3,000,000 Shares of Common Stock
HEARTLAND EXPRESS, INC.
UNDERWRITING AGREEMENT
_________, 2002
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
DEUTSCHE BANC ALEX.▇▇▇▇▇
BB&T CAPITAL MARKETS
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇▇▇▇ INC.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the ▇▇▇▇▇▇ Charitable Foundation, each stockholders
of Heartland Express, Inc., a corporation organized and existing under the laws
of Nevada (the "Company"), (▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the ▇▇▇▇▇▇ Charitable
Foundation shall collectively be referred to as the "Selling Stockholders," each
may be referred to individually as a "Selling Stockholder," and ▇▇. ▇▇▇▇▇▇ maybe
referred to as "▇▇. ▇▇▇▇▇▇") propose, subject to the terms and conditions stated
herein, to issue and sell to the several underwriters named in Schedule I hereto
(the "Underwriters") an aggregate of 3,000,000 shares (the "Firm Shares") of
their common stock, par value $0.01 per share (the "Common Stock"). In addition,
for the sole purpose of covering over-allotments in connection with the sale of
the Firm Shares, at the option of the Underwriters, ▇▇. ▇▇▇▇▇▇ proposes, subject
to the terms and conditions stated herein, to issue and sell to the Underwriters
up to an additional 450,000 shares (the "Additional Shares") of Common Stock.
The Firm Shares and any Additional Shares purchased by the Underwriters are
referred to herein as the "Shares." The Shares are more fully described in the
Registration Statement referred to below.
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-_____), and
amendments thereto, and related preliminary prospectuses for the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of the
Shares which registration statement, as so amended (including post-effective
amendments), has been declared effective by the Commission and copies of which
have heretofore been delivered to the Underwriters. The registration statement,
as amended at the time it became effective, including the exhibits and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A or 434(d) under the Securities Act, is
hereinafter referred to as the "Registration Statement." If the Company has
filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Securities Act registering
additional shares of Common Stock (a "Rule 462(b) Registration Statement"),
then, unless otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration Statement.
Other than a Rule 462(b) Registration Statement, which became effective upon
filing, no other document with respect to the Registration Statement has
heretofore been filed with the Commission. No stop order suspending the
effectiveness of either the Registration Statement or the Rule 462(b)
Registration Statement, if any, has to the knowledge of the Company been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission. The Company, if required by the Exchange Act and rules and
regulations of the Commission (together, the "Rules and Regulations"), proposes
to file the Prospectus with the Commission pursuant to Rule 424(b) of the Rules
and Regulations. The Prospectus, in the form in which it is to be filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations, or, if the
Prospectus is not to be filed with the Commission pursuant to Rule 424(b), the
Prospectus in the form included as part of the Registration Statement at the
time the Registration Statement became effective, is hereinafter referred to as
the "Prospectus," except that if any revised prospectus or prospectus supplement
shall be provided to the Underwriters by the Company for use in connection with
the offering and sale of the Shares (the "Offering") which differs from the
Prospectus (whether or not such revised prospectus or prospectus supplement is
required to be filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations), the term "Prospectus" shall refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any preliminary prospectus or
prospectus subject to completion included in the Registration Statement or filed
with the Commission pursuant to Rule 424 under the Securities Act is hereafter
called a "Preliminary Prospectus." Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on or before the effective date of the Registration
Statement, the date of such preliminary prospectus or the date of the
Prospectus, as the case may be, and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and
2
include (i) the filing of any document under the Exchange Act after the
effective date of the Registration Statement, the date of such preliminary
prospectus or the date of the Prospectus, as the case may be, which is
incorporated therein by reference and (ii) any such document so filed. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, the Preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing, shall be deemed to include
any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("▇▇▇▇▇").
(b) At the time of the effectiveness of the Registration Statement or the
effectiveness of any post-effective amendment to the Registration Statement,
when the Prospectus is first filed with the Commission pursuant to Rule 424(b)
or Rule 434 of the Regulations, when any supplement to or amendment of the
Prospectus is filed with the Commission, when any document filed under the
Exchange Act was or is filed and at the Closing Date and the Additional Closing
Date, if any (as hereinafter respectively defined), the Registration Statement
and the Prospectus and any amendments thereof and supplements thereto complied
or will comply in all material respects with the applicable provisions of the
Securities Act and the Rules and Regulations and did not and will not contain an
untrue statement of a material fact and did not and will not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein (i) in the case of the Registration Statement, not misleading
and (ii) in the case of the Prospectus or any related Preliminary Prospectus in
light of the circumstances under which they were made, not misleading. When any
related preliminary prospectus was first filed with the Commission (whether
filed as part of the registration statement for the registration of the Shares
or any amendment thereto or pursuant to Rule 424(a) of the Rules and
Regulations) and when any amendment thereof or supplement thereto was first
filed with the Commission, such Preliminary Prospectus and any amendments
thereof and supplements thereto complied in all material respects with the
applicable provisions of the Securities Act and the Rules and Regulations and
the Exchange Act and the respective rules and regulations thereunder and did not
contain an untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein in light of the circumstances under which they were made not
misleading. No representation and warranty is made in this subsection (b),
however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related Preliminary Prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through you specifically for use therein ("Underwriters'
Information"). The parties acknowledge and agree that the Underwriters
Information consists solely of the material included in paragraphs 2, 4, 10 and
11 under the caption "Underwriting" in the Prospectus. If Rule 434 is used, the
Company will comply with the requirements of Rule 434.
3
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who has certified the financial statements and
supporting schedules included or incorporated in the Registration Statement, are
independent public accountants as required by the Securities Act and the Rules
and Regulations.
(d) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, the Company has not paid any
dividends on its capital stock and there has been no material adverse change or
any development involving a prospective material adverse change on (i) the
business, prospects, properties, operations, condition (financial or other),
stockholders' equity (investment) or results of operations of the Company and
each subsidiary of the Company listed on Exhibit 21 of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Subsidiaries"), taken as a whole; (ii) the long-term debt of the Company; (iii)
the capital stock of the Company; (iv) the Offering, or anything giving rise to
any liability or obligation on the part of the Underwriters; or (v) the
consummation of the transactions contemplated by this Agreement or the Company's
performance of its obligations hereunder (a "Material Adverse Change" or
"Material Adverse Effect"), whether or not arising from transactions in the
ordinary course of business, and since the date of the latest balance sheet
presented in the Registration Statement and the Prospectus, neither the Company
nor any of the Subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, or entered into any transactions which are
material to the Company and the Subsidiaries taken as a whole, except for
liabilities or obligations which are reflected in the Registration Statement and
the Prospectus.
(e) This Agreement and the transactions contemplated herein have been duly
and validly authorized by the Company and this Agreement has been duly and
validly executed and delivered by the Company.
(f) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of the Subsidiaries pursuant to any indenture, mortgage, deed of trust, loan
agreement or other agreement, instrument, franchise, license or permit to which
the Company or any of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries or their respective properties or assets may be bound or
(ii) violate or conflict with any provision of the certificate or articles of
incorporation, by-laws or other organizational documents of the Company or any
of the Subsidiaries or any judgment, decree, order, statute, rule or regulation
of any court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties, operations or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or permit
4
of or with any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, by the Registration Statement and by the Prospectus,
including the sale and delivery of the Shares to be sold and delivered
hereunder, except the registration under the Securities Act of the Shares and
such consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters.
(g) The Company has the authorized capitalization set forth in the
Prospectus and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and were not issued in violation of or subject to any preemptive or similar
rights that entitle or will entitle any person to acquire any Shares upon sale
by the Company of Shares in the Offering, except for such rights as may have
been fully satisfied or waived prior to the effectiveness of the Registration
Statement; and all of the issued shares of capital stock of each of its
Subsidiaries has been duly and validly authorized and issued and are fully paid
and non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims; the Common Stock, the Firm
Shares and the Additional Shares conform to the descriptions thereof contained
in the Registration Statement and the Prospectus. Except as disclosed in the
Prospectus, the Company has no outstanding options to purchase, or preemptive
rights or other rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible securities
or obligations.
