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EXHIBIT 1.1
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
CLASS A COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
DATED SEPTEMBER __, 1999
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TABLE OF CONTENTS
Page
1. Representations and Warranties of the Company........................... 2
(a) Effective Registration Statement...................... 2
(b) Contents of Registration Statement.................... 2
(c) Due Incorporation..................................... 3
(d) Subsidiaries.......................................... 3
(e) Underwriting Agreement................................ 3
(f) Description of Capital Stock.......................... 3
(g) Authorized Stock...................................... 3
(h) Validly Issued Shares................................. 3
(i) No Conflict........................................... 3
(j) No Material Adverse Change............................ 4
(k) Legal Proceedings; Exhibits; Agreements............... 4
(l) Compliance with Securities Act........................ 4
(m) Not an Investment Company............................. 4
(n) Compliance with Laws.................................. 4
(o) Compliance with Environmental Laws.................... 5
(p) No Environmental Costs................................ 5
(q) No Registration Rights................................ 5
(r) Absence of Material Charges........................... 5
(s) Good Title to Properties.............................. 5
(t) Intellectual Property Rights.......................... 6
(u) No Labor Disputes..................................... 6
(v) Insurance............................................. 6
(w) Governmental Permits.................................. 6
(x) Accounting Controls................................... 6
(y) Listing of Common Stock............................... 7
(z) Year 2000 Compliance.................................. 7
(aa) Directed Share Program................................ 7
2. Purchase and Sale Agreements............................................ 7
(a) Firm Shares........................................... 7
(b) Additional Shares..................................... 8
(c) Market Standoff Provision............................. 8
(d) Terms of Public Offering.............................. 8
3. Payment and Delivery.................................................... 9
(a) Firm Shares........................................... 9
(b) Additional Shares..................................... 9
(c) Delivery of Certificates.............................. 9
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4. Covenants of the Company................................................ 9
(a) Furnish Copies of Registration Statement
and Prospectus........................................ 9
(b) Notification of Amendments or Supplements............. 10
(c) Filings of Amendments or Supplements.................. 10
(d) Blue Sky Laws......................................... 10
(e) Earnings Statement.................................... 10
(f) Use of Proceeds....................................... 10
(g) Transfer Agent........................................ 10
(h) Periodic Reporting Obligations........................ 11
(i) Directed Share Program................................ 11
(j) Exchange Act Compliance............................... 11
5. Conditions to the Underwriters' Obligations............................. 11
(a) Effective Registration Statement...................... 11
(b) Rule 462 Registration Statement....................... 11
(c) Prospectus Filed with Commission...................... 11
(d) No Stop Order......................................... 12
(e) No NASD Objection..................................... 12
(f) No Debt Downgrading................................... 12
(g) No Material Adverse Change............................ 12
(h) Officer's Certificate................................. 12
(i) Opinion of Company Counsel............................ 12
(j) Opinion of Regulatory Counsel......................... 13
(k) Opinion of Underwriters Counsel....................... 13
(l) Accountant's Comfort Letter........................... 13
(m) Lock-Up Agreements.................................... 13
(n) Additional Documents.................................. 13
6. Expenses................................................................ 14
7. Indemnity and Contribution.............................................. 15
(a) Indemnification of the Underwriters................... 15
(b) Indemnification by the Underwriters................... 15
(c) Indemnification Procedures............................ 16
(d) Indemnification for Directed Share Program............ 17
(e) Contribution Agreement................................ 18
(f) Contribution Amounts.................................. 19
(g) Survival of Provisions................................ 19
8. Effectiveness........................................................... 19
9. Termination............................................................. 19
10.Defaulting Underwriters................................................. 20
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11.Counterparts............................................................ 21
12.Headings; Table of Contents............................................. 21
13.Notices................................................................. 21
14.Successors.............................................................. 22
15.Partial Unenforceability................................................ 22
16.Governing Law........................................................... 22
17.Entire Agreement........................................................ 22
18.Amendments.............................................................. 22
19.Sophisticated Parties................................................... 23
Exhibits
A Form of Legal Opinion of Company Counsel
B Form of Lock-Up Agreement
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September __, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
As Representatives of the several Underwriters
c/o Thomas ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Introduction. ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule A hereto (the "Underwriters") an aggregate of ____________ shares of
the Class A Common Stock, par value $.01 per share, of the Company (the "Firm
Shares").
