•] Shares K12 Inc. Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
[•] Shares
Common Stock
[•], 2007
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Credit Suisse Securities (USA) LLC
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
As Representatives of the Several Underwriters
Ladies and Gentlemen:
1. Introductory. K12 Inc., a Delaware corporation (the “Company”) agrees with the several
Underwriters named in Schedule A hereto (“Underwriters”) to issue and sell to the several
Underwriters [•] shares of its common stock, par value $0.0001 per share (“Securities”) and the
stockholders listed in Schedule B hereto (“Selling Stockholders”) agree severally with the
Underwriters to sell to the several Underwriters an aggregate of [•] outstanding shares of the
Securities (such shares of Securities being hereinafter referred to as the “Firm Securities”). The
Selling Stockholders also agree severally to sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than [•] additional outstanding shares of the Company’s
Securities (the “Optional Securities”), as set forth below. The Firm Securities and the Optional
Securities are herein collectively called the “Offered Securities”. As part of the offering
contemplated by this Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated (the “Designated Underwriter”)
has agreed to reserve out of the Firm Securities purchased by it under this Agreement, up to [•]
shares, for sale to the Company’s directors, officers, employees and other parties associated with
the Company (collectively, “Participants”), as set forth in the Final Prospectus (as defined
herein) under the heading “Underwriting” (the “Directed Share Program”). The Firm Securities to be
sold by the Designated Underwriter pursuant to the Directed Share Program (the “Directed Shares”)
will be sold by the Designated Underwriter pursuant to this Agreement at the public offering price.
Any Directed Shares not subscribed for by the end of the business day on which this Agreement is
executed will be offered to the public by the Underwriters as set forth in the Final Prospectus.
The Company and the Selling Stockholders hereby agree with the several underwriters as follows:
2. Representations and Warranties of the Company and the Selling Stockholders. (a) The
Company represents and warrants to, and agrees with, the several Underwriters that:
(i) Filing and Effectiveness of Registration Statement; Certain Defined Terms. The
Company has filed with the Commission a registration statement on Form S-1 (No. 333-144894)
covering the registration of the Offered Securities under the Act, including a related
preliminary prospectus or prospectuses. At any particular time, this initial registration
statement, in the form then on file with the Commission, including all information
contained in the registration statement (if any) pursuant to Rule 462(b) and then deemed to
be a part of the initial registration statement, and all 430A Information and all 430C
Information, that in any case has not then been superseded or modified, shall be referred
to as the “Initial Registration Statement”. The Company may also have filed, or may file
with the Commission, a Rule 462(b) registration statement covering the
registration of Offered Securities. At any particular time, this Rule 462(b)
registration statement, in the form then on file with the Commission, including the
contents of the Initial Registration Statement incorporated by reference therein and
including all 430A Information and all 430C Information, that in any case has not then been
superseded or modified, shall be referred to as the “Additional Registration Statement”.
The Initial Registration Statement and the Additional Registration Statement are
referred to collectively as the “Registration Statements” and individually as a
“Registration Statement”. A “Registration Statement” with reference to a particular time
means the Initial Registration Statement and any Additional Registration Statement as of
such time. A “Registration Statement” without reference to a time means such Registration
Statement as of its Effective Time. For purposes of the foregoing definitions, 430A
Information with respect to a Registration Statement shall be considered to be included in
such Registration Statement as of the time specified in Rule 430A.
As of the time of execution and delivery of this Agreement, the Initial Registration
Statement has been declared effective under the Act and is not proposed to be amended. Any
Additional Registration Statement has or will become effective upon filing with the
Commission pursuant to Rule 462(b) and is not proposed to be amended. The Offered
Securities all have been or will be duly registered under the Act pursuant to the Initial
Registration Statement and, if applicable, the Additional Registration Statement.
For purposes of this Agreement:
“430A Information”, with respect to any registration statement, means information
included in a prospectus and retroactively deemed to be a part of such registration
statement pursuant to Rule 430A(b).
“430C Information”, with respect to any registration statement, means information
included in a prospectus then deemed to be a part of such registration statement pursuant
to Rule 430C.
“Act” means the Securities Act of 1933, as amended.
“Applicable Time” means [•] (Eastern time) on the date of this Agreement.
“Closing Date” has the meaning defined in Section 3 hereof.
“Commission” means the United States Securities and Exchange Commission.
“Effective Time” with respect to the Initial Registration Statement or, if filed prior
to the execution and delivery of this Agreement, the Additional Registration Statement
means the date and time as of which such Registration Statement was declared effective by
the Commission or has become effective upon filing pursuant to Rule 462(c). If an
Additional Registration Statement has not been filed prior to the execution and delivery of
this Agreement but the Company has advised the Representatives that it proposes to file
one, “Effective Time” with respect to such Additional Registration Statement means the date
and time as of which such Registration Statement is filed and becomes effective pursuant to
Rule 462(b).
“Exchange Act” means the Securities Exchange Act of 1934.
“Final Prospectus” means the Statutory Prospectus that discloses the public offering
price, other 430A Information and other final terms of the Offered Securities and otherwise
satisfies Section 10(a) of the Act.
“General Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being so specified in Schedule C to this Agreement.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433, relating to the Offered Securities in the form filed or
required to be filed with the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to Rule 433(g).
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“Limited Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not a General Use Issuer Free Writing Prospectus.
“Rules and Regulations” means the rules and regulations of the Commission.
“Securities Laws” means, collectively, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
(“▇▇▇▇▇▇▇▇-▇▇▇▇▇”), the Act, the Exchange Act, the Rules and Regulations, the auditing
principles, rules, standards and practices applicable to auditors of “issuers” (as defined
in ▇▇▇▇▇▇▇▇-▇▇▇▇▇) promulgated or approved by the Public Company Accounting Oversight Board
and the rules of the New York Stock Exchange (“Exchange Rules”).
“Statutory Prospectus” with reference to a particular time means the prospectus
included in a Registration Statement immediately prior to that time, including any 430A
Information or 430C Information with respect to such Registration Statement. For purposes
of the foregoing definition, 430A Information shall be considered to be included in the
Statutory Prospectus as of the actual time that form of prospectus is filed with the
Commission pursuant to Rule 424(b) or Rule 462(c) and not retroactively.
Unless otherwise specified, a reference to a “Rule” is to the indicated rule under the
Act.
(ii) Compliance with Securities Act Requirements. (A) At their respective Effective
Times, (B) on the date of this Agreement and (C) on each Closing Date, each of the Initial
Registration Statement and the Additional Registration Statement (if any) conformed and
will conform in all respects to the requirements of the Act, (ii) on its date, at the time
of filing of the Final Prospectus pursuant to Rule 424(b) or (if no such filing is
required) at the Effective Time of the Additional Registration Statement in which the Final
Prospectus is included, and on each Closing Date, the Final Prospectus will conform in all
respects to the requirements of the Act and the Rules and Regulations and will not include
any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and (iii) on the
date of this Agreement, at their respective Effective Times or issue dates and on each
Closing Date, each Registration Statement, the Final Prospectus, any Statutory Prospectus,
any prospectus wrapper and any Issuer Free Writing Prospectus complied or comply, and such
documents and any further amendments or supplements thereto will comply, with any
applicable laws or regulations of foreign jurisdictions in which the Final Prospectus, any
Statutory Prospectus, any prospectus wrapper or any Issuer Free Writing Prospectus, as
amended or supplemented, if applicable, are distributed in connection with the Directed
Share Program. The preceding sentence does not apply to statements in or omissions from
any such document based upon written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it being understood
and agreed that the only such information is that described as such in Section 8(c) hereof.
(iii) Ineligible Issuer Status. (i) At the time of the initial filing of the Initial
Registration Statement and (ii) at the date of this Agreement, the Company was not and is
not an “ineligible issuer,” as defined in Rule 405.
(iv) General Disclosure Package. As of the Applicable Time, neither (i) the General
Use Issuer Free Writing Prospectus(es) issued at or prior to the Applicable Time, the
preliminary prospectus, dated [•], 2007 (which is the most recent Statutory Prospectus
distributed to investors generally) and the other information, if any, stated in Schedule C
to this Agreement to be included in the general disclosure package, all considered together
(collectively, the “General Disclosure Package”), nor (ii) any individual Limited Use
Issuer Free Writing Prospectus, when considered together with the General Disclosure
Package, included any untrue statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The preceding sentence does not apply to
statements in or omissions from any Statutory Prospectus or any Issuer Free Writing
Prospectus in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for use therein, it
being understood and agreed that the only such information furnished by any Underwriter
consists of the information described as such in Section 8(c) hereof.