(h) The Subsidiaries are the only subsidiaries (as defined in Rule 405 of
the Securities Act) of the Company. Each of the Company and the Subsidiaries has
been duly organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the character or location of
its properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to be so
qualified or in good standing which will not in the aggregate have a Material
Adverse Effect on the condition (financial or otherwise), results of operations,
business, properties or prospects of the Company and
5
the Subsidiaries taken as a whole. Each of the Company and the Subsidiaries has
all requisite power and authority, and all material consents, approvals,
authorizations, orders, registrations, qualifications, licenses and permits
(collectively, the "Consents") of and from all public, regulatory or
governmental agencies and bodies, to own, lease and operate its properties and
conduct its business as now being conducted and as described in the Registration
Statement and the Prospectus. No Consent contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and the
Prospectus.
(i) Except as described in the Prospectus, there is no legal or
governmental proceeding, including routine litigation, to which the Company or
any of the Subsidiaries is a party or of which any property of the Company or
any of the Subsidiaries is the subject which, singularly or in the aggregate, if
determined adversely to the Company or any of the Subsidiaries, is reasonably
likely to have a Material Adverse Effect, and to the best of the Company's
knowledge, no such proceeding is threatened or contemplated by governmental
authorities or threatened or contemplated by others, and the defense of all such
claims against the Company in the aggregate, including routine litigation, will
not have a Material Adverse Effect on the Company.
(j) Neither the Company nor any of its affiliates have taken and nor will
any of them take, directly or indirectly, any action designed to cause or result
in, or which constitutes or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(k) Except for the Subsidiaries, the Company owns no capital stock or other
beneficial interest, directly or indirectly, in any corporation, partnership,
joint venture or other business entity.
(l) The financial statements, including the notes thereto, and supporting
schedules included or incorporated by reference in the Registration Statement
and the Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries and the other entities for which financial statements
are included in the Registration Statement and the Prospectus as of the dates
indicated and condition and results of operations for the periods specified;
except as otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved; and
the supporting schedules included in the Registration Statement present fairly
the information required to be stated therein.
6
(n) Except as disclosed in the Prospectus, no holder of securities of the
Company has any rights to the registration of securities of the Company because
of the filing of the Registration Statement or otherwise in connection with the
sale of the Shares contemplated hereby, and any such rights so disclosed have
either been fully complied with by the Company or effectively waived by the
holders thereof.
(o) The Company is not, and upon consummation of the transactions
contemplated hereby, and at all times up to and including the application of net
proceeds as described in the Prospectus, will not be, subject to registration as
an "investment company" under the Investment Company Act of 1940.
(p) The Company and the Subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Registration Statement and the
Prospectus or such as do not materially affect the value of such property by the
Company and the Subsidiaries; and any real property and buildings held under
lease or sublease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and the Subsidiaries. Neither the Company
nor any of the Subsidiaries has received any notice of any claim adverse to
their ownership of any real or personal property or of any claim against the
continued possession of any real property, whether owned or held under lease or
sublease by the Company or any of the Subsidiaries.
(q) The Company and each of the Subsidiaries have accurately prepared and
timely filed all federal, state and other tax returns that are required to be
filed by it and has paid or made provision for the payment of all taxes,
assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which the Company and each of
the Subsidiaries is obligated to withhold from amounts owning to employees,
creditors and third parties, with respect to
7
the periods covered by such tax returns (whether or not such amounts are shown
as due on any tax return). No deficiency assessment with respect to a proposed
adjustment of the Company's or any of the Subsidiaries' Federal, state, or other
taxes is pending or, to the best of the Company's knowledge, threatened. There
is no tax lien, whether imposed by any federal, state, or other taxing
authority, outstanding against the assets, properties or business of the Company
or any of the Subsidiaries.
(r) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and the outstanding shares of Common Stock (including the Shares)
are listed for quotation on the NASDAQ National Market (the "NASDAQ National
Market"), and the Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or de-listing the Common Stock from the NASDAQ National Market, nor has the
Company received any notification that the SEC or the NASDAQ National Market is
contemplating terminating such registration or listing.
(s) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(t) The documents incorporated or deemed to be incorporated by reference in
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all respects with the requirements of
the Exchange Act and the rules and regulations of the Commission under the
Exchange Act, and, when read together with the other information in the
Prospectus, at the time the Registration Statement and any amendments thereto
become effective and at the Closing Date, will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(u) There are no contracts or other documents (including, without
limitation, any voting agreement), which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement or the Prospectus
by the Securities Act or by the Rules and Regulations and which have not been so
described or filed.
(v) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
8
(w) Neither the Company nor any of the Subsidiaries (i) is in violation of
its charter or by-laws, (ii) is in default (and no event has occurred which,
with notice or lapse of time or both, would constitute such a default) under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
property or assets is subject or (iii) is in violation in any respect of any
statute or any judgment, decree, order, rule or regulation of any court or
governmental or regulatory agency or body having jurisdiction over the Company
or any of the Subsidiaries or any of their properties or assets, except any
violation or default that would not have a Material Adverse Effect on the
condition (financial or otherwise), results of operations, business, properties
or prospects of the Company and the Subsidiaries taken as a whole.
(x) The Company and each of the Subsidiaries owns or possesses adequate
right to use all patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service ▇▇▇▇ registrations, copyrights,
licenses, formulae, customer lists, and know-how and other intellectual property
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the conduct of
their respective businesses as being conducted and as described in the
Registration Statement and Prospectus and have no reason to believe that the
conduct of their respective businesses will conflict with, and have not received
any notice of any claim of conflict with, any such right of others. To the best
of the Company's knowledge, all material technical information developed by and
belonging to the Company which has not been patented has been kept confidential.
Neither the Company nor any of it's subsidiaries has granted or assigned to any
other person or entity any right to manufacture, have manufactured, assemble or
sell the current products and services of the Company or those products and
services described in the Registration Statement and Prospectus.
(y) No labor disturbance by the employees of the Company or any of the
Subsidiaries exists or, to the best of the Company's knowledge, is imminent
which might be expected to have a Material Adverse Effect.
(z) No "prohibited transaction" (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended from time to time (the "Code"), or
"accumulated funding deficiency" (as defined in Section 302 of ERISA) or any of
the events set forth in Section 4043(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has been
waived) has occurred with respect to any employee benefit plan which could have
a Material Adverse Effect; each employee benefit plan is in compliance in all
material respects with applicable law; including ERISA and the Code; the Company
has not incurred and does not expect to
9
incur liability under Title IV of ERISA with respect to the termination of, or
withdrawal from any "pension plan;" and each "pension plan" (as defined in
ERISA) for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
could cause the loss of such qualification. The Company has not agreed to
assume, undertake or provide indemnification for any liability of any other
person under any Environmental Law, including any obligation for cleanup or
remedial action, except under any lease of property operated by the Company
under which the Company is liable for its own cleanup.
(aa) Neither the Company, any of the subsidiaries nor, to the Company's
knowledge, any of its employees or agents has at any time during the last five
years (i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by laws of the United States or any jurisdiction thereof.
(bb) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of toxic
or other wastes or other hazardous substances by, due to, or caused by the
Company (or, to the Company's knowledge, any other entity for whose acts or
omissions the Company is or may be liable) upon any other property now or
previously owned or leased by the Company or any of the Subsidiaries, or upon
any other property, in violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit or which would, under any statute
or any ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any violation
or liability which would not have, singularly or in the aggregate with all such
violations and liabilities, a Material Adverse Effect; there has been no
disposal discharge, emission or other release of any kind onto such property or
into the environment surrounding such property of any toxic or other wastes or
other hazardous substances with respect to which the Company or any of the
Subsidiaries has knowledge, except as would not have a material adverse effect.
