DRAFT 11/14/96
EXHIBIT 1
3,000,000 SHARES
THE FINISH LINE, INC.
CLASS A COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
December __, 1996
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇▇▇▇▇▇ & CO., INC.
As Representatives of the Several Underwriters
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The Finish Line, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell an aggregate of 2,400,000 shares of its Class A common stock,
$0.01 par value per share, to the several Underwriters named in Schedule II
hereto (the "Underwriters") and the persons named in Part A of Schedule I hereto
(the "Selling Stockholders") propose to sell to the several Underwriters an
aggregate of 600,000 shares of Class A common stock of the Company. The Company
and the Selling Stockholders are hereinafter sometimes referred to as the
"Sellers." The Company's Class A common stock, $0.01 par value, is hereinafter
referred to as the "Common Stock" and the 2,400,000 shares of Common Stock to be
issued and sold to the Underwriters by the Company and the 600,000 shares of
Common Stock to be sold to the Underwriters by the Selling Stockholders are
hereinafter referred to as the "Firm Shares." The Selling Stockholders listed in
Part B of Schedule I hereto also propose to sell to the Underwriters, upon the
terms and conditions set forth in Section 2 hereof, up to an additional 450,000
shares (the "Additional Shares") of Common Stock. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "Shares."
The Company and the Selling Stockholders wish to confirm as follows
their respective agreements with you (the "Representatives") and the other
several Underwriters on whose behalf you are acting, in connection with the
several purchases of the Shares by the Underwriters.
1. Registration Statement and Prospectus. 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, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 under the Act (the "registration
statement"), including a prospectus subject to completion relating to the
Shares. The term "Registration Statement" as used in this Agreement 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. 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
in this Agreement means the registration statement as amended by said post-
effective amendment. The term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement, or, if the
prospectus included in the Registration Statement omits information in reliance
on Rule 430A under the Act and such information is included in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectus" as used in this Agreement means the prospectus in the form included
in the Registration Statement as supplemented by the addition of the Rule 430A
information contained in the prospectus filed with the Commission pursuant to
Rule 424(b). The term "Prepricing Prospectus" as used in this Agreement means
the prospectus subject to completion in the form included in the registration
statement at the time of the initial filing of the registration statement with
the Commission, and as such prospectus shall have been amended from time to time
prior to the date of the Prospectus. Any reference in this Agreement to the
registration statement, the Registration Statement, any Prepricing Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act,
as of the date of the registration statement, the Registration Statement, such
Prepricing Prospectus or the Prospectus, as the case may be, and any reference
to any amendment or supplement to the registration statement, the Registration
Statement, any Prepricing Prospectus or the Prospectus shall be deemed to refer
to and include any documents filed after such date under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")
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which, upon filing, are incorporated by reference therein, as required by
paragraph (b) of Item 12 of Form S-3. As used herein, the term "Incorporated
Documents" means the documents which at the time are incorporated by reference
in the registration statement, the Registration Statement, any Prepricing
Prospectus, the Prospectus, or any amendment or supplement thereto.
2. Agreements to Sell and Purchase. Subject to such adjustments as
you may determine in order to avoid fractional Shares, the Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue and
sell to each Underwriter and, upon the basis of the representations, warranties
and agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $_____ per Share (the "purchase price per share"), the number of Firm
Shares which bears the same proportion to the aggregate number of Firm Shares to
be issued and sold by the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto (or such number of
Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of Firm Shares to be sold by the Company and the Selling Stockholders.
Subject to such adjustments as you may determine in order to avoid
fractional Shares, each Selling Stockholder agrees, subject to all the terms and
conditions set forth herein, to sell to each Underwriter and, upon the basis of
the representations, warranties and agreements of the Company and the Selling
Stockholders herein contained and subject to all the terms and conditions set
forth herein, each Underwriter, severally and not jointly, agrees to purchase
from each Selling Stockholder at the purchase price per share that number of
Firm Shares which bears the same proportion to the number of Firm Shares set
forth opposite the name of such Selling Stockholder in Schedule I hereto as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto (or such number of Firm Shares increased as set forth in
Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by
the Company and the Selling Stockholders.
The Selling Stockholders listed in Part B of Schedule I hereto also
agree, subject to all the terms and conditions set forth herein, to sell to the
Underwriters, and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, the Underwriters shall
have the right to purchase from the Selling Stockholders listed in Part B of
Schedule I hereto, at the purchase price per share, pursuant to an option (the
"over-allotment option") which may be exercised at any time and from time to
time prior to 9:00 P.M., New York City time,
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on the 30th day after the date of the Prospectus (or, if such 30th day shall be
a Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading), up to an aggregate of 450,000
Additional Shares from the Selling Stockholders listed in Part B of Schedule I
hereto (the maximum number of Additional Shares which each of them agrees to
sell upon the exercise by the Underwriters of the over-allotment option is set
forth opposite their respective names in Part B of Schedule I). Additional
Shares may be purchased only for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. The number of Additional
Shares which the Underwriters elect to purchase upon any exercise of the over-
allotment option shall be provided by each Selling Stockholder who has agreed to
sell Additional Shares in proportion to the respective maximum numbers of
Additional Shares which each such Selling Stockholder has agreed to sell. Upon
any exercise of the over-allotment option, each Underwriter, severally and not
jointly, agrees to purchase from each Selling Stockholder who has agreed to sell
Additional Shares the number of Additional Shares (subject to such adjustments
as you may determine in order to avoid fractional Shares) which bears the same
proportion to the number of Additional Shares to be sold by each Selling
Stockholder who has agreed to sell Additional Shares as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule II hereto (or
such number of Firm Shares increased as set forth in Section 12 hereof) bears to
the aggregate number of Firm Shares to be sold by the Selling Stockholders.