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(v) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its
issue date (if prepared by or on behalf of the Company) or as of the date the Company first
uses or refers to such Issuer Free Writing Prospectus (such date, as applicable, the
“Adoption Date”) and at all subsequent times through the completion of the public offer and
sale of the Offered Securities or until any earlier date that the Company notified or
notifies each of the Representatives as described in the next sentence, did not, does not
and will not include any information that conflicted, conflicts or will conflict with the
information then contained in the Registration Statement. If at any time following the
Adoption Date of an Issuer Free Writing Prospectus there occurred or occurs an event or
development as a result of which such Issuer Free Writing Prospectus (i) conflicted or
would conflict with the information then contained in the Registration Statement or (ii)
included or would include an untrue statement of a material fact or omitted or would omit
to state a material fact necessary in order to make the statements therein, in each case,
in the light of the circumstances under which they were made, not misleading, (A) the
Company has promptly notified or will promptly notify each of the Representatives and (B)
the Company has promptly amended or will promptly amend or supplement such Issuer Free
Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(vi) Good Standing of the Company. The Company has been duly incorporated and is
existing and in good standing under the laws of the State of Delaware, with power and
authority (corporate and other) to own its properties and conduct its business as described
in the General Disclosure Package; and the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such qualification, except where
the failure to be so qualified or in good standing in any such jurisidiction would not,
individually or in the aggregate, result in material adverse effect on the condition
(financial or other), business, properties, prospects or results of operations of the
Company and its subsidiaries taken as a whole (“Material Adverse Effect”).
(vii) Subsidiaries. Each subsidiary of the Company has been duly incorporated or
formed, as the case may be, and is an existing corporation or limited liability company, as
the case may be, and in good standing under the laws of the jurisdiction of its
incorporation or formation, as the case may be, with power and authority (corporate and
other) to own its properties and conduct its business as described in the General
Disclosure Package; and each subsidiary of the Company is duly qualified to do business as
a foreign corporation or limited liability company in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its business
requires such qualification; except for such failures as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; all of the issued and
outstanding capital stock or membership interests of each subsidiary of the Company has
been duly authorized and validly issued and is fully paid and nonassessable; and the
capital stock of each subsidiary owned by the Company, directly or through subsidiaries, is
owned free from liens, encumbrances and defects other than liens securing indebtedness
under the Company’s Revolving Credit Agreement with PNC Bank, National Association, dated
December 21, 2006, as amended, and liens, encumbrances and defects that would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(viii) Offered Securities. The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; the authorized equity
capitalization of the Company is as set forth in the General Disclosure Package; all
outstanding shares of capital stock of the Company are, and, when the Offered Securities
have been delivered and paid for in accordance with this Agreement on each Closing Date,
such Offered Securities will have been, validly issued, fully paid and nonassessable, will
conform to the information in the General Disclosure Package and to the description of such
Offered Securities contained in the Final Prospectus; the stockholders of the Company have
no preemptive rights with respect to the Securities; and none of the outstanding shares of
capital stock of the Company have been issued in violation of any preemptive or similar
rights of any security holder.
(ix) No Finder’s Fee. Except as disclosed in the General Disclosure Package, there
are no contracts, agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter for a brokerage
commission, finder’s fee or
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other like payment in connection with this offering.
(x) Registration Rights. Except as disclosed in the General Disclosure Package, there
are no contracts, agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration statement under the Act
with respect to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered pursuant to a
Registration Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act (collectively, “registration
rights”), and any person to whom the Company has granted registration rights has agreed not
to exercise such rights until after the expiration of the Lock-Up Period referred to in
Section 5(l) hereof.
(xi) Listing. The Offered Securities have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance.
(xii) Absence of Further Requirements. No consent, approval, authorization, or order
of, or filing or registration with, any person (including any governmental agency or body
or any court) is required to be obtained or made by the Company for the consummation of the
transactions contemplated by this Agreement in connection with the sale of the Offered
Securities, except such as have been obtained, or made and such as may be required under
state securities laws. No authorization, consent, approval, license, qualification or
order of, or filing or registration with any person (including any governmental agency or
body or any court) in any foreign jurisdiction is required for the consummation of the
transactions contemplated by this Agreement in connection with the offering, issuance and
sale of the Directed Shares under the laws and regulations of such jurisdiction except such
as have been obtained or made.
(xiii) Title to Property. Except as disclosed in the General Disclosure Package, the
Company and its subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens, charge,
encumbrances and defects that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by them and, except as disclosed in the
General Disclosure Package, the Company and its subsidiaries hold any leased real or
personal property under valid and enforceable leases with no terms or provisions that would
materially interfere with the use made or to be made thereof by them.
(xiv) Absence of Defaults and Conflicts Resulting from Transaction. The execution,
delivery and performance of this Agreement, and the issuance and sale of the Offered
Securities will not result in a breach or violation of any of the terms and provisions of,
or constitute a default or a Debt Repayment Triggering Event (as defined below) under, or
result in the imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, under (i) the charter or by-laws (or
similar organizational documents) of the Company or any of its subsidiaries, (ii) any
statute, rule, regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any
of their properties, or (iii) any material agreement, instrument or contract to which the
Company or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the properties of the Company or any of its
subsidiaries is subject except, in the case of the foregoing clauses (ii) and (iii), as
would not reasonably be expected to have a Material Adverse Effect, or materially and
adversely affect the performance of the Company of its obligations under this Agreement or
the consummation of the transactions contemplated hereby; a “Debt Repayment Triggering
Event” means any event or condition that gives, or with the giving of notice or lapse of
time would give, the holder of any note, debenture, or other evidence of indebtedness (or
any person acting on such holder’s behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or any of its
subsidiaries.
(xv) Absence of Existing Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is (i) in violation of its respective charter or by-laws (or similar
organizational documents), (ii) in breach or violation of any statute, judgment, decree,
order, rule or regulation applicable to any of them or any of their respective properties
or assets or (iii) in breach of or default
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under or in violation of any of the terms or provisions of any indenture, mortgage, deed of
trust, loan agreement, note, franchise agreement, permit, certificate, contract or lease or
other agreement or instrument to which any of them is a party or by which any of them or
their respective properties or assets is bound, except, in the case of the foregoing
clauses (ii) and (iii), for any breach, violation or default that would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect, or
materially and adversely affect the performance of the Company of its obligations under
this Agreement or the consummation of the transactions contemplated hereby.
(xvi) Authorization of Agreement. This Agreement has been duly authorized, executed
and delivered by the Company.
(xvii) Possession of Licenses and Permits. The Company and its subsidiaries possess,
and are in compliance with the terms of, all adequate certificates, authorizations,
franchises, licenses and permits (“Licenses”) necessary or material to the conduct of the
business now conducted or proposed in the General Disclosure Package to be conducted by
them and have not received any written notice of proceedings relating to the revocation or
modification of any Licenses that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse Effect.
(xviii) Absence of Labor Dispute. No labor dispute with the employees of the Company
or any of its subsidiaries exists or, to the knowledge of the Company, is imminent, and the
Company is not aware of any existing or imminent labor disturbance by the employees of any
of its or its subsidiaries’ principal suppliers, contractors or customers, that, in any
such case, would reasonably be expected to have a Material Adverse Effect.