(cc) The statistical and market-related data included in the Prospectus are
based on or derived from sources which are reliable and accurate.
2. Representations and Warranties of the Selling Stockholders. Each Selling
Stockholder severally represents and warrants to, and agrees with, each of the
Underwriters that:
(a) This Agreement has been duly and validly authorized, executed and
delivered by or on behalf of the Selling Stockholders and is a valid and binding
agreement of the Selling Stockholders, enforceable against each Selling
Stockholder in accordance with its terms, except as enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general
equitable principles.
10
(b) Each of the Custody Agreements and Powers of Attorney (each, a "Custody
Agreement and Power of Attorney") signed by (i) each Selling Stockholder, (ii)
_______________, as custodian (in such capacity, the "Custodian"), and (iii)
______________ as the Selling Stockholders' attorney-in-fact (in such capacity,
the "Attorney-In-Fact"), has been duly and validly authorized, executed and
delivered by each Selling Stockholder and is a valid and binding agreement of
each Selling Stockholder, enforceable against him, her or it in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles. ▇▇. ▇▇▇▇▇▇ agrees that the Additional Shares, if any, to be sold by
him on deposit with the Custodian are subject to the interests of the
Underwriters, that the arrangements made for such custody are to that extent
irrevocable, and that the obligations of each Selling Stockholder hereunder
shall not be terminated, except as provided in this Agreement or in the Custody
Agreement and Power of Attorney, by any act of the Selling Stockholder, by
operation of law, by death or incapacity of such Selling Stockholder or by the
occurrence of any other event. If ▇▇. ▇▇▇▇▇▇ should die or become incapacitated,
or if any other event should occur, before the delivery of the Additional
Shares, if any, to be sold by ▇▇. ▇▇▇▇▇▇ hereunder, the documents evidencing the
Additional Shares, if any, to be sold by ▇▇. ▇▇▇▇▇▇ then on deposit with the
Custodian shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death, incapacity or other event had not
occurred, regardless of whether or not the Custodian shall have received notice
thereof.
(c) ▇▇. ▇▇▇▇▇▇ is the lawful owner of the Additional Shares, if any, to be
sold by him hereunder and upon sale and delivery of, and payment for, such
Additional Shares, as provided herein, ▇▇. ▇▇▇▇▇▇ will convey to the
Underwriters good and marketable title to such Additional Shares, free and clear
of all liens, encumbrances, equities, claims and security interests whatsoever.
(d) ▇▇. ▇▇▇▇▇▇ has, and on the Additional Closing Date, if any, will have,
good and valid title to all of the Additional Shares which may be sold by him
pursuant to this Agreement on such date and the legal right and power, and all
authorizations and approvals required by law, to enter into this Agreement and
the applicable Custody Agreement and Power of Attorney, to sell, transfer and
deliver all of the Additional Shares which may be sold by ▇▇. ▇▇▇▇▇▇ pursuant to
this Agreement and to comply with his or her other obligations hereunder and
thereunder.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by ▇▇. ▇▇▇▇▇▇ of
the transactions contemplated herein, except such as may have been obtained
under the Securities Act and such as may be required under the state securities
laws or the blue sky laws or any jurisdiction in connection with the purchase
and distribution of the Additional Shares by the Underwriters and such other
approvals as have been obtained.
11
(f) Neither the sale of the Additional Shares, if any, being sold by ▇▇.
▇▇▇▇▇▇ nor the consummation of any of the other transactions contemplated herein
by the Selling Stockholders or the fulfillment of the terms hereof by the
Selling Stockholders will conflict with, result in a breach or violation of, or
constitute a default under any law or the terms of any indenture or other
agreement or instrument to which any Selling Stockholder is party or bound, any
judgment, order or decree applicable to any Selling Stockholder or any court or
regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over any Selling Stockholder.
(g) None of the Selling Stockholders has any registration or other similar
rights to have any equity or debt securities registered for sale by the Company
under the Registration Statement or included in the offering of the Shares,
except for such rights as have been waived or which are described in the
Prospectus.
(h) The Selling Stockholders do not have, or have waived prior to the date
hereof, any preemptive right, co-sale right or right of first refusal or other
similar right to purchase any of the Additional Shares, if any, that are to be
sold by ▇▇. ▇▇▇▇▇▇ to the Underwriters pursuant to this Agreement; and the
Selling Stockholders do not own any warrants, options or similar rights to
acquire, and do not have any right or arrangement to acquire, any capital stock,
right, warrants, options or other securities from the Company, other than those
described in the Registration Statement and the Prospectus.
(i) All information furnished by or on behalf of the Selling Stockholders
in writing for use in the Registration Statement and Prospectus, or any document
incorporated by reference into the Registration Statement and Prospectus is, and
on the Closing Date and the Additional Closing Date, if any, will be, true,
correct, and complete in all material respects, and does not, and on the Closing
Date and the Additional Closing Date, if any, will not, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make such information not misleading. To the extent such information appears in
the Prospectus, each Selling Stockholder confirms as accurate the number of
shares of Common Stock and options set forth opposite such Selling Stockholder's
name and as described in the related footnote in the Prospectus under the
caption "Principal and Selling Stockholders" (both prior to and after giving
effect to the sale of the Additional Shares).
(j) The Selling Stockholders have not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(k) The Selling Stockholders have not distributed and will not distribute,
prior to the later of the Additional Closing Date, if any, and the completion of
the Underwriters' distribution of the Shares, any offering material in
connection with the
12
offering and sale of the Shares by the Selling Stockholders other than a
Preliminary Prospectus, the Prospectus or the Registration Statement.
(l) Each Selling Stockholder has reviewed and is familiar with the
Registration Statement and the Prospectus and (i) has no knowledge of any
material adverse information with regard to the Company or the Subsidiaries
which is not disclosed in the Registration Statement and the Prospectus and (ii)
has no knowledge of any misstatement of a material fact or failure to state a
material fact necessary to make the statements in the Prospectus, in light of
the circumstances under which they were made, not misleading. ▇▇. ▇▇▇▇▇▇ further
represents that he is not prompted to sell the Additional Shares, if any, to be
sold by him.
(m) The representations and warranties of the Selling Stockholders in the
respective Custody Agreements and Powers of Attorney are, and on the Closing
Date and Additional Closing Date, if any, will be, true and correct.
Any certificate signed by or on behalf of the Selling Stockholder and
delivered to the Representatives or to Underwriters' Counsel shall be deemed to
be a representation and warranty by such Selling Shareholder to each Underwriter
as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the selling stockholders agree to sell to the Underwriters and the
Underwriters, severally and not jointly, agree to purchase from the selling
stockholders, at a purchase price per share of $_______, the number of Firm
Shares set forth opposite the respective names of the Underwriters in Schedule I
hereto plus any additional number of Shares which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for, and delivery of certificates for,
the Shares shall be made at the office of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇
▇ ▇▇▇▇▇▇, ▇. ▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, D. C. 20005, ("Underwriters' Counsel")
or at such other place as shall be agreed upon by Bear, ▇▇▇▇▇▇▇ & Co. Inc. and
the Company, at 10:00 A.M., New York City time on the third or fourth business
day (as permitted under Rule 15c6-1 under the Exchange Act) (unless postponed in
accordance with the provisions of Section 10 hereof) following the date of the
effectiveness of the Registration Statement (or, if the Company has elected to
rely upon Rule 430A of the Regulations, the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) after the determination of
the public offering price of the Shares), or such other time not later than ten
business days after such date as shall be agreed upon by Bear, ▇▇▇▇▇▇▇ & Co.
Inc. and the Company (such time and date of payment and delivery being herein
called the "Closing Date").
