Exhibit 1
▇▇▇▇▇▇ & Bird LLP
Draft dated 10/28/03
Conn's, Inc.
[__________] SHARES*
Common Stock
($0.01 par value)
UNDERWRITING AGREEMENT
___________, 2003
▇▇▇▇▇▇▇▇ Inc.
SunTrust Capital Markets, Inc.
As Representatives of the several
Underwriters named in Schedule I hereto.
c/o Stephens Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Conn's, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇., as the selling stockholder (the "Selling Stockholder"), severally and not
jointly confirm their agreement with the several underwriters (the
"Underwriters") for whom you are acting as representatives (the
"Representatives") as follows:
The Company proposes to issue and sell [_________] shares of its authorized
and unissued common stock, par value $0.01 per share, (the "Company Shares"),
and the Selling Stockholder proposes to sell [________] shares of the issued and
outstanding common stock of the Company (the "Selling Stockholder Shares"), to
the Underwriters. The Company Shares and the Selling Stockholder Shares are
hereinafter collectively referred to as the "Underwritten Shares." The Company's
common stock is more fully described in the Registration Statement and the
Prospectus hereinafter mentioned. For the sole purpose of covering
over-allotments in connection with the sale of the Underwritten Shares, the
Company grants to the Underwriters an option (the "Option") to purchase all or
any part of an additional [__________] shares of the Company's common stock from
the Company (the "Option Shares"). The Underwritten Shares and the Option Shares
purchased pursuant to this Underwriting Agreement (this "Agreement") are herein
called the "Shares," and the proposed offering of the Shares by the Underwriters
is hereinafter referred to as the "Public Offering."
As part of the Public Offering, the Underwriters have agreed to reserve out
of the Underwritten Shares up to [_________] shares for sale to the Company's
directors,
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* Plus up to [____________] additional shares of common stock to cover
over-allotments.
officers, employees and other parties associated with the Company (collectively,
"Participants"), as part of the distribution of the Shares by the Underwriters
(the "Directed Share Program"), subject to the terms of this Agreement and
applicable laws, rules and regulations. ▇▇▇▇▇▇▇▇ Inc. ("▇▇▇▇▇▇▇▇") will process
all sales to Participants under the Directed Share Program. The Underwritten
Shares to be sold by the Underwriters pursuant to the Directed Share Program
(the "Directed Shares") will be sold by the Underwriters pursuant to this
Agreement at the public offering price. Any Directed Shares not subscribed for
by the end of the business day on which this Agreement is executed will be
offered to the public by the Underwriters as part of the Public Offering
contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), pursuant to the Securities Act of 1933, as amended (the "Act"),
and published rules and regulations adopted by the Commission under the Act (the
"Rules"), a registration statement on Form S-1 (the "Form S-1") (File No.
333-109046), including a form of prospectus, relating to the Shares, and such
amendments to the Form S-1 as may have been filed with the Commission prior to
the date of this Agreement. The Company has furnished to the Representatives
copies of the Form S-1, each amendment to it filed by the Company with the
Commission, and each Preliminary Prospectus (as defined herein) filed by the
Company with the Commission. The Form S-1, as amended, at the time it was
declared effective (the "Effective Date"), including all financial statement
schedules and exhibits thereto and any information deemed to be included in the
Prospectus (as defined herein) by Rule 430A under the Act, is called the
"Registration Statement." The term "Preliminary Prospectus" means any (i)
prospectus subject to completion included at any time as a part of the Form S-1
or any amendment or post-effective amendment thereto that was delivered by the
Company or the Underwriters to potential investors in the Public Offering, and
(ii) prospectus subject to completion, if any, included in the Registration
Statement at the Effective Date); and the term "Prospectus" means the prospectus
in the form first used by the Underwriters to confirm sales of the Shares. If
the Company has filed or is required pursuant to the terms hereof to file an
amendment to the Registration Statement pursuant to Rule 462(b) under the Act
registering additional shares of the Company's common stock (a "Rule 462(b)
Registration Statement"), such Rule 462(b) Registration Statement will become
effective no later than 10:00 p.m., eastern time, on the date of this Agreement.
Unless otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration Statement.
As the Representatives, you have advised the Company and the Selling
Stockholder that (a) you are authorized to enter into this Agreement on behalf
of the several Underwriters and (b) the Underwriters are willing, acting
severally and not jointly, to purchase the amounts of the Underwritten Shares
set forth opposite their respective names on Schedule I hereto, plus their pro
rata portion of the Option Shares if the Representatives elect to exercise the
over-allotment Option in whole or in part for the accounts of the several
Underwriters.
As used in this Agreement, the "Company" means Conn's, Inc. or Conn
Appliances, Inc., as applicable. As used in this Agreement, references to the
"Company's knowledge," to the "knowledge of the Company" or other similar
language means and
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refers to those facts that are actually known or should have been known after
reasonable inquiry by any of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇., C. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. or ▇▇▇▇▇
▇. ▇▇▇▇▇▇.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the Company,
the Selling Stockholder and the Underwriters hereby agree as follows:
1. Representations, Warranties and Agreements.
(a) The Company represents and warrants to, and agrees with, each
Underwriter as follows:
(i) Each of Conn's Inc. and Conn Appliances, Inc. has been duly
incorporated and organized and is validly existing as a corporation in good
standing under the laws of Delaware and Texas, respectively, with full
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Prospectus. Each
subsidiary of the Company (each a "Subsidiary" and collectively the
"Subsidiaries") has been duly incorporated and organized and is validly
existing as a corporation, limited liability company or limited
partnership, in good standing under the laws of the jurisdiction of its
organization, with full power and authority (corporate and other) to own,
lease and operate its properties and conduct its business as described in
the Prospectus. Each of the Company and the Subsidiaries is duly qualified
to transact business as a foreign corporation in good standing in all other
jurisdictions in which the ownership or lease of their properties requires
such qualifications. All of the issued and outstanding capital stock or
other equity interest of each Subsidiary has been duly authorized and
validly issued and is fully paid and non-assessable. Except as disclosed in
the Prospectus, the Company owns all of the outstanding capital stock of
its Subsidiaries free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest. The Company does not own or
control, directly or indirectly, any corporation or other entity other than
the subsidiaries listed in Exhibit 21 to the Registration Statement.
(ii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization" (other than for subsequent issuances, if any, pursuant to
employee benefit plans described in the Prospectus). The common stock of
the Company (including the Shares) conforms in all material respects to the
description thereof contained in the Prospectus. All of the issued and
outstanding shares of common stock of the Company have been duly authorized
and are validly issued, fully paid and nonassessable. None of the issued
and outstanding shares of common stock of the Company were issued in
violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity or
debt securities convertible into or exchangeable or exercisable for, any
capital stock of the Company or any of its subsidiaries other than (A)
those accurately described in the Prospectus or
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(B) the put options that will terminate immediately following the
consummation of the Public Offering. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, set forth in the Prospectus accurately
and fairly presents the information required to be shown with respect to
such plans, arrangements, options and rights.
(iii) The Company Shares and the Option Shares are duly authorized
and, when issued and paid for as contemplated herein, will be validly
issued and fully paid and non-assessable and will conform to the
description thereof in the Prospectus.
(iv) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any equity or debt securities of
the Company owned or to be owned by such person or to require the Company
to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under the Act.
Neither the filing of the Registration Statement nor the offering or sale
of the Shares as contemplated by this Agreement gives rise to any rights
for or relating to the registration of any securities of the Company.
(v) Any Preliminary Prospectus, the Prospectus and the Registration
Statement, when filed, complied in all material respects as to form with
the requirements of the Act and the Rules, including those of Form S-1. The
Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Act. To the knowledge of the
Company, the Company has complied to the Commission's satisfaction with all
requests of the Commission for additional information. Neither the
Commission nor any other agency, body, authority, court or arbitrator of
competent jurisdiction has, by order or otherwise, prohibited or suspended
the use of any Preliminary Prospectus or the Prospectus relating to the
Public Offering of the Shares or instituted or, to the Company's knowledge,
threatened proceedings for that purpose. No stop order suspending the
effectiveness of the Registration Statement or any part thereof has been
issued and no proceeding for that purpose has been instituted or, to the
Company's knowledge, threatened or is contemplated by the Commission or the
securities authority of any state or other jurisdiction.
(vi) When any Preliminary Prospectus was filed with the Commission it
did not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
Registration Statement and each amendment thereto, and the Prospectus and
each supplement thereto, as of its date and while effective or during the
period in which the Prospectus is required to be delivered, (A) contained
or will contain all statements required to be stated therein in accordance
with, and complied or will comply in all material respects with the
requirements of, the Act and the Rules and (B) did
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not or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; if the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration Statement or any amendment thereto, if applicable, when
it becomes effective and while it is effective, (X) will contain all
statements required to be stated therein in accordance with, and will
comply in all material respects with the requirements of, the Act and the
Rules and (Y) will not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein
not misleading. The Company does not make any of the foregoing
representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives, expressly for use in the preparation thereof as
hereinafter set forth in Section 12. The statistical and market-related
data included in the Prospectus are based on or derived from independent
sources which the Company believes to be reliable and accurate in all
material respects or represent the Company's good faith estimates that are
made on the basis of data derived from such sources.
(vii) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules, as set forth in
the Registration Statement, the Prospectus or any Preliminary Prospectus
present fairly the consolidated financial position, the results of
operations and cash flows of the Company and the Subsidiaries, on a
consolidated basis, as of the indicated dates and for the indicated
periods. Such financial statements comply as to form in all material
respects with the Rules with respect thereto and have been prepared in
accordance with generally accepted accounting principles in the United
States ("GAAP"), consistently applied throughout the periods involved, and
all adjustments necessary for a fair presentation of results for such
periods have been made; any schedules included in the Registration
Statement present fairly the information required to be stated therein. No
other financial statements or supporting schedules are required to be
included in the Registration Statement. Except (A) as disclosed in the
Prospectus, (B) as reflected in the Company's unaudited balance sheet at
July 31, 2003 or liabilities described in any notes thereto (or liabilities
for which neither accrual nor footnote disclosure is required pursuant to
GAAP) or (C) for liabilities incurred in the ordinary course of business
since July 31, 2003 consistent with past practice, neither the Company nor
any Subsidiary has any material liabilities or obligations of any nature.
Except as set forth in the Prospectus, neither the Company nor any
Subsidiary has engaged in or effected any transaction or arrangement that
would constitute an "off-balance sheet arrangement" (as defined in Item 303
of Regulation S-K of the Commission). The financial information included in
the Prospectus included under the captions "Summary--Summary Consolidated
Financial Data", "Capitalization," "Selected Consolidated Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business--Products and Merchandising" and "Business--Finance
Operations"
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(and any amendment or supplement thereto) present fairly in accordance with
GAAP the information shown therein and have been compiled on a basis
consistent with that of the audited and unaudited financial statements from
which they were derived.