(xix) Possession of Intellectual Property. The Company and its subsidiaries own,
possess or can acquire on reasonable terms adequate trademarks, trade names, patent rights,
copyrights, domain names, licenses, approvals, trade secrets, and other rights to
inventions, technology, know-how, patents, copyrights, confidential information and other
intellectual property and similar rights, including registrations and applications for
registration thereof (collectively, “Intellectual Property Rights”) necessary or material
to the conduct of the business now operated by them, or presently employed by them, or
proposed in the General Disclosure Package to be conducted by them and have not received
any notice of infringement of or conflict with asserted rights of others with respect to
any Intellectual Property Rights and the expected expiration of any such Intellectual
Property Rights that, if determined adversely to the Company or any of its subsidiaries,
would not, individually or in the aggregate, have a Material Adverse Effect. Except as
disclosed in the General Disclosure Package or as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect (i) to the Company’s
knowledge, there are no rights of third parties to any of the Intellectual Property Rights
owned by the Company or its subsidiaries; (ii) to the Company’s knowledge, there is no
material infringement, misappropriation breach, default or other violation, or the
occurrence of any event that with notice or the passage of time would constitute any of the
foregoing, by the Company, its subsidiaries or third parties of any of the Intellectual
Property Rights of the Company or its subsidiaries; (iii) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the
Company’s or any subsidiary’s rights in or to, or the violation of any of the terms of, any
of their Intellectual Property Rights, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (iv) to the Company’s knowledge, there is no
pending or threatened action, suit, proceeding or claim by others challenging the validity,
enforceability or scope of any such Intellectual Property Rights, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; (v) there is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by
others that the Company or any subsidiary infringes, misappropriates or otherwise violates
or conflicts with any Intellectual Property Rights or other proprietary rights of others
and the Company is unaware of any other fact which would form a reasonable basis for any
such claim; and (vi) none of the Intellectual Property Rights used by the Company or its
subsidiaries in their businesses has been obtained or is being used by the Company or its
subsidiaries in violation of any contractual obligation binding on the Company or any of
its subsidiaries in violation of the rights of any
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persons.
(xx) Environmental Laws. Except as disclosed in the General Disclosure Package,
neither the Company nor any of its subsidiaries (i) is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or human
exposure to hazardous or toxic substances (collectively, “environmental laws”), (ii) to
the Company’s knowledge, owns or operates any real property contaminated with any substance
that is subject to any environmental laws, (iii) to the Company’s knowledge, is liable for
any off-site disposal or contamination pursuant to any environmental laws or (iv) to the
Company’s knowledge, is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim described in subsections (i) through (iv)
above would individually or in the aggregate have a Material Adverse Effect; and the
Company does not have knowledge of any pending investigation which could reasonably be
expected to lead to such a claim.
(xxi) Accurate Disclosure. The statements in the General Disclosure Package and the
Final Prospectus under the headings “Material U.S. Federal Tax Considerations for Non-U.S.
Holders”, “Description of Capital Stock”, “The Business—Legal Proceedings”, “Regulation”
and “Risk Factors—Risks Related to Government Funding and Regulation of Public Education”
insofar as such statements summarize legal matters, agreements, documents or proceedings
discussed therein, are accurate and fair summaries of such legal matters, agreements,
documents or proceedings and present the information required to be shown.
(xxii) Absence of Manipulation. The Company has not taken, directly or indirectly,
any action that is designed to or that has constituted or that would reasonably be expected
to cause or result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Offered Securities.
(xxiii) Statistical and Market-Related Data. Any third-party statistical and
market-related data included in a Registration Statement, a Statutory Prospectus or the
General Disclosure Package are based on or derived from sources that the Company believes
to be reliable and accurate.
(xxiv) Internal Controls and Compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. Except as set
forth in the General Disclosure Package, the Company, its subsidiaries and the Company’s
Board of Directors (the “Board”) are in compliance with ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and all applicable
Exchange Rules. The Company maintains a system of internal controls, including, but not
limited to, disclosure controls and procedures, internal controls over accounting matters
and financial reporting, an internal audit function and legal and regulatory compliance
controls (collectively, “Internal Controls”) that comply with the Securities Laws and are
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 U.S.
General 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 the
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences. The Internal Controls are, or upon consummation of the offering of the
Offered Securities will be, overseen by the Audit Committee (the “Audit Committee”) of the
Board in accordance with Exchange Rules. The Company has not publicly disclosed or
reported to the Audit Committee or the Board, and within the next 135 days the Company does
not reasonably expect to publicly disclose or report to the Audit Committee or the Board, a
significant deficiency, material weakness, change in Internal Controls or fraud involving
management or other employees who have a significant role in Internal Controls (each, an
“Internal Control Event”), any violation of, or failure to comply with, the Securities
Laws, or any matter involving internal controls which, if determined adversely, would have
a Material Adverse Effect.
(xxv) Litigation. Except as disclosed in the General Disclosure Package, there are no
pending actions, suits or proceedings (including any inquiries or investigations by any
court or governmental
7
agency or body, domestic or foreign) against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate have a Material
Adverse Effect, or would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise material in the
context of the sale of the Offered Securities; and no such actions, suits or proceedings
(including any inquiries or investigations by any court or governmental agency or body,
domestic or foreign) are threatened or, to the Company’s knowledge, contemplated.
(xxvi) Financial Statements. The historical financial statements of the Company and
its consolidated subsidiaries included in each Registration Statement and the General
Disclosure Package present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of operations and cash
flows for the periods shown, and, except as otherwise disclosed in the General Disclosure
Package, such financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent basis; the
schedules included in each Registration Statement present fairly the information required
to be stated therein; and the assumptions used in preparing the pro forma financial
statements included in each Registration Statement and the General Disclosure Package
provide a reasonable basis for presenting the significant effects directly attributable to
the transactions or events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns therein reflect the
proper application of those adjustments to the corresponding historical financial statement
amounts.
(xxvii) No Material Adverse Change in Business. Except as disclosed in the General
Disclosure Package, since the end of the period covered by the latest audited financial
statements included in the General Disclosure Package (i) there has been no change, nor any
development or event involving a prospective change, in the condition (financial or
otherwise), results of operations, business, properties or prospects of the Company and its
subsidiaries, that, taken as a whole, has or would reasonably be expected to have a
Material Adverse Effect, (ii) except as disclosed in or contemplated by the General
Disclosure Package, there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock and (iii) except as disclosed in
or contemplated by the General Disclosure Package, there has been no material adverse
change in the capital stock, short-term indebtedness, long-term indebtedness, net current
assets or net assets of the Company and its subsidiaries.
(xxviii) Investment Company Act. The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the proceeds thereof as
described in the General Disclosure Package, will not be an “investment company” as defined
in the Investment Company Act of 1940 (the “Investment Company Act”).
(xxix) Ratings. No “nationally recognized statistical rating organization” as such
term is defined for purposes of Rule 436(g)(2) (i) has imposed (or has informed the Company
that it is considering imposing) any condition (financial or otherwise) on the Company’s
retaining any rating assigned to the Company or any securities of the Company or (ii) has
indicated to the Company that it is considering any of the actions described in Section
7(c)(ii) hereof.
(xxx) Compliance with Law. Each of the Company, its subsidiaries and any of their
respective officers, directors, supervisors, managers, agents, or employees, has not
violated and its participation in the offering will not violate: (a) anti-bribery laws,
including but not limited to, any applicable law, rule, or regulation of any locality, or
any other law, rule or regulation of similar purpose and scope, (b) anti-money laundering
laws, including but not limited to, applicable federal, state, international, foreign or
other laws, regulations or government guidance regarding anti-money laundering, and
international anti-money laundering principles or procedures by an intergovernmental group
or organization of which the United States is a member and with which designation the
United States representative to the group or organization continues to concur, all as
amended, and any Executive order, directive, or regulation pursuant to the authority of any
of the foregoing, or any orders or licenses issued thereunder or (c) laws and regulations
imposing U.S. economic sanctions measures.
8
(xxxi) Tax. The Company and its subsidiaries have filed all federal, state, local
and non-U.S. tax returns that are required to be filed or have requested extensions thereof
(except in any case in which the failure so to file would not have a Material Adverse
Effect); and, except as set forth in the General Disclosure Package, the Company and its
subsidiaries have paid all taxes (including any assessments, fines or penalties) required
to be paid by them, except for any such taxes, assessments, fines or penalties currently
being contested in good faith or as would not, individually or in the aggregate, have a
Material Adverse Effect.
(xxxii) No Recent Sales of Common Stock. Except as described in the General
Disclosure Package, the Company has not sold, issued or distributed any shares of its
common stock during the six-month period preceding the date hereof, including any sales
pursuant to Rule 144A under, or Regulation D or S of, the Act, other than shares issued
pursuant to employee benefit plans, qualified stock option plans or other employee
compensation plans or pursuant to outstanding options, rights or warrants.
(xxxiii) Insurance. The Company and its subsidiaries are insured by insurers with
appropriately rated claims paying abilities against such losses and risks and in such
amounts as are prudent and customary for the businesses in which they are engaged; all
policies of insurance insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force and effect; the
Company and its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the Company or any of its
subsidiaries under any such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights clause; neither the Company
nor any such subsidiary has been refused any insurance coverage sought or applied for;
neither the Company nor any such subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue its business
at a cost that would not have a Material Adverse Effect, except as set forth in or
contemplated in the General Disclosure Package; and the Company will obtain directors’ and
officer’s insurance in such amounts as is customary for an initial public offering.