13
(c) Payment for the Firm Shares to be sold by the Selling Stockholders
shall be made to or upon the order of the Selling Stockholders of the purchase
price by wire transfer in Federal (same day) funds to the Selling Stockholders
[[or the Custodian]] at the offices of Underwriters' Counsel, or such other
location as may be mutually acceptable, upon delivery of the certificates for
the Firm Shares to Bear, ▇▇▇▇▇▇▇ & Co. Inc. for the respective accounts of the
Underwriters. Each Selling Stockholder hereby agrees that (i) it will pay all
stock transfer taxes, stamp duties and other similar taxes, if any, payable upon
the sale or delivery of the Firm Shares to be sold by the Selling Stockholders
to the several Underwriters, or otherwise in connection with the performance of
the Selling Stockholders' obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to the
Selling Stockholders hereunder and to hold such amounts for the account of the
Selling Stockholders with the Custodian under the Custody Agreement and Power of
Attorney.
(d) In addition, ▇▇. ▇▇▇▇▇▇ hereby grants to the Underwriters the option to
purchase up to 450,000 Additional Shares at the same purchase price per share to
be paid by the Underwriters to the Selling Stockholders for the Firm Shares as
set forth in this Section 3, for the sole purpose of covering over-allotments in
the sale of Firm Shares by the Underwriters. This option may be exercised at any
time and from time to time, in whole or in part, on or before the thirtieth day
following the date of the Prospectus, by written notice by you to ▇▇. ▇▇▇▇▇▇.
Such notice shall set forth the aggregate number of Additional Shares as to
which the option is being exercised and the date and time, as reasonably
determined by you, when the Additional Shares are to be delivered (such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
the Closing Date or earlier than the second full business day after the date on
which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 10 hereof). Certificates for the Additional Shares shall be registered
in such name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
▇▇. ▇▇▇▇▇▇ will permit you to examine and package such certificates for delivery
at least one full business day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall be the
number which bears the same ratio to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 10 hereof) bears to the total number of Firm Shares, subject, however,
to such adjustments to eliminate any fractional shares as Bear, ▇▇▇▇▇▇▇ & Co.
Inc. in its sole discretion shall make.
14
Payment for the Additional Shares to be sold by ▇▇. ▇▇▇▇▇▇ shall be made to
or upon the order of ▇▇. ▇▇▇▇▇▇ of the purchase price by wire transfer in
Federal (same day) funds to ▇▇. ▇▇▇▇▇▇ [[or the Custodian]] at the offices of
Underwriters' Counsel, or such other location as may be mutually acceptable,
upon delivery of the certificates for the Additional Shares to Bear, ▇▇▇▇▇▇▇ &
Co. Inc. for the respective accounts of the Underwriters. ▇▇. ▇▇▇▇▇▇ hereby
agrees that (i) he will pay all stock transfer taxes, stamp duties and other
similar taxes, if any, payable upon the sale or delivery of the Additional
Shares to be sold by the Selling Stockholders to the several Underwriters, or
otherwise in connection with the performance of ▇▇. ▇▇▇▇▇▇'▇ obligations
hereunder and (ii) the Custodian is authorized to deduct for such payment any
such amounts from the proceeds to ▇▇. ▇▇▇▇▇▇ hereunder and to hold such amounts
for the account of ▇▇. ▇▇▇▇▇▇ with the Custodian under the Custody Agreement and
Power of Attorney.
4. Offering. Upon your authorization of the release of the Firm Shares, the
Underwriters propose to offer the Shares for sale to the public upon the terms
and conditions set forth in the Prospectus.
5. Covenants of the Company; Covenants of the Selling Stockholders.
A. The Company covenants and agrees with each of the Underwriters that:
(a) The Registration Statement and any amendments thereto have become
effective, and if Rule 430A is used or the filing of the Prospectus is otherwise
required under Rule 424(b), or Rule 434, the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) within
the prescribed time period and will provide evidence satisfactory to you of such
timely filing. If the Company elects to rely on Rule 434, the Company will
prepare and file a Term Sheet that complies with requirements of Rule 434 and
provide the Underwriters with copies of such filings prior to their use.
The Company will notify you immediately (and, if requested by you, will
confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the Company's intention to file or
prepare any amendments to the Registration Statement (including pursuant to rule
462(b)), the Term Sheet or any supplement, revision or amendment to the
Registration Statement or the Prospectus, (iv) of the mailing or the delivery to
the Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, it being understood that the Company shall make every
effort to avoid the issuance of any such stop order, (v) of the receipt of any
comments from the
15
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b) or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement or,
file any document under the Exchange Act if such document would be deemed to be
incorporated by reference into the Prospectus to which you shall reasonably
object in writing after being timely furnished in advance a copy thereof.
(b) The Company shall comply with the Securities Act and the Exchange Act
to permit completion of the distribution as contemplated in this Agreement,
Registration Statement and Prospectus. If at any time when a prospectus relating
to the Shares is required to be delivered under the Securities Act or the
Exchange Act in connection with the sales of Shares, any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would, in the reasonable judgment of the Underwriters or the Company, include an
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 the light
of the circumstances existing at the time of delivery to the purchaser, not
misleading, or if it shall be necessary at any time to amend or supplement the
Prospectus or Registration Statement to comply with the Securities Act or the
Rules and Regulations, or to file under the Exchange Act so as to comply
therewith any document incorporated by reference in the Registration Statement
or the Prospectus or in any amendment thereof or supplement thereto, the Company
will notify you promptly and prepare and file with the Commission, subject to
the second paragraph of Section 5(A)(a) hereof, an appropriate amendment or
supplement (in form and substance satisfactory to you) which will correct such
statement or omission or which will effect such compliance and will use its best
efforts to have any amendment to the Registration Statement declared effective
as soon as possible.
(c) The Company will promptly deliver to each of the Representatives and
Underwriters' Counsel a signed copy of the Registration Statement, including all
consents and exhibits filed therewith and all documents incorporated by
reference therein and all amendments thereto, and the Company will promptly
deliver to each of the Underwriters such number of copies of any Preliminary
Prospectus, the Prospectus, the Registration Statement, and all amendments of
and supplements to such documents, if any, all documents incorporated by
reference in the Registration Statement and Prospectus or any amendment thereof
or supplement thereto, as you may reasonably request. Prior to 10:00 A.M., New
York time, on the business day next succeeding the date of this Agreement and
from time to time thereafter the Company will furnish the
16
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request.
(d) The Company shall promptly deliver to each of the Underwriters and to
Underwriters' Counsel copies of the Preliminary Prospectus, and the Company
consents to the use and delivery of the Preliminary Prospectus by the
Underwriters in accordance with Rule 430 and Section 5(b) of the Securities Act.
The Company shall also furnish to each of the Underwriters copies of the final
Prospectus as requested by any of the Underwriters.
(e) The Company will use its best efforts, in cooperation with you, at or
prior to the time of effectiveness of the Registration Statement, to qualify the
Shares for offering and sale under the securities laws relating to the offering
or sale of the Shares of such jurisdictions as you may designate and to maintain
such qualification in effect for so long as required for the distribution
thereof; except that in no event shall the Company be obligated in connection
therewith to qualify as a foreign corporation or to execute a general consent to
service of process.
(f) The Company will make generally available to its security holders and
to the Underwriters as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Securities Act), an earnings statement of the
Company and the Subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158).