3. Terms of Public Offering. The Sellers have been 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 and initially
to offer the Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
The Finish Line, Inc., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, at
10:00 A.M., New York City time, on December __, 1996 (the "Closing Date"). The
place of closing for the Firm Shares and the Closing Date may be varied by
agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of the Company at such time on such date (the "Option Closing Date"), which may
be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
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notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement between you and
the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor in immediately available funds.
5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of the happening
of any event, which makes any statement of a material fact made in the
Registration Statement or the Prospectus (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement or the Prospectus (as then amended or supplemented) in
order to state a material fact
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required by the Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge (i) four signed
copies of the registration statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits to
the registration statement, (ii) such number of conformed copies of the
registration statement as originally filed and of each amendment thereto, but
without exhibits, as you may reasonably request, (iii) such number of copies of
the Incorporated Documents, without exhibits, as you may reasonably request, and
(iv) four copies of the exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus or, prior to the
end of the period of time referred to in the first sentence in subsection (f)
below, file any document which, upon filing becomes an Incorporated Document, of
which you shall not previously have been advised or to which, after you shall
have received a copy of the document proposed to be filed, you shall reasonably
object.
(e) Prior to the execution and delivery of this Agreement, the Company
has delivered to you, without charge, in such quantities as you have requested,
copies of each form of the Prepricing Prospectus. The Company consents to the
use, in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by dealers, prior to the date of the Prospectus, of
each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the Act to be delivered
in connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
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which the Shares are offered by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the Prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or dealer.
If during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus (or to file under the Exchange Act any
document which, upon filing, becomes an Incorporated Document) in order to
comply with the Act or any other law, the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file with the Commission an
appropriate supplement or amendment thereto (or to such document), and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof. In the event that the Company and you, as Representatives of
the several Underwriters, agree that the Prospectus should be amended or
supplemented, the Company, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(h) The Company will make generally available to its security holders
an earning statement, which need not be audited, covering a twelve-month period
commencing after the effective date of the Registration Statement and ending not
later than 15 months thereafter, as soon as practicable after the end of such
period, which earning statement shall satisfy the provisions of Section 11(a) of
the Act.
(i) During the period of three years hereafter, the Company will
furnish to you (i) as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission, and (ii) from time to time
such other information
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concerning the Company as you may reasonably request; provided that following
the first anniversary of the date hereof, the Company shall only be obligated to
furnish such information pursuant to this clause (ii) if you have entered into
reasonably satisfactory confidentiality arrangements with the Company.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 hereof or by notice given by you terminating this
Agreement pursuant to Section 12 or Section 13 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on the
part of the Company or the Selling Stockholders to comply with the terms or
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
the Representatives for all out-of-pocket expenses (including fees and expenses
of counsel for the Underwriters) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will timely file
the Prospectus pursuant to Rule 424(b) under the Act and will advise you of the
time and manner of such filing.
(m) Except as provided in this Agreement or as permitted or required
by the Company's 1992 Employee Stock Incentive Plan and Non-Employee Director
Stock Option Plan, the Company will not sell, contract to sell or otherwise
dispose of any Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or grant any options or warrants to purchase
Common Stock, for a period of 120 days after the date of the Prospectus, without
the prior written consent of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, to the same effect as the
agreements set forth in Section 6(d) below and with a term of 90 days after the
date of the Prospectus, signed by each of its current executive officers and
directors (other than the Selling Stockholders) and its stockholders designated
by you, except that the lock-up letters signed by [four] of such executive
officers will permit without restriction the sale of an aggregate of 80,000
shares of Class A Common Stock by such [four] executive officers.
(o) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in
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stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares.
(p) The Company will use its best efforts to have the shares of Common
Stock which it agrees to sell under this Agreement listed, subject to notice of
issuance, on the Nasdaq National Market on or before the Closing Date.
6. Agreements of the Selling Stockholders. Each of the Selling Stockholders
agrees with the several Underwriters as follows:
(a) Such Selling Stockholder will cooperate to the extent necessary to
cause the registration statement or any post-effective amendment thereto to
become effective at the earliest possible time.
(b) Such Selling Stockholder will pay all Federal and other taxes, if
any on the transfer or sale of the Shares being sold by the Selling Stockholder
to the Underwriters.
(c) Such Selling Stockholder will do or perform all things required to
be done or performed by the Selling Stockholder prior to the Closing Date or any
Option Closing Date, as the case may be, to satisfy all conditions precedent to
the delivery of the Shares pursuant to this Agreement.
(d) Such Selling Stockholder will not sell, contract to sell or
otherwise dispose of any Common Stock, except for the sale of Shares to the
Underwriters pursuant to this Agreement, prior to the expiration of 120 days
after the date of the Prospectus, without the prior written consent of ▇▇▇▇▇
▇▇▇▇▇▇ Inc.