(viii) Except as disclosed in the Prospectus, there is no action,
litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending, threatened or any basis therefor or, to the
knowledge of the Company, contemplated against the Company, any Subsidiary
or any of their respective officers or of which any of their properties,
assets or rights are the subject before any court, regulatory authority or
other governmental body which (A) if determined adversely to the Company or
such Subsidiary could reasonably be expected to (1) result in any material
adverse change in the financial position, or in the business, affairs,
properties, business prospects or results of operations of the Company and
its Subsidiaries taken as a whole (a "Material Adverse Change" or "Material
Adverse Effect," as the case may be), whether or not arising in the
ordinary course of business or (2) adversely affect the performance of this
Agreement or the consummation of the transactions herein contemplated or
(B) is required to be disclosed in the Prospectus.
(ix) Since the date of the most recent audited financial statements
included in the Registration Statement and the Prospectus, neither the
Company nor any Subsidiary has sustained any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as disclosed in or
contemplated by the Prospectus.
(x) Except as disclosed in the Prospectus, neither the Company nor any
Subsidiary is in violation of or in default with respect to any law,
ordinance, governmental rule or regulation, or court order, judgment or
decree to which they may be subject, except for violations or defaults
which could not reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Effect.
(xi) The Company and its Subsidiaries have (A) good and marketable
title to all of the real properties and (B) valid title to all other assets
reflected in the consolidated financial statements described Section
1(a)(vii) of this Agreement or as described in the Prospectus as being
owned by them, in each case subject to no lien, mortgage, pledge, security
interest or encumbrance of any kind except those that would not materially
affect the value thereof or materially interfere with the use made or to be
made thereof by them and described in the Prospectus. The Company and its
Subsidiaries occupy or hold their leased properties under valid, subsisting
and binding leases with no exceptions that would materially interfere with
the use made or to be made thereof by them. There exists no default by the
Company, or to the Company's knowledge, any other party, under the
provisions of any lease, contract or other obligation relating to its
properties and to which the Company or its Subsidiaries are a party, which
could reasonably be expected to result in a Material Adverse Effect.
(xii) The Company and its Subsidiaries have filed all federal, state
and
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local income, franchise tax, sales tax and other tax returns and reports
which are required to be filed by them and have paid all taxes (including,
without limitation, withholding taxes) shown as due by said returns and all
other taxes, assessments and governmental charges (including, without
limitation, all penalties and interest) that are due, and there is no tax
deficiency that has been or, to the Company's knowledge, might be asserted
against the Company or any Subsidiary. All material tax liabilities are
adequately provided for on the financial statements of the Company and its
Subsidiaries.
(xiii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, as they may be amended or
supplemented, and except as set forth in the Prospectus, (A) there has not
been any Material Adverse Change nor any development or event that could
reasonably be expected to result in a Material Adverse Change, (B) there
has not been any transaction entered into by the Company or its
Subsidiaries that is material to the business, affairs, properties,
business prospects or results of operations of the Company and its
Subsidiaries taken as a whole, (C) other than changes in the amounts
outstanding under the Company's and its Subsidiaries' revolving credit
facilities, there has not been any change in the capital stock, long-term
debt or material liabilities of the Company or its Subsidiaries, and (D)
there has not been any dividend or distribution of any kind declared, paid
or made on the capital stock of the Company or any Subsidiary or any
repurchase or redemption of any class of capital stock by the Company or
any Subsidiary.
(xiv) The filing of the Registration Statement and the Prospectus have
been duly authorized by the Board of Directors of the Company; this
Agreement has been duly authorized, executed and delivered and constitutes
a valid and binding obligation of the Company enforceable in accordance
with its terms except as enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
laws affecting creditors' rights generally and by general principles of
equity and federal and state securities laws. Neither the Company nor any
Subsidiary is in violation of its charter or bylaws or in breach or
violation of or default under any indenture, mortgage, deed of trust,
lease, contract, note or other agreement or instrument to which it is a
party or by which it or any of its properties is bound and which breach,
violation or default could reasonably be expected to result in a Material
Adverse Effect. The execution, delivery and performance of this Agreement
and the issuance and sale of the Shares will not (A) conflict with, or
(with or without the giving of notice or the passage of time or both)
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien upon any property or assets of the Company pursuant to, any indenture,
mortgage, deed of trust, lease, contract, note or other agreement or
instrument to which the Company or any Subsidiary is a party or by which
any of their properties are bound which could reasonably be expected to
have a Material Adverse Effect, (B) conflict with or violate any provision
of the Company's or any Subsidiary's charter or bylaws or (C) conflict with
or violate any constitution, law, decree, order, rule, writ, injunction or
regulation of any court, regulatory authority or other governmental body
having jurisdiction over the Company, the Subsidiaries or any of their
properties.
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(xv) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory authority or other
governmental body is required in connection with the sale of the Shares and
the execution and delivery by the Company of this Agreement and the
performance of its obligations hereunder except as such have been obtained
or made and are in full force and effect and except for such additional
steps as may be necessary to qualify the Shares for public offering by the
Underwriters under Blue Sky laws, and filing the Prospectus under Rule
424(b).
(xvi) Each of the Company and each Subsidiary holds all licenses,
authorizations, charters, certificates and permits (each, an
"Authorization") of, and has made all filings with and notices to
regulatory authorities or governmental bodies which are necessary to own
their properties and conduct their businesses, except for failures to hold
any Authorization that could not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect. Each such
Authorization is valid and in full force and effect, and the Company is in
compliance, in all material respects, with all the terms and conditions
thereof and with the applicable rules and regulations of the regulatory
authorities and governmental bodies having jurisdiction with respect
thereto, except any such noncompliance that could not reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect, and no event has occurred (including, without limitation, the
receipt of any notice from any regulatory authority or governmental body)
which allows or, after notice or lapse of time or both, would allow
revocation, suspension or termination of any such Authorization or results
or, after notice or lapse of time or both, would result in any other
impairment of the rights under any such Authorization, except such
revocations, suspensions, terminations or impairments that could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect on the Company and the Subsidiaries taken as a
whole; and no such Authorization contains any restriction that is
materially burdensome to the Company.
(xvii) Except as otherwise set forth in the Prospectus, the Company
and its Subsidiaries own or otherwise possess rights to use the patents,
patent rights, licenses, inventions, copyrights, trademarks, service marks
and trade names presently employed by them in connection with the
businesses now operated by them as described in the Prospectus, and the
expected expiration of any of the foregoing could not reasonably be
expected to result in a Material Adverse Change. Neither the Company nor
any Subsidiary has infringed, is infringing or received any notice of
infringements of or conflict with asserted rights of others with respect to
any of the foregoing which could reasonably be expected to have a Material
Adverse Effect.
(xviii) To the Company's knowledge, Ernst & Young LLP ("Ernst &
Young"), independent auditors, who have certified certain of the financial
statements of the Company and its Subsidiaries contained in the Prospectus
and Registration Statement, are and were during the periods covered by
their reports included in the Registration Statement and the Prospectus
independent public
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accountants within the meaning of the Act, the Rules and Regulation S-X of
the Commission and Rule 101 of the Code of Professional Ethics of the
American Institute of Certified Public Accountants. Ernst & Young (A) based
solely on representations made by Ernst & Young, to the Company's
knowledge, is a registered public accounting firm (as defined in Section
2(a)(12) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 ("SOX")) and (B) is, with
respect to the Company, in compliance with subsections (g) through (l) of
Section 10A of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(xix) There are no (A) agreements, contracts or other documents of a
character required to be described in the Registration Statement or the
Prospectus or required to be filed as exhibits to the Registration
Statement which are not described or filed as required, (B) laws, orders,
judgments, decrees, rules or regulations that are required to be described
in the Registration Statement or the Prospectus and are not so described as
required, (C) pending or threatened legal or governmental proceedings that
are required to be described in the Registration Statement or the
Prospectus and are not so described as required, or (D) outstanding loans,
advances, guarantees of indebtedness or other transactions or
relationships, direct or indirect, between or among the Company or its
Subsidiaries or affiliates, on the one hand, and the directors, officers or
stockholders of the Company or its Subsidiaries or affiliates on the other
hand, that are required to be described in the Registration Statement or
the Prospectus and are not so described as required; and all descriptions
thereof in the Registration Statement (including the statements under Items
14 and 15 of Part II of the Registration Statement) and the Prospectus are
fair summaries thereof and fairly present the information required to be
disclosed with respect thereto under the Act.
(xx) No labor dispute is pending or, to the knowledge of the Company,
threatened by the Company's or any Subsidiary's employees, or to the
Company's knowledge, by the employees of any principal supplier of the
Company, which could reasonably be expected to result in a Material Adverse
Effect. No collective bargaining agreement exists or is contemplated with
any of the Company's or any Subsidiary's employees.
(xxi) All offers and sales of the Company's capital stock prior to the
date hereof were at all relevant times, and all planned offers and sales of
the Company's capital stock described in the Registration Statement and the
Prospectus under the caption "Certain Relationships and Related
Transactions--Redemption of our Preferred Stock" were or will be, exempt
from the registration requirements of the Act and were or will be the
subject of an available exemption from the registration requirements of the
applicable Blue Sky laws.
(xxii) Neither the Company nor any of its officers, directors or
affiliates has (A) distributed any offering materials in connection with
the offering and sale of the Shares other than a Preliminary Prospectus,
the Prospectus or the Registration Statement, (B) issued any press releases
or other communications, directly or indirectly or held any press
conferences with respect to (1) since July 31, 2003, the Company, its
financial condition or results of operations, except
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with the approval of the Representatives, or (2) the Public Offering, (C)
except with the approval of the Representatives, taken, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares or (D) except to the
Underwriters pursuant to this Agreement, since the filing of the
Registration Statement (1) sold, bid for, purchased or paid anyone any
compensation for soliciting purchases of, the Shares or (2) paid or agreed
to pay to any person any compensation for soliciting another to purchase
any other securities of the Company.
(xxiii) Without limiting the generality of any of the foregoing
representations (A) none of the operations of the Company or its
Subsidiaries is in violation of any federal, state or local statute, rule,
regulation, decision or order of any regulatory authority or governmental
body or any court relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection of human health and safety
or the protection or restoration of the environment or human exposure to
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "environmental laws"); (B) neither the Company nor any
Subsidiary has been notified that it is under investigation or under review
by any regulatory authority or governmental body with respect to compliance
with any environmental law; (C) neither the Company nor any Subsidiary has
any material liability in connection with the past generation, use,
treatment, storage, disposal or release of any hazardous material; (D)
there is no hazardous material that may reasonably be expected to pose any
material risk to safety, health, or the environment, on, under or about any
property owned, leased or operated by the Company or any Subsidiary or, to
the knowledge of the Company, any property adjacent to any such property;
and (E) there has heretofore been no release of any hazardous material on,
under or about such property, or, to the knowledge of the Company, any such
adjacent property. None of the currently owned real property or, to the
knowledge of the Company, currently leased or previously owned real
property of the Company or any Subsidiary is listed or proposed for listing
on the National Priorities List pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or on the
Comprehensive Environmental Response Compensation Liability Information
System List or any similar state list of sites requiring remedial action.