(g) During the period of 90 days from the date of the Prospectus, the
Company will not, directly or indirectly, without your prior written consent,
issue, sell, offer or agree to sell, grant any option for the sale of, pledge,
make any short sale or maintain any short position, establish or maintain a "put
equivalent position" (within the meaning of Rule 16-a-1(h) under the Exchange
Act ), enter into any swap, derivative transaction or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock (whether any such transaction is to be settled by
delivery of Common Stock, other securities, cash or other consideration) or
otherwise dispose of, any Common Stock (or any securities convertible into,
exercisable for or exchangeable for Common Stock) or interest therein of the
Company or of any of the Subsidiaries, and the Company will obtain the
undertaking of each of its officers and directors and such of its shareholders
as have been heretofore designated by you and listed on Schedule II attached
hereto not to engage in any of the aforementioned transactions on their own
behalf, other than the Company's sale of Shares hereunder and the Company's
issuance of Common Stock upon (i) the conversion or exchange of convertible or
exchangeable securities outstanding on the date hereof; (ii) the exercise of
currently outstanding options; (iii) the exercise of currently
17
outstanding warrants; (iv) the grant and exercise of options under, or the
issuance and sale of shares pursuant to, employee stock option plans in effect
on the date hereof and (v) the issuance of shares in respect of the acquisition
of the Company of the assets, capital stock or business of another person or
entity whether by merger, exchange of stock or otherwise.
(h) During the period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of all reports or
other communications (financial or other) furnished to security holders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and the Subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission).
(k) The Company, during the period when the Prospectus is required to be
delivered under the Securities Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act and the rules
and regulations thereunder.
B. Each Selling Stockholder covenants and agrees with each Underwriter:
(a) To deliver to the Representatives prior to the Closing Date, a properly
completed and executed United States Treasury Department Form W-8 (if the
Selling Stockholder is a non-United States Person) or Form W-9 (if the Selling
Stockholder is a United States Person).
(b) If, at any time prior to the date on which the distribution of the
Shares as contemplated herein and in the Prospectus has been completed, as
determined by the Representatives, such Selling Stockholder has knowledge of the
occurrence of any event as a result of which the Prospectus or the Registration
Statement, in each case as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, such Selling Stockholder will promptly notify the Company
and the Representatives.
(c) To cooperate to the extent necessary to cause the Registration
Statement or any post-effective amendment thereto to become effective at
18
the earliest possible time and to do and perform all things to be done and
performed under this Agreement prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Shares pursuant to this Agreement.
(d) To deliver to Bear, ▇▇▇▇▇▇▇ & Co. Inc. on or prior to the date of this
Agreement each lock-up agreement referenced in Section 7(j) hereof.
C. ▇▇. ▇▇▇▇▇▇ covenants and agrees with each Underwriter to pay or cause to
be paid all transfer taxes with respect to the Additional Shares, if any, to be
sold by him.
6. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholders hereunder, including the
following: (i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the
Securities Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing any Agreement among Underwriters, this Agreement, the blue sky
memoranda, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(A)(e)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the blue sky survey;
(iv) all fees and expenses in connection with listing the Shares on the NASDAQ
National Market; (v) all travel expenses of the Company's officers and employees
and any other expense of the Company incurred in connection with attending or
hosting meetings with prospective purchasers of the Shares; (vi) any stock
transfer taxes incurred in connection with this Agreement or the Offering; (vii)
the filing fees incident to, and the reasonable legal fees and disbursements of
counsel for the Underwriters in connection with, securing any required review by
the National Association of Securities Dealers, Inc. of the terms of the sale of
the Shares, and (viii) fees of the Custodian and other fees and expenses related
to the offering of the Additional Shares by ▇▇. ▇▇▇▇▇▇, on behalf of ▇▇. ▇▇▇▇▇▇
in connection with the sale of Additional Shares, if any. The Company also will
pay or cause to be paid: (i) the cost of preparing stock certificates; (ii) the
cost and charges of any transfer agent or registrar; and (iii) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section 6. It is understood,
however, that except as provided in this Section, and Sections 8 and 12 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel, stock transfer taxes on resale of any of the Shares by
them, and any advertising expenses connected with any offers they may make.
19
7. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company and the Selling Stockholders herein contained, as of
the date hereof and as of the Closing Date (for purposes of this Section 7
"Closing Date" shall refer to the Closing Date for the Firm Shares and any
Additional Closing Date, if different, for the Additional Shares), to the
absence from any certificates, opinions, written statements or letters furnished
to you or to Underwriters' Counsel pursuant to this Section 7 of any
misstatement or omission, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Registration Statement shall have become effective and all
necessary approvals from the NASDAQ National Market shall have been received not
later than, if pricing pursuant to Rule 430A: 5:30 P.M., New York time, on the
date of this Agreement or at such later time and date as shall have been
consented to in writing by you; if the Company shall have elected to rely upon
Rule 430A or Rule 434 of the Regulations, the Prospectus shall have been filed
with the Commission in a timely fashion in accordance with Section 5(A)(a)
hereof and a form of the Prospectus containing information relating to the
description of the Shares and the method of distribution and similar matters
shall have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period; and, at or prior to the Closing Date no stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereof shall have been issued and no proceedings therefor shall have
been initiated or threatened by the Commission.
(b) At the Closing Date, you shall have received the favorable written
opinions of ▇▇▇▇▇▇▇ Law Firm, P.C., LLO, counsel for the Company, and dated the
Closing Date addressed to the Underwriters in the form attached hereto as Annex
I.
(c) At the Closing Date, you shall have received the favorable written
opinion of ▇▇▇▇▇▇▇ Law Firm, P.C., LLO, counsel for the Selling Stockholders,
dated the Closing Date addressed to the Underwriters in the form attached hereto
as Annex II.
(d) All proceedings taken in connection with the sale of the Firm Shares
and the Additional Shares as herein contemplated shall be reasonably
satisfactory in form and substance to you and to Underwriters' Counsel, and the
Underwriters shall have received from said Underwriters' Counsel a favorable
opinion, dated as of the Closing Date with respect to the issuance and sale of
the Shares, the Registration Statement and the Prospectus and such other related
matters as you may require, and the Company shall have furnished to
Underwriters' Counsel such documents as they reasonably request for the purpose
of enabling them to pass upon such matters.
(e) At the Closing Date, you shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Company, dated the Closing
Date, to the effect that (i) the condition set forth in subsection (a) of this
Section
20
7 has been satisfied, (ii) as of the date hereof and as of the Closing Date the
representations and warranties of the Company set forth in Section 1 hereof are
accurate, (iii) as of the Closing Date all agreements, conditions and
obligations of the Company to be performed or complied with hereunder on or
prior thereto have been duly performed or complied with, (iv) the Company and
the Subsidiaries have not sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, and (v) subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus there has not been any material adverse 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 the business, prospects,
properties, operations, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries taken as a whole, except in each
case as described in or contemplated by the Prospectus.
(f) At the time this Agreement is executed and at the Closing Date, you
shall have received a comfort letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Company and the
Underwriters and in form and substance satisfactory to the Underwriters and
Underwriters' Counsel.
(h) You shall have also received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, a letter stating
that the Company's system of internal accounting controls taken as a whole is
sufficient to meet the broad objectives of internal accounting control insofar
as those objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to the financial
statements of the Company and the Subsidiaries.
(i) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), 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
21
prospective change, in or affecting the condition (financial or otherwise),
results of operations, business, properties or prospects of the Company and the
Subsidiaries taken as a whole, including, without limitation, the occurrence of
a fire, flood, explosion or other calamity at any of the properties owned or
leased by the Company or any of its Subsidiaries, the effect of which, in any
such case described above, is, in the judgment of the Underwriters, 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 (exclusive of any supplement).
(j) You shall have received a lock-up agreement from each person who is a
director or an executive officer of the Company and each Selling Stockholder
substantially in the form attached hereto as Annex III.
(l) At the Closing Date, you shall have received a certificate of an
authorized representative of the Selling Stockholders, dated the Closing Date,
to the effect that the representations and warranties of the Selling
Stockholders set forth in Section 2 hereof are accurate and that each of the
Selling Stockholders has complied with all agreements and satisfied all
conditions on his or her part to be performed or satisfied hereunder at or prior
to the Closing Date.