(e) Except as stated in this Agreement and in the Prepricing
Prospectus and the Prospectus, such Selling Stockholder will not take, directly
or indirectly, any action designed to or that might reasonably be 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.
(f) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, within the period of time
referred to in Section 5(f) hereof, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations or of any change in information relating to such Selling Stockholder
or the Company or any new information relating to the Company or relating to any
matter stated in the Prospectus or any amendment or supplement thereto which
comes to the attention of such Selling Stockholder that suggests that any
statement made in
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the Registration Statement or the Prospectus (as then amended or supplemented,
if amended or supplemented) is or may be untrue in any material respect or that
the Registration Statement or Prospectus (as then amended or supplemented, if
amended or supplemented) omits or may omit to state a material fact or a fact
necessary to be stated therein in order to make the statements therein not
misleading in any material respect, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented, if amended or supplemented) in
order to comply with the Act or any other law.
7. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act. The Commission has not issued
any order preventing or suspending the use of any Prepricing Prospectus.
(b) The Company and the transactions contemplated by this Agreement
meet the requirements for using Form S-3 under the Act. The registration
statement in the form in which it became or becomes effective and also in such
form as it may be when any post-effective amendment thereto shall become
effective and the prospectus and any supplement or amendment thereto when filed
with the Commission under Rule 424(b) under the Act, complied or will comply in
all material respects with the provisions of the Act and will not at any such
times contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except that this representation and warranty does not apply to
statements in or omissions from the registration statement or the prospectus
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, and any further
Incorporated Documents so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder; no such document when it was filed (or, if an amendment
with respect to any such document was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a material
fact
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required to be stated therein or necessary in order to make the statements
therein not misleading; and no such further document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading.
(d) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the Shares to be issued and sold
by the Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable and free of any preemptive or
similar rights; and the capital stock of the Company conforms to the description
thereof in the registration statement and the prospectus.
(e) The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and is
duly registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Company.
(f) The Company has no subsidiaries.
(g) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company, or to which the
Company, or to which any of its respective properties is subject, that are
required to be described in the Registration Statement or the Prospectus but are
not described as required, and there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that are not described or
filed as required by the Act or the Exchange Act.
(h) The Company is not in violation of its certificate or articles of
incorporation or by-laws, or other organizational documents, or of any law,
ordinance, administrative or governmental rule or regulation applicable to the
Company or of any decree of any court or governmental agency or body having
jurisdiction over
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the Company, or in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any material agreement, indenture, lease or
other instrument to which the Company is a party or by which any of them or any
of their respective properties may be bound, except for any such violation or
default which does not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Company.
(i) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement by the Company nor the consummation by
the Company of the transactions contemplated hereby (i) requires any consent,
approval, authorization or other order of or registration or filing with, any
court, regulatory body, administrative agency or other governmental body, agency
or official (except such as may be required for the registration of the Shares
under the Act and the Exchange Act and compliance with the securities or Blue
Sky laws of various jurisdictions, all of which have been or will be effected in
accordance with this Agreement, and except such as may be required under the
rules of the National Association of Securities Dealers, Inc. ("NASD") in
connection with the compensation of the Underwriters) or conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
the certificate or articles of incorporation or bylaws, or other organizational
documents, of the Company or (ii) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, any agreement, indenture,
lease or other instrument to which the Company is a party or by which any of
them or any of their respective properties may be bound, or violates or will
violate any statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Company or any of its properties, or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to the terms of any agreement or instrument to
which it is a party or by which it may be bound or to which any of the property
or assets of it is subject, except for any such conflict, breach, violation or
default which would not result in a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Company.
(j) The accountants, Ernst & Young LLP, who have certified or shall
certify the financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) are independent public accountants as required by the Act.
(k) The financial statements, together with related schedules and
notes, included or incorporated by reference in the
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Registration Statement and the Prospectus (and any amendment or supplement
thereto), present fairly the financial position, results of operations and
changes in financial position of the Company on the basis stated in the
Registration Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
or incorporated by reference in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) are accurately presented in all
material respects and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(l) The execution and delivery of, and the performance by the Company
of its obligations under, this Agreement have been duly and validly authorized
by the Company, and this Agreement has been duly executed and delivered by the
Company and constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except (A) as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles and (B) to the extent that rights
to indemnity or contribution under this Agreement may be limited by federal and
state securities laws or the public policy underlying such laws.
(m) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), the
Company has not incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, that is
material to the Company, and there has not been any change in the capital stock
(except for issuances of Class A Common Stock pursuant to the exercise of
previously granted employee stock options), or material increase in the short-
term debt or long-term debt, of the Company, or any material adverse change, or
any development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company.
(n) The Company has good and marketable title to all property (real
and personal) described in the Prospectus as being owned by it, free and clear
of all liens, claims, security interests or other encumbrances except such as
are described in the Registration Statement and the Prospectus or in a document
filed as
- 13 -
an exhibit to the Registration Statement and all the property described in the
Prospectus as being held under lease by each of the Company is held by it under
valid, subsisting and enforceable leases, except where the failure of such lease
to be valid, subsisting and enforceable would not result in a material adverse
effect on the condition (financial or other), business, properties, net worth or
results of operations of the Company.