The Company also proposes to issue and sell to the several Underwriters
not more than an additional ____________ shares of its Class A Common Stock, par
value $.01 per share (the "Additional Shares"), if and to the extent that you
shall have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of common stock granted to the Underwriters in Section 2
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares". The shares of Class A Common Stock, par value $.01
per share, of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "Class A Common Stock".
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. have agreed to
act as representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the offering and sale of the Shares.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (file no. 333-_____),
including a prospectus, relating to the Shares. The registration statement as
amended at the time it becomes effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"Securities Act"), is hereinafter referred to as the "Registration Statement";
the prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "Prospectus". If the Company has filed a registration
statement to register additional shares of Class A Common Stock pursuant to Rule
462(b) under the Securities Act (the "Rule 462 Registration Statement"), then
any reference herein to the term "Registration Statement" shall be deemed to
include such Rule 462 Registration Statement. All references in this Agreement
to the Registration Statement, the Rule 462 Registration Statement, a
preliminary prospectus, the Prospectus, or any
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amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("▇▇▇▇▇").
As part of the offering contemplated by this Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Partners has agreed to reserve out of the Shares set forth opposite its name on
Schedule A to this Agreement, up to ______________ shares, for sale to the
Company's employees, officers, and directors and other parties associated with
the Company (collectively, "Participants"), as set forth in the Prospectus under
the heading "Underwriting" (the "Directed Share Program"). The Shares to be sold
by ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners pursuant to the Directed Share Program (the "Directed
Shares") will be sold by ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners pursuant to this Agreement at
the public offering price. Any Directed Shares not orally confirmed for purchase
by any Participants by the end of the first business day after the date on which
this Agreement is executed will be offered to the public by ▇▇▇▇▇▇ ▇▇▇▇▇▇
Partners as set forth in the Prospectus.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) Effective Registration Statement. The Registration
Statement has become effective; no stop order suspending the effectiveness of
the Registration Statement is in effect, and no proceedings for such purpose are
pending before or, to the best knowledge of the Company, threatened by the
Commission.
(b) Contents of Registration Statement. (i) The Registration
Statement, when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) Due Incorporation. The Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company.
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(d) Subsidiaries. The Company has no subsidiaries.
(e) Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by the Company, and is a valid and binding
agreement of the Company, enforceable in accordance with its terms, except as
rights to indemnification hereunder may be limited by applicable law and except
as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(f) Description of Capital Stock. The authorized capital stock
of the Company conforms as to legal matters to the description thereof contained
in the Prospectus.
(g) Authorized Stock. The shares of Class A Common Stock and
Class B Common Stock, par value $.01 per share, of the Company (the "Class B
Common Stock"; and together with the Class A Common Stock, the "Common Stock")
outstanding prior to the issuance of the Shares to be sold by the Company
hereunder have been duly authorized and are validly issued, fully paid and
non-assessable. All of the outstanding shares of Class B Common Stock are owned
by Vitamin Shoppe Industries, Inc. ("VSI").
(h) Validly Issued Shares. The Shares to be sold by the
Company hereunder have been duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.
(i) No Conflict. The execution and delivery by the Company of,
and the performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other instrument
binding upon the Company that is material to the Company, or any judgment, order
or decree of any governmental body, agency or court having jurisdiction over the
Company, and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be required
by the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares.
(j) No Material Adverse Change. There has not occurred any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
business or operations of the Company from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement).
(k) Legal Proceedings; Exhibits; Agreements. There are no
legal or governmental proceedings pending or, to the best knowledge of the
Company, threatened to which the Company is a party or to which any of the
properties of the Company is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
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described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required. All of the agreements and instruments described in the Prospectus
under "Business -- Intercompany Agreements" have been validly authorized,
executed and delivered by the Company and VSI.
(l) Compliance with Securities Act. Each preliminary
prospectus filed as part of the registration statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder.