(m) On or prior to the Closing Date, you shall have received a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof) from each Selling Stockholder.
(n) The Company shall have complied with the provisions of Section 5(A)(c)
hereof with respect to the furnishing of prospectuses.
(o) The Company and the Selling Stockholders shall have furnished the
Underwriters and Underwriters' Counsel with such other certificates, opinions or
other documents as they may have reasonably requested.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to you or to Underwriters'
Counsel pursuant to this Section 7 shall not be in all material respects
reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, all obligations of the Underwriters hereunder may be cancelled by you
at, or at any time prior to, the Closing Date and the obligations of the
Underwriters to purchase the Additional Shares may be cancelled by you at, or at
any time prior to, the Additional Closing Date. Notice of such cancellation
shall be given to the Company in writing, or by telephone. Any such telephone
notice shall be confirmed promptly thereafter in writing.
22
8. Indemnification.
(a) The Company shall indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act against any and all
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to reasonable attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Shares, as originally filed
or any amendment thereof, or any related Preliminary Prospectus or the
Prospectus, or in any supplement thereto or amendment thereof, 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
not misleading; provided, however, that the Company will not be liable in any
such case to the extent but only to the extent that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through you expressly for use
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have including under this Agreement.
(b) Each Selling Stockholder agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
relating to such Selling Stockholder contained in the Registration Statement for
the registration of the Shares, as originally filed or any amendment thereof, or
any related Preliminary Prospectus or the Prospectus, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact relating to such Selling
Stockholder required to be stated therein or necessary to make the statements
therein not misleading. This indemnity agreement will
23
be in addition to any liability which any Selling Stockholder may otherwise have
including under this Agreement.
(c) Each Underwriter severally, and not jointly, shall indemnify and hold
harmless the Company, each of the directors of the Company, each of the officers
of the Company who shall have signed the Registration Statement, and each other
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to reasonable attorneys' fees and any and all expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim, and any and all amounts paid in
settlement of any claim or litigation), jointly or severally, to which they or
any of them may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related preliminary prospectus or the Prospectus, or
in any amendment thereof 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 not misleading,
in each case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through you
expressly for use therein; provided, however, that in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which any
Underwriter may otherwise have including under this Agreement. The Company
acknowledges that the statements set forth in paragraphs [___], [___] and [___]
under the caption "Underwriting" in the Prospectus constitute the only
information furnished in writing by or on behalf of any Underwriter expressly
for use in the Registration Statement relating to the Shares as originally filed
or in any amendment thereof, any related preliminary prospectus or the
Prospectus or in any amendment thereof or supplement thereto, as the case may
be.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve
the indemnifying party from any liability which it may have under this Section 8
to the extent that it is not materially prejudiced as a result thereof and in
any event shall not relieve it from any
24
liability that such indemnifying party may have otherwise than on account of the
indemnity agreement hereunder). In case any such claim or action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, an indemnifying party may participate, at its own expense
in the defense of such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party; provided however, that counsel to the
indemnifying party shall not (except with the written consent of the indemnified
party) also be counsel to the indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
(iii) the indemnifying party does not diligently defend the action after
assumption of the defense, or (iv) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. No indemnifying party shall, without the prior written
consent of the indemnified parties, effect any settlement or compromise of, or
consent to the entry of judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could have been sought under Section 8 or 9 hereof (whether or not
the indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of the
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim, (ii) does not include a statement as to, or
an admission of, fault, culpability or a failure to act, by or on behalf of the
indemnified party and (iii) the indemnifying party reaffirms its obligations.
9. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 8 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, the Selling Stockholders
and the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company and each
Selling Stockholder, any contribution received by the Company and/or the Selling
Stockholder from persons, other than the Underwriters, who may also be liable
for
25
contribution, including persons who control the Company and/or the Selling
Stockholder within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) as incurred to which the Company, each
Selling Stockholder and one or more of the Underwriters may be subject, in such
proportions as are appropriate to reflect the relative benefits received by the
Company and each Selling Stockholder on the one hand and the Underwriters on the
other hand from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 8
hereof, in such proportions as are appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Selling Stockholder on the one hand and the Underwriters on the other hand in
connection with the statements or omissions 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 Stockholders
on the one hand and the Underwriters on the other hand shall be deemed to be in
the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Selling Stockholders bear to (y) the underwriting discount received by
the respective Underwriters, respectively, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of each of the
Company, any Selling Stockholder and of the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Stockholder or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholders and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by 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 above in this Section 9. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 9 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section 9, (i) no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the shares are
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any
26
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 9, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as such Underwriter, and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company and any
Selling Stockholder, as applicable, subject in each case to clauses (i) and (ii)
of this Section 9. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties, notify each party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 9 or otherwise. The obligations of the
Underwriters to contribute pursuant to this Section 9 are several in proportion
to the respective number of Shares purchased by each of the Underwriters
hereunder and not joint.
10. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective names in Schedule I hereto bear to the aggregate number of Firm
Shares set forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the Firm
Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within five calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 10, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company and ▇▇. ▇▇▇▇▇▇ to sell the Additional Shares shall thereupon
terminate, without liability on the part of the Company or ▇▇. ▇▇▇▇▇▇ with
respect thereto (except in each case as provided in Sections 6, 8(a) and 9
hereof with respect to the Company and Sections 8(b) and 9 hereof with respect
to the Selling Stockholders) or the Underwriters, but nothing in this Agreement
shall relieve a defaulting Underwriter or Underwriters of
27
its or their liability, if any, to the other Underwriters and the Company and
the Selling Stockholders for damages occasioned by its or their default
hereunder.
(c) In the event that the Firm Shares or Additional Shares to which the
default relates are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, you or the Company
shall have the right to postpone the Closing Date or Additional Closing Date, as
the case may be for a period, not exceeding five business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 10 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Additional Shares.
11. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters, and the Company and
the Selling Stockholders contained in this Agreement or in certificates of
officers of the Company or any Subsidiary submitted hereto or thereto, including
the agreements contained in Section 6, the indemnity agreements contained in
Section 7 and the contribution agreements contained in Section 9, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof or by or on
behalf of the Company, any of its officers and directors or any controlling
person thereof, and shall survive delivery of and payment for the Shares to and
by the Underwriters. The representations contained in Sections 1 and 2 and the
agreements contained in Sections 6, 8, 9, 11 and 12(d) hereof shall survive the
termination of this Agreement, including termination pursuant to Section 10 or
12 hereof.
12. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later of when (i) you
and the Company shall have received notification of the effectiveness of the
Registration Statement or (ii) the execution of this Agreement. If either the
public offering price or the purchase price per Share has not been agreed upon
prior to 5:00 P.M., New York City time, on the fifth full business day after the
Registration Statement shall have become effective, this Agreement shall
thereupon terminate without liability to the Company or the Underwriters except
as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you or by you
notifying the Company. Notwithstanding the foregoing, the provisions of this
Section 12 and of Sections 1, 2, 6, 8 and 9 hereof shall at all times be in full
force and effect.
