or Supplements. If, during such
period after the first date of the public offering of the Shares when in the
opinion of counsel for the Underwriters, the Disclosure Package or Prospectus is
required by law to be delivered in connection with sales by an Underwriter or
dealer (the "PROSPECTUS DELIVERY PERIOD"), any event or development shall occur
or condition exist as a result of which it is necessary to amend or supplement
the Disclosure Package or Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Disclosure Package or Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have been sold by
you on behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Disclosure Package or the Prospectus so that
the statements in the Disclosure Package or the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the Disclosure
Package or Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
5.4 Blue Sky Laws. To endeavor to qualify the Shares for offer
and sale under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request; provided, however, that the Company will not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not now so qualified or
required to file such consent.
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5.5 Earnings Statement. To make generally available to its
security holders as soon as practicable, but in any event not later than
eighteen (18) months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Securities Act), an earnings statement of the
Company and its subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the rules and regulations thereunder (including,
at the option of the Company, Rule 158).
5.6 Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Shares sold by it in the manner described under the caption
"Use of Proceeds" in the Registration Statement, the Disclosure Package and the
Prospectus.
5.7 Transfer Agent. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Common Stock.
5.8 Reporting Obligations; Exchange Act Compliance. During the
Prospectus Delivery Period, the Company shall file, on a timely basis, with the
Commission and the Nasdaq National Market all reports and documents required to
be filed under the Exchange Act. Additionally, the Company shall file with the
Commission such information on Form 10-Q or Form 10-K as may be required by Rule
463 under the Securities Act.
5.9 Public Communications. Prior to the Closing Date, the
Company will issue no press release or other communications directly or
indirectly and hold no press conference with respect to the Company or its
subsidiaries, the condition, financial or otherwise, or the earnings, business,
operations or prospects of any of them, or the offering of the Shares without
the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC unless in the judgment
of the Company and its counsel, and after notification to ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners
LLC, such press release or communication is required by law.
5.10 Directed Share Program. That in connection with the
Directed Share Program, the Company will ensure that the Directed Shares will be
restricted to the extent required by the NASD or the NASD rules from sale,
transfer, assignment, pledge or hypothecation for a period of 180 days following
the date of the effectiveness of the Registration Statement. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Partners LLC will notify the Company as to which Participants will need to be so
restricted. The Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time. Furthermore, the
Company covenants with ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC that the Company will comply
with all applicable securities and other applicable laws, rules and regulations
in each foreign jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
6. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the several Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date or Option Closing Date, as the case may be, are subject to the
following conditions:
6.1 Effective Registration Statement. The Registration
Statement shall have become effective not later than [December __, 2005]
(Eastern Standard Time) on the date hereof.
6.2 Rule 462(b) Registration Statement. If the Company elects
to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and the Company shall at
the time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Securities Act.
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6.3 Representations and Warranties. The representations and
warranties of the Company and each of the Selling Stockholders contained in this
Agreement and in the certificate delivered pursuant to Section 6.9 and Section
6.15 shall be true and correct when made and on and as of each of the Closing
Date and Option Closing Date as if made on such date (except that those
representations and warranties that address matters only as of a particular date
shall remain true and correct as of such date). The Company and each of the
Selling Stockholders shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by the Company or any Selling Stockholder at or before
such Closing Date or Option Closing Date, as the case may be.
6.4 Prospectus Filed with Commission. The Company shall have
filed the Prospectus with the Commission (including the information required by
Rule 430A under the Securities Act) in the manner and within the time period
required by Rule 424(b) under the Securities Act; or the Company shall have
filed a post-effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective amendment shall
have become effective. The Company shall have filed any material required to be
filed by the Company with the Commission in the manner and within the time
period required by Rule 433 of the Securities Act, including the Issuer Free
Writing Prospectus, the Selling Stockholder Free Writing Prospectus and the
Other Free Writing Prospectus.
6.5 No Stop Order. No stop order suspending the effectiveness
of the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect and
no proceedings for such purpose shall have been instituted or threatened by the
Commission.
6.6 Nasdaq. The Shares have been listed for quotation on the
Nasdaq National Market System.
6.7 No NASD Objection. The NASD shall have raised no objection
to the fairness and reasonableness of the underwriting terms and arrangements.