(o) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the Prepricing
Prospectus, the Prospectus or other materials, if any, permitted by the Act.
(p) The Company has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its respective properties and to conduct its business in the
manner described in the Prospectus, subject to such qualifications as may be set
forth in the Prospectus; the Company has fulfilled and performed all its
material obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights of
the holder of any such permit, subject in each case to such qualification as may
be set forth in the Prospectus, except for any such revocation, termination or
impairment which would not result in a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Company; and, except as described in the Prospectus, none of such permits
contains any restriction that is materially burdensome to the Company.
(q) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(r) To the Company's knowledge, neither the Company nor any employee
or agent of the Company has made any payment of funds of the Company or received
or retained any funds in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
- 14 -
(s) The Company has filed all Federal, state, local and foreign tax
returns which are required to be filed through the date hereof, or has received
extensions thereof, except where the failure to file any such state, local and
foreign tax returns would not result in a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Company, and has paid all taxes shown on such returns and all
assessments received by it to the extent that the same are material and have
become due, except where the failure to pay any such taxes would not result in a
material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company.
(t) No holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the Company
because of the filing of the registration statement or consummation of the
transactions contemplated by this Agreement.
(u) The Company owns or possesses all patents, trademarks, trademark
registration, service marks, service ▇▇▇▇ registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in the
Prospectus as being owned by it or necessary for the conduct of its businesses,
and the Company is not aware of any claim to the contrary or any challenge by
any other person to the rights of the Company with respect to the foregoing.
(v) The Company has complied with all provisions of Florida Statutes,
(S)517.075, relating to issuers doing business with Cuba.
(w) The Company is not involved in any labor dispute nor is any such
dispute threatened, which dispute may reasonably be expected to involve a
material adverse change in the condition (financial or other), business, net
worth or results of operations of the Company.
8. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder represents and warrants to each Underwriter that:
(a) Such Selling Stockholder will, immediately prior to each Closing
hereunder, cause a sufficient number of shares of Class B Common Stock held by
such Selling Stockholder to be converted into the number of shares of Class A
Common Stock required to be delivered to the Underwriters at such Closing, and
such Selling Stockholder will have, on the Closing Date and any Option Closing
Date, valid and marketable title to the Shares to be sold by such Selling
Stockholder, free and clear of any lien,
- 15 -
claim, security interest or other encumbrance, including, without limitation,
any restriction on transfer.
(b) Such Selling Stockholder now has full legal right, power and
authorization, and any approval required by law, to convert shares of Class B
Common Stock into the number of shares of Class A Common Stock required to be
delivered to the Underwriters at each Closing, and on the Closing Date and any
Option Closing Date such Selling Stockholder will have, full legal right, power
and authorization, and any approval required by law, to sell, assign transfer
and deliver such Shares in the manner provided in this Agreement, and upon
delivery of and payment for such Shares as provided in this Agreement, the
several Underwriters will acquire valid and marketable title to such Shares free
and clear of any lien, claim, security interest, or other encumbrance.
(c) This Agreement has been duly authorized, executed and delivered
by such Selling Stockholder and is the valid and binding agreement of such
Selling Stockholder enforceable against such Selling Stockholder in accordance
with its terms, except (A) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles and (B) to the extent that rights to indemnity or
contribution under this Agreement may be limited by federal and state securities
laws or the public policy underlying such laws.
(d) Neither the execution and delivery of this Agreement by such
Selling Stockholder nor the consummation of the transactions herein or therein
contemplated by such Selling Stockholder requires any consent, approval,
authorization or order of, or filing or registration with, any court, regulatory
body, administrative agency or other governmental body, agency or official
(except such as may be required under the Act or such as may be required under
state securities or Blue Sky laws governing the purchase and distribution of the
Shares, and except such as may be required under the rules of the NASD in
connection with the compensation of the Underwriters) or conflicts or will
conflict with or constitutes or will constitute a breach of, or default under,
or violates or will violate, any agreement, indenture or other instrument to
which such Selling Stockholder is a party or by which such Selling Stockholder
is or may be bound or to which any of such Selling Stockholder's property or
assets is subject, or any statute, law, rule, regulation, ruling, judgment,
injunction, order or decree applicable to such Selling Stockholder or to any
property or assets of such Selling Stockholder.
(e) The Registration Statement and the Prospectus, do not and will
not contain an untrue statement of a material fact or
- 16 -
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(f) Such Selling Stockholder has not taken, directly or indirectly,
any action designed to or that might reasonably be 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, except for the lock-up arrangements described
in the Prospectus.
(g) To the best knowledge of such Selling Stockholder, the
representations of the Company herein are true.