To the knowledge of the Company, neither the Company nor any Subsidiary is
subject to any state environmental property transfer act. The Company has
reasonably concluded that any environmental liabilities could not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change.
(xxiv) The Company and its Subsidiaries maintain insurance of the
types and in the amounts customary for the businesses in which they are
engaged, including, but not limited to, insurance covering liability and
real and personal property owned or leased by the Company against theft,
damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect and
issued by insurers of recognized financial responsibility; and neither the
Company nor any Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and
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when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a comparable cost,
except as disclosed in the Prospectus.
(xxv) Other than as contemplated by this Agreement, including, without
limitation Sections 2 and 8, there are no contracts, agreements or
understandings between the Company and any person that would give rise to a
valid claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with the
offering and sale of the Shares.
(xxvi) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" or a company
"controlled by" an "investment company" as defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act"); provided
the Company makes no representation that ▇▇▇▇▇▇▇▇ is not an "investment
company" or controlled by an "investment company."
(xxvii) (A) the Registration Statement, the Prospectus and any
Preliminary Prospectus comply, and any further amendments or supplements
thereto will comply, with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus or any Preliminary Prospectus, as
amended or supplemented, if applicable, are distributed in connection with
the Directed Share Program, and (B) no authorization, approval, consent,
license, order, registration or qualification of or with any regulatory
authority or governmental body or court, other than such as have been
obtained, is necessary under the securities laws and regulations of foreign
jurisdictions in which the Directed Shares are offered outside the United
States. The Company has not offered, or caused the Underwriters to offer,
any Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (X) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business
with the Company of (Y) a trade journalist or publication to write or
publish favorable information about the Company or its products.
(xxviii) The Shares have been approved for listing on the Nasdaq
National Market, subject only to official notice of issuance.
(xxix) The Company maintains systems of internal accounting and
disclosure controls and procedures sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (C) access
to assets is permitted only in accordance with management's general or
specific authorization; (D) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences; and (E) accounts, notes
and other receivables and inventory are recorded accurately, and proper and
adequate procedures are implemented to effect the collection thereof on a
current and timely basis. The Company has complied with such systems of
internal
-11-
accounting and disclosure controls and procedures in all material respects
and has not received a notification or other communication from any
accountants, independent auditors or other consultants challenging the
adequacy or requesting modification of such systems. Such systems of
internal accounting and disclosure controls and procedures (X) are
sufficient to ensure that information required to be disclosed by the
Company in the reports that it will file and submit to the Commission under
the Exchange Act is accumulated, recorded, processed, communicated to the
Company's principal executive officer and principal financial officer,
summarized and reported within the time periods specified in the
Commission's rules and forms, (Y) contain no deficiencies in the design or
operation of such controls and procedures which could materially adversely
affect the Company's ability to so accumulate, record, process,
communicate, summarize and report financial and other relevant information
and (Z) are sufficient to satisfy Section 302 of SOX and related rules
promulgated thereunder.
(xxx) The Company and its Subsidiaries and any "employee benefit plan"
(as defined under the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
Subsidiaries or their "ERISA Affiliates" (as defined below) are in
compliance in all material respects with ERISA. "ERISA Affiliate" means,
with respect to the Company or a Subsidiary, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such
Subsidiary is a member. No "reportable event" (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any "employee
benefit plan" established or maintained by the Company, its Subsidiaries or
any of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, its Subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have any
"amount of unfunded benefit liabilities" (as defined under ERISA). Neither
the Company, its Subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any liability under (A) Title IV of
ERISA with respect to termination of, or withdrawal from, any "employee
benefit plan" or (B) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Company, its
Subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause the loss
of such qualification.
(xxxi) Except as disclosed in the Prospectus, the Company has not,
since September 23, 2003, extended or maintained credit, arranged for the
extension of credit, or renewed an extension of credit, in the form of a
personal loan to or for any director or executive officer of the Company;
and any such credit that was outstanding on September 23, 2003 or that is
currently outstanding was in place on or before July 30, 2002, and there
has been no material modification to any term of such credit or any renewal
of such credit on or after July 30, 2002.
-12-
(b) The Selling Stockholder represents and warrants, and agrees with, each
Underwriter as follows:
(i) Each of this Agreement and the Custody Agreement signed by the
Selling Stockholder and EquiServe Trust Company, N.A., as custodian (the
"Custodian"), relating to the deposit of the Shares to be sold by the
Selling Stockholder (the "Custody Agreement") has been duly executed and
delivered by the Selling Stockholder and is a valid and binding obligation
of the Selling Stockholder, enforceable in accordance with its terms,
except as rights to indemnification hereunder and thereunder may be limited
by applicable law and except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other laws affecting creditors' rights generally and by general
principles of equity.
(ii) The execution, delivery and performance of this Agreement, the
Custody Agreement and the sale of the Shares will not (A) conflict with, or
(with or without the giving of notice or the passage of time or both)
result in a material breach or violation of any of the terms or provisions
of, or constitute a default under, or result in the creation or imposition
of any lien upon any property or assets of the Selling Stockholder pursuant
to, any indenture, mortgage, deed of trust, lease, contract, note or other
agreement or instrument to which the Selling Stockholder is a party or by
which any of his properties are bound or (B) conflict with or violate any
constitution, law, decree, order, rule, writ, injunction or regulation of
any court, regulatory authority or other governmental body having
jurisdiction over the Selling Stockholder or any of his properties.
(iii) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory authority or other
governmental body is required in connection with the sale of the Shares and
the execution and delivery by the Selling Stockholder of this Agreement and
the Custody Agreement and the performance of his obligations hereunder and
thereunder except as such have been obtained or made and are in full force
and effect and except for such additional steps as may be necessary to
qualify the Shares for public offering by the Underwriters under Blue Sky
laws, and filing the Prospectus under Rule 424(b).
(iv) The Selling Stockholder has and will have on the Closing Date (as
such date is hereinafter defined) good and valid title to the portion of
the Shares to be sold by the Selling Stockholder, free of any liens,
encumbrances, equities and claims, and full right, power and authority to
effect the sale and delivery of such Shares; and upon the delivery of and
payment for such Shares pursuant to this Agreement, good and valid title
thereto, free of any liens, encumbrances, equities and claims, will be
transferred to the several Underwriters.
(v) The information contained under the caption "Principal and Selling
Stockholders" in the Prospectus and each supplement thereto, as of its date
or during the period in which the Prospectus is required to be delivered,
insofar as such information relates to the Selling Stockholder, did not or
will not contain any untrue statement of a material fact or omit to state
any material fact required to be
-13-
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(vi) Other than as contemplated by this Agreement, including, without
limitation Sections 2 and 8, there are no contracts, agreements or
understandings between the Selling Stockholder and any person that would
give rise to a valid claim against the Selling Stockholder or any
Underwriter for a brokerage commission, finder's fee or other like payment
in connection with the offering and sale of the Selling Stockholder Shares.
(c) Any certificate signed by any officer of the Company or the Selling
Stockholder and delivered to the Representatives or counsel for the Underwriters
with respect to the Public Offering shall be deemed a representation and
warranty by the Company or the Selling Stockholder, as the case may be, to the
Underwriters as to the matters covered thereby.
(d) Each of the Company and the Selling Stockholder acknowledges that the
Underwriters and, for purposes of the opinions to be delivered pursuant to
Section 6 hereof, counsel to the Company and the Selling Stockholder and counsel
to the Underwriters, will rely upon the accuracy and truthfulness of the
foregoing representations and hereby consents to such reliance.
2. Purchase, Sale and Delivery of the Underwritten Shares. On the basis of
the representations, warranties and covenants herein contained, and subject to
the terms and conditions herein set forth, the Company and the Selling
Stockholder, severally and not jointly, agree to sell to each Underwriter, and
each Underwriter agrees, severally and not jointly, to purchase, at a price of
$______ per share, the Company Shares and the Selling Stockholder Shares,
respectively. The obligation of each Underwriter to the Company and to the
Selling Stockholder shall be to purchase from the Company or the Selling
Stockholder that number of Company Shares or Selling Stockholder Shares, as the
case may be, which, adjusted by the Representatives in such manner as to avoid
fractional shares, is in the same proportion to the number of Company Shares or
Selling Stockholder Shares as the case may be (subject to adjustment as provided
as provided in Section 10 hereof) is to the total number of Underwritten Shares
to be purchased by all of the Underwriters under this Agreement.
Payment for the Underwritten Shares shall be made by wire transfer of
immediately available Federal (same day) funds to designated accounts of the
Company and the Selling Stockholder, against delivery of certificates for the
Underwritten Shares to the Representatives for the accounts of the several
Underwriters. Delivery of certificates shall be to the Representatives c/o
Stephens Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
address as ▇▇▇▇▇▇▇▇ may designate in writing. Payment will be made at the
offices of ▇▇▇▇▇▇▇▇, or at such other place as shall be agreed upon by ▇▇▇▇▇▇▇▇
and the Company, at approximately 9:00 a.m., eastern time, on __________, 2003,
such time and date being herein referred to as the "Closing Date." For purposes
of Rule 15c6-1 under the Exchange Act, the Closing Date (if later than the
otherwise applicable settlement date) shall be the settlement date for payment
of funds and delivery of securities for all of the Underwritten Shares sold
pursuant to this Agreement. The certificates for the Underwritten Shares will be
delivered in such
-14-
denominations and in such registrations as ▇▇▇▇▇▇▇▇ reasonably requests in
writing and will be made available for inspection at such locations as ▇▇▇▇▇▇▇▇
may request at least one full business day prior to the Closing Date.