6.8 No Material Adverse Effect. There shall not have occurred
any Material Adverse Effect, or any development involving a prospective Material
Adverse Effect, from that set forth in the each of the Disclosure Package and
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Statutory Prospectus and Prospectus.
6.9 Officer's Certificate. The Underwriters shall have
received on the Closing Date or Option Closing Date, as the case may be, a
certificate, dated such Closing Date or Option Closing Date, and signed by the
Chief Executive Officer or President of the Company, to the effect that (i)
Sections 6.3 (with respect to the Company), 6.4, 6.5 and 6.8 (to the knowledge
of such person) above are true and correct as of such Closing Date or Option
Closing Date, as applicable (except that those representations and warranties
that address matters only as of a particular date shall remain true and correct
as of such date), (ii) they have carefully examined the Registration Statement,
the Disclosure Package, the Prospectus and, in their opinion, since the
Effective Date no event has occurred which should have been set forth in a
supplement or otherwise required an amendment to the Registration Statement, the
Disclosure Package or the Prospectus and (iii) the Company has complied with all
of the covenants and agreements and satisfied all of the conditions on its part
to be performed or satisfied hereunder on the Closing Date or Option Closing
Date, as the case may be.
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6.10 Opinion of Company Counsel. The Underwriters shall have
received on the Closing Date an opinion of ▇▇▇▇▇▇▇▇▇ Traurig, LLP, counsel for
the Company, dated the Closing Date, the form of which is attached hereto as
Exhibit A. The opinion shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
6.11 Opinion of Selling Stockholders Counsel. The Underwriters
shall have received on the Option Closing Date an opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
LLP, counsel for the Selling Stockholders, dated the Option Closing Date, the
form of which is attached hereto as Exhibit B. The opinion shall be rendered to
the Underwriters at the request of the Selling Stockholders and shall so state
therein.
6.12 Opinion of Underwriters Counsel. The Underwriters shall
have received on the Closing Date an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, counsel for
the Underwriters, dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriters.
6.13 Accountant's Comfort Letter. The Underwriters shall have
received, on each of the date hereof and the Closing Date, a letter dated the
date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, from Ernst & Young LLP, independent public
auditors, containing statements and information of the type ordinarily included
in accountants' "comfort letters" to Underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement, Disclosure Package and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than the
date hereof.
6.14 Lock-Up Agreements. The "lock-up" agreements, each
substantially in the form of Exhibit C hereto, between you and certain of the
stockholders and each of the officers and directors of the Company, delivered to
you on or before the date hereof, shall be in full force and effect on the
Closing Date.
6.15 Selling Stockholders Certificate. The Underwriters shall
have received, on the Option Closing Date, a certificate dated the Option
Closing Date and signed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as the Attorney-in-Fact of each
Selling Stockholder, to the effect that the representations and warranties of
the Selling Stockholders contained in this Agreement are true and correct as of
the Option Closing Date and that the Selling Stockholders have complied with all
of the agreements and satisfied all of the conditions on their part to be
performed or satisfied hereunder on or before the Option Closing Date.
6.16 Selling Stockholder Documents. On the date hereof, the
Company and the Selling Stockholders shall have furnished for review by the
Underwriters copies of the Powers of Attorney and Custody Agreements executed by
each of the Selling Stockholders and such further information, certificates and
documents as the Underwriters may reasonably request.
6.17 Additional Documents. On the Closing Date and Option
Closing Date, the Representatives and counsel for the Underwriters shall have
received such information, documents and opinions as they may reasonably require
for the purposes of enabling them to pass upon the issuance and sale of the
Shares as contemplated herein, or in order to evidence the accuracy of any of
the representations and warranties, or the satisfaction of any of the conditions
or agreements, herein contained.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction of each of the above conditions
on or prior to the Option Closing Date and to the delivery to you on the Option
Closing Date of such documents as you may reasonably request with respect to the
good
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standing of the Company, the due authorization and issuance and good title of
the Additional Shares and other matters related to the issuance of the
Additional Shares.
6.18 Legal Matters. All corporate proceedings and other legal
matters incident to negotiation and execution of this Agreement and the issuance
and sale of the Shares, as contemplated herein shall be reasonably satisfactory
to counsel for the Underwriters, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters.
7. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Sellers agree to
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel, the Company's accountants and counsel for the
Selling Stockholders in connection with the preparation and negotiation of this
Agreement and the registration and delivery of the Shares under the Securities
Act and all other fees or expenses in connection with the preparation and filing
of the Registration Statement, any Preliminary Prospectus, the Disclosure
Package, the Prospectus and amendments and supplements to any of the foregoing,
including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or
legal investment memorandum in connection with the offer and sale of the Shares
under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
contemplated by Section 5.4 hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, provided that all such fees and disbursements under this sub-clause
(iii) shall not exceed $5,000, (iv) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Shares by the NASD, provided
that all such fees and disbursements under this sub-clause (iv) shall not exceed
$20,000, (v) all fees and expenses in connection with the preparation and filing
of the registration statement on Form 8-A relating to the Common Stock and all
costs and expenses incident to listing the Shares on the Nasdaq National Market,
(vi) the cost of printing certificates representing the Shares, (vii) the costs
and charges of any transfer agent, registrar or depositary, (viii) the costs and
charges of any custodian of the Shares to be sold by the Selling Stockholders,
(ix) the costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the offering of
the Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
one-half of the cost of any aircraft chartered in connection with the road show
(it being understood that the Underwriters shall be responsible for paying
travel and lodging expenses of the representatives of the Underwriters, any
ground transportation used by representatives of the Company or the Underwriters
in connection with the road show, and one-half of the cost of any aircraft
chartered in connection with the road show), (x) all expenses in connection with
any offer and sale of the Shares outside of the United States, including filing
fees, (xi) all reasonable fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program and stamp duties,
similar taxes or duties or other taxes, if any, incurred by the Underwriters in
connection with the Directed Share Program and (xii) all other costs and
expenses incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 8 entitled "Indemnity
and Contribution", and the last paragraph of Section 11 below, the
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Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel and any advertising expenses connected with any
offers they may make.
8. Indemnity and Contribution.
8.1 Indemnification of the Underwriters. The Company and the
Company Selling Stockholders jointly and severally agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) arising out of, based upon, or caused by any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any Preliminary Prospectus, the Disclosure
Package or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or in any Blue Sky application
or other information or other documents executed by the Company filed in any
state or other jurisdiction to qualify any or all of the Shares under the
securities laws thereof or arising out of, based upon, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
8.2 Indemnification of Company by the Selling Stockholders.
Each Selling Stockholder agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) arising out
of, based upon or caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any Preliminary Prospectus, the Disclosure Package, the Selling
Stockholder Free Writing Prospectus, or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or arising out of, based upon or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with reference
to information relating to such Selling Stockholder furnished in writing by or
on behalf of such Selling Stockholder expressly for use in the Registration
Statement, any Preliminary Prospectus, the Disclosure Package, the Prospectus or
any amendments or supplements thereto.
8.3 Indemnification of Underwriters by Selling Stockholders.
Each Selling Stockholder agrees, severally and not jointly, to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) arising out of, based upon or caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any Preliminary Prospectus, the
Disclosure Package, the Selling Stockholder Free Writing Prospectus, or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or arising out of, based upon or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only with
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reference to information relating to such Selling Stockholder furnished in
writing by or on behalf of such Selling Stockholder expressly for use in the
Registration Statement, any Preliminary Prospectus, the Disclosure Package, the
Prospectus or any amendments or supplements thereto.
8.4 Indemnification by the Underwriters. Subject to the last
sentence in Section 1.2 above, each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, the Selling Stockholders,
the directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the Company or any
Selling Stockholder within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) arising out of, based upon or caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any Preliminary Prospectus, the
Statutory Prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or arising
out of, based upon or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement, any
Preliminary Prospectus, the Statutory Prospectus, the Prospectus or any
amendments or supplements thereto.