9. Indemnification and Contribution. (a) The Company and, subject
to the last proviso of this sentence, each Selling Stockholder, severally, agree
to indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or in
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to such Underwriter furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending, and provided further, however, that the indemnification
contained in this paragraph (a) by each Selling Stockholder shall be limited to
an amount equal to the number of Shares sold to the
- 17 -
Underwriters hereunder by such Selling Stockholder multiplied by the purchase
price per share hereunder. The foregoing indemnity agreement shall be in
addition to any liability which the Company or any Selling Stockholder may
otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company or any Selling Stockholder, such
Underwriter or such controlling person shall promptly notify the parties against
whom indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. Such Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the indemnifying parties have agreed in
writing to pay such fees and expenses, (ii) the indemnifying parties have failed
to assume the defense and employ counsel, or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties) include both such
Underwriter or such controlling person and the indemnifying parties and such
Underwriter or such controlling person shall have been advised by its counsel in
writing that representation of such indemnified party and any indemnifying party
by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or reasonably likely potential differing interests
between them (in which case the indemnifying party shall not have the right to
assume the defense of such action, suit or proceeding on behalf of such
Underwriter or such controlling person). It is understood, however, that the
indemnifying parties shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Underwriters and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be designated
in writing by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., and that all such fees and expenses shall be
reimbursed as they are incurred. The indemnifying parties shall not be liable
for any settlement of any such action, suit or proceeding effected without their
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
indemnifying parties agree to indemnify and hold harmless any Underwriter, to
the extent provided in the preceding paragraph, and any such controlling person
from and against any
- 18 -
loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, each Selling Stockholder, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company and
the Selling Stockholders to each Underwriter, but only with respect to
information relating to such Underwriter furnished in writing by or on behalf of
such Underwriter through you expressly for use in the Registration Statement,
the Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the Company,
any of its directors, any such officer, any Selling Stockholder, or any such
controlling person based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto, and in respect of
which indemnity may be sought against any Underwriter pursuant to this paragraph
(c), such Underwriter shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officer, the Selling Stockholders, and any such
controlling person shall have the rights and duties given to the Underwriters by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability which any Underwriter may otherwise have.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other hand from the offering of the Shares, or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
- 19 -
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus; provided
that, in the event that the Underwriters shall have purchased any Additional
Shares hereunder, any determination of the relative benefits received by the
Company, the Selling Stockholders or the Underwriters from the offering of the
Shares shall include the net proceeds (before deducting expenses) received by
the Company and the Selling Stockholders, and the underwriting discounts and
commissions received by the Underwriters, from the sale of such Additional
Shares, in each case computed on the basis of the respective amounts set forth
in the notes to the table on the cover page of the Prospectus. The relative
fault of the Company and the Selling Stockholders on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Stockholders on the one hand or by the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by a 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
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above 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 any claim or defending any such action,
suit or proceeding. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and the contribution obligation of each Selling
Stockholder shall be limited to an amount equal to the number of Shares sold to
the Underwriters hereunder by such Selling Stockholder multiplied by the price
per share. No person guilty of fraudulent misrepresentation (within
- 20 -
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to the respective numbers of Firm Shares set forth opposite their
names in Schedule II hereto (or such numbers of Firm Shares increased as set
forth in Section 12 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or 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 action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or the Selling Stockholders or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
9.
10. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
registration statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the registration
statement shall have been issued
- 21 -
and no proceeding for that purpose shall have been instituted or, to the
knowledge of the Company or any Underwriter, threatened by the Commission, and
any request of the Commission for additional information (to be included in the
registration statement or the prospectus or otherwise) shall have been complied
with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company not contemplated
by the Prospectus, which in your opinion, as Representatives of the several
Underwriters, would materially, adversely affect the market for the Shares, or
(ii) any event or development relating to or involving the Company or any
officer or director of the Company or any Selling Stockholder which makes any
material statement made in the Prospectus untrue or which, in the opinion of the
Company and its counsel or the Underwriters and their counsel, requires the
making of any addition to or change in the Prospectus in order to state a
material fact required by the Act or any other law to be stated therein or
necessary in order to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development would, in your
opinion, as Representatives of the several Underwriters, materially adversely
affect the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company and the Selling
Stockholders, dated the Closing Date and addressed to you, as Representatives of
the several Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware;
(ii) The Company has all requisite corporate power and authority to
own, lease and license its assets and properties and to conduct its
business as now being conducted and as described in the Registration
Statement and the Prospectus and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires
such registration or qualification, except where the failure so to register
or qualify does not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company; and the Company has all requisite corporate
power and authority to enter into, deliver and perform the
- 22 -
Underwriting Agreement and to issue and sell the Company Shares;
(iii) As of the date of effectiveness of the Registration Statement,
the Company had authorized capital stock as set forth in the "actual" column
of the capitalization table under the caption "Capitalization" in the
Prospectus; the certificates evidencing the Shares are in due and proper
legal form and have been duly authorized for issuance by the Company; all of
the outstanding shares of Class A Common Stock (including the Selling
Shareholder Shares) and Class B Common Stock have been duly and validly
authorized and are fully paid and nonassessable and none of them was issued
in violation of any preemptive or, to our knowledge, other similar right.
The Selling Shareholder Shares were duly issued upon the conversion of the
Class B Common Stock pursuant to the Restated Certificate of Incorporation
of the Company. The Company Shares, when issued and sold pursuant to the
Underwriting Agreement, will be duly and validly issued, outstanding, fully
paid and nonassessable and none of them will have been issued in violation
of any preemptive or other similar right. To the knowledge of such counsel,
except as disclosed in the Registration Statement and the Prospectus, there
is no outstanding option, warrant or other right calling for the issuance
of, and no commitment, plan or agreement to issue, any share of stock of the
Company or any security convertible into, exercisable for, or exchangeable
for stock of the Company. The Class A Common Stock, the Class B Common Stock
and the Shares conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus;
(iv) All necessary corporate action has been duly and validly taken
by the Company to authorize the execution, delivery and performance of the
Underwriting Agreement, and the issuance and sale of the Company Shares.