(m) Not an Investment Company. The Company is not and, after
giving effect to the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(n) Compliance with Laws. The Company is conducting its
business in compliance with all applicable federal, state and local laws, rules
and regulations of the jurisdictions in which it is conducting business,
including, without limitation, the Dietary Supplement Health and Education Act
of 1994, the Federal Food, Drug and Cosmetic Act, the Nutritional Labeling and
Education Act of 1990 and the Federal Trade Commission Act and all rules and
regulations promulgated thereunder.
(o) Compliance with Environmental Laws. The Company (i) is in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct
its business and (iii) is in compliance with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, individually or in the aggregate, have a
material adverse effect on the Company.
(p) No Environmental Costs. There are no costs or liabilities
associated with Environmental Laws (including, without limitation, any capital
or operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties) which would, individually or in the aggregate, have a material
adverse effect on the Company.
(q) No Registration Rights. 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
Securities Act with respect to any securities of the Company or to require the
Company to include such securities with the Shares registered pursuant to the
Registration Statement other than as described in the Registration
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Statement and as have been waived in writing in connection with the offering
contemplated hereby.
(r) Absence of Material Charges. Subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, (1) the Company has not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction not
in the ordinary course of business; (2) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (3) there has not been any
material change in the capital stock, short-term debt or long-term debt of the
Company, except in each case as described in the Prospectus.
(s) Good Title to Properties. The Company has good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company; and any real
property and buildings held under lease by the Company are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company. VSI has sold and assigned to the Company
good and marketable title to all assets of VSI that were used primarily in the
Internet business of VSI.
(t) Intellectual Property Rights. The Company owns or
possesses, or can acquire on reasonable terms, all material patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names currently
employed by it in connection with the business now operated by them, and the
Company has not received any notice of infringement of or conflict with asserted
rights of others with respect to any of the foregoing which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse affect on the Company.
(u) No Labor Disputes. No material labor dispute with the
employees of the Company exists, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or imminent
labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could have a material adverse effect on the
Company.
(v) Insurance. The Company is insured by the insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; and the Company has no 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 on the
Company.
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(w) Governmental Permits. The Company possesses all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct its business, and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
Company.
(x) Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(y) Listing of Common Stock. The Class A Common Stock
(including the Shares and the Directed Shares) is registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and is listed on the Nasdaq National Market, subject to notice of issuance.
(z) Year 2000 Compliance. The Company has reviewed its
operations and that of any third parties with which the Company has a material
relationship to evaluate the extent to which the business or operations of the
Company will be affected by the Year 2000 Problem. As a result of such review,
the Company has no reason to believe, and does not believe, that the Year 2000
Problem will have a material adverse effect on the Company or result in any
material loss or interference with the Company's business or operations. The
"Year 2000 Problem" as used herein means any significant risk that computer
hardware or software used in the receipt, transmission, processing,
manipulation, storage, retrieval, retransmission or other utilization of data or
in the operation of mechanical or electrical systems of any kind will not, in
the case of dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
(aa) Directed Share Program. The Company represents and
warrants to ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners that (i) the Registration Statement, the
Prospectus and any preliminary prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or regulations of
foreign jurisdictions in which the Prospectus or any preliminary prospectus, as
amended or supplemented, if applicable, are distributed in connection with the
Directed Share Program, and that (ii) no authorization, approval, consent,
license, order, registration or qualification of or with any government,
governmental instrumentality or court, other than such as have been obtained, is
necessary under the securities laws and regulations of foreign jurisdictions in
which the Directed Shares are offered outside the United States.
2. Purchase and Sale Agreements.
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(a) Firm Shares. The Company hereby agrees to sell to the
several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company at $______ a share (the "Purchase Price") the number of Firm Shares set
forth in Schedule A hereto opposite the name of such Underwriter.
(b) Additional Shares. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and conditions,
the Company agrees to sell to the Underwriters the Additional Shares, and the
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to _______________ Additional Shares at the Purchase Price. If you, on behalf
of the Underwriters, elect to exercise such option, you shall so notify the
Company in writing not later than thirty (30) days after the date of this
Agreement, which notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten (10) business days after
the date of such notice. Additional Shares may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule A
hereto opposite the name of such Underwriter bears to the total number of Firm
Shares.