In addition, on the basis of the representations, warranties, agreements
and covenants herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants the Option to the several Underwriters to
purchase the Option Shares at the price per share as set forth in the first
paragraph of this Section 2. The Option may be exercised in whole or in part
from time to time upon written notice (or oral notice, subsequently confirmed in
writing) given not more than thirty (30) days following the date of this
Agreement, by ▇▇▇▇▇▇▇▇, on behalf of the Representatives, to the Company setting
forth the number of Option Shares as to which the several Underwriters are
exercising the Option and the names and denominations in which the Option Shares
are to be registered. The Company agrees to sell to the Underwriters the number
of Option Shares, respectively specified in such notice, and the Underwriters
agree, severally and not jointly, upon such exercise to purchase such Option
Shares. Each closing of the purchase of the Option Shares (each an "Option
Closing Date"), if any, shall occur at a time and date determined by ▇▇▇▇▇▇▇▇
(which may be simultaneous with, but not earlier than, the Closing Date), but
not later than five (5) full business days following the date upon which notice
of exercise of the Option is given to the Company, and shall take place at the
offices of ▇▇▇▇▇▇▇▇, or at such other place as shall be agreed upon by ▇▇▇▇▇▇▇▇
and the Company. Subject to Section 10, the number of Option Shares to be
purchased by each Underwriter shall be in the same proportion as the number of
shares set forth on Schedule I hereto bears to the total number of Underwritten
Shares, adjusted by the Representatives in such manner as to avoid fractional
shares. The Option may be exercised only to cover over-allotments in the sale of
the Underwritten Shares by the Underwriters. ▇▇▇▇▇▇▇▇, on behalf of the
Representatives, may cancel such Option at any time prior to its expiration by
giving written notice (or oral notice, subsequently confirmed in writing) of
such cancellation to the Company. To the extent, if any, that the Option is
exercised, on each Option Closing Date payment for the Option Shares shall be
made by wire transfer of immediately available Federal (same day) funds to a
designated account of the Company. Certificates for the Option Shares shall be
delivered on each Option Closing Date in the same manner and upon the same terms
as the Underwritten Shares. Time shall be of the essence, and delivery of the
Underwritten Shares and the Option Shares at the time and place specified in
this Agreement is a further condition to the obligations of the Underwriters.
3. Offering by the Underwriters. It is understood that the Public Offering
of the Underwritten Shares is to be made as soon as the Representatives deem it
advisable to do so after the Registration Statement has become effective. The
Underwritten Shares are to be initially offered to the public at the public
offering price and on the other terms and conditions set forth in the
Prospectus. To the extent, if at all, that any Option Shares are purchased
pursuant to Section 2 hereof, the Underwriters will offer them to the public on
the foregoing terms. It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of the Shares, in
accordance with an Agreement Among Underwriters which has been entered into by
you and the several other Underwriters.
4. Covenants of the Company and the Selling Stockholder. The Company
-15-
and the Selling Stockholder (with respect to paragraphs (c), (h) and (m))
severally, and not jointly, covenant and agree with each of the several
Underwriters that:
(a) The Company will file the Prospectus with the Commission in the manner
and within the time period required by Rule 424(b). The Company will advise the
Representatives promptly of any such filing pursuant to Rule 424(b). The Company
will not file any amendment or supplement to the Prospectus or any amendment to
the Registration Statement unless the Representatives have received a reasonable
period of time to review the Prospectus or any such proposed amendment or
supplement and consented to the filing thereof, which consent shall not be
unreasonably withheld or delayed.
(b) The Company will advise the Representatives promptly of any request of
the Commission or other securities regulatory agency ("Other Securities
Regulator") for amendment of the Registration Statement or for supplement to the
Prospectus or for any additional information, or of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution of any proceedings
for that purpose, or action taken or initiated by any Other Securities Regulator
to suspend the qualification of the Shares for offer or sale in any jurisdiction
or to remove, suspend or terminate from listing or quotation the Shares from any
securities exchange upon which they are listed for trading or included or
designated for quotation, and the Company will use commercially reasonable
efforts to prevent the issuance of any such stop order preventing or suspending
the use of the Prospectus or such qualification, removal, suspension or
termination and to obtain as soon as possible the lifting thereof, if issued.
(c) If, during the period necessary to effect the distribution of the
Shares, any event shall occur or condition shall exist as a result of which, in
the judgment of the Company, the Selling Stockholder or the Representatives or
in the opinion of counsel for the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order that the Prospectus at the time it is
delivered to a purchaser does not contain an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or it is
otherwise necessary to amend or supplement the Prospectus to comply with law,
the Company and the Selling Stockholder will promptly, subject to the
Representatives' prior review, prepare and file with the Commission and any
appropriate Other Securities Regulator and furnish at its own expense to the
Underwriters and to dealers appropriate amendments or supplements to the
Prospectus so that the Prospectus as so amended or supplemented will not, in
light of the circumstances when it is delivered to a purchaser, be misleading,
or so that the Prospectus will comply with applicable law. If required, the
Company will file any amendment or supplement to the Prospectus with the
Commission in the manner and within the time period required by Rule 424(b). The
Company will advise the Representatives, promptly after receiving notice
thereof, of the time when any amendment to the Registration Statement, or when
any Rule 462(b) Registration Statement or any amendment thereto, has been filed
or declared effective or when the Prospectus or any amendment or supplement
thereto has been filed and will provide evidence to the Representatives of each
such filing or effectiveness.
(d) The Company will cooperate with the Representatives and counsel for the
-16-
Underwriters to qualify or register the Shares for offering and sale under (or
obtain exemptions from the application of) the securities or Blue Sky laws of
such jurisdictions (including foreign jurisdictions) as the Representatives may
reasonably designate, and will make such applications, file such documents, and
furnish such information as may be reasonably required for that purpose;
provided, however, the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction where it is not so qualified or required to file such a consent.
The Company will, from time to time, prepare and file such statements, reports,
and other documents, as are or may be required to continue such qualifications
in effect for so long a period as the Representatives may reasonably request for
distribution of the Shares.
(e) The Company will deliver to, upon the order of, the Representatives,
from time to time without charge, as many copies of any Preliminary Prospectus
or the Prospectus, or as thereafter amended or supplemented, as the
Representatives may reasonably request. The Company will deliver to each of the
Representatives at or before the Closing Date, two (2) manually signed copies of
the Registration Statement and all amendments thereto, including all exhibits
filed therewith, and will deliver to the Representatives such number of
conformed copies of the Registration Statement, but without exhibits, and of all
amendments thereto, as the Underwriters may reasonably request.
(f) Prior to the Closing Date, the Company will furnish the
Representatives, as soon as they have been prepared by or are available to the
Company, a copy of any unaudited interim financial statements of the Company for
any period subsequent to the period covered by the most recent financial
statements appearing in the Registration Statement and the Prospectus.
(g) The Company will use the net proceeds from the sale of the Shares in
the manner set forth in the Prospectus under the caption "Use of Proceeds" and
will in no event invest or otherwise use such net proceeds in such a manner as
would require the Company or any of the Subsidiaries to register as an
investment company under the Investment Company Act.
(h) Neither the Company nor the Selling Stockholder (i) during any
"restricted period" (as defined in Rule 100 of Regulation M) will take, directly
or indirectly, any action designed to cause or result in, or that might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company, (ii) will distribute any Prospectus or
offering materials in connection with the Public Offering and (iii) prior to the
Closing Date or, if applicable, the Option Closing Date, will issue any press
releases or other communications, directly or indirectly, and will hold no press
conferences with respect to the Company, its financial condition or results of
operations, or the Public Offering, without the prior consent of the
Representatives other than as may be required by any applicable law or
regulation.
(i) During the period necessary to effect the distribution of the Shares,
the Company shall file, on a timely basis, with the Commission and the Nasdaq
National Market all reports and documents required to be filed under the
Exchange Act. Additionally, the Company shall report the use of proceeds from
the issuance of the Shares as may be required under Rule 463 under the Act.
-17-
(j) As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its stockholders,
an earnings statement, which will satisfy the provisions of Section 11(a) of the
Act, covering a period of at least twelve (12) consecutive months beginning
after the Effective Date or, if later, the Effective Date of the Rule 462(b)
Registration Statement. For the purpose of the preceding sentence, "Availability
Date" means the 45th day after the end of the fourth fiscal quarter following
the fiscal quarter that includes such Effective Date, except that, if such
fourth fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(k) For a period of three (3) years from the date of this Agreement, the
Company will furnish to the Representatives, to the extent not available on the
Commission's Electronic Data Gathering, Analysis and Retrieval (▇▇▇▇▇) System,
(i) concurrently with furnishing of such reports to its stockholders, statements
of operations of the Company for each quarter in the form furnished to the
Company's stockholders; (ii) concurrently with furnishing of such reports to its
stockholders, balance sheets of the Company as of the end of such fiscal year,
together with statements of operations, stockholders' equity and cash flows of
the Company for such fiscal year, all in reasonable detail and accompanied by a
copy of the report thereon of independent public accountants; (iii) as soon as
they are available, copies of all reports (financial or other) mailed to
stockholders; (iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission; (v) every press
release which is released by the Company regarding the Company's financial
condition or prospects, or results of operations; and (vi) any additional
information of a public nature concerning the Company or its business which the
Representatives may reasonably request. During such period, if the Company shall
have active Subsidiaries, the foregoing financial statements shall be on a
consolidated basis to the extent that the accounts of the Company and its
Subsidiaries are consolidated, and shall be accompanied by similar financial
statements for any Subsidiary which is not so consolidated.
(l) The Company will use its commercially reasonable efforts to maintain a
transfer agent at all times when its common stock is publicly traded and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for its common stock and for a period of three (3) years after the date of this
Agreement will use its commercially reasonably efforts to maintain the listing
of the Shares on the Nasdaq National Market or a national securities exchange
(provided nothing in this Section 4(l) shall be deemed to prevent the Company
from seeking and/or agreeing to any merger or acquisition).
(m) Each of the Company and the Selling Stockholder will not, for a period
of one-hundred eighty (180) days after the date of the Prospectus, offer, sell,
contract to sell, or otherwise dispose of, directly or indirectly, any shares of
the Company's common stock or securities convertible into or exchangeable or
exercisable for shares of the Company's common stock, enter into any transaction
that would have the same effect or enter into any swap, hedge or other
arrangement that transfers in whole or in part any of the economic consequences
of ownership of the Company's common stock, whether any of these transactions
are to be settled by delivery of the Company's common stock or other securities,
in cash or otherwise, or publicly disclose the intention to do any of the
-18-
foregoing, without the prior written consent of ▇▇▇▇▇▇▇▇ (which consent may be
withheld at the sole discretion of ▇▇▇▇▇▇▇▇), except (i) with respect to the
Shares as contemplated by this Agreement, (ii) in connection with the
transactions described in the Prospectus under the caption "Certain
Relationships and Related Transactions -- Redemption of our Preferred Stock",
(iii) in the case of the Company, (A) with respect to grants of stock options to
employees of the Company, (B) the issuance of shares of common stock pursuant to
employee, director or other stock and stock option plans described in or
contemplated by the Prospectus, or (C) in connection with a merger or
acquisition or (iv) in the case of the Selling Stockholder, (X) bona fide gifts,
provided the recipient of such gift shall agree to the terms of this paragraph
for the remainder of such one hundred eighty (180) day period or (Y) in
connection with a merger or a transaction to acquire a majority of the capital
stock of the Company pursuant to an offer made on substantially the same terms
to all of the Company's stockholders.