(b) You shall have the right to terminate this Agreement at any time prior
to the Closing Date or the obligations of the Underwriters to purchase the
28
Additional Shares at any time prior to the Additional Closing Date, as the case
may be, if (A) any domestic or international event or act or occurrence has
materially disrupted, or in your opinion will in the immediate future materially
disrupt, the market for the Company's securities or securities in general; or
(B) if trading on the New York Stock Exchange or on the NASDAQ National Market
shall have been suspended, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, on the New York Stock Exchange or on the NASDAQ National Market by the
New York Stock Exchange or by the NASDAQ National Market or by order of the
Commission or any other governmental authority having jurisdiction; or (C) if a
banking moratorium has been declared by any state or federal authority or if any
material disruption in commercial banking or securities settlement or clearance
services shall have occurred; or (D) any downgrading shall have occurred in the
Company's corporate credit rating or the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization" as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act or if any such organization shall have publicly announced that it
has under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities; or (E) (i) if there shall have
occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a declaration of a national emergency or
war by the United States or (ii) if there shall have been any other calamity or
crisis or any change in political, financial or economic conditions if the
effect of any such event in (i) or (ii) as in your judgment makes it
impracticable or inadvisable to proceed with the offering, sale and delivery of
the Firm Shares or the Additional Shares, as the case may be, on the terms and
in the manner contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 12 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the provisions
hereof (otherwise than pursuant to (i) notification by you as provided in
Section 12(a) hereof or (ii) Section 10(b)), or if the sale of the Shares
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof, the Company will, subject to demand by you,
reimburse the Underwriters for all out-of-pocket expenses (including the fees
and expenses of their counsel), incurred by the Underwriters in connection
herewith. If this Agreement shall be terminated pursuant to Section 12(b)
hereof, then no party shall have any liability hereunder except for the
Company's obligation, pursuant to Section 6 hereof, to pay all out-of-pocket
expenses of the Underwriters incurred in connection with this Agreement.
13. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
29
(a) if sent to any Underwriter, shall be mailed, delivered, or faxed and
confirmed in writing, to such Underwriter c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Equity Capital Markets, with a copy
to ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇. ▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
D. C. 20005, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(b) if sent to the Company, shall be mailed, delivered, or faxed and
confirmed in writing to Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇ and its counsel at ▇▇▇▇▇▇▇ Law Firm, P.C., L.L.O., ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇.
(c) if sent to the Selling Stockholders, shall be mailed, delivered, or
faxed and confirmed in writing to the Custodian at [c/o the Company, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ____________].
provided, however, that any notice to an Underwriter pursuant to Section 8
shall be delivered or sent by mail or facsimile transmission to such Underwriter
at its address set forth in its acceptance facsimile to you, which address will
be supplied to any other party hereto by you upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof.
14. Parties. This Agreement shall insure solely to the benefit of, and
shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 8 and
9 hereof, and their respective successors and assigns, and no other person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and their
respective successors, and said controlling persons, and officers and directors
and their heirs and legal representatives, and it is not for the benefit of any
other person, firm or corporation. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of Shares from any of the
Underwriters.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be delivered by facsimile and shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
17. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
30
18. Time is of the Essence. Time shall be of the essence of this Agreement.
As used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
[signature page follows]
31
If the foregoing correctly sets forth the understanding between you and the
Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
HEARTLAND EXPRESS, INC.
By:
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
-----------------------------------------
as custodian for the Selling Stockholders
By:
--------------------------------------------
Name:
Title:
By:
--------------------------------------------
Name:
Title:
as attorney-in-fact for the Selling Stockholders
Accepted as of the date first above written
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
------------------------------------------------
Name:
Title:
On behalf of themselves and the other Underwriters named in Schedule I hereto.
HEARTLAND EXPRESS, INC.
By:
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
SCHEDULE I
NAME OF UNDERWRITER NUMBER OF FIRM SHARES
TO BE PURCHASED
Bear, ▇▇▇▇▇▇▇ & Co. Inc.............................. _______________
Deutsche Banc Alex.▇▇▇▇▇............................. _______________
BB&T Capital Markets................................. _______________
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc......................... _______________
▇▇▇▇▇▇▇▇ Inc......................................... _______________
Total:......................................... 3,000,000
=========
I-1
SCHEDULE II
NAMES OF STOCKHOLDERS SUBJECT TO THE LOCK-UP PROVISION
II-1
ANNEX I
Form of Opinion of Company Counsel
(i) Each of the Company and the Subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation with full power and corporate and all
other necessary authority to own its properties and conduct its business
as described in the Prospectus. Each of the Company and the Subsidiaries
is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties
(owned, leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to be so
qualified or in good standing which will not in the aggregate have a
Material Adverse Effect.
(ii) The Company has an authorized capitalization as set forth in the
Registration Statement and the Prospectus. All of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are not now in violation
of or subject to any preemptive or, to the best of such counsel's
knowledge, similar rights that entitle or will entitle any person to
acquire any Shares from the Company upon issuance thereof by the
Company; and the Common Stock, the Firm Shares and the Additional Shares
conform to the descriptions thereof contained in the Registration
Statement and the Prospectus. The Shares to be delivered on the Closing
Date have been duly and validly authorized and, when delivered by the
Company against payment therefor in accordance with this Agreement, will
be duly and validly issued, fully paid and non-assessable and will not
have been issued in violation of or subject to preemptive or, to the
best of such counsel's knowledge, similar rights that entitle or will
entitle any person to acquire any Shares from the Company upon issuance
thereof by the Company. All of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims.
(iii) The Company has not granted any registration rights that remain
outstanding with respect to any of its capital stock, and no such rights
will be triggered by the consummation of the Offering or the
transactions contemplated by the Underwriting Agreement.
(iv) The Common Stock currently outstanding is listed, and the Shares to be
sold under this Agreement to the Underwriters are duly authorized for
listing on the NASDAQ National Market.
(v) This Agreement has been duly and validly authorized, executed and
delivered by the Company.
(vi) To the best of such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of the Subsidiaries is a party or of which
any property of the Company or any of the Subsidiaries is the subject
which, if determined adversely to the Company or any of the
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(vii) The issuance and sale of the Shares by the Company, the execution,
delivery, and performance of this Agreement, compliance by the Company
with all provisions of this Agreement and the consummation of the
transactions contemplated hereby by the Company do not and will not
(A) conflict with or result in a breach of any of the terms or
provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant
to, any indenture, mortgage, deed of trust, loan agreement or any other
agreement, instrument, franchise, license or permit known to such
counsel to which the Company or any of the Subsidiaries is a party or by
which any of the Company or any of the Subsidiaries or their respective
properties or assets is subject or may be bound or (B) violate or
conflict with any provision of the certificate of incorporation or
by-laws of the Company or any of the Subsidiaries, or, to the best
knowledge of such counsel, any judgment, decree, order, statute, rule or
regulation of
any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of the Subsidiaries or any
of their respective properties or assets.
(viii) No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over the
Company or any of the Subsidiaries or any of their respective properties
or assets is required for the issuance, sale and delivery of the Shares,
the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for
(1) such as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no opinion),
(2) such as have been made or obtained under the Securities Act and
(3) such as are required by the National Association of Securities
Dealers, Inc.
(ix) The Registration Statement and the Prospectus and any amendments
thereof or supplements thereto (other than the financial statements and
schedules and other financial data included or incorporated by reference
therein, as to which no opinion need be rendered) comply as to form in
all material respects with the requirements of the Securities Act and
the Rules and Regulations. There are no known amendments to the
Registration Statement and there are no documents required by the Rules
and Regulations to be filed in connection with, incorporated by
reference, or described in the Registration Statement that have not been
so filed, incorporated by reference or described. The documents filed
under the Exchange Act and incorporated by reference in the Registration
Statement and the Prospectus or any amendment thereof or supplement
thereto (other than the financial statements and schedules and other
financial data included or incorporated by reference therein, as to
which no opinion need be rendered) when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the Securities Act or the Exchange Act, as
applicable, and the Rules and Regulations of the Commission thereunder;
and such counsel has no reason to believe that any of such documents,
when such documents became effective or
were so filed, as they case may be, contained, in the case of a
registration statement which became effective under the Securities Act,
an untrue statement of a material fact, or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or, in the case of other documents which were
filed under the Exchange Act with the Commission, an untrue statement of
a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading.