(c) Market Standoff Provision. The Company hereby agrees that,
without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners, it will not, during
the period ending 180 days after the date of the Prospectus, (i) offer, issue,
pledge, sell, contract to issue or sell, issue or sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise issue, transfer or dispose of, directly
or indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Shares to be sold hereunder or (B) the
issuance by the Company of shares of Class A Common Stock upon the exercise of
options or warrants described in the Prospectus or the grant of options, in the
ordinary course of business, pursuant to plans described in the Prospectus.
(d) Terms of Public Offering. The Company is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable.
3. Payment and Delivery.
(a) Firm Shares. Payment for the Firm Shares to be sold by the
Company
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shall be made to the Company in immediately available funds against delivery of
such Firm Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on ____________, 1999, or at such other time on
the same or such other date, not later than _________, 1999 [five business days
after scheduled closing date], as shall be designated in writing by you. The
time and date of such payment are hereinafter referred to as the "Closing Date".
(b) Additional Shares. Payment for any Additional Shares shall
be made to the Company in immediately available funds in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2(b) or at such other time on the same or on such
other date, in any event not later than _______, 1999 [40 days after date of
this Agreement], as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "Option Closing Date".
(c) Delivery of Certificates. Certificates for the Firm Shares
and Additional Shares shall be in definitive form and registered in such names
and in such denominations as you shall request in writing not later than one (1)
full business day prior to the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and Additional Shares
shall be delivered to you on the Closing Date or the Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
4. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) Furnish Copies of Registration Statement and Prospectus.
To furnish to you, without charge, four signed copies of the Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without exhibits
thereto) and to furnish to you in New York City, without charge, prior to 10:00
a.m. New York City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 4(c) below, as many copies
of the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Notification of Amendments or Supplements. Before amending
or supplementing the Registration Statement or the Prospectus, to furnish to you
a copy of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such rule.
(c) Filings of Amendments or Supplements. If, during such
period after the first date of the public offering of the Shares as in the
opinion of counsel for the Underwriters the
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Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer (the "Prospectus Delivery Period"), any event shall occur
or condition exist as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish to
the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with law.
(d) Blue Sky Laws. To endeavor to qualify the Shares for offer
and sale under the securities or Blue Sky laws of each state of the United
States and such other such jurisdictions as you shall reasonably request.
(e) Earnings Statement. To make generally available to its
securityholders as soon as practicable, but in any event not later than eighteen
(18) months after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Securities Act), an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the rules and regulations thereunder (including, at the
option of the Company, Rule 158).
(f) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Shares sold by it in the manner described under the caption
"Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Class A Common Stock.
(h) Periodic Reporting Obligations. During the Prospectus
Delivery Period, the Company shall file, on a timely basis, with the Commission
and the Nasdaq National Market all reports and documents required to be filed
under the Exchange Act. Additionally, the Company shall file with the Commission
such information on Form 10-Q or Form 10-K as may be required by Rule 463 under
the Securities Act.
(i) Directed Share Program. That in connection with the
Directed Share Program, the Company will ensure that the Directed Shares will be
restricted if and to the extent required by the National Association of
Securities Dealers, Inc. (the "NASD") or the NASD rules from sale, transfer,
assignment, pledge or hypothecation for a period of three (3) months following
the date of the effectiveness of the Registration Statement. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Partners 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
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time. Furthermore, the Company covenants with ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners that the
Company will comply with all applicable securities and other applicable laws,
rules and regulations in each foreign jurisdiction in which the Directed Shares
are offered in connection with the Directed Share Program.
(j) Exchange Act Compliance. During the Prospectus Delivery
Period, the Company will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act in the manner
and within the time periods required by the Exchange Act.
5. Conditions to the Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Shares on the Closing Date are subject
to the following conditions:
(a) Effective Registration Statement. The Registration
Statement shall have become effective not later than 5:00 p.m. (New York City
time) on the date hereof.