(n) The Company will enforce all existing agreements between the Company
and any of its security holders that prohibit the offer, sale, pledge or other
disposition of any of the Company's securities in connection with the Public
Offering or otherwise. In addition, the Company will direct its transfer agent
to place stop transfer restrictions upon any such securities of the Company that
are bound by such existing "lock-up" or other agreements for the duration of the
periods contemplated in those agreements.
(o) In connection with the Directed Share Program, the Company will ensure
that the Directed Shares will be restricted to the extent required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or other disposition for a period of
three (3) months following the Effective Date. ▇▇▇▇▇▇▇▇ will notify the Company
as to which Participants shall be so restricted. The Company will direct its
transfer agent to place stop transfer restrictions upon such shares for such
period of time.
The foregoing covenants and agreements shall apply to any successor of the
Company, including without limitation, any entity into which the Company might
consolidate or merge.
5. Costs and Expenses. Whether or not the Public Offering is completed, the
Company will pay all costs, expenses and fees incident to the performance of the
obligations of the Company and the Selling Stockholder under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Company and the Selling Stockholder; the cost of printing and delivering to the
Underwriters copies of the Registration Statement, any Preliminary Prospectus,
the Prospectus, this Agreement, the Agreement Among Underwriters, the Selected
Dealer Agreement, Underwriters' Questionnaire and Power of Attorney, and any
survey of Blue Sky laws and any supplements thereto; the filing fees of the
Commission; the filing fees and other expenses (including fees and disbursements
of counsel to the Underwriters) incident to securing any required review by the
NASD of the terms of the sale of the Shares on behalf of, and any disbursements
made by, the Representatives; the filing fees and other expenses (including fees
and disbursements of counsel to the Underwriters) incident to qualifying or
registering (or obtaining exemption from qualification or registration of) the
shares for offer and sale under the securities or Blue Sky laws of applicable
states and foreign
-19-
jurisdictions; Nasdaq listing fees; the cost of printing certificates
representing the Shares; fees and disbursements of counsel to the Underwriters
incurred by the Underwriters in connection with the Directed Share Program; and
the cost and charges of any transfer agent or registrar. Any transfer taxes
imposed on the sale of the Shares to the Underwriters will be paid by the
Company [and the Selling Stockholder], with respect to the Shares sold by the
Company [or the Selling Stockholder], as the case may be. Neither the Company
nor the Selling Stockholder shall, however, be required to pay for any of the
Underwriters' expenses (other than those related to qualification, registration
or exemption of the Shares under applicable Blue Sky laws, review by the NASD,
or the Directed Share Program) except that if the Public Offering shall not be
consummated because this Agreement is terminated by the Representatives pursuant
to Section 6 or Section 10 or because the conditions in Section 6 hereof are not
satisfied, or by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholder to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on their
part to be performed, unless such failure to satisfy said condition or to comply
with said terms is due to the default or omission of any Underwriter, then the
Company shall reimburse the several Underwriters upon demand for all costs and
expenses, including fees and disbursements of counsel to the Underwriters,
incurred in connection with investigating, marketing and proposing to market the
Shares or in contemplation of performing their obligations hereunder, but the
Company shall in no event be liable to any of the several Underwriters for
damages on account of loss of anticipated profits from the sale by them of the
Shares.
6. Conditions of Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Shares as provided herein are
subject to the accuracy, as of the date hereof, as of the Closing Date and as of
each Option Closing Date, of the representations and warranties of each of the
Company and the Selling Stockholder contained herein, to the timely performance
by each of the Company and the Selling Stockholder of their obligations
hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective, and no stop
order or other order suspending the effectiveness thereof or the qualification
or registration of the Shares under the Blue Sky laws of any jurisdiction shall
have been issued and no proceeding for that purpose shall have been instituted
or, to the knowledge of the Company, shall be contemplated or threatened by the
Commission or any Other Securities Regulator. If the Company has elected to rely
upon Rule 430A, the price of the Shares and any price-related information
previously omitted from the effective Registration Statement pursuant to Rule
430A shall have been transmitted to the Commission for filing pursuant to Rule
424(b) within the prescribed time period, and prior to the Closing Date the
Company shall have provided evidence satisfactory to the Representatives of such
timely filing, or a post-effective amendment providing such information shall
have been promptly filed and declared effective in accordance with the
requirements of Rule 430A. All requests for additional information on the part
of the Commission or any Other Securities Regulator shall be complied with to
the satisfaction of the Commission or such Other Securities Regulator.
(b) The Representatives shall have received the opinion of ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., counsel for the Company and the Selling Stockholder,
dated as of the
-20-
Closing Date and, if applicable, each Option Closing Date, addressed to the
Underwriters in form and substance satisfactory to ▇▇▇▇▇▇ & Bird LLP, counsel to
the Underwriters, to the effect that:
(i) Conn's, Inc., Conn Appliances, Inc. and the Subsidiaries have been
duly incorporated and are validly existing in good standing under the laws
of the jurisdictions of their organization, with corporate power and
authority to own, lease and operate their properties and conduct their
business as described in the Prospectus; and Conn's, Inc., Conn Appliances,
Inc. and the Subsidiaries are duly qualified to transact business as
foreign corporations in good standing in the jurisdictions set forth on
Schedule II;
(ii) the authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization" (other than for subsequent issuances, if any, pursuant to
employee benefit plans and any other adjustments described in the
Prospectus);
(iii) all of the outstanding shares of capital stock of the Company
prior to the issuance of the Company Shares or the Company Option Shares,
as the case may be, have been duly authorized and validly issued and are
fully paid and nonassessable; none of the outstanding shares of capital
stock were issued in violation of or subject to any preemptive right of any
person to subscribe for or to purchase any securities of the Company
arising under the Company's articles or certificate of incorporation or
bylaws, the Texas Business Corporation Act or the Delaware General
Corporation Law, as applicable; there are no preemptive rights of any
person to subscribe for or to purchase any securities of the Company
arising under the Company's articles or certificate of incorporation or
bylaws, the Texas Business Corporation Act or the Delaware General
Corporation Law, as applicable; and other than as disclosed in the
Prospectus, to the knowledge of such counsel, no options or warrants or
other rights to purchase or otherwise acquire from the Company, no
agreements or other obligations to issue and no other rights to convert any
security or obligation into any shares of capital stock or other ownership
interests in the Company are outstanding;
(iv) all of the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital stock of
any of the Subsidiaries was issued in violation of or subject to any
preemptive right of any person arising under the articles or certificate of
incorporation or bylaws of such Subsidiary or the general corporation law
or business corporation code of its state of incorporation; the Company
owns all of the outstanding stock of each of the Subsidiaries free and
clear of all possessory liens, pledges, security interests (other than the
pledge of the stock of the Subsidiaries to secure the Company's secured
credit facility); and other than as disclosed in the Prospectus, to the
knowledge of such counsel, no options or warrants or other rights to
purchase from the Company or any Subsidiary, no agreements or other
obligations to issue and no other rights to convert any obligations into
any shares of capital stock or other ownership interests in any of the
Subsidiaries are outstanding other than those described in the Prospectus;
-21-
(v) to the knowledge of such counsel, all sales of the Company's
capital stock by Conn's, Inc. or Conn Appliances, Inc. during the
three-year period prior to the date hereof were exempt from the
registration requirements of the Act and of the Texas Securities Act;
(vi) other than as disclosed in the Prospectus, to the knowledge of
such counsel, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company or to include any securities of the Company in
any registration statement of the Company; and, to the knowledge of such
counsel, neither the filing of the Registration Statement nor the offer or
sale of the Shares as contemplated thereby gives rise to any rights for or
related to the registration of any shares of common stock or any other
securities of the Company;
(vii) the Registration Statement, including any Rule 462(b)
Registration Statement, and the Prospectus, and each amendment or
supplement to the Registration Statement and the Prospectus (other than the
financial statements and the notes thereto and the other financial and
statistical data included therein or omitted therefrom, as to all of which
such counsel need express no opinion), as of their respective effective or
issue dates, complied as to form in all material respects with the
applicable requirements of the Act and the Rules;
(viii) to the knowledge of such counsel, (A) there are no contracts,
instruments or other documents or agreements to which the Company or any of
the Subsidiaries is a party of a character required to be described or
referred to in the Prospectus or to be filed as exhibits to the
Registration Statement which are not so described, referred to or filed as
required, (B) there are no constitutions, statutes, laws, judicial or
administrative decrees, writs, judgments, orders, rules or regulations of a
character required to be described or referred to in the Prospectus which
are not so described or referred to as required, and (C) there are no legal
or governmental proceedings pending, or overtly threatened by a written
communication, against the Company or any of the Subsidiaries or any of
their respective properties of a character required to be described or
referred to in the Prospectus which are not so described or referred to as
required;
(ix) the statements in the Prospectus under the captions "Risk Factors
-- Pending litigation relating to the sale of credit insurance and the sale
of service maintenance agreements in the retail industry, including one
lawsuit in which we are the defendant, and could adversely affect our
business," "Risk Factors -- Our anti-takeover provisions and Delaware law
could prevent or delay a change in control of our company, even if such a
change of control would be beneficial to our stockholders," "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources," "Business -- Regulation," "Business --
Legal Proceedings," "Management," "Certain Relationships and Related
Transactions," "Description of Capital Stock," "Shares Eligible for Future
Sale," and "Underwriting" and in Item 14 and Item 15 of the Registration
Statement, insofar as such statements constitute a summary of
-22-
the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents or proceedings;
(x) the Shares conform in all material respects as to legal matters to
the description thereof in the Prospectus under the caption "Description of
Capital Stock;"
(xi) the Registration Statement has become effective under the Act;
all filings required by Rules 424(b), 430A and 462(b) (if relied upon by
the Company) of the Commission have been made in the manner and within the
time period required; and to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement under the Act
has been issued and no proceedings for that purpose have been instituted or
are pending or threatened by the Commission;
(xii) the common stock of Conn's, Inc. has been registered under the
Exchange Act, and the Shares have been approved for listing on the Nasdaq
National Market, subject only to notice of issuance;
(xiii) the form of certificate evidencing the common stock of Conn's,
Inc. and included as an exhibit to the Registration Statement complies in
all material respects with all requirements of Delaware law, any applicable
requirements of the certificate of incorporation and bylaws of Conn's, Inc.