The Underwriting Agreement has been duly authorized and validly executed
and delivered by the Company;
(v) Neither the execution, delivery and performance of the
Underwriting Agreement by the Company nor the consummation of any of the
transactions contemplated thereby (including the issuance and sale of the
Company Shares) will give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with or result in the breach
of any term or provision of, or constitute a default (or any event which
with notice or lapse of time, or both, would constitute a default) under,
or require any consent or waiver that has not been obtained under, or
result in the execution or imposition of any lien, charge or encumbrance
upon any
- 23 -
properties or assets of the Company pursuant to any term, covenant or condition
of any agreement included in the exhibits to the Registration Statement or any
Incorporated Document to which the Company is a party or by which its assets or
properties or businesses are bound nor will any such action result in any
violation of any existing law, regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment, injunction, order or
decree known to such counsel after reasonable inquiry, applicable to the Company
or any of its properties;
(vi) The Company is not in violation of its certificate of
incorporation, and to the knowledge of such counsel, no default exists, and no
event has occurred which with notice or lapse of time, or both, would constitute
a default, in the due performance and observance by the Company of any term,
covenant or condition, of its bylaws or any agreement included in the exhibits
to the Registration Statement or any Incorporated Document to which the Company
is a party or by which its assets or properties or businesses are bound where
the consequences of such default would have a material and adverse effect on the
properties, business, results of operations, prospects or condition (financial
or otherwise) of the Company;
(vii) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental agency, body or official is required for the performance
of the Underwriting Agreement by the Company or the consummation of the
transactions contemplated thereby, except such as have been obtained under the
Act and such as may be required under state or foreign securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
several Underwriters and under the rules of the NASD in connection with the
compensation of the Underwriters;
(viii) To the knowledge of such counsel, except as disclosed in the
Registration Statement and Prospectus, there is no litigation or governmental or
other proceeding or investigation, before any court or before or by any public
body or board pending or threatened against, or involving the assets, properties
or businesses of, the Company which is required to be described in the
Registration Statement or Prospectus (or any amendment or supplement thereto) or
which would have a material adverse effect upon the properties, business,
results of operations, prospects or condition (financial or otherwise) of the
Company;
-24-
(ix) The statements in the Prospectus under the caption "Description
of Capital Stock," and the statements in the Company's 1996 Proxy Statement
under the captions "Management -- Option Grants," "Management -- Employee
Incentive Stock Option Plan" and "Management -- Non-Employee Director Stock
Option Plan," insofar as such statements constitute a summary of legal matters,
documents referred to therein or matters of law, are fair summaries of the
material provisions thereof and accurately present in all material respects the
information called for with respect to such documents and matters. To the
knowledge of such counsel, there are no agreements, contracts, indentures,
leases or other instruments, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not described or filed as required, as the case
may be;
(x) The Registration Statement, all preliminary prospectuses and
the Prospectus and each amendment or supplement thereto (except for the
financial statements and notes and schedules and other financial data included
therein, as to which counsel need not express any opinion) comply as to form in
all material respects with the requirements of the Securities Act and the
published rules and regulations thereunder; and each of the Incorporated
Documents (except for the financial statements and the notes thereto and the
schedules and other financial and statistical data included therein, as to which
counsel need not express any opinion) complies as to form in all material
respects with the Exchange Act and the rules and regulations of the Commission
thereunder;
(xi) The Registration Statement has become effective under the
Securities Act, and, to the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are threatened, pending or
contemplated; and any required filing of the Prospectus pursuant to Rule 424(b)
has been made in accordance with Rule 424(b);
(xii) Each of the Underwriters who has purchased Selling Shareholder
Shares in good faith and without notice of any adverse claim within the meaning
of the applicable Uniform Commercial Code has received good and valid title to
such Selling Shareholder Shares, free and clear of any liens, encumbrances,
security interests and claims whatsoever, except for liens, encumbrances,
security interests and claims created or imposed by, or in favor of, the
Underwriters.