(xxxiv) Absence of Unlawful Influence. The Company has not offered or sold, or
caused the Underwriters to offer or sell, any Offered Securities to any person pursuant to
the Directed Share Program with the specific intent to unlawfully influence (i) a customer
or supplier of the Company to alter the customer’s or supplier’s level or type of business
with the Company or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
(b) Each Selling Stockholder severally and not jointly represents and warrants to, and agrees
with, the several Underwriters that:
(i) Title to Securities. Such Selling Stockholder has and on each Closing Date
hereinafter mentioned will have valid and unencumbered title to the Offered Securities to
be delivered by such Selling Stockholder on such Closing Date and full right, power and
authority to enter into this Agreement and to sell, assign, transfer and deliver the
Offered Securities to be delivered by such Selling Stockholder on such Closing Date
hereunder; and upon delivery and payment for such Offered Securities on each Closing Date
hereunder the several Underwriters will acquire valid and unencumbered title to the Offered
Securities to be delivered by such Selling Stockholder on such Closing Date..
(ii) Absence of Further Requirements. No consent, approval, authorization or order
of, or filing with, any governmental agency or body or any court is required to be obtained
or made by such Selling Stockholder for the consummation of the transactions contemplated
by the Custody Agreement, the Power of Attorney or this Agreement in connection with the
offering and sale of the Offered Securities being sold by such Selling Stockholder, except
such as have been obtained and made under the Act, the Exchange Act and such as may be
required under state securities laws;
9
(iii) Absence of Defaults and Conflicts Resulting from Transaction. The execution,
delivery and performance of the Custody Agreement and this Agreement and the consummation
of the transactions therein and herein contemplated will not result in a breach or
violation of (A) any of the terms and provisions of, or constitute a default under, or
result in the imposition of any lien, charge or encumbrance upon any property or assets of
such Selling Stockholder pursuant to, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over such Selling Stockholder
or any of its properties or any agreement or instrument to which such Selling Stockholder
is a party or by which such Selling Stockholder is bound or to which any of the properties
of such Selling Stockholder is subject, or (B) the charter or by-laws of any Selling
Stockholder that is a corporation or the constituent documents of any Selling Stockholder
that is not a natural person or a corporation, except that in the case described in the
above subclause (A) of this clause (iii), such as would not individually or in the
aggregate reasonably be expected to materially and adversely affect the performance of the
Selling Stockholder of its obligations under this Agreement or the consummation of the
transactions contemplated hereby;
(iv) Custody Agreement. The Power of Attorney and related Custody Agreement with
respect to such Selling Stockholder has been duly authorized, executed and delivered by
such Selling Stockholder and constitute valid and legally binding obligations of such
Selling Stockholder enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity principles;
(v) Compliance with Securities Act Requirements. (i) (A) At their respective
Effective Times, (B) on the date of this Agreement and (C) on each Closing Date, each of
the Initial Registration Statement and the Additional Registration Statement (if any)
conformed and will conform in all respects to the requirements of the Act and (ii) on its
date, at the time of filing of the Final Prospectus pursuant to Rule 424(b) or (if no such
filing is required) at the Effective Time of the Additional Registration Statement in which
the Final Prospectus is included, and on each Closing Date, the Final Prospectus will
conform in all respects to the requirements of the Act and the Rules and Regulations and
will not include any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading.
The preceding sentence only applies to statements in or omissions from the Initial
Registration Statement and Additional Registration Statement (if any), and the Final
Prospectus, in each case at the Effective Time, made in reliance upon and in strict
conformity with the written information furnished to the Company by or on behalf of such
Selling Stockholder specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 8(b) hereof.
(vi) No Undisclosed Material Information. The sale of the Offered Securities by such
Selling Stockholder pursuant to this Agreement is not prompted by any material information
concerning the Company or any of its subsidiaries that is not set forth the General
Disclosure Package.
(vii) Authorization of Agreement. This Agreement has been duly authorized, executed
and delivered by such Selling Stockholder.
(viii) No Finder’s Fee. Except as disclosed in the General Disclosure Package, there
are no contracts, agreements or understandings between such Selling Stockholder and any
person that would give rise to a valid claim against such Selling Stockholder or any
Underwriter for a brokerage commission, finder’s fee or other like payment in connection
with this offering.
(ix) Absence of Manipulation. Such Selling Stockholder has not taken, directly or
indirectly, any action that is designed to or that has constituted or that would reasonably
be expected to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Offered Securities.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations,
warranties and agreements and subject to the terms and conditions set forth herein, the Company and
each Selling
10
Stockholder agree, severally and not jointly, to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company and each Selling Stockholder, at a
purchase price of $[•] per share, the respective number of shares of Firm Securities (rounded up or
down, as determined by the Representatives in their discretion, in order to avoid fractions)
obtained by multiplying [•] Firm Securities in the case of the Company and the number of Firm
Securities set forth opposite the name of such Selling Stockholder in Schedule B hereto, in the
case of a Selling Stockholder, in each case by a fraction the numerator of which is the number of
Firm Securities set forth opposite the name of such Underwriter in Schedule A hereto and the
denominator of which is the total number of Firm Securities.
Certificates in negotiable form for the Offered Securities to be sold by the Selling
Stockholders hereunder have been placed in custody, for delivery under this Agreement, under
Custody Agreements made with the Company, as custodian (“Custodian”). Each Selling Stockholder
agrees that the shares represented by the certificates held in custody for the Selling Stockholders
under such Custody Agreements are subject to the interests of the Underwriters hereunder, that the
arrangements made by the Selling Stockholders for such custody are to that extent irrevocable, and
that the obligations of the Selling Stockholders hereunder shall not be terminated by operation of
law, whether by the death of any individual Selling Stockholder or the occurrence of any other
event, or in the case of a trust, by the death of any trustee or trustees or the termination of
such trust. If any individual Selling Stockholder or any such trustee or trustees should die, or
if any other such event should occur, or if any of such trusts should terminate, before the
delivery of the Offered Securities hereunder, certificates for such Offered Securities shall be
delivered by the Custodian in accordance with the terms and conditions of this Agreement as if such
death or other event or termination had not occurred, regardless of whether or not the Custodian
shall have received notice of such death or other event or termination.
The Company and the Custodian will deliver the Firm Securities to or as instructed by the
Representatives for the accounts of the several Underwriters in a form reasonably acceptable to the
Representatives against payment of the purchase price in Federal (same day) funds by official bank
check or checks or wire transfer or transfers to an account at one or more banks acceptable to the
Representatives drawn to the order of [•] in the case of [•] shares of Firm Securities and [•] in
the case of [•] shares of Firm Securities, at the office of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 A.M., New York time, on [•], 2007, or at such other time not
later than seven full business days thereafter as the Representatives and the Company determine,
such time being herein referred to as the “First Closing Date”. For purposes of Rule 15c6-1 under
the Securities Exchange Act of 1934, the First Closing Date (if later than the otherwise applicable
settlement date) shall be the settlement date for payment of funds and delivery of securities for
all the Offered Securities sold pursuant to the offering. The Firm Securities so to be delivered or
evidence of their issuance will be made available for checking at the above office of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇ at least 24 hours prior to the First Closing Date.
In addition, upon written notice from the Representatives given to the Company and the Selling
Stockholders from time to time not more than 30 days subsequent to the date of the Final
Prospectus, the Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Selling Stockholders agree,
severally and not jointly, to sell to the Underwriters the respective numbers of shares of Optional
Securities obtained by multiplying the number of shares of Optional Securities specified in such
notice by a fraction the numerator of which is the number of shares set forth opposite the names of
such Selling Stockholders in Schedule B hereto under the caption “Number of Optional Securities to
be Sold” and the denominator of which is the total number of shares of Optional Securities (subject
to adjustment by the Representatives to eliminate fractions). Such Optional Securities shall be
purchased from each Selling Stockholder for the account of each Underwriter in the same proportion
as the number of Firm Securities set forth opposite such Underwriter’s name bears to the total
number of shares of Firm Securities (subject to adjustment by the Representatives to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of covering
over-allotments made in connection with the sale of the Firm Securities. No Optional Securities
shall be sold or delivered unless the Firm Securities previously have been, or simultaneously are,
sold and delivered. The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be surrendered and
terminated at any time upon notice by each of the Representatives to the Company and the Selling
Stockholders.