and the requirements of the Nasdaq National Market;
(xiv) neither the Company nor any of the Subsidiaries is or will be,
after giving effect to the offer and sale of the Shares and the application
of the net proceeds thereof as described in the Registration Statement and
the Prospectus, an "investment company" or a company controlled by an
"investment company" within the meaning of the Investment Company Act, and
in giving such opinion, counsel may assume ▇▇▇▇▇▇▇▇ is not an "investment
company";
(xv) the Company has duly authorized the execution, delivery and
performance of this Agreement and has duly executed and delivered this
Agreement, and assuming the due authorization, execution and delivery of
this Agreement by the Representatives, this Agreement is enforceable
against the Company except to the extent that (A) enforceability may be
limited by applicable bankruptcy, insolvency, liquidation, reorganization,
moratorium and other laws relating to or affecting the rights and remedies
of creditors generally, (B) the remedy of specific performance and other
forms of equitable relief may be subject to certain defenses and to the
discretion of the court before which a proceeding may be brought, and (C)
the enforcement of rights to indemnity and contribution under this
Agreement may be limited by federal and applicable Blue Sky laws or
principles of public policy underlying such laws or otherwise;
(xvi) the Company Shares and the Company Option Shares have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company against payment of
-23-
the consideration set forth in this Agreement, will be validly issued,
fully paid and nonassessable; and the issuance of such Shares will not be
in violation of or subject to any preemptive right of any person to
subscribe for or to purchase any securities of the Company arising under
the certificate of incorporation or bylaws of Conn's, Inc., the Delaware
General Corporation Law;
(xvii) the execution and delivery by the Company of this Agreement did
not, and the performance by the Company of its obligations hereunder and
the consummation by the Company of the transactions contemplated hereby
(other than the performance of the Company's indemnification and
contribution obligations hereunder, as to which such counsel need express
no opinion) will not (with or without the giving of notice or the passage
of time or both), result in any violation by the Company of its articles or
certificate of incorporation or bylaws, or result in any breach of or
default under, or the creation or imposition of any contractual lien or
security interest in, on or against any property or assets of the Company
or any of the Subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement, lease or other written agreement or instrument filed
as an Exhibit to the Registration Statement or result in any violation in
any material respect of any constitution, statute or law or any judicial or
administrative decree, writ, judgment, order, rule or regulation to which,
to the knowledge of such counsel, the Company or any of the Subsidiaries or
any of their respective properties or assets is subject or result in the
suspension, termination or revocation of any consent, approval or
authorization of the Company or any of the Subsidiaries issued or provided
thereunder;
(xviii) no consent, approval, authorization, order or other action of,
or notice to or registration, qualification or filing with, any court,
regulatory body, administrative agency, governmental body or arbitrator of
the United States or the States of Texas or Delaware or, to the knowledge
of such counsel, any third party is required on the part of the Company for
the performance by the Company of the transactions contemplated by this
Agreement, except (A) such as have been obtained under the Act the Exchange
Act and the Rules, (B) such as may be required under applicable Blue Sky
laws, rules and regulations in connection with the offer, sale and
distribution of such Shares by the Underwriters and (C) such as may be
required by the NASD (as to which, with regard to clauses (B) and (C), such
counsel need express no opinion);
(xix) the Selling Stockholder has duly executed and delivered this
Agreement and the Custody Agreement, and assuming the due authorization,
execution and delivery of this Agreement by the Representatives and the
Custody Agreement by the Custodian, this Agreement and the Custody
Agreement are enforceable against the Selling Stockholder except to the
extent that (A) enforceability may be limited by applicable bankruptcy,
insolvency, liquidation, reorganization, moratorium and other laws relating
to or affecting the rights and remedies of creditors generally, (B) the
remedy of specific performance and other forms of equitable relief may be
subject to certain defenses and to the discretion of the court before which
a proceeding may be brought, and (C) the enforcement of rights to indemnity
and contribution under this Agreement and the Custody
-24-
Agreement may be limited by federal and applicable Blue Sky laws or
principles of public policy underlying such laws;
(xx) the execution and delivery by the Selling Stockholder of this
Agreement and the Custody Agreement did not, and the performance by the
Selling Stockholder of its obligations hereunder and thereunder and the
consummation by the Selling Stockholder of the transactions contemplated
hereby and thereby (other than the performance of the Selling Stockholder's
indemnification and contribution obligations hereunder, as to which such
counsel need express no opinion) will not (with or without the giving of
notice or the passage of time or both), result in any breach of or default
under, any agreement listed on Schedule III to which the Selling
Stockholder is a party or result in any violation in any material respect
of any constitution, statute or law or any judicial or administrative
decree, writ, judgment, order, rule or regulation to which, to the
knowledge of such counsel, the Selling Stockholder is subject;
(xxi) to the knowledge of such counsel, upon the delivery and payment
for the Selling Stockholder Shares as contemplated in the Agreement, each
of the Underwriters will receive such Shares purchased by it from the
Selling Stockholder, free and clear of any adverse claim, assuming, for the
purpose of such opinion, that the Underwriters purchased the same in good
faith without notice of any adverse claims; and
(xxii) no consent, approval, authorization, order or other action of,
or notice to or registration, qualification or filing with, any court,
regulatory body, administrative agency, governmental body or arbitrator of
the United States or the States of Texas or Delaware or, to the knowledge
of such counsel, any third party is required on the part of the Selling
Stockholder for the performance by the Selling Stockholder of the
transactions contemplated by this Agreement and the Custody Agreement,
except (A) such as have been obtained under the Act the Exchange Act and
the Rules, (B) such as may be required under applicable Blue Sky laws,
rules and regulations in connection with the offer, sale and distribution
of such Shares by the Underwriters and (C) such as may be required by the
NASD (as to which, with regard to clauses (B) and (C), such counsel need
express no opinion).
In addition, such counsel shall state that although they do not assume any
responsibility for the accuracy, completeness or fairness of the information and
statements contained in the Registration Statement or the Prospectus, other than
those mentioned in subparagraphs (x) and (xi) above, on the basis of the
foregoing, no facts have come to its attention that lead it to believe that the
Registration Statement, on the Effective Date, contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, at the time the Prospectus was issued or on the Closing Date or the
Option Closing Date, as applicable, included or includes 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; provided, however, that such counsel need
express no belief regarding the financial statements and notes thereto and other
financial and statistical data
-25-
included in or omitted from the Registration Statement or the Prospectus.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the Texas Business Corporation Act or
the federal law of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion (which shall be dated the Closing
Date or the Option Closing Date, as the case may be, shall be satisfactory in
form and substance to the Underwriters, shall expressly state that the
Underwriters may rely on such opinion as if it were addressed to them and shall
be furnished to the Representatives) of other counsel of good standing whom they
believe to be reliable and who are reasonably satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent they deem proper, on
certificates of the Selling Stockholder and responsible officers of the Company
and public officials.
(c) The Representatives shall have received the opinion of ▇▇▇▇▇▇ & Bird
LLP, counsel to the Underwriters, dated as of the Closing Date, and if
applicable, each Option Closing Date with respect to the incorporation of the
Company, the validity of the Shares delivered on such Closing Date, the
Registration Statement, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(d) The Representatives shall have received at or prior to the Closing Date
from ▇▇▇▇▇▇ & Bird LLP a memorandum or summary, in form and substance
satisfactory to the Representatives, with respect to the registration,
qualification or exemption therefrom for offering and sale by the Underwriters
of the Shares under the Blue Sky laws of such jurisdictions as the
Representatives may reasonably have designated.
(e) On the date hereof, the Representatives shall have received from Ernst
& Young LLP, independent public or certified public accountants for the Company,
a letter dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Representatives, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters, delivered according to Statement of Auditing Standards No. 72 (or
any successor bulletin), with respect to the audited and unaudited financial
statements and certain financial information contained in the Registration
Statement and the Prospectus (and the Representatives shall have received an
additional two (2) conformed copies of such accountants' letter for each of the
several Underwriters).
(f) On each of the Closing Date and each Option Closing Date, the
Representatives shall have received from Ernst & Young LLP a letter dated such
date, in form and substance satisfactory to the Representatives, to the effect
that they reaffirm the statements made in the letter furnished by them pursuant
to paragraph (e) of this Section 6, except that the specified date referred to
therein for the carrying out of procedures shall be no more than three business
days prior to the Closing Date or Option Closing Date, as the case may be (and
the Representatives shall have received an additional two (2) conformed copies
of such accountants' letter for each of the several Underwriters).
(g) Neither the Company nor any of the Subsidiaries shall have sustained,
-26-
since the date of the latest audited financial statements included in the
Prospectus, any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and since the respective dates as of
which information is given in the Prospectus, there shall not have been any
change in the capital stock or long-term debt of the Company or any of the
Subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and the
Subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in either such case is in the judgment of the Representatives
so material and adverse as to make it impracticable or inadvisable to proceed
with the Public Offering or the delivery of the Shares on the terms and in the
manner contemplated in the Prospectus;
(h) On or after the date of this Agreement, there shall not have occurred
any downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any
securities of the Company, any of its Subsidiaries or affiliates, or Conn
Funding II, L.P. by any "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the Act.
(i) On or after the date of this Agreement, there shall not have occurred
any of the following: (i) a suspension or material limitation or disruption in
trading in securities generally on the New York Stock Exchange or the Nasdaq
National Market, or the establishment of minimum or maximum prices for trading
or maximum ranges for prices of securities on the New York Stock Exchange or the
Nasdaq National Market; (ii) a suspension or material limitation or disruption
in trading in the Company's securities on the Nasdaq National Market; (iii) a
general moratorium on commercial banking activities declared by either federal
or New York State or Texas authorities or a material disruption in commercial
banking or securities settlement, payment or clearance services in the United
States; (iv) the outbreak or escalation of hostilities or acts of terrorism
involving the United States or the declaration by the United States of a
national emergency or war; or (v) the occurrence of any other calamity or crisis
or any change in financial, political or economic conditions in the United
States or elsewhere, if the effect of any such event specified in clause (iv) or
(v) in the judgment of the Representatives makes it impracticable or inadvisable
to proceed with the Public Offering or the delivery of the Shares on the terms
and in the manner contemplated in the Prospectus;
(j) The Shares shall have been approved for listing on the Nasdaq National
Market, subject only to official notice of issuance.
(k) On or prior to the date of this Agreement, the Company shall have
furnished to the Representatives lock-up agreements, in form and substance
satisfactory to the Representatives and attached hereto as Exhibit A or Exhibit
B, from each director and executive officer of Conn's, Inc., other than the
Selling Stockholder and such agreements shall be in full force and effect on the
Closing Date and each Option Closing Date.
-27-
(l) The Company shall have furnished to the Representatives evidence of the
due qualification of the Company and the Subsidiaries to transact business in
the jurisdictions set forth on Schedule II.