-25-
(xiii) This Agreement has been duly executed and delivered by each
of the Selling Stockholders;
(xiv) To the knowledge of such counsel, each Selling Stockholder
has full legal right, power and authorization, and any approval required by law,
to sell, assign, transfer and deliver good, valid and marketable title to the
Shares which such Selling Stockholder has agreed to sell pursuant to this
Agreement;
(xv) To the knowledge of such counsel, the execution and delivery
of this Agreement by the Selling Stockholders and the consummation of the
transactions contemplated hereby and thereby will not conflict with, violate,
result in a breach of or constitute a default under the terms or provisions of
any agreement, indenture, mortgage or other instrument to which any Selling
Stockholder is a party or by which any of them or any of their assets or
property is bound, or any court order or decree or any law, rule, or regulation
applicable to any Selling Stockholder or to any of the property or assets of any
Selling Stockholder;
(xvi) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency, or official is required on the part of the
Selling Stockholders for the performance of the Underwriting Agreement or the
consummation of the transaction contemplated thereby (except as have been
obtained under the Act, such as may be required under state securities or Blue
Sky laws governing the purchase and distribution of the Shares and under the
rules of the NASD in connection with the compensation of the Underwriters);
(xvii) To the knowledge of such counsel, the Company is lawfully
entitled to use the name "Finish Line" and such counsel is not aware of any
claim to the contrary or any challenge by any other person to the rights of the
Company to such name which could have a material and adverse effect on the
properties, business, results of operations, prospects or condition (financial
or otherwise) of the Company;
(xviii) No holder of any security has any right to require
registration of shares of Class A Common Stock or any other security of the
Company as a result of filing the registration statement; and
(xix) Such counsel shall also state that they have participated in
the preparation of the Registration Statement, the Prospectus and the
Incorporated Documents and in
-26-
conferences with officers and other representatives of the Company,
representatives of the Representatives and representatives of the
independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement, the Prospectus, the
Incorporated Documents and related matters were discussed; since they have
not undertaken to determine independently the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
Prospectus (other than with respect to the statements in the Prospectus as
to which paragraph (ix) refers), and because of the limitations inherent in
the examination made by them and knowledge available to them and the nature
and extent of their participation in such conferences, they are unable to
assume, explicitly or implicitly, and they do not assume, any
responsibility for the accuracy, completeness or fairness of such
statements and they can give no assurance that such examination, knowledge
and participation in such conferences would necessarily reveal matters of
significance with respect to the items discussed in the remainder of this
paragraph; however, based upon the information revealed to them as a result
of their participation in the preparation of the Registration Statement,
Prospectus and the Incorporated Documents and such conferences, no facts
have come to their attention that lead them to believe that the
Registration Statement at the time it became effective (except with respect
to the financial statements and notes and schedules thereto and other
financial data, as to which they need express no opinion) contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus as amended or supplemented (except
with respect to the financial statements and notes and schedules thereto
and other financial data, as to which they need express no statement) on
the date thereof and on the Closing Date and Option Closing Date, as the
case may be, contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States,
the State of New York or the General Corporation Law of the State of Delaware,
provided that (1) each such local counsel is acceptable to the Representatives,
(2) such reliance is expressly authorized by each opinion so relied upon and a
copy of each such opinion is delivered to the Representatives and is, in form
and substance satisfactory to them
-27-
and their counsel, and (3) counsel shall state in their opinion that they
believe that they and the Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇, counsel for the Underwriters, dated the Closing Date and addressed to
you, as Representatives of the several Underwriters, with respect to the matters
referred to in clauses (iv) and (xix) of the foregoing paragraph (c) and such
other related matters as you may request.
(e) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Ernst & Young LLP, independent certified public accountants,
substantially in the forms heretofore approved by you.
(f)(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
change in the capital stock (except for issuances of Class A Common Stock
pursuant to the exercise of previously granted employee stock options) of the
Company nor any material increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or Supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), except as may otherwise be
stated in the Registration Statement and Prospectus (or any amendment or
supplement thereto), any material adverse change in the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Company; (iv) the Company shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Company, other than those reflected in the Registration
Statement or the Prospectus (or any amendment or supplement thereto); and (v)
all the representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the chief executive
officer and the chief financial officer of the Company (or such other officers
as are acceptable to you), to the effect set forth in this Section 10(f) and in
Section 10(g) hereof.
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(g) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(h) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by or on behalf of the Selling Stockholders to the effect set forth in
this Section 10(h) and in Section 10(i) hereof.
(i) The Selling Stockholders shall not have failed at or prior to the
Closing Date to have performed or complied with any of their agreements herein
contained and required to be performed or complied with by them hereunder at or
prior to the Closing Date.
(j) Prior to the Closing Date the shares of Common Stock which the
Company agrees to sell pursuant to this Agreement shall have been listed,
subject to notice of issuance, on the Nasdaq National Market.
(k) The Sellers shall have furnished or caused to be furnished to you
such further certificates and documents as you shall have requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company or any
Selling Stockholder and delivered to you, as Representatives of the
Underwriters, or to counsel for the Underwriters, shall be deemed a
representation and warranty by the Company, the Selling Stockholders or the
particular Selling Stockholder, as the case may be, to each Underwriter as to
the statements made therein.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of any Option Closing Date
of the conditions set forth in this Section 10, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (i) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c), (d) and
(e) shall be revised to reflect the sale of Additional Shares.
-29-
11. Expenses. Each of the Sellers covenants and agrees as follows:
(a) Except as provided in paragraph (b) below, the Company agrees to
pay, or reimburse if paid by the Representatives, whether or not the
transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the public offering of the Shares
and the performance of the obligations of the Sellers under the Agreement
including those relating to (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the registration statement, each
Prepricing Prospectus, the Prospectus, the Incorporated Documents, and all
amendments or supplements to any of them, as may be reasonably requested for use
in connection with the offering and sale of the Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; (iv) the printing (or reproduction) and delivery of this Agreement,
the preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the listing of the Shares on the Nasdaq National Market; (vi)
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(g)
hereof (including the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing or reproduction, and
delivery of the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the filing fees and the fees and expenses
of counsel for the Underwriters in connection with any filings required to be
made with the National Association of Securities Dealers, Inc.; (viii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of
the Shares; and (ix) the fees and expenses of the Company's accountants and the
fees and expenses of counsel (including local and special counsel) for the
Company and the Selling Stockholders.