(b) Rule 462 Registration Statement. If the Company elects to
rely upon Rule 462(b), the Company shall file a Rule 462 Registration Statement
with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462 Registration
Statement or give irrevocable instructions for the payment of such fee pursuant
to Rule 111(b) under the Securities Act.
(c) Prospectus Filed with Commission. The Company shall have
filed the Prospectus with the Commission (including the information required by
Rule 430A under the Securities Act) in the manner and within the time period
required by Rule 424(b) under the Securities Act; or the Company shall have
filed a post-effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective amendment shall
have become effective.
(d) No Stop Order. No stop order suspending the effectiveness
of the Registration Statement, any Rule 462 Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect and
no proceedings for such purpose shall have been instituted or threatened by the
Commission.
(e) No NASD Objection. The NASD shall have raised no objection
to the fairness and reasonableness of the underwriting terms and arrangements.
(f) No Debt Downgrading. There shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act.
(g) No Material Adverse Change. There shall not have occurred
any change,
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or any development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations of the Company from
that set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
(h) Officer's Certificate. The Underwriters shall have
received on the Closing Date a certificate, dated the Closing Date and signed by
the Chief Executive Officer or President of the Company, to the effect set forth
in Sections 5(d) and 5(g) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as of
the Closing Date and that the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
(i) Opinion of Company Counsel. The Underwriters shall have
received on the Closing Date an opinion of ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ &
Handler, LLP, counsel for the Company, dated the Closing Date, the form of which
is attached hereto as Exhibit A. The opinion shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(j) Opinion of Regulatory Counsel. The Underwriters shall have
received on the Closing Date an opinion of _________________, regulatory counsel
for the Company, dated the Closing Date, to the effect that the statements in
the Prospectus under the captions "Risk Factors -- Extensive governmental
regulation could add significant additional costs to our business," and
"Business -- Government Regulation," insofar as such statements constitute
summaries of the laws, regulations or legal matters referred to therein, fairly
summarize such laws, regulations and legal matters. The opinion shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
(k) Opinion of Underwriters Counsel. The Underwriters shall
have received on the Closing Date an opinion of ▇▇▇▇ and ▇▇▇▇ LLP, counsel for
the Underwriters, dated the Closing Date, covering the matters referred to in
Exhibit A, paragraphs (v), (vi), (viii) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters") and (xi).
With respect to paragraph (xii) of Exhibit A, such counsel may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification, except as specified.
(l) Accountant's Comfort Letter. The Underwriters shall have
received, on each of the date hereof and the Closing Date, a letter dated the
date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, from Deloitte & Touche LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided that the letter delivered on
the Closing Date shall use a "cut-off date" not
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earlier than the date hereof.
(m) Lock-Up Agreements. The "lock-up" agreements, each
substantially in the form of Exhibit B hereto, between you and the stockholders,
optionholders, officers and directors of the Company, delivered to you on or
before the date hereof, shall be in full force and effect on the Closing Date.
(n) Additional Documents. On the Closing Date, the
Representatives and counsel for the Underwriters shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Shares as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction of each of the above conditions
on or prior to the Option Closing Date and to the delivery to you on the Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
6. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of their
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Shares under state securities laws and
all expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as contemplated by Section 4(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection with such qualification and in connection with
the Blue Sky or legal investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Shares by
the NASD, (v) all fees and expenses in connection with the preparation and
filing of the registration statement on Form 8-A relating to the Class A Common
Stock and all costs and expenses incident to listing the Shares on the Nasdaq
National Market, (vi) the cost of printing certificates representing the Shares,
(vii) the costs and charges of any transfer agent, registrar or depositary,
(viii) the costs and expenses of the Company relating to investor presentations
on any "road show" undertaken in connection with the marketing of the offering
of the Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of
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17
any consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, (ix) all
expenses in connection with any offer and sale of the Shares outside of the
United States, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection with offers and sales outside of
the United States, (x) all reasonable fees and disbursements of counsel incurred
by the Underwriters in connection with the Directed Share Program and stamp
duties, similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program and (xi) all other
costs and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 7 entitled
"Indemnity and Contribution", and the last paragraph of Section 10 below, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel and any advertising expenses connected with any
offers they may make.