(x) The statements under the captions "Prospectus Summary", "Risk Factors",
"Business", "Management", "Transactions with Related Parties",
"Description of Capital Stock" and "Underwriting" [and "in the
Prospectus and Items 14 and 15 of Part II of the Registration Statement,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings [To the extent that the aforementioned statements are
incorporated by reference into the Registration Statement such
statements appear in the Company's [10-Q dated September 30, 2001 /
10-K dated September 31, 2000].
(xi) 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" as such term is
defined in the Investment Company Act of 1940, as amended.
(xii) The Registration Statement is effective under the Securities Act, and,
to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereof has been issued and no proceedings therefor have been
initiated or threatened by the Commission and all filings required by
Rule 424(b) and Rule 430A of the Rules and Regulations have been made.
(xiii) The Company has full right, power and authority to execute and deliver
this Agreement and the Shares and to perform its obligations hereunder,
and all corporate action required to be taken for the due and proper
authorization, execution and delivery of this Agreement and the Shares
and the consummation of the transactions contemplated by this Agreement
and as described in the Prospectus have been duly and validly taken.
(xiv) To the best knowledge of the Company, no contract or agreement is
required to be filed as an exhibit to the Registration Statement that is
not so filed.
(xv) Neither the Company nor any of the Subsidiaries is in violation of its
respective charter or by-laws and, to the best of such counsel's
knowledge after due inquiry, neither the Company nor any of the
Subsidiaries is in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and the Subsidiaries, taken as a whole, to
which the Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries or their respective properties
may be bound.
(xvi) Each of the Company and the Subsidiaries has such authorizations of, and
has made all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, including, without limitation, under any applicable
environmental laws, as are necessary to own, lease, license and
operate its respective properties and to conduct its business, except
where the failure to have any such authorization or to make any such
filing or notice would not, singly or in the aggregate, have a Material
Adverse Effect; each such authorization is valid and in full force and
effect and each of the Company and the Subsidiaries is in compliance
with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having jurisdiction
with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing
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 of the holder of any such
authorization; and such authorizations contain no restrictions that are
burdensome to the Company or any of the Subsidiaries; except where such
failure to be valid and in full force and effect or to be in compliance,
the occurrence of any such event or the
presence of any such restriction would not, singly or in the aggregate,
have a Material Adverse Effect.
In addition, such opinion shall also contain a statement that such counsel has
participated in conferences with officers and representatives of the Company,
representatives of the independent public accountants for the Company and the
Underwriters at which the contents and the Prospectus and related matters were
discussed and, no facts have come to the attention of such counsel which would
lead such counsel to believe that either the Registration Statement, at the time
it became effective (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A(b) or
Rule 434, if applicable), or any amendment thereof made prior to the Closing
Date, as of the date of such amendment, contained or incorporated by reference
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 (including the documents incorporated by
reference therein), as of its date (or any amendment thereof or supplement
thereto made prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits 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 (it being
understood that such counsel need express no belief or opinion with respect to
the financial statements and schedules and other financial data included or
incorporated by reference therein).
ANNEX II
[To Be Discussed]
Form of Opinions of Selling Stockholders' Counsel
(i) Each Selling Stockholder has full legal right, power
and authority, and any approval required by law (other
than any approval imposed by the applicable state
securities and Blue Sky laws), to sell, assign,
transfer and deliver the Firm Shares and Additional
Shares to be sold by such Selling Stockholder in the
manner provided in this Agreement.
(ii) To the best of such counsel's knowledge, after due
inquiry, each Selling Stockholder has good and clear
title to the certificates for the Firm Shares and
Additional Shares to be sold by such Selling
Stockholder, and upon delivery thereof pursuant hereto
and payment therefor, good and clear title will pass to
the Underwriters, severally, free of all restrictions
and transfer, liens, encumbrances, security interests
and claims whatsoever.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by each Selling Stockholder.
(iv) The Custody Agreements and Powers of Attorney
appointing _________________ as the Custodian and
_______________ as such Selling Stockholder's
Attorney-In-Fact, to the extent set forth therein with
regard to the transactions contemplated hereby and by
the Registration Statement, have been duly authorized,
executed and delivered by or on behalf of each Selling
Stockholder enforceable in accordance with its terms,
and pursuant to such power of attorney, each Selling
Stockholder has authorized such Attorney-In-Fact, to
execute and deliver on such Selling Stockholder's
behalf this Agreement and any other document necessary
or desirable in connection with the transactions
contemplated hereby and to deliver the Firm Shares and
Additional Shares to be sold by such Selling
Stockholder pursuant to this Agreement.
(v) The execution, delivery and performance of this
Agreement by each Selling Stockholder, compliance by
each Selling Stockholder with all the provisions hereof
and the consummation of the transactions contemplated
hereby will not require any consent, approval,
authorization or other order of any court, regulatory
body, administrative
agency or other governmental body (except as such may
be required under the Securities Act, state securities
laws or Blue Sky laws or except as such may have been
obtained) and will not conflict with or constitute a
breach of any of the terms or provisions of, or a
default under, any material agreement, indenture or
other instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder or property
of the Selling Stockholder is bound, or, to the
knowledge of such counsel, violate or conflict with any
laws, administrative regulation or ruling or court
decree applicable to such Selling Stockholder or
property of such Selling Stockholder.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws other than the laws of the United States and jurisdictions
in which they are admitted, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to Underwriters' Counsel) of other
counsel reasonably acceptable to Underwriters' Counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent they deem proper, on
certificates of the Selling Stockholders provided that copies of any such
statements or certificates shall be delivered to Underwriters' Counsel. The
opinion of such counsel shall state that the opinion of any such other counsel
is in form satisfactory to such counsel and, in their opinion, you and they are
justified in relying thereon.
ANNEX III
Heartland Express, Inc.
January ____, 2002
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Deutsche Banc Alex.▇▇▇▇▇
BB&T Capital Markets
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇▇▇ Inc.
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Equity Capital Markets
Heartland Express, Inc. Lock-Up Agreement
Ladies and Gentlemen:
We refer to the proposed Underwriting Agreement (the "Underwriting
Agreement"), between Heartland Express, Inc., a Nevada corporation (the
"Company"), and you as representative of the Underwriters named therein (the
"Underwriters") relating to an underwritten public offering (the "Offering") of
common stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned hereby agrees that, without the prior
written consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc., the undersigned will not, directly
or indirectly, during the period from the date hereof until ninety (90) days
from the date of the final prospectus for the Offering (the "Lock-Up Period"),
(i) offer, sell, agree to offer or sell, solicit offers to purchase, grant any
call option or purchase any put option with respect to, pledge, borrow or
otherwise dispose of any Relevant Security, (ii) establish or increase a "put
equivalent position" or liquidate or decrease a "call equivalent position" with
respect to any Relevant Security (in each case within the meaning of Section 16
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder), or otherwise enter into any swap,
derivative or other transaction or arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any Relevant
Security, whether or not such transaction is to be settled by delivery of
Relevant Securities, other securities, cash or other consideration. As used
herein "Relevant Security" means the Common Stock, any other equity security of
the Company or any of its subsidiaries and any security convertible into, or
exercisable or exchangeable for, any Common Stock or other such equity security.
The undersigned hereby further agrees that, except as set forth in the
Underwriting Agreement, during the Lock-up Period, the undersigned (x) will not
file or participate in the filing with the Securities and Exchange Commission of
any registration statement, or circulate or participate in the circulation of
any preliminary or final prospectus or other disclosure document with respect to
any proposed offering or sale of a Relevant Security and (y) will not exercise
any rights the undersigned may have to require registration with the Securities
and Exchange Commission of any proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement and that this
letter agreement constitutes the legal, valid and binding obligation of the
undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon the
successors and assigns of the undersigned from the date first above written.
This letter agreement shall be governed by and construed in accordance with
the laws of the State of New York. Delivery of a signed copy of this letter by
telecopier or facsimile transmission shall be effective as delivery of the
original hereof.
Very truly yours,
By:
-------------------------------------------