(b) Each of the Selling Stockholders severally agrees to pay, or
reimburse if paid by the Representatives or the Company, whether or not the
transactions contemplated hereby are consummated or this Agreement is
terminated, (i) all costs and expenses directly incident to the public offering
of the Shares by such Selling Stockholder and the performance of the obligations
of such Selling Stockholder under this Agreement and (ii) such Selling
-30-
Stockholder's pro rata share of the costs and expenses set forth in clauses (vi)
and (vii) of paragraph (a) above and of the registration fee paid in connection
with the filing of the Registration Statement. For purposes of clause (ii)
above, each Selling Stockholder's pro rata share of the applicable costs and
expenses shall be determined by dividing the total number of Shares that may be
sold by such Selling Stockholder hereunder by the total number of Shares.
12. Effective Date of Agreement. This Agreement shall become effective: (i)
upon the execution and delivery hereof by the parties hereto; or (ii) if, at the
time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the registration statement or such post-effective amendment
has been released by the Commission. Until such time as this Agreement shall
have become effective, it may be terminated by the Company, by notifying you, or
by you, as Representatives of the several Underwriters, by notifying the Company
and the Selling Stockholders.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than one-
tenth of the aggregate number of Shares which the Underwriters are obligated to
purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule II hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters or
in such other proportion as you may specify in accordance with Section 20 of the
Master Agreement Among Underwriters of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., to purchase the Shares
which such defaulting Underwriter or Underwriters are obligated, but fail or
refuse, to purchase. If any one or more of the Underwriters shall fail or refuse
to purchase Shares which it or they are obligated to purchase on the Closing
Date and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares which the
Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Company for the purchase of such Shares by one or
more non-defaulting Underwriters or other party or parties approved by you and
the Company are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for
-31-
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule II hereto who, with your approval and the approval of the Company,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or any Selling Stockholder, by notice to the Company,
if prior to the Closing Date or any Option Closing Date (if different from the
Closing Date and then only as to the Additional Shares), as the case may be, (i)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking activities
in New York or Indiana shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your reasonable
judgment, impracticable or inadvisable to commence or continue the offering of
the Shares at the offering price to the public set forth on the cover page of
the Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
14. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, and the statements in the first and third paragraphs under
the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12
and 13 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to the
-32-
Company, at the office of the Company at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer, or (ii) if to
the Selling Stockholders, as their names appear on Schedule I, at the office of
the Company at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or (iii)
if to you, as Representatives of the several Underwriters, care of ▇▇▇▇▇ ▇▇▇▇▇▇
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager,
Investment Banking Division, with a copy of any notice to the Company or any
Selling Stockholder to be sent to ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and a copy
of any notice to any Underwriter to be sent to H. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, Esq.,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, its directors and officers, and the other controlling
persons referred to in Section 9 hereof and their respective successors and
assigns, to the extent provided herein, and no other person shall acquire or
have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Shares in his
status as such purchaser.
16. Applicable Law; Counterparts; Facsimile Delivery. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the State of New
York.
This Agreement may be signed in various counterparts and delivered by
facsimile transmission all of which counterparts together constitute one and the
same instrument. If signed in counterparts, this Agreement shall not become
effective unless at least one counterpart hereof shall have been executed and
delivered on behalf of each party hereto.
-33-
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
THE FINISH LINE, INC.
By:_______________________________
President
_______________________________
▇▇▇▇ ▇. ▇▇▇▇▇
_______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
_______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Confirmed as of the date first
above mentioned on behalf of
themselves and the other
several Underwriters named
in Schedule II hereto.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇▇▇▇▇▇ & CO., INC.
As Representatives of the Several Underwriters
By: ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By:________________________________
Managing Director
-34-
SCHEDULE I
THE FINISH LINE, INC.
Part A - Firm Shares
--------------------
NUMBER OF
SELLING STOCKHOLDERS FIRM SHARES
-------------------- -----------
▇▇▇▇ ▇. ▇▇▇▇▇...................... 176,188
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇................... 176,188
▇▇▇▇▇ ▇. ▇▇▇▇▇..................... 121,749
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.................. 125,875
-------
Total.............. 600,000
=======
Part B - Additional Shares
--------------------------
NUMBER OF
SELLING STOCKHOLDERS ADDITIONAL SHARES
-------------------- -----------------
▇▇▇▇ ▇. ▇▇▇▇▇................ 132,141
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇............. 132,141
▇▇▇▇▇ ▇. ▇▇▇▇▇............... 91,312
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇............ 94,406
-------
Total........ 450,000
=======
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SCHEDULE II
THE FINISH LINE, INC.
NUMBER OF
UNDERWRITER FIRM SHARES
----------- -----------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc............................
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc....................
▇▇▇▇▇▇▇▇▇▇▇ & Co., Inc......................
---------
Total............... 3,000,000
=========