7. Indemnity and Contribution.
(a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except (i) insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein and (ii) that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit of
any Underwriter from whom the person asserting any loss, claim, damage or
liability purchased Shares, or any person controlling such Underwriter, if
copies of the Prospectus were timely delivered to the Underwriter pursuant to
Section 4 and a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or expense.
(b) Indemnification by the Underwriters. Each Underwriter
agrees, severally and not jointly, to indemnify and hold harmless the Company,
the directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who
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controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) Indemnification Procedures. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to this Section 7,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and (ii) the fees and expenses
of more than one separate firm (in addition to any local counsel) for the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters and such
control persons of any Underwriters, such firm shall be designated in writing by
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners. In the case of any such separate firm for the Company,
and such directors, officers and control persons of the Company, such firm shall
be designated in writing by the Company. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the
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second and third sentences of this paragraph, the indemnifying party agrees that
it shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the specific terms of such
settlement at least 15 days prior to such settlement being effected, and (iii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to Section 7(e) hereof in respect of such action or
proceeding, then in addition to such separate firm for the indemnified parties,
the indemnifying party shall be liable for the reasonable fees and expenses of
not more than one separate firm (in addition to any local counsel) for ▇▇▇▇▇▇
▇▇▇▇▇▇ Partners for the defense of any losses, claims, damages and liabilities
arising out of the Directed Share Program, and all persons, if any, who control
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act.
(d) Indemnification for Directed Share Program. The Company
agrees to indemnify and hold harmless ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners and each person, if
any, who controls ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act ("▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners
Entities"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) (i)
caused by any untrue statement or alleged untrue statement of a material fact
contained in the prospectus wrapper material prepared by or with the consent of
the Company for distribution in foreign jurisdictions in connection with the
Directed Share Program attached to the Prospectus or any preliminary prospectus,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement therein, when
considered in conjunction with the Prospectus or any applicable preliminary
prospectus, not misleading; (ii) caused by the failure of any Participant to pay
for and accept delivery of the shares which, immediately following the
effectiveness of the Registration Statement, were subject to a properly
confirmed agreement to purchase; or (iii) related to, arising out of, or in
connection with the Directed Share Program, provided that, the Company shall not
be responsible under this subparagraph (iii) for any losses, claim, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of ▇▇▇▇▇▇
▇▇▇▇▇▇ Partners Entities.
(e) Contribution Agreement. To the extent the indemnification
provided for in this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or
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liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by 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 indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Shares (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate price at which the Shares are
sold to the public pursuant to this Agreement. The relative fault of the Company
on the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective number of Shares they have purchased hereunder, and not joint.
(f) Contribution Amounts. The Company and the Underwriters
agree that it would not be just or equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 7(e). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 7 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) Survival of Provisions. The indemnity and contribution
provisions contained in this Section 7 and the representations, warranties and
other statements of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter or the Company, its officers or
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directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
8. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
9. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York, Delaware or California shall have been declared by
either federal or New York, Delaware or California state authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse, or (v) in the judgment of the Representatives, there shall
have occurred any material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of business, of
the Company, and (b) in the case of any of the events specified in clauses
9(a)(i) through 9(a)(v), such event, individually or together with any other
such event, makes it, in your judgment, impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus.
10. Defaulting Underwriters. If, on the Closing Date or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of the Shares to be purchased on such
date, the other Underwriters shall be obligated severally in the proportions
that the number of Firm Shares set forth opposite their respective names in
Schedule A bears to the aggregate number of Firm Shares set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as
you may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 10 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven (7) days, in
order that the required changes, if
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any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, on the Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional Shares
and the aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
12. Headings; Table of Contents. The headings of the sections of this
Agreement and the table of contents have been inserted for convenience of
reference only and shall not be deemed a part of this Agreement.