11
Each time for the delivery of and payment for the Optional Securities, being herein referred
to as an “Optional Closing Date”, which may be the First Closing Date (the First Closing Date and
each Optional Closing Date, if any, being sometimes referred to as a “Closing Date”), shall be
determined by the Representatives, but shall be not later than five full business days and not
sooner than two business days following the date on which the Company and the Custodian, on behalf
of the Selling Stockholders, receives written notice of the election to purchase Optional
Securities from the Representatives. The Company and the Custodian will deliver the Optional
Securities being purchased on each Optional Closing Date to or as instructed by the Representatives
for the accounts of the several Underwriters in a form reasonably acceptable to the
Representatives, against payment of the purchase price therefore in Federal (same day) funds by
official bank check or checks or wire transfer to an account at a bank acceptable to the
Representatives drawn to the order of [•] in the case of [•] Optional Securities and [•] in the
case of [•] Optional Securities, at the above office of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇. The Optional
Securities being purchased on each Optional Closing Date or evidence of their issuance will be made
available for checking at the above office of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ at a reasonable time in advance
of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters propose to offer
the Offered Securities for sale to the public as set forth in the Final Prospectus.
5. Certain Agreements of the Company and each of the Selling Stockholders, severally and not
jointly. The Company agrees with the several Underwriters and each of the Selling Stockholders,
severally and not jointly, that (for the avoidance of doubt, no Selling Stockholder is making any
agreement under this Section 5 except to the extent set forth in clauses (h), (j) and (l) of this
Section 5):
(a) Additional Filings. Unless filed pursuant to Rule 462(c) as part of the
Additional Registration Statement in accordance with the next sentence, the Company will
file the Final Prospectus, in a form approved by the Representatives, with the Commission
pursuant to and in accordance with subparagraph (1) (or, if applicable and if consented to
by the Representatives, subparagraph (4)) of Rule 424(b) not later than the earlier of (A)
the second business day following the execution and delivery of this Agreement or (B) the
fifteenth business day after the Effective Time of the Initial Registration Statement. The
Company will advise the Representatives promptly of any such filing pursuant to Rule 424(b)
and provide satisfactory evidence to the Representatives of such timely filing. If an
Additional Registration Statement is necessary to register a portion of the Offered
Securities under the Act but the Effective Time thereof has not occurred as of the
execution and delivery of this Agreement, the Company will file the additional registration
statement or, if filed, will file a post-effective amendment thereto with the Commission
pursuant to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on
the date of this Agreement or, if earlier, on or prior to the time the Final Prospectus is
finalized and distributed to any Underwriter, or will make such filing at such later date
as shall have been consented to by the Representatives.
(b) Filing of Amendments: Response to Commission Requests. The Company will promptly
advise the Representatives of any proposal to amend or supplement at any time the Initial
Registration Statement, any Additional Registration Statement or any Statutory Prospectus
and will not effect such amendment or supplementation without the Representatives’ consent,
such consent not to be unreasonably withheld or delayed, and the Company will also advise
the Representatives promptly of (i) the effectiveness of any Additional Registration
Statement (if its Effective Time is subsequent to the execution and delivery of this
Agreement), (ii) any amendment or supplementation of a Registration Statement or any
Statutory Prospectus, (iii) any request by the Commission or its staff for any amendment to
any Registration Statement, for any supplement to any Statutory Prospectus or for any
additional information, (iv) the institution by the Commission of any stop order
proceedings in respect of a Registration Statement or the threatening of any proceeding for
that purpose, and (v) the receipt by the Company of any notification with respect to the
suspension of the qualification of the Offered Securities in any jurisdiction or the
institution or threatening of any proceedings for such purpose. The Company will use its
best efforts to prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal thereof.
12
(c) Continued Compliance with Securities Laws. If, at any time when a prospectus
relating to the Offered Securities is (or but for the exemption in Rule 172 would be)
required to be delivered under the Act by any Underwriter or dealer, any event occurs as a
result of which the Final Prospectus 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 the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Registration Statement or
supplement the Final Prospectus to comply with the Act, the Company will promptly notify
the Representatives of such event and will promptly prepare and file with the Commission
and furnish, at its own expense, to the Underwriters and the dealers and any other dealers
upon request of the Representatives, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance. Neither the
Representatives’ consent to, nor the Underwriters’ delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in Section 7
hereof.
(d) Rule 158. As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its security holders an
earnings statement covering a period of at least 12 months beginning after the Effective
Time of the Initial Registration Statement (or, if later, the Effective Time of the
Additional Registration Statement) which will satisfy the provisions of Section 11(a) of
the Act and Rule 158 under the Act. For the purpose of the preceding sentence,
“Availability Date” means the day after the end of the fourth fiscal quarter following the
fiscal quarter that includes such Effective Time on which the Company is required to file
its Form 10-Q for such fiscal quarter except that, if such fourth fiscal quarter is the
last quarter of the Company’s fiscal year, “Availability Date” means the day after the date
the Company is required to file its Form 10-K.
(e) Furnishing of Prospectuses. The Company will furnish to the Representatives
copies of each Registration Statement (three of which will be signed and will include all
exhibits), each related Statutory Prospectus, and, so long as a prospectus relating to the
Offered Securities is (or but for the exemption in Rule 172 would be) required to be
delivered under the Act in connection with sales by an Underwriter or dealer, the Final
Prospectus and all amendments and supplements to such documents, in each case in such
quantities as the Representatives request. The Final Prospectus shall be so furnished on or
prior to 3:00 P.M., New York time, on the business day following the execution and delivery
of this Agreement. All other such documents shall be so furnished as soon as available.
The Company will pay the expenses of printing and distributing to the Underwriters all such
documents.
(f) Blue Sky Qualifications. The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as required for the
distribution of the Offered Securities by the Underwriters, provided the Company will not
be required to qualify as a foreign corporation or to file a general consent to service of
process in any such jurisdiction where it is not now so required.
(g) Reporting Requirements. During the period of five years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the other Underwriters,
as soon as practicable after the end of each fiscal year, a copy of its annual report to
stockholders for such year; and the Company will furnish to the Representatives (i) as soon
as available, a copy of each report and any definitive proxy statement of the Company filed
with the Commission under the Exchange Act or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as the Representatives may reasonably
request. However, so long as the Company is subject to the reporting requirements of
either Section 13 or Section 15(d) of the Exchange Act and is timely filing reports with
the Commission on its Electronic Data Gathering, Analysis and Retrieval system (“▇▇▇▇▇”),
it is not required to furnish such reports or statements to the Underwriters.
(h) Payment of Expenses. The Company agrees with the several Underwriters that the
Company will pay all expenses incident to the performance of the obligations of the Company
and each Selling Stockholder, as the case may be, under this Agreement, including but not
limited to (i)
13
any filing fees and other expenses (including fees and disbursements of ▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to the Underwriters) incurred in connection with qualification of the
Offered Securities for sale under the laws of such jurisdictions as the Representatives
designate and the preparation and printing of memoranda relating thereto, (ii) any costs
and expenses related to the review by the National Association of Securities Dealers, Inc.
(the “NASD”) of the Offered Securities (including filing fees and the fees and expenses of
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters relating to such review), which shall
not exceed $20,000 in the aggregate (not including filing fees), (iii) costs and expenses
relating to investor presentations or any “road show” in connection with the offering and
sale of the Offered Securities including, without limitation, any travel expenses of the
Company’s officers and employees and any other expenses of the Company including the
chartering of airplanes, (iv) any fees and expenses incident to listing the Offered
Securities on the New York Stock Exchange, (v) any fees and expenses in connection with the
registration of the Offered Securities under the Exchange Act, any transfer taxes on the
sale by the Selling Stockholders of the Offered Securities to the Underwriters and (vi) any
expenses incurred in printing and distributing preliminary prospectuses and the Final
Prospectus (including any amendments and supplements thereto) to the Underwriters and (vii)
any expenses incurred for preparing, printing and distributing any Issuer Free Writing
Prospectuses to investors or prospective investors; provided that this paragraph shall not
affect or modify any separate, valid agreement relating to the allocation of payment of
expenses between the Company, on the one hand, and the Selling Stockholders, on the other
hand. It is understood, however, that except as provided by this Section 5 and Sections 8,
9 and 10 hereof, the Underwriters will pay all of their own costs and expenses, including
the legal and other fees and expenses of their counsel, other than the aforementioned fees
and expenses of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ referred to in the preceding clauses (i) and (ii),
and any advertising expenses incurred in connection with the offers they make. It is
further understood that, except as set forth in the preceding clauses (i)-(vii) of this
Section 5(h), the Selling Stockholders will pay all of their own costs and expenses
incident to this offering, including legal and other fees and expenses of their counsel.
(i) Use of Proceeds. The Company will use the net proceeds received by it in
connection with this offering in the manner described in the “Use of Proceeds” section of
the General Disclosure Package and, except as disclosed in the General Disclosure Package,
the Company does not intend to use any of the proceeds from the sale of the Offered
Securities hereunder to repay any outstanding debt owed to any affiliate of any
Underwriter.
(j) Absence of Manipulation. The Company and each of the Selling Stockholders,
severally and not jointly, will not take, directly or indirectly, any action designed to or
that would constitute or that might reasonably be expected to cause or result in,
stabilization or manipulation of the price of any securities of the Company to facilitate
the sale or resale of the Offered Securities.
(k) Restriction on Sale of Securities by Company. For the period specified below
(the “Lock-Up Period”), the Company will not, directly or indirectly, take any of the
following actions with respect to its Securities or any securities convertible into or
exchangeable or exercisable for any of its Securities (“Lock-Up Securities”): (i) offer,
sell, issue, contract to sell, pledge or otherwise dispose of Lock-Up Securities, (ii)
offer, sell, issue, contract to sell, contract to purchase or grant any option, right or
warrant to purchase Lock-Up Securities, (iii) enter into any swap, hedge or any other
agreement that transfers, in whole or in part, the economic consequences of ownership of
Lock-Up Securities, (iv) establish or increase a put equivalent position or liquidate or
decrease a call equivalent position in Lock-Up Securities within the meaning of Section 16
of the Exchange Act or (v) file with the Commission a registration statement under the Act
relating to Lock-Up Securities, or publicly disclose the intention to take any such action,
without the prior written consent of each of the Representatives, except grants of employee
stock options pursuant to the terms of a plan in effect on the date hereof, issuances of
Lock-Up Securities pursuant to the exercise of such options or the exercise of any other
employee stock options outstanding on the date hereof and the filing by the Company of any
registration statement with the Commission on form S-8 relating to the offering of stock
pursuant to the terms of a plan in effect on the date hereof. The initial Lock-Up Period
will commence on the date hereof and continue for 180 days after the date hereof or such
earlier date that the Representatives consent to in writing; provided,
14
however, that if (1) during the last 17 days of the initial Lock-Up Period, the
Company releases earnings results or material news or a material event relating to the
Company occurs or (2) prior to the expiration of the initial Lock-Up Period, the Company
announces that it will release earnings results during the 16-day period beginning on the
last day of the initial Lock-Up Period, then in each case the Lock-Up Period will be
extended until the expiration of the 18-day period beginning on the date of release of the
earnings results or the occurrence of the materials news or material event, as applicable,
unless each of the Representatives waives, in writing, such extension. The Company will
provide each of the Representatives with notice of any announcement described in clause (2)
of the preceding sentence that gives rise to an extension of the Lock-Up Period. The
abovementioned restrictions on sale of securities by the Company will not apply to the
issuance by the Company of shares of common stock or any security convertible into shares
of common stock in connection with a bona fide merger or acquisition transaction; provided
that the aggregate number of shares issued in these transactions shall not exceed 5% of the
Offered Securities and that any recipient of these shares executes a copy of the lock-up
agreement referred to in Section 7(h) hereof substantially in the form attached hereto as
Exhibit C.
(l) Restriction on Sale of Securities by Selling Stockholders. On or prior to the
date hereof, each of the Selling Stockholders will execute and deliver to the
Representatives lock-up letters, substantially in the form attached hereto as Exhibit C.
(m) Transfer Restrictions. In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent required by the NASD
or the NASD rules from sale, transfer, assignment, pledge or hypothecation for a period of
three months following the date of the effectiveness of the Registration Statement. The
Designated Underwriter will notify the Company as to which Participants will need to be so
restricted. The Company will direct the transfer agent to place stop transfer restrictions
upon such securities for such period of time.
(n) Payment of Expenses Related to Directed Share Program. The Company will pay all
fees and disbursements of counsel (including non-U.S. counsel) incurred by the Underwriters
in connection with the Directed Share Program and stamp duties, similar taxes or duties or
other taxes, if any, incurred by the underwriters in connection with the Directed Share
Program.
(o) Compliance with Foreign Laws. The company will comply with all applicable
securities and other applicable laws, rules and regulations in each foreign jurisdiction in
which the Directed Shares are offered in connection with the Directed Share Program.
6. Free Writing Prospectuses. The Company and each Selling Stockholder, severally and not
jointly, represents and agrees that, unless they obtain the prior consent of each of the
Representatives, and each Underwriter represents and agrees that, unless it obtains the prior
consent of the Company and each of the Representatives, it has not made and will not make any offer
relating to the Offered Securities that would constitute an Issuer Free Writing Prospectus, or that
would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be
filed with the Commission. Any such free writing prospectus consented to by the Company and the
Representatives is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company
represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus
as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply
with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus,
including timely Commission filing where required, legending and record keeping. The Company
represents that it has satisfied and agrees that it will satisfy the conditions in Rule 433 to
avoid a requirement to file with the Commission any electronic road show.
7. Conditions of the Obligations of the Underwriters. The obligations of the several
Underwriters to purchase and pay for the Firm Securities on the First Closing Date and the Optional
Securities to be purchased on each Optional Closing Date, if any, will be subject to the accuracy
of the representations and warranties of the Company and the applicable Selling Stockholders herein
(as though made on such Closing Date), to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company and the applicable Selling
Stockholders of their obligations hereunder and to the following
15
additional conditions precedent:
(a) Accountants’ Comfort Letter. The Representatives shall have received letters,
dated, respectively, the date hereof and each Closing Date, in form and substance
reasonably satisfactory to the Representatives, of BDO ▇▇▇▇▇▇▇, LLP, containing statements
and information of the type customarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial information
contained in the Registration Statement, the General Disclosure Package and the Final
Prospectus; provided, that the letter delivered on a Closing Date shall use a “cut-off”
date no more than three business days prior to such Closing Date.
(b) Chief Financial Officer’s Certificate. The Representatives shall have received a
certificate, dated such Closing Date, of the Chief Financial Officer of the Company
substantially in the form attached hereto as Exhibit D.
(c) Effectiveness of Registration Statement. If the Effective Time of the Additional
Registration Statement (if any) is not prior to the execution and delivery of this
Agreement, such Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, the time the Final Prospectus is
finalized and distributed to any Underwriter, or shall have occurred at such later time as
shall have been consented to by the Representatives. The Final Prospectus shall have been
filed with the Commission in accordance with the Rules and Regulations and Section 5(a)
hereof. Prior to such Closing Date, no stop order suspending the effectiveness of a
Registration Statement shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of any Selling Stockholder, the Company or the
Representatives, shall be contemplated by the Commission.
(d) No Material Adverse Change. Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company and its subsidiaries taken as
a whole which, in the judgment of the Representatives, is material and adverse and makes it
impractical or inadvisable to market the Offered Securities; (ii) any downgrading in the
rating of any debt securities of the Company by any “nationally recognized statistical
rating organization” (as defined for purposes of Rule 436(g)), or any public announcement
that any such organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such rating); (iii)
any change in U.S. or international financial, political or economic conditions or currency
exchange rates or exchange controls the effect of which is such as to make it, in the
judgment of the Representatives, impractical to market or to enforce contracts for the sale
of the Offered Securities, whether in the primary market or in respect of dealings in the
secondary market; (iv) any suspension or material limitation of trading in securities
generally on the New York Stock Exchange or the NASDAQ Stock Market, or any setting of
minimum or maximum prices for trading on such exchange; (v) or any suspension of trading of
any securities of the Company on any exchange or in the over-the-counter market; (vi) any
banking moratorium declared by any U.S. federal or New York authorities; (vii) any major
disruption of settlements of securities, payment or clearance services in the United States
or any other country where such securities are listed or (viii) any attack on, outbreak or
escalation of hostilities or act of terrorism involving the United States, any declaration
of war by Congress or any other national or international calamity or emergency if, in the
judgment of the Representatives, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency is such as to make it impractical or inadvisable to
market the Offered Securities or to enforce contracts for the sale of the Offered
Securities.
(e) Opinion of Counsel for the Company. The Representatives shall have received an
opinion, dated such Closing Date, of each of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Company,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President and General Counsel to the Company, substantially
in the form set forth on Exhibits A and B, respectively.
(f) Opinion of Counsel for Selling Stockholders. The Representatives shall have
received
16
(i) an opinion, dated such Closing Date, of [•] and [•], counsel to [•], in the forms as
set forth on Exhibit E -1A and E-1B hereto, (ii) an opinion, dated such Closing Date, of
[•], counsel to [•], in the form set forth on Exhibit E-2 hereto, (iii) an opinion, dated
such Closing Date, of counsel for the remaining Selling Stockholders, substantially in the
form as set forth in Exhibit E-3 hereto.
(g) Opinion of Counsel for Underwriters. The Representatives shall have received from
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to such matters as the Representatives may require, and the
Selling Stockholders and the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon such matters.
(h) Officer’s Certificate. The Representatives shall have received a certificate,
dated such Closing Date, of an executive officer of the Company and a principal financial
or accounting officer of the Company in which such officers shall state that: the
representations and warranties of the Company in this Agreement are true and correct; the
Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date; no stop order suspending
the effectiveness of any Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the best of their knowledge and after reasonable
investigation, are contemplated by the Commission; the Additional Registration Statement
(if any) satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was timely
filed pursuant to Rule 462(b), including payment of the applicable filing fee in accordance
with Rule 111(a) or (b) and Regulation S-T of the Commission; and, subsequent to the date
of the most recent financial statements in the General Disclosure Package, there has been
no material adverse change, nor any development or event involving a prospective material
adverse change, in the condition (financial or otherwise), results of operations, business,
properties or prospects of the Company and its subsidiaries taken as a whole except as set
forth in the General Disclosure Package or as described in such certificate.
(i) Lock-Up Agreements. On or prior to the date hereof, the Representatives shall
have received lock-up letters, substantially in the form attached hereto as Exhibit C, from
each of the executive officers and directors of the Company, each Selling Stockholder and
each other stockholder of the Company.
(j) The Custodian will deliver to the Representatives a letter stating that they will
deliver to each Selling Stockholder a United States Treasury Department Form 1099 (or other
applicable form or statement specified by the United States Treasury Department regulations
in lieu thereof) on or before January 31 of the year following the date of this Agreement.
The Selling Stockholders and the Company will furnish the Representatives with such conformed
copies of such opinions, certificates, letters and documents as the Representatives reasonably
request. The Representatives may in their sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder, whether in respect
of an Optional Closing Date or otherwise.
8. Indemnification and Contribution. (a) Indemnification of Underwriters by Company. The
Company will indemnify and hold harmless each Underwriter, its partners, members, directors,
officers, employees, agents, affiliates and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an
“Indemnified Party”), against any and all losses, claims, damages or liabilities, joint or several,
to which such Indemnified Party may become subject, under the Act, the Exchange Act, other Federal
or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any part of any Registration Statement
at any time, any Statutory Prospectus as of any time, the Final Prospectus or any Issuer Free
Writing Prospectus, or arise out of or are based upon the omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Indemnified Party for any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending against any loss,
claim, damage, liability, action, litigation,
17
investigation or proceeding whatsoever (whether or not such Indemnified Party is a party thereto),
whether threatened or commenced, and in connection with the enforcement of this provision with
respect to any of the above as such expenses are incurred; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information furnished by any Underwriter
consists of the information described as such in subsection (c) below.
The Company agrees to indemnify and hold harmless the Designated Underwriter and its
affiliates and each person, if any, who controls the Designated Underwriter within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act (the “Designated Entities”), from
and against any and all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or investigating any such
action or claim) (i) arising out of or based upon any untrue statement or alleged untrue statement
of a material fact contained in any material prepared by or with the consent of the Company for
distribution to Participants in connection with the Directed Share Program or arising out of or
based upon any omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) arising out of or based upon the
failure of any Participant to pay for and accept delivery of Directed Shares that the Participant
agreed to purchase; or (iii) arising out of, related to, or in connection with the Directed Share
Program, other than losses, claims, damages or liabilities (or expenses relating thereto) that are
finally judicially determined to have resulted from the willful misconduct or gross negligence of
the Designated Entities.
(b) Indemnification of Underwriters by Selling Stockholders. The Selling Stockholders,
severally and not jointly, will indemnify and hold harmless each Indemnified Party against any and
all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may
become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation
or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any part of any Registration Statement at any time, any Statutory
Prospectus as of any time, the Final Prospectus or any Issuer Free Writing Prospectus, or arise out
of or are based upon the omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will reimburse each
Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending against any loss, claim, damage, liability, action,
litigation, investigation or proceeding whatsoever (whether or not such Indemnified Party is a
party thereto), whether threatened or commenced, and in connection with the enforcement of this
provision with respect to the above as such expenses are incurred; provided, however, that such
Selling Stockholder will only be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from any of such documents in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such Selling Stockholder, it
being understood and agreed that the information appearing in the table in the section entitled
“Principal and Selling Stockholders” under the headings “Name of Beneficial Owner,” “Shares
Beneficially Owned Prior to this Offering—Number,” “Shares to be Sold in the Offering,” “Shares
Beneficially Owned After This Offering—Number,” Shares to be Sold in the Over-Allotment” and
“Shares Beneficially Owned After this Offering with the Over-Allotment—Number” and in the
footnote(s) related to such information pertaining to such Selling Stockholder constitute the only
information concerning such Selling Stockholder furnished in writing to the Company by such Selling
Stockholder for inclusion in any Registration Statement and Final Prospectus; provided, further,
that the liability under this subsection of any Selling Stockholder shall be limited to an amount
equal to the aggregate gross proceeds after underwriting commissions and discounts, but before
expenses, to such Selling Stockholder from the sale of Offered Securities sold by such Selling
Stockholder hereunder.
(c) Indemnification of Company and Selling Stockholders. Each Underwriter will severally and
not jointly indemnify and hold harmless the Company, each of its directors and each of its officers
who signs a Registration Statement and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and each Selling Stockholder,
its partners, members, directors, officers and each person (if any) who controls such Selling
Stockholder within the meaning of Section 15 of
18
the Act or Section 20 of the Exchange Act (each, an “Underwriter Indemnified Party”) against any
losses, claims, damages or liabilities to which such Underwriter Indemnified Party may become
subject, under the Act, the Exchange Act, or other Federal or state statutory law or regulation or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement at any time, any Statutory Prospectus at any time, the
Final Prospectus or any Issuer Free Writing Prospectus or arise out of or are based upon the
omission or the alleged omission of 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 such untrue statement or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the Company by such
Underwriter through either of the Representatives specifically for use therein, and will reimburse
any legal or other expenses reasonably incurred by such Underwriter Indemnified Party in connection
with investigating or defending against any such loss, claim, damage, liability, action,
litigation, investigation or proceeding whatsoever (whether or not such Underwriter Indemnified
Party is a party thereto), whether threatened or commenced, based upon any such untrue statement or
omission, or any such alleged untrue statement or omission as such expenses are incurred, it being
understood and agreed that the only such information furnished by any Underwriter consists of the
following information in the Final Prospectus furnished on behalf of each Underwriter: the
concession and reallowance figures appearing in the third paragraph under the caption
“Underwriting” and the information contained in the twelfth paragraph under the caption
“Underwriting” relating to stabilizing transactions.
(d) Actions against Parties; Notification. Promptly after receipt by an indemnified party
under this Section of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under subsection (a), (b) or
(c) above, notify the indemnifying party of the commencement thereof; but the failure to notify the
indemnifying party shall not relieve it from any liability that it may have under subsection (a),
(b) or (c) above except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided further that the
failure to notify the indemnifying party shall not relieve it from any liability that it may have
to an indemnified party otherwise than under subsection (a), (b) or (c) above. In case any such
action is brought against any indemnified party and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying party), and after notice
from the indemnifying party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party under this Section for
any legal or other expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. Notwithstanding anything contained
herein to the contrary, if indemnity may be sought pursuant to the last paragraph in Section 8(a)
hereof in respect of such action or proceeding, then in addition to such separate firm for the
indemnified parties, the indemnifying party shall be liable for the reasonable fees and expenses of
not more than one separate firm (in addition to any local counsel) for the Designated Underwriter
for the defense of any losses, claims, damages and liabilities arising out of the Directed Share
Program, and all persons, if any, who control the Designated Underwriter within the meaning of
either Section 15 of the Act of Section 20 of the Exchange Act. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such settlement (i)
includes an unconditional release of such indemnified party from all liability on any claims that
are the subject matter of such action and (ii) does not include a statement as to, or an admission
of, fault, culpability or a failure to act by or on behalf of an indemnified party. No
indemnifying party shall be liable for any settlement of any proceeding without its prior written
consent, which consent shall not be unreasonably withheld. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested that an indemnifying party reimburse the
indemnified party for fees and expenses of counsel as contemplated by this paragraph, the
indemnifying party shall be liable for any settlement of any proceeding effected without its
written consent if (x) such settlement is entered into more than 30 days after receipt by the
indemnifying party of such request and (y) the indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such settlement.
19
(e) Contribution. If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or (c) above, then
each indemnifying party shall contribute to the amount paid or payable by such indemnified party as
a result of the losses, claims, damages or liabilities referred to in subsection (a), (b) or (c)
above (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the other from the
offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities 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 shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting expenses) received by the
Company and the Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault 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 Stockholders or the Underwriters and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to
in the first sentence of this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (e). Notwithstanding the provisions of this
subsection (e), (i) no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities 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) the amount any Selling Stockholder is required to contribute shall be
limited to an amount equal to the aggregate gross proceeds after underwriting commissions and
discounts, but before expenses, to such Selling Stockholder from the sale of Offered Securities
sold by such Selling Stockholder hereunder. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this
subsection (e) to contribute are several in proportion to their respective underwriting obligations
and not joint. The Company, the Selling Stockholders and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8(e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in
this Section 8(e).
9. Default of Underwriters. If any Underwriter or Underwriters default in their obligations
to purchase Offered Securities hereunder on either the First or any Optional Closing Date and the
aggregate number of shares of Offered Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date, the
Representatives may make arrangements satisfactory to the Company and the Selling Stockholders for
the purchase of such Offered Securities by other persons, including any of the Underwriters, but if
no such arrangements are made by such Closing Date, the non-defaulting Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to purchase the
Offered Securities that such defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate number of shares of Offered
Securities with respect to which such default or defaults occur exceeds 10% of the total number of
shares of Offered Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to each of the Representatives, the Company and the Selling
Stockholders for the purchase of such Offered Securities by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders, except as provided in Section
10 (provided that if such default occurs with respect to Optional Securities after the First
Closing Date, this Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the term “Underwriter”
includes any person substituted for an Underwriter under this Section. Nothing herein will relieve
a defaulting Underwriter from liability for its default.
20
10. Survival of Certain Representations and Obligations. The respective indemnities,
agreements, representations, warranties and other statements of the Selling Stockholders, of the
Company or its officers and of the several Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, any Selling Stockholder, the Company
or any of their respective representatives, officers or directors or any controlling person, and
will survive delivery of and payment for the Offered Securities. If the purchase of the Offered
Securities by the Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 9 hereof, the occurrence of any event specified
in clauses (iii), (iv), (vii) or (viii) of Section 7(d), or any breach by the Underwriters of any
representation set forth herein, the Company will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by them in connection
with the offering of the Offered Securities, and the respective obligations of the Company, the
Selling Stockholders and the Underwriters pursuant to Section 8 hereof shall remain in effect. In
addition, if any Offered Securities have been purchased hereunder, the representations and
warranties in Section 2 and all obligations under Section 5 shall also remain in effect.
11. Notices. All communications hereunder will be in writing and, if sent to the
Underwriters, will be mailed, delivered or telegraphed and confirmed to each of the Representatives
at: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Legal
Department and at Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, N.Y.
10010-3629, Attention: LCD-IBD, or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at K12, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel or, if sent to the Selling Stockholders or any of them, will be mailed,
delivered or telegraphed and confirmed to [•]; provided, however, that any notice to an Underwriter
pursuant to Section 8 will be mailed, delivered or telegraphed and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers and directors and controlling persons
referred to in Section 8, and no other person will have any right or obligation hereunder.
13. Representation. The Representatives will act for the several Underwriters in connection
with the transactions contemplated by this Agreement, and any action under this Agreement taken by
the Representatives will be binding upon all the Underwriters. The Company will act for the Selling
Stockholders in connection with such transactions, and any action under or in respect of this
Agreement taken by the Company in conformity with the applicable Power of Attorney will be binding
upon all the Selling Stockholders.
14. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall together constitute one
and the same Agreement.
15. Absence of Fiduciary Relationship. The Company and the Selling Stockholders acknowledge
and agree that:
(a) No Other Relationship. The Representatives have been retained solely to act as
underwriters in connection with the sale of the Offered Securities and that no fiduciary, advisory
or agency relationship between the Company or the Selling Stockholders, on the one hand, and the
Representatives, on the other, has been created in respect of any of the transactions contemplated
by this Agreement or the Final Prospectus, irrespective of whether the Representatives have advised
or are advising the Company or the Selling Stockholders on other matters;
(b) Arms’ Length Negotiations. The price of the Offered Securities set forth in this
Agreement was established by the Company and the Selling Stockholders following discussions and
arms-length negotiations with the Representatives and the Company and the Selling Stockholders are
capable of evaluating and understanding and understand and accept the terms, risks and conditions
of the transactions contemplated by this Agreement;
21
(c) Absence of Obligation to Disclose. The Company and the Selling Stockholders have been
advised that the Representatives and their affiliates are engaged in a broad range of transactions
which may involve interests that differ from those of the Company or the Selling Stockholders and
that the Representatives have no obligation to disclose such interests and transactions to the
Company or the Selling Stockholders by virtue of any fiduciary, advisory or agency relationship;
and
(d) Waiver. The Company and the Selling Stockholders waive, to the fullest extent permitted
by law, any claims they may have against the Representatives for breach of fiduciary duty or
alleged breach of fiduciary duty and agree that the Representatives shall have no liability
(whether direct or indirect) to the Company or the Selling Stockholders in respect of such a
fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of
the Company, including stockholders, employees or creditors of the Company.
16. Applicable Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts
in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. The Company irrevocably and
unconditionally waives any objection to the laying of venue of any suit or proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby in Federal and state
courts in the Borough of Manhattan in the City of New York and irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such suit or proceeding in any
such court has been brought in an inconvenient forum.
22
If the foregoing is in accordance with the Representatives’ understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a
binding agreement among the Selling Stockholders, the Company and the several Underwriters in
accordance with its terms.
| Very truly yours, | ||||||
| K12 INC. | ||||||
| By | ||||||
| Name: | ||||||
| Title: | ||||||
| The Selling Stockholders named in | ||||||
| Schedule I hereto, acting severally | ||||||
| By | ||||||
| Attorney - in - Fact | ||||||
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
confirmed and accepted as of the date first above
written.
| ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated | ||||
By:
|
||||
| Name: | ||||
| Title: | ||||
| Credit Suisse Securities (USA) LLC | ||||
By:
|
||||
| Name: | ||||
| Title: | ||||
Acting on behalf of themselves and as the
Representatives of the several
Underwriters.
Representatives of the several
Underwriters.
23
SCHEDULE A
| Number of | ||
| Firm Securities | ||
| Underwriter | to be Purchased | |
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated |
[•] | |
Credit Suisse Securities (USA) LLC |
[•] | |
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated |
[•] | |
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated |
[•] | |
BMO Capital Markets Corp. |
[•] | |
ThinkEquity Partners LLC |
[•] | |
Total |
[•] | |
24
SCHEDULE B
| Number of | Number of | |||||||
| Firm | Optional | |||||||
| Securities to | Securities to | |||||||
| Selling Stockholder | be Sold | be Sold | ||||||
Total |
||||||||
25
SCHEDULE C
1. General Use Free Writing Prospectuses (included in the General Disclosure Package)
[•]
2. Other Information Included in the General Disclosure Package
The following information is also included in the General Disclosure Package:
1. The initial price to the public of the Offered Securities.
2. [•]
26
EXHIBIT A
[Form of Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP]
EXHIBIT B
[Form of Opinion of General Counsel]
EXHIBIT C
[Form of Lock-up Agreement]
EXHIBIT D
[Form of Chief Financial Officer’s Certificate]