(m) The Representatives shall have received on the Closing Date and on each
Option Closing Date, as the case may be, a certificate or certificates of the
Company, executed by the Chief Executive Officer and the Chief Financial Officer
of the Company to the effect that, as of the Closing Date and each Option
Closing Date, as the case may be, each of them severally represents as follows:
(i) (A) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date and on and as
of each Option Closing Date, as the case may be, and (B) the Company has
complied with all of its agreements and covenants and has satisfied all of
the conditions on its part to be performed or satisfied as of or prior to
the Closing Date and as of or prior to each Option Closing Date, as the
case may be.
(ii) They have carefully examined the Registration Statement and the
Prospectus and, in their opinion, such Registration Statement and
Prospectus did not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein
not misleading.
(n) The Representatives shall have received on the Closing Date a
certificate from the Selling Stockholder to the effect that, as of the Closing
Date, the Selling Stockholder represents as follows:
(i) (A) the representations and warranties of the Selling Stockholder
in this Agreement are true and correct on and as of the Closing Date, and
(B) the Selling Stockholder has complied with all of his agreements and
covenants and has satisfied all of the conditions on his part to be
performed or satisfied as of or prior to the Closing Date.
(ii) The Selling Stockholder has carefully examined the Registration
Statement and the Prospectus and, in his opinion, such Registration
Statement and Prospectus did not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein not misleading
(o) On or before each of the Closing Date and each Option Closing Date, the
Representatives and counsel for the Underwriters shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Shares as
contemplated herein or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.
(p) The Company and the Representatives shall have received from ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (the "QIU") a letter, dated as of the Closing Date and in
form and substance satisfactory to the Company that:
(i) The QIU is a member of the NASD and is qualified to act as a
-28-
"qualified independent underwriter" within the meaning of paragraph (b)(15)
of NASD Rule 2720.
(ii) The QIU has participated in the preparation of the Registration
Statement and the Prospectus relating to the offer and sale of the Shares
and has exercised the usual standards of `due diligence" in respect
thereto.
(iii) The QIU has undertaken the legal responsibilities and
liabilities of an underwriter under the Act, specifically including those
inherent in Section 11 of the Act.
(iv) Based upon (A) a review of the Company, including an examination
of the Registration Statement, information regarding the earnings, assets,
capital structure, and growth rate of the Company, and other pertinent
financial and statistical data, (B) inquiries of and conferences with
management of the Company and its counsel and independent public
accountants regarding the business and prospects of the Company, (C)
consideration of the prospects for the industry in which the Company
competes, estimates of the business potential of the Company, assessments
of its management, the general condition of the securities markets, market
prices of the capital stock and debt securities of, and financial and
operating data concerning, companies believed by the QIU to be comparable
to the Company, and the demand for securities of comparable companies
similar to the Shares, and (D) such other studies, analyses, and
investigations as the ▇▇▇ ▇▇▇▇▇ appropriate, and assuming the offering and
sale of the Shares is made as contemplated in the Prospectus, the QIU has
recommended a maximum initial public offering price for the Shares.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company of such termination in writing or by
confirmed telefax at or prior to the Closing Date or, if applicable, any Option
Closing Date. In such event, the Company, the Selling Stockholder and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 5, 7 and 8 hereof).
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls within the meaning of the Act and the Rules
any Underwriter from and against any and all losses, claims, damages, and
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of a Prospectus or Preliminary Prospectus, in light of the
circumstances in which such statements were made) not misleading; and the
Company
-29-
will reimburse each Underwriter and each such controlling person for legal and
other expenses incurred in connection with investigating or defending any such
loss, claim, damage, liability, action or proceeding; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives specifically for use in the
preparation thereof, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in Section 12 below; and provided further, that with respect to any
untrue statement or alleged untrue statement in or omission or alleged omission
from any Preliminary Prospectus, the indemnity contained in this Section 7(a)
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased the Shares concerned,
to the extent that a prospectus relating to such Shares was required to be
delivered by such Underwriter under the Act in connection with such purchase and
any such loss, claim, damage or liability of such Underwriter results from the
fact that there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Shares to such person, a copy of the Prospectus
as then amended or supplemented, if the Company had previously furnished copies
thereof to such Underwriter. This indemnity will be in addition to any liability
which the Company may otherwise have.
The Company agrees to indemnify and hold harmless ▇▇▇▇▇▇▇▇ and each person,
if any, who controls ▇▇▇▇▇▇▇▇ within the meaning of either the Act or the
Exchange Act (the "Designated Entities"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses incurred in connection with defending or investigating any such
action or claim) (i) caused by any untrue statement or alleged untrue statement
of a material fact contained in any material prepared by or with the consent of
the Company for distribution to Participants in connection with the Directed
Share Program or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) caused by the failure of any Participant to pay for
and accept delivery of Directed Shares that the Participant agreed to purchase;
or (iii) related to, arising out of, or in connection with the Directed Share
Program, other than losses, claims, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of the Designated Entities.
(b) The Selling Stockholder agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls within the meaning of the Act
and the Rules any Underwriter from and against any and all losses, claims,
damages, and liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement made by the Selling Stockholder in Section 1(b) of this
Agreement; or (ii) any untrue statement or alleged untrue statement of any
material fact contained under the caption "Principal and Selling Stockholders"
in the Prospectus and each supplement thereto, insofar as such information
relates to the Selling
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Stockholder, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of a Prospectus, in light of the
circumstances in which such statements were made) not misleading; and the
Selling Stockholder will reimburse each Underwriter and each such controlling
person for legal and other expenses incurred in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that the Selling Stockholder will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any untrue statement or alleged untrue statement made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in Section 12 below; provided further, that with
respect to any untrue statement or alleged untrue statement in or omission or
alleged omission from any Preliminary Prospectus, the indemnity contained in
this Section 7(b) shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages or liabilities purchased
the Shares concerned, to the extent that a prospectus relating to such Shares
was required to be delivered by such Underwriter under the Act in connection
with such purchase and any such loss, claim, damage or liability of such
Underwriter results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Shares to
such person, a copy of the Prospectus as then amended or supplemented, if the
Company had previously furnished copies thereof to such Underwriter; and
provided further that the Selling Stockholder shall only be liable pursuant to
this Section 7(b)(ii) only to the extent that any untrue statement or alleged
untrue statement in or omission or alleged omission from the Registration
Statement, the Preliminary Prospectus or the Prospectus is based upon written
information furnished to the Company by him, in his individual capacity as a
Selling Stockholder, specifically for use therein. This indemnity will be in
addition to any liability which the Selling Stockholder may otherwise have. In
no event shall the liability of the Selling Stockholder pursuant to this Section
or Section 7(e) exceed the net proceeds received by the Selling Stockholder with
respect to the sale of the Shares.
(c) Each Underwriter severally, but not jointly, will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, the Selling Stockholder and each person, if
any, who controls within the meaning of the Act and the Rules the Company from
and against any losses, claims, damages or liabilities to which the Company, the
Selling Stockholder or any such director, officer, or controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, and will
reimburse any legal or other expenses incurred by the Company, the Selling
Stockholder or any such director, officer, or controlling person in connection
with investigating or defending any such loss, claim, damage, liability, action
or proceeding; provided, however, that each Underwriter will be liable under
this Section 7(c) only to the extent that such untrue statement, or alleged
untrue statement has been made in the Registration Statement, any Preliminary
-31-
Prospectus, the Prospectus, or such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Company by or
through the Representatives expressly for use in the preparation thereof, which
information is described in Section 12. This indemnity will be in addition to
any liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section 7 or
Section 8 of notice of the commencement of any action or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 7 or Section 8, notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 7 or Section 8. In case
any such action or proceeding is brought against any party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof with counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 7 or Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof, other than reasonable costs of investigation. Notwithstanding
anything contained herein to the contrary, if indemnity may be sought pursuant
to the last paragraph in Section 7(a) hereof in respect of such action or
proceeding, then in addition to such separate firm for the indemnified parties,
the indemnifying party shall be liable for the reasonable fees and expenses of
not more than one separate firm (in addition to any local counsel) for the
Designated Entities for the defense of any losses, claims, damages and
liabilities arising out of the Directed Share Program. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party. Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (A) the employment of such counsel has been
specifically authorized in writing by the indemnifying party, (B) the
indemnifying party has failed to assume the defense and employ counsel, or (C)
the named parties to any such action (including any impleaded parties) including
such indemnified party and the indemnifying party, as the case may be, and such
indemnified party shall have been advised in writing by such counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party, in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, that (X) the
indemnifying party shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable only for the reasonable
fees and expenses of one separate firm of attorneys (in addition to any local
counsel) for all such indemnified parties, which firm
-32-
shall be designated in writing by the indemnified parties, and that (Y) all such
reasonable fees and expenses shall be reimbursed as they are incurred.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 or
Section 8 is for any reason held to be unavailable to an indemnified party under
subsection (a) or (b) above with respect to any losses, claims, damages,
liabilities or expenses referred to therein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
Selling Stockholder and the Underwriters from the Public 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 parties in connection with the statements, omissions or other conduct which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholder on the one hand and the Underwriters on
the other hand shall be deemed to be in the same proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the Selling Stockholder
bears to the underwriting discounts and commissions received by the
Underwriters. The relative fault of a party 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 each party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any such action or claim.
The Company, the Selling Stockholder and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 or
Section 8 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
7, no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriters would have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute shall be several in proportion
to their respective underwriting obligations and not joint.
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against
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whom contribution may be sought under this Section 7 or Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
8. Qualified Independent Underwriter. The Company hereby confirms that at
its request and pursuant to a letter agreement dated October 15, 2003 among the
Company, ▇▇▇▇▇▇▇▇ and the QIU, the terms of which are incorporated herein by
reference, the QIU acted as "qualified independent underwriter" within the
meaning of Rule 2720 of the Conduct Rules of the NASD in connection with the
Public Offering. The Company will indemnify and hold harmless the QIU and each
person who controls the QIU within the meaning of either the Act or the Exchange
Act against any and all losses, claims, damages or liabilities, joint or
several, to which the QIU may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon the QIU's acting (or alleged failing to
act) as such "qualified independent underwriter" and will reimburse the QIU for
any legal or other expenses reasonably incurred by the QIU in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage, or
liability results from the gross negligence or willful misconduct of the QIU or
any misrepresentation or breach of warranty by the QIU under the terms of such
letter agreement. As compensation for the services of the QIU hereunder,
▇▇▇▇▇▇▇▇ agrees to pay the QIU $50,000 on the Closing Date and to reimburse the
QIU for all reasonable expenses, including fees and disbursements of counsel,
incurred by it as the QIU. The price at which the Shares will be sold to the
public shall not be higher than the maximum price recommended by the QIU.