13. Notices. All communications hereunder shall be in writing and shall
be mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Representatives:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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If to the Company:
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ____________
Attention: President
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the officers and directors and
controlling persons referred to in Section 7, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The
term "successors" shall not include any purchaser of the Shares as such from any
of the Underwriters merely by reason of such purchase.
15. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
17. Entire Agreement. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof.
18. Amendments. This Agreement may only be amended or modified in
writing, signed by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit.
19
24
19. Sophisticated Parties. Each of the parties hereto acknowledges that
it is a sophisticated business person who was adequately represented by counsel
during negotiations regarding the provisions hereof, including, without
limitation, the indemnification and contribution provisions of Section 7, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Section 7 hereto fairly allocate the risks
in light of the ability of the parties to investigate the Company, its affairs
and its business in order to assure that adequate disclosure has been made in
the Registration Statement, any preliminary prospectus and the Prospectus (and
any amendments and supplements thereto), as required by the Securities Act and
the Exchange Act.
[Remainder of page intentionally left blank]
20
25
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
By:_____________________________
Name:______________________
Title:_______________________
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
Acting severally on behalf of themselves and the several Underwriters named in
Schedule A hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
By:_______________________________
Name:____________________________
Title:_____________________________
21
26
SCHEDULE A
Underwriter Number of Firm
Shares
To Be Purchased
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
Total
22
27
EXHIBIT A
Form of Legal Opinion of Company Counsel
THE FINAL OPINION IN DRAFT FORM SHOULD BE ATTACHED AS EXHIBIT A AT THE
TIME THIS AGREEMENT IS EXECUTED.
(i) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company.
(ii) To the knowledge of such counsel, the Company has no subsidiaries.
(iii) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(iv) The shares of capital stock of the Company outstanding immediately
prior to the issuance of the Shares to be sold by the Company hereunder have
been duly authorized and are validly issued, fully paid and non-assessable.
(v) The Shares to be sold by the Company hereunder have been duly
authorized and, when issued and delivered in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and non-assessable,
and the issuance of such Shares will not be subject to any preemptive or similar
rights.
(vi) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(vii) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Underwriting Agreement will not
contravene any provision of applicable law or the certificate of incorporation
or by-laws of the Company or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken as a
whole, or, to the best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
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(viii) The statements (A) in the Prospectus under the captions
"Management's Discussion and Analysis of Financial Condition and Results of
Operation - Liquidity and Capital Resources", "Business - Intercompany
Agreements", "Management - Employee Benefits", "Management - Employment and
Severance Agreements", "Certain Transactions", "Description of Capital Stock"
and "Underwriting" and (B) in the Registration Statement in Items 14 and 15, in
each case insofar as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein.
(ix) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
(x) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(xi) Such counsel (A) is of the opinion that the Registration Statement
and Prospectus (except for financial statements and schedules and other
financial and statistical data included therein as to which such counsel need
not express any opinion) comply as to form in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder, (B) has no reason to believe that (except for financial statements
and schedules and other financial and statistical data as to which such counsel
need not express any belief) the Registration Statement and the prospectus
included therein at the time the Registration Statement became effective
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading and (C) has no reason to believe that (except for financial
statements and schedules and other financial and statistical data as to which
such counsel need not express any belief) the Prospectus contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
With respect to paragraph (xi) of Exhibit A, such counsel may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification, except as specified.
2
29
EXHIBIT B
FORM OF LOCK-UP AGREEMENT
30
FORM OF LOCK-UP AGREEMENT
*
_____, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
*▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company
As Representatives of the several Underwriters
c/o Thomas ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: LOCK-UP AGREEMENT ("AGREEMENT")
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of
certain shares of Class A Common Stock, par value $0.01 per share (the "CLASS A
COMMON STOCK"), and/or shares of Class B Common Stock, par value $0.01 per share
(the "CLASS B COMMON STOCK, together with Class A Common Stock, the "CAPITAL
STOCK"), of ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the "COMPANY"), or
securities convertible into or exchangeable for or issuable upon the exercise of
stock options and warrants to purchase shares of Capital Stock. The undersigned
understands that you, as representatives (the "REPRESENTATIVES"), propose to
enter into an underwriting agreement (the "UNDERWRITING AGREEMENT") on behalf of
the several Underwriters named therein (collectively, the "UNDERWRITERS"), with
the Company providing for a public offering of shares of the Class A Common
Stock of the Company pursuant to a Registration Statement on Form S-1 to be
filed with the Securities and Exchange Commission (the "PUBLIC OFFERING"). The
undersigned recognizes that the Public Offering will benefit the undersigned and
the Company by, among other things, raising additional capital for the
operations of the Company. The undersigned acknowledges that you and the other
Underwriters are relying on the representations and agreements of the
undersigned contained in this Agreement in carrying out the Public Offering and
in entering into underwriting arrangements with the Company with respect to the
Public Offering.