8.5 Indemnification Procedures. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to this Section 7,
such person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (a) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (b) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the Company,
its directors, its officers who sign the Registration Statement and each person,
if any, who controls the Company within the meaning of either such Section and
(iii) the fees and expenses of more than one separate firm (in addition to any
local counsel) for all Selling Stockholders and all persons, if any, who control
any Selling Stockholder within the meaning of either such Section, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Underwriters and such control persons of any
Underwriters, such firm shall be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners
LLC. In the case of any such separate firm for the Company, and such directors,
officers and control persons of the Company, such firm shall be designated in
writing by the Company. In the case of any such separate firm for the Selling
Stockholders and such control persons of any Selling Stockholders, such firm
shall be designated in writing by the persons named as attorneys-in-fact for the
Selling Stockholders under the Powers of Attorney. The indemnifying party shall
not
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be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (x) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (y) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to Section 8.7 hereof in respect of such action or
proceeding, then in addition to such separate firm for the indemnified parties,
the indemnifying party shall be liable for the reasonable fees and expenses of
not more than one separate firm (in addition to any local counsel) for ▇▇▇▇▇▇
▇▇▇▇▇▇ Partners LLC for the defense of any losses, claims, damages and
liabilities arising out of the Directed Share Program, and all persons, if any,
who control ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act.
8.6 Limitation of Selling Stockholder Liability. The liability
of each Selling Stockholder under the indemnity and contribution provisions of
this Section 8 shall be limited to an amount equal to the initial public
offering price of the Shares sold by such Selling Stockholder, less the
underwriting discount, as set forth on the front cover page of the Prospectus.
The Company and the Selling Stockholders may agree, as among themselves and
without limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
8.7 Indemnification for Directed Share Program. The Company
agrees to indemnify and hold harmless ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC and each
person, if any, who controls ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
("▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS ENTITIES"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) (i) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Disclosure Package or prospectus
wrapper material prepared by or with the consent of the Company for distribution
in foreign jurisdictions in connection with the Directed Share Program attached
to the Prospectus or the Preliminary Prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein, when considered in conjunction with
the Disclosure Package, the Prospectus or the Preliminary Prospectus, not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of the shares which, immediately following the effectiveness of the
Registration Statement, were subject to a properly confirmed agreement to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, provided that, the Company shall not be responsible
under this subparagraph (iii) for any losses, claim, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners
Entities.
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8.8 Contribution Agreement. To the extent the indemnification
provided for in this Section 8 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by Section 8.9 below is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in Section 8.8 below but also the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Sellers on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares (net
of underwriting discounts and commissions but before deducting expenses)
received by each Seller and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Sellers on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Sellers or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
8.9 Contribution Amounts. The Sellers and the Underwriters
agree that it would not be just or equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 8.8. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
8.10 Survival of Provisions. The indemnity and contribution
provisions contained in this Section 8 and the representations, warranties and
other statements of the Company and the Selling Stockholders contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter, any Selling
Stockholders or any person controlling any Selling Stockholder, or the Company,
its officers or directors or any person controlling the Company and (iii)
acceptance of and payment for any of the Shares.
-23-
9. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market, (ii) trading of any securities of the Company shall have been suspended
on any exchange or in any over the counter market, (iii) a general moratorium on
commercial banking activities in
New York, Delaware or California shall have
been declared by either federal or
New York, Delaware or California state
authorities or (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in your judgment, is material and adverse, or (v) in the reasonable judgment of
the Representatives, there shall have occurred any Material Adverse Effect, or
any development that could reasonably be expected to result in a Material
Adverse Effect, whether or not arising from transactions in the ordinary course
of business, of the Company and its subsidiaries, taken as a whole, and (b) in
the case of any of the events specified in clauses 10(a)(i) through 10(a)(v),
such event, individually or together with any other such event, makes it, in
your judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
11. Defaulting Underwriters. If, on the Closing Date or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of the Shares to be purchased on such
date, the other Underwriters shall be obligated severally in the proportions
that the number of Firm Shares set forth opposite their respective names in
Schedule A bears to the aggregate number of Firm Shares set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as
you may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and if
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate (other than with respect to (i) expenses to be borne by the Company
and the Underwriters as provided in Section 7 hereof and (ii) the
indemnification and contribution obligations of the Company and the Underwriters
as provided in Section 8 hereof) without liability on the part of any
non-defaulting Underwriter, or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven (7) days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability to the Company and/or the non-defaulting
Underwriters, as the case may be, arising out of or related to any default of
such Underwriter under this Agreement.
-24-
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out of pocket expenses (including the reasonable fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
13. Headings; Table of Contents. The headings of the sections of this
Agreement and the table of contents have been inserted for convenience of
reference only and shall not be deemed a part of this Agreement.
14. Notices. All communications hereunder shall be in writing and shall
be mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Representatives:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
If to the Company:
Vocus, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Selling Stockholders:
Wachovia Bank, National Association
[Address]
Facsimile: (_____) ____-____
Attention: [ ]
Any party hereto may change the address for receipt of communications
by giving written notice to the others.
15. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 11 hereof, and to the benefit of the officers and directors and
controlling persons referred to in Section 8, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The
term "successors" shall not include any purchaser of the Shares as such from any
of the Underwriters merely by reason of such purchase.
16. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
18. Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("RELATED PROCEEDINGS") must be instituted in the federal courts of the
United States of America or the courts of the State of
New York in each case
located in the City and County of
New York (collectively, the "SPECIFIED
COURTS"), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment of
any such court (a "RELATED JUDGMENT"), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. Service of
any process, summons, notice or document by certified mail to such party's
address set forth above shall be effective service of process for any suit,
action or other proceeding brought in any such court. The parties irrevocably
and unconditionally waive any objection to the laying of venue of any suit,
action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.
19. Failure of the Selling Stockholders to Sell and Deliver Shares. If
one or more of the Selling Stockholders shall fail to sell and deliver to the
Underwriters the Shares to be sold and delivered by such Selling Stockholders at
the Option Closing Date pursuant to this Agreement, then the Underwriters may at
their option, by written notice from the Representatives to the Company and the
Selling Stockholders, either (i) terminate their obligations hereunder to
purchase Additional Shares or (ii) purchase the Additional Shares
-26-
which the other Selling Stockholders have agreed to sell and deliver in
accordance with the terms hereof. In any such case you shall have the right to
postpone the Option Closing Date, but in no event for longer than seven (7) days
in order that the required changes, if any, to the Registration Statement and
the Prospectus or any other documents or arrangements may be effected.
20. Entire Agreement. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof.
21. Amendments. This Agreement may only be amended or modified in
writing, signed by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit.
22. Sophisticated Parties. Each of the parties hereto acknowledges that
it is a sophisticated business person who was adequately represented by counsel
during negotiations regarding the provisions hereof, including, without
limitation, the indemnification and contribution provisions of Section 7, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Section 7 hereto fairly allocate the risks
in light of the ability of the parties to investigate the Company, its affairs
and its business in order to assure that adequate disclosure has been made in
the Registration Statement, any preliminary prospectus and the Prospectus (and
any amendments and supplements thereto), as required by the Securities Act and
the Exchange Act.
[Remainder of page intentionally left blank]
-27-
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
VOCUS, INC.
By:
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
and President
The Selling Stockholders
named in Schedule B hereto,
acting severally
By:
------------------------------------
Attorney-in-Fact
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
RBC Capital Markets Corporation
Wachovia Capital Markets, LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule A hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
By:
----------------------------------------------------
Name:
Title:
-28-
SCHEDULE A
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
---------------------------------------------------------------- -----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
RBC Capital Markets Corporation
Wachovia Capital Markets, LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
Total
SCHEDULE B
NUMBER OF ADDITIONAL SHARES
SELLING STOCKHOLDER TO BE PURCHASED
---------------------------------------------------------------- -----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 164,023
▇▇▇▇▇▇ ▇▇▇▇▇ 100,000
Lazard Alternative Investments LLC 250,000
Sterling Venture Partners, LP 150,000
Carmel Investments, L.L.P. 85,977
Total 750,000
SCHEDULE C
LIST OF ISSUER FREE WRITING PROSPECTUS
Electronic road show of
Vocus, Inc. displayed at ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
SCHEDULE D
COMPANY SELLING STOCKHOLDERS
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE E
INVESTOR SELLING STOCKHOLDERS
--------------------------------------------------------------------------------
Lazard Alternative Investments LLC
Sterling Venture Partners, LP
EXHIBIT A
FORM OF LEGAL OPINION OF COMPANY COUNSEL
[TO BE PROVIDED]
EXHIBIT B
FORM OF LEGAL OPINION OF SELLING STOCKHOLDERS COUNSEL
[TO BE PROVIDED]
-2-
EXHIBIT C
FORM OF LOCK-UP AGREEMENT
-3-