9. Representations, Warranties and Agreements to Survive Delivery. The
respective representations, warranties and agreements of the Company, the
Selling Stockholder, the several Underwriters and the officers of the Company
herein or in certificates delivered pursuant hereto, and the indemnity and
contribution agreements contained in Section 7 and Section 8 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriters or any controlling person, or by or on
behalf of the Company, any of its officers, directors or controlling persons or
the Selling Stockholder, and shall survive delivery of the Underwritten Shares
and, if appropriate, the Option Shares to the Representatives or termination of
this Agreement.
10. Default by Underwriters. If any Underwriter shall fail to purchase and
pay for the Shares which such Underwriter has agreed to purchase and pay for
hereunder (otherwise than by reason of any default on the part of the Company or
the Selling Stockholder), you, as the Representatives of the Underwriters, shall
use your commercially reasonable efforts to procure within twenty-four hours
thereafter one or more of the other Underwriters, or any others, to purchase
from the Company and the Selling Stockholder such amounts as may be agreed upon
and upon the terms set forth herein, the Shares which the defaulting Underwriter
or Underwriters failed to purchase. If during such twenty-four hours you, as
such Representatives, shall not have procured such
-34-
other Underwriters, or any others, to purchase the Shares agreed to be purchased
by the defaulting Underwriter or Underwriters, then (a) if the aggregate number
of Shares with respect to which such default shall occur does not exceed 10% of
the Shares which the Underwriters are obligated to purchase hereby, the other
Underwriters shall be obligated, severally, in proportion to the respective
number of Shares which they are obligated to purchase hereunder, to purchase the
Shares which such defaulting Underwriter or Underwriters failed to purchase, or
(b) if the aggregate number of Shares with respect to which such default shall
occur exceeds 10% of the Shares covered hereby, the Company or you, as the
Representatives of the Underwriters, will have the right, by written notice
given within the next twenty-four hour period to the parties to this Agreement,
to terminate this Agreement without liability on the part of the non-defaulting
Underwriters, the Company or the Selling Stockholder except to the extent
provided in Section 7 or Section 8 hereof (provided that if such default occurs
with respect to Option Shares after the Closing Date, this Agreement will not
terminate as to the Underwritten Shares or any Option Shares purchased prior to
such termination). In the event of a default by any Underwriter or Underwriters,
as set forth in this Section 10, the time of closing may be postponed for such
period, not to exceed seven days, as you, as the Representatives, may determine
in order that the required changes in the Registration Statement, the Prospectus
or in any other documents or arrangements may be effected. The term
"Underwriters" includes any person substituted for a defaulting Underwriter. Any
action taken under Section 10 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
11. Notices. All notices and communications hereunder shall be in writing
and, except as otherwise provided in, will be mailed, delivered or telefaxed and
confirmed as follows: if to the Underwriters, c/o the Representatives as
follows: to ▇▇▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, with a copy to ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Bird LLP,
One Atlantic Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, if to
the Company or to the Selling Stockholder, to Conn's, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., with a copy to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., 5400 Renaissance Tower, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
12. Information Furnished by Underwriters. The information set forth in the
Prospectus: (a) in the final paragraph on the cover page, (b) in the fourth
paragraph under the caption "Shares Eligible for Future Sale," relating to the
early release of shares from lock-up agreements, (c) in the table under the
caption "Underwriting," listing the Underwriters and the number of shares each
has agreed to purchase, (d) in the fourth paragraph under the caption
"Underwriting," relating to the concession to dealers and the re-allowance to
certain other dealers and the delivery of the Shares, (e) in the first paragraph
under the caption "Underwriting--Lock-up Agreements," relating to the early
release of shares from lock-up agreements and (f) in the first paragraph under
the caption "Underwriting--Underwriters' Market Activities," constitute the
written information furnished by or on behalf of any Underwriters referred to in
paragraph (a) (vi) of Section 1 hereof and in paragraphs (a) and (b) of Section
7 hereof.
13. Successors. This Agreement has been and is made solely for the benefit
of the Underwriters, the Company, the Selling Stockholder and their respective
successors, executors, administrators, heirs, and assigns, and the officers,
directors and controlling
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persons referred to herein, and except as provided herein no other person will
have any right or obligation hereunder. The term "successors" shall not include
any purchaser of the Shares merely because of such purchase.
14. Miscellaneous. The Representatives will act for the several
Underwriters in connection with the Public Offering, and any action under this
Agreement taken by the Representatives jointly or by ▇▇▇▇▇▇▇▇ will be binding
upon all of the Underwriters.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
The invalidity or unenforceability of any section, paragraph or provision
of this Agreement shall not affect the validity or enforceability of any other
section, paragraph or provision of this Agreement. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW OR
CONFLICT OF LAW PRINCIPLES THEREOF. The Company and the Selling Stockholder
hereby submit to the non-exclusive jurisdiction of the Federal and state courts
in the Borough of Manhattan in The City of New York in any suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
-36-
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company, the Selling Stockholder and the
several Underwriters in accordance with its terms.
Very truly yours,
CONN'S, INC.
By:__________________________
Name: _______________________
Title: ________________________
CONN APPLIANCES, INC.
By:__________________________
Name: _______________________
Title: ________________________
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
▇▇▇▇▇▇▇▇ INC.
SUNTRUST CAPITAL MARKETS, INC.
By: ▇▇▇▇▇▇▇▇ Inc.
By:__________________________
Name: _______________________
Title: ________________________
As Representatives of the several Underwriters
named in Schedule I hereto
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Schedule I
Underwriter Number of Underwritten Shares
----------- -----------------------------
▇▇▇▇▇▇▇▇ Inc.
SunTrust Capital Markets, Inc.
-----------------
Total
=================
-38-
Schedule II
Texas
Louisiana
-39-
Schedule III
-40-
Exhibit A
Form of Lockup Agreement
Conn's, Inc.
Conn Appliances, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc.
SunTrust Capital Markets, Inc.
as Representatives of the Several Underwriters
c/o Stephens Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting Agreement
pursuant to which an offering will be made that is intended to result in the
establishment of a public market for the common stock, par value $0.01 per share
(the "Common Stock"), of Conn's, Inc. (together with any successor (by merger or
otherwise) thereto, the "Company"), the undersigned hereby agrees that from the
date hereof and until 180 days after the public offering date set forth on the
final prospectus used to sell the Common Stock (the "Public Offering Date"), the
undersigned will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any shares of Common Stock or shares of common
stock, par value $0.01 per share, of Conn Appliances, Inc. or securities
convertible into or exchangeable or exercisable for any such shares (all of such
shares and other securities being referred to collectively hereinafter as the
"Securities"), enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of the Securities, whether
any such aforementioned transaction is to be settled by delivery of the
Securities or such other securities, in cash or otherwise, or publicly disclose
the intention to make any such offer, sale, pledge or disposition, or to enter
into any such transaction, swap, hedge or other arrangement, without, in each
case, the prior written consent of ▇▇▇▇▇▇▇▇ Inc., except for (1) the transfer by
the undersigned of Securities in connection with the merger of Conn's Merger
Sub, Inc. with and into Conn Appliances, Inc., (2) the transfer by the
undersigned of Securities to the Company in connection with a redemption of
Securities, (3) bona fide gifts, provided the recipient of such gift shall agree
to be bound by this Agreement for the remainder of such 180 day period, and (4)
in connection with merger or a transaction to acquire a majority of the capital
stock of the Company or Conn Appliances, Inc. pursuant to an offer made on
substantially the same terms to all of the Company's or Conn Appliances, Inc.'s
stockholders.
Any Securities received upon exercise of options granted to the undersigned
will also be subject to this Agreement. Any Securities acquired by the
undersigned in the open market or in the Company's directed share program will
not be subject to this Agreement. A transfer of Securities to a family member or
trust may be made, provided the transferee agrees to be bound in writing by the
terms of this Agreement.
-41-
In furtherance of the foregoing, Conn Appliances, Inc., the Company and its
transfer agent and registrar are hereby authorized to decline to make any
transfer of Securities if such transfer would constitute a violation or breach
of this Agreement.
This Agreement shall be binding on the undersigned and the successors,
heirs, personal representatives and assigns of the undersigned. This Agreement
shall lapse and become null and void if the Public Offering Date shall not have
occurred on or before March 23, 2004.
Very truly yours,
____________________________________
____________________________________
Printed Name(s)
Date: ______________, 2003
-42-
Exhibit B
Alternate Form of Lockup Agreement
Conn's, Inc.
Conn Appliances, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc.
SunTrust Capital Markets, Inc.
as Representatives of the Several Underwriters
c/o Stephens Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting Agreement
pursuant to which an offering will be made that is intended to result in the
establishment of a public market for the common stock, par value $0.01 per share
(the "Common Stock"), of Conn's, Inc. (together with any successor (by merger or
otherwise) thereto, the "Company"), the undersigned hereby agrees that from the
date hereof and until 180 days after the public offering date set forth on the
final prospectus used to sell the Common Stock (the "Public Offering Date"), the
undersigned will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any shares of Common Stock or shares of common
stock, par value $0.01 per share, of Conn Appliances, Inc. or securities
convertible into or exchangeable or exercisable for any such shares (all of such
shares and other securities being referred to collectively hereinafter as the
"Securities"), enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of the Securities, whether
any such aforementioned transaction is to be settled by delivery of the
Securities or such other securities, in cash or otherwise, or publicly disclose
the intention to make any such offer, sale, pledge or disposition, or to enter
into any such transaction, swap, hedge or other arrangement, without, in each
case, the prior written consent of ▇▇▇▇▇▇▇▇ Inc., except for (1) the transfer by
the undersigned of Securities in connection with the merger of Conn's Merger
Sub, Inc. with and into Conn Appliances, Inc., (2) the transfer by the
undersigned of Securities to the Company in connection with a redemption of
Securities, and (3) the transfer by the undersigned, prior to the closing of the
public offering, of all Securities then beneficially owned by the undersigned to
a revocable trust to be established pursuant to the terms of a voting trust
agreement to be entered into among ▇▇▇▇▇ ▇▇▇▇▇▇▇ as trustee, the undersigned and
the other beneficial owners of Securities to be named therein.
Any Securities received upon exercise of options granted to the undersigned
will also be subject to this Agreement. Any Securities acquired by the
undersigned in the open market or in the Company's directed share program will
not be subject to this
-43-
Agreement. A transfer of Securities to a family member or trust may be made,
provided the transferee agrees to be bound in writing by the terms of this
Agreement.
In furtherance of the foregoing, Conn Appliances, Inc., the Company and its
transfer agent and registrar are hereby authorized to decline to make any
transfer of Securities if such transfer would constitute a violation or breach
of this Agreement.
-44-
This Agreement shall be binding on the undersigned and the successors,
heirs, personal representatives and assigns of the undersigned. This Agreement
shall lapse and become null and void if the Public Offering Date shall not have
occurred on or before March 23, 2004.
Very truly yours,
____________________________________
____________________________________
Printed Name(s)
Date: ______________, 2003
-45-