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇ Partners LLC ("▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS") (which consent may be withheld in
its sole discretion), it will not, and will not publicly announce its intention
to, during the period commencing on the date hereof and ending 180 days after
the date of the final prospectus relating to the Public Offering (the
"PROSPECTUS"), (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of, directly
or indirectly, any shares of Capital Stock or any securities convertible into or
exercisable or exchangeable for Capital Stock or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Capital Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Capital Stock or such other securities, in cash or otherwise. In addition, the
undersigned agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇
Partners (which consent may be withheld in its sole discretion), it will not,
during the period commencing on the date hereof and ending 180 days after the
date of the Prospectus, make any demand for or exercise any right with respect
31
to, the registration, offering or sale of any shares of Capital Stock or any
security convertible into or exchangeable for or issuable upon the exercise of
stock options and warrants to purchase shares of Capital Stock. With respect to
the Public Offering, the undersigned waives any registration rights relating to
registration under the Securities Act of 1933, as amended, of any offering or
sale of any Capital Stock owned either of record or beneficially by the
undersigned, including any rights to receive notice of the Public Offering.
The foregoing restrictions are expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or reasonably expected to lead to or result in a sale or disposition of the
Capital Stock even if such Capital Stock would be disposed of by someone other
than the undersigned. Such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or grant of any
right (including without limitation any put option or put equivalent position or
call option or call equivalent position) with respect to any of the Capital
Stock or with respect to any security that includes, relates to, or derives any
significant part of its value from such Capital Stock.
Notwithstanding the foregoing, the undersigned may transfer
shares of Capital Stock or securities convertible into or exchangeable or
exercisable for Capital Stock (i) as a bona fide gift or gifts, provided that
the donee or donees thereof agree to be bound by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust agrees to be bound by the restrictions set forth herein, and provided
further that any such transfer shall not involve a disposition for value, (iii)
to any corporation, partnership, limited liability company or other business
entity that is wholly owned by the undersigned and/or its donees or assignees,
provided that any such transfer shall not involve a disposition for value and
any such transferee agrees to be bound by the restrictions set forth herein, or
(iv) to the Underwriters pursuant to the Underwriting Agreement. For purposes of
this Agreement, "immediate family" shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin.
*
The undersigned understands that whether the Public Offering
actually occurs will depend on a number of factors, including stock market
conditions. The Public Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to negotiation among the Company and
the Underwriters.
The undersigned agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of shares of Capital Stock or securities convertible into or
exchangeable or exercisable for Capital Stock held by the undersigned except in
compliance with the foregoing restrictions.
This Agreement is irrevocable and shall be binding on the
undersigned and the respective successors, heirs, personal representatives and
assigns of the undersigned.
*
32
This Agreement shall terminate if the Underwriting Agreement
(other than provisions that survive termination) shall terminate or be
terminated prior to the payment for the delivery of the shares of the Class A
Common Stock thereunder or if such agreement is not executed by each party
thereto on or prior to December 31, 1999.
Very truly yours,
*
-------------------------------------
Address:
----------------------------
----------------------------
----------------------------
33
This Agreement shall terminate if the Underwriting Agreement
(other than provisions that survive termination) shall terminate or be
terminated prior to the payment for the delivery of the shares of the Class A
Common Stock thereunder or if such agreement is not executed by each party
thereto on or prior to December 31, 1999.
Very truly yours,
*
By:
----------------------------
Name:
Title: