1,800,000 Shares ROCKY BRANDS, INC. COMMON STOCK (WITHOUT PAR VALUE) UNDERWRITING AGREEMENT
Exhibit
1.1
1,800,000
Shares
COMMON
STOCK (WITHOUT PAR VALUE)
May 10,
2010
▇▇▇▇▇▇ ▇.
▇▇▇▇▇ & CO. INCORPORATED
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.
▇▇▇▇▇▇▇▇ & CO.
8 Third
Street North
The
Davidson Building
Great
Falls, Montana 59401
Ladies
and Gentlemen:
Rocky
Brands, Inc., an Ohio corporation (the “Company”), proposes to issue
and sell to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated (“Baird”) and ▇.▇. ▇▇▇▇▇▇▇▇
& Co. (“D.A.
Davidson” and, collectively with Baird, the “Underwriters”) 1,800,000
shares of common stock, (without par value) of the Company (the “Firm Shares”).
The
Company also proposes to issue and sell to the several Underwriters up to an
additional 270,000 shares of common stock (no par value) of the Company (the
“Additional Shares”), if
and to the extent that Baird 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 the
common stock (no par value) of the Company to be outstanding after giving effect
to the sales contemplated hereby are hereinafter referred to as the “Common Stock.”
The
Company has prepared and filed, in accordance with the Securities Act of 1933,
as amended (the “Securities
Act”), and the rules and regulations thereunder, with the Securities and
Exchange Commission (the “Commission”) a registration
statement on Form S-3 (file number 333-165170), including a prospectus, relating
to the Shares, which registration statement and prospectus incorporate or are
deemed to incorporate by reference documents that the Company has filed, or will
file, with the Commission in accordance with the Securities Exchange Act of
1934, as amended (the “Exchange
Act”), and the rules and regulations thereunder. The registration
statement as amended at the time it becomes effective for purposes of Section 11
of the Securities Act (as such section applies to the Underwriters), including
the documents filed as part thereof and information contained or incorporated by
reference in the prospectus or otherwise deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A or Rule 430B under
the Securities Act, is hereinafter referred to as the “Registration
Statement.” If the Company files an abbreviated registration
statement to register additional shares of 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. The
Company has also filed with, or transmitted for filing to, or shall promptly
after the date of this Agreement file with or transmit for filing to, the
Commission a prospectus supplement (in the form first used to confirm sales of
the Shares (or in the form first made available to the Underwriters by the
Company to meet requests of purchasers pursuant to Rule 173 under the Securities
Act), the “Prospectus
Supplement”) pursuant to Rule 424 under the Securities Act. The term
“Base Prospectus” means
the prospectus dated May 6, 2010, relating to the Shares, in the form in which
it has most recently been filed with the Commission as part of the Registration
Statement on or prior to the date of this Agreement. The term “Prospectus” means the Base
Prospectus as supplemented by the Prospectus Supplement. The term “Preliminary Prospectus” means
any preliminary form of Prospectus (including without limitation the preliminary
Prospectus Supplement dated May 10, 2010, filed with the Commission pursuant to
Rule 424).
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For
purposes of this Agreement, “free writing prospectus” has
the meaning set forth in Rule 405 under the Securities Act; “Time of Sale Prospectus” means
the Base Prospectus and the Preliminary Prospectus, together with the free
writing prospectuses, if any, each identified in Schedule II hereto (each, a
“Permitted Free Writing
Prospectus”), and other information conveyed to purchasers of the Shares
at or prior to the Time of Sale as set forth in Schedule II hereto; “Time of Sale” means 10:00 p.m.
(Central Time) on the date of this Agreement; and “road show” has the meaning set
forth in Rule 433(h)(4) under the Securities Act. As used herein, the
terms “Registration Statement,” “Base Prospectus,” “Preliminary Prospectus,”
“Time of Sale Prospectus” and “Prospectus” shall include the documents, if any,
deemed to be incorporated by reference therein, including, unless the context
otherwise requires, the documents, if any, filed as exhibits to such
incorporated documents. The terms “supplement,” “amendment” and
“amend” as used herein with respect to the Registration Statement, the Base
Prospectus, the Time of Sale Prospectus, any Preliminary Prospectus, the
Prospectus or any free writing prospectus shall include all documents
subsequently filed by the Company with the Commission pursuant to the Exchange
Act that are deemed to be incorporated by reference therein.
1. Representations and Warranties of
the Company. The Company represents and warrants to and agrees
with each of the Underwriters on the date hereof, on the Closing Date (as
defined in Section 4) and on each Option Closing Date (as defined in
Section 2), if any, that:
(a) The
Registration Statement has become effective under the Securities Act; no stop
order suspending the effectiveness of the Registration Statement or preventing
or suspending the use of any Preliminary Prospectus or the Prospectus is in
effect, and no proceedings for such purpose are pending before or threatened by
the Commission.
(b) The
Base Prospectus and any 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 rules and regulations
thereunder (including, without limitation, Rule 430B(a) or
430A(b)).
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(c) (i)
Each document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Time of Sale Prospectus or the Prospectus
complied or will comply when so filed in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission thereunder; (ii)
each part of the Registration Statement, when such part became effective, did
not contain and each such part, 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; (iii) the Registration Statement, as of the date hereof, 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 required to
be stated therein or necessary to make the statements therein not misleading;
(iv) the Registration Statement complies and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act; the
conditions to the use of Form S-3 in connection with the offering and sale of
the Shares as contemplated hereby have been satisfied; the Registration
Statement meets, and the offering and sale of the Shares as contemplated hereby
complies with, the requirements of Rule 415 under the Securities Act (including
without limitation Rule 415(a)(5)); (v) at no time during the period that begins
on the earlier of the date of the Preliminary Prospectus and the date on which
the Preliminary Prospectus was filed with the Commission and ends immediately
prior to the execution of this Agreement did any Preliminary Prospectus 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; (vi) the Time of Sale Prospectus
does not, and at the Time of Sale, at the Closing Date (as defined in Section 4)
and, if applicable, each Option Closing Date (as defined in Section 2), the
Time of Sale Prospectus, as then amended or supplemented by the Company, 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; (vii) each
Permitted Free Writing Prospectus does not conflict with the information
contained in the Registration Statement, the Time of Sale Prospectus or the
Prospectus; (viii) each presentation or other information provided at any road
show (the “Road Show
Information”), when considered together with the Time of Sale Prospectus,
does 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; and (ix) the
Prospectus, as of the date it is filed with the Commission pursuant to Rule 424,
at the Closing Date and at each Option Closing Date, if any, will comply in all
material respects with the Securities Act (including without limitation Section
10(a) of the Securities Act) and 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; provided, however, that the representations and warranties set forth
in this Section 1(c) do not apply to statements or omissions in the Registration
Statement, the Time of Sale Prospectus, any Preliminary Prospectus, any
Permitted Free Writing Prospectus, any Road Show Information or the Prospectus
or any amendments or supplements thereto based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
Baird expressly for use therein, it being agreed that the only information
furnished by the Underwriters to the Company expressly for use therein are the
statements contained in the third, fourth and ninth paragraphs of the
“Underwriting” section of the Prospectus Supplement (and preliminary Prospectus
Supplement).
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(d) Prior
to the execution of this Agreement, the Company has not, directly or indirectly,
offered or sold any Shares by means of any “prospectus” (within the meaning of
the Securities Act) or used any “prospectus” (within the meaning of the
Securities Act) in connection with the offer or sale of the Shares, in each case
other than the Preliminary Prospectus and/or the Permitted Free Writing
Prospectuses; the Company has not, directly or indirectly, prepared, used or
referred to any free writing prospectuses, without the prior written consent of
Baird, other than the Permitted Free Writing Prospectuses and Road Show
Information furnished or presented to the Underwriters before first
use. Each Permitted Free Writing Prospectus has been prepared, used
or referred to in compliance with Rules 164 and 433 under the Securities Act;
assuming that such Permitted Free Writing Prospectus is so sent or given after
the Registration Statement was filed with the Commission (and after such
Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under
the Securities Act, filed with the Commission), the sending or giving, by any
Underwriter, of any Permitted Free Writing Prospectus will satisfy the
provisions of Rule 164 and Rule 433 (without reliance on subsections (b), (c)
and (d) of Rule 164); the conditions set forth in one or more of subclauses (i)
through (iv), inclusive, of Rule 433(b)(1) under the Securities Act are
satisfied, and the registration statement relating to the offering of the Shares
contemplated hereby, as initially filed with the Commission, includes a
prospectus that, other than by reason of Rule 433 or Rule 431 under the Act,
satisfies the requirements of Section 10 of the Act; neither the Company nor the
Underwriters are disqualified, by reason of subsection (f) or (g) of Rule 164
under the Act, from using, in connection with the offer and sale of the Shares,
free writing prospectuses pursuant to Rules 164 and 433 under the Act; each
Permitted Free Writing Prospectus that the Company has filed, or is required to
file, pursuant to Rule 433(d) under the Securities Act or that was prepared by
or behalf of or used or referred to by the Company complies or will comply in
all material respects with the requirements of the Securities Act; no Permitted
Free Writing Prospectus conflicts with the information contained in the
Registration Statement, any Preliminary Prospectus, Time of Sale Prospectus or
Prospectus; and, to the Company’s knowledge, no free writing prospectus prepared
by or on behalf of or used by any Underwriter contains any “issuer information”
within the meaning of Rule 433(h)(2) under the Securities Act.
(e) The
Company was, at the time of the Registration Statement was initially filed and
when it became effective, eligible to use Form S-3 to register the offering of
the Shares contemplated hereby. The Company was not an “ineligible
issuer” (as defined in Rule 405 under the Securities Act) as of the eligibility
determination date for purposes of Rules 164 and 433 under the Act with respect
to the offering of the Shares contemplated by the Registration
Statement.
(f) The
Common Stock is listed on the NASDAQ Stock Market (“NASDAQ”), and the Company has
not received any notice from the NASDAQ regarding the delisting of such shares
from the NASDAQ. The Shares are duly listed and admitted and
authorized for trading, subject to official notice of issuance, on the
NASDAQ. To the Company’s knowledge, there are no affiliations or
associations between (i) any member of the Financial Industry Regulatory
Authority (“FINRA”) and
(ii) the Company or any of the Company’s officers, directors or 5% or greater
security holders or any beneficial owner of the Company’s unregistered equity
securities that were acquired at any time on or after the 180th day immediately
preceding the date the Registration Statement was initially filed with the
Commission, except as disclosed in the Registration Statement (excluding the
exhibits thereto), the Time of Sale Prospectus and the Prospectus.
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(g) 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 Time of Sale 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 (i) have a material adverse effect on the assets,
business, condition (financial or otherwise), results of operation or prospects
of Company and its subsidiaries, taken as a whole, (ii) prevent or materially
interfere with consummation of the transactions contemplated hereby,
or (iii) result in the delisting of shares of Common Stock from the
NASDAQ (the occurrence of any such effect, prevention, interference or result
described in the foregoing clauses (i), (ii) or (iii) being herein referred to
as a “material adverse
effect”).
(h) Each
subsidiary of the Company has been duly organized, is validly existing as a
corporation or limited liability company in good standing under the laws of the
jurisdiction of its organization, has the corporate power and authority to own
its property and to conduct its business as described in the Time of Sale
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; all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims, other than liens or encumbrances
granted to secure borrowings under those agreements listed on Exhibit C attached
hereto or other such liens or encumbrances that do not interfere with the
ownership or operations of such subsidiary.
(i) This
Agreement has been duly authorized, executed and delivered by the
Company.
(j) The
authorized and outstanding capitalization of the Company is as set forth in the
Time of Sale Prospectus and will be as set forth in the Prospectus, subject, in
each case, to the issuance of shares of Common Stock upon exercise of stock
options and warrants disclosed as outstanding in the Time of Sale Prospectus and
the Prospectus, as the case may be, and the grant of options under existing
stock option plans described in the Time of Sale Prospectus and the
Prospectus. The authorized capital stock of the Company conforms and
will conform as to legal matters to the description thereof contained in the
Time of Sale Prospectus and the Prospectus.
(k) The
shares of Common Stock outstanding prior to the issuance of the Shares to be
sold by the Company have been duly authorized, are validly issued, fully paid
and non assessable, have been issued in compliance with applicable securities
laws and were not issued in violation of any preemptive or similar
rights.
(l) The
Shares to be sold by the Company 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.
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(m) Neither
the execution and delivery by the Company of, nor the performance by the Company
of its obligations under, this Agreement will conflict with, contravene, result
in a breach or violation of, or imposition of any lien, charge or encumbrance
upon any assets of the Company or any of its subsidiaries pursuant to, or
constitute a default under (i) any statute, law, rule, regulation, judgment,
order or decree of any governmental body, regulatory or administrative agency or
court having jurisdiction over the Company or any subsidiary; (ii) the
certificate of incorporation or bylaws of the Company or any of its
subsidiaries; or (iii) any contract, agreement, obligation, covenant or
instrument to which the Company or any of its subsidiaries (or any of their
respective assets) is subject or bound, other than, in the case of clauses (i)
and (iii) only, such conflicts, breaches or violations that could not reasonably
be expected to have a material adverse effect.
(n) No
approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency, or of or with any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, NASDAQ),
or approval of the Company’s shareholders, is required in connection with the
issuance and sale of the Shares or the consummation of the transactions
contemplated hereby, other than (i) registration of the Shares under the
Securities Act, which has been effected (or, with respect to any Rule 462
Registration Statement, will be effected in accordance Rule 462(b) under the
Securities Act), (ii) any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Shares are being offered by
the Underwriters or (iii) the filing of a notice of listing of additional shares
and related materials with NASDAQ, (iv) under the FINRA rules or (v) any filings
required by the Exchange Act.
(o) There
are no actions, suits, claims, investigations or proceedings pending or, to the
Company’s knowledge, threatened or contemplated to which the Company or any of
its subsidiaries or any of their respective directors or officers is or would be
a party or of which any of their respective properties is or would be subject at
law or in equity, before or by any federal, state, local or foreign governmental
or regulatory commission, board, body, authority or agency, or before or by any
self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, NASDAQ) (i) other than any such action, suit,
claim, investigation or proceeding accurately described in the Time of Sale
Prospectus which, if resolved adversely to the Company or any of its
subsidiaries, would not, individually or in the aggregate, have a material
adverse effect or (ii) that are required to be described in the Time of Sale
Prospectus and are not so described. There are no 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.
(p) 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, required to register as an “investment company” as such term is defined
in the Investment Company Act of 1940, as amended.
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(q) The
financial statements included or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, together with the
related notes and schedules, present fairly the consolidated financial position
of the Company and its subsidiaries as of the dates indicated and the
consolidated results of operations, cash flows and changes in shareholders’
equity of the Company for the periods specified and have been prepared in
compliance with the requirements of the Securities Act and Exchange Act and in
conformity with U.S. generally accepted accounting principles applied on a
consistent basis during the periods involved; all pro forma financial statements
or data included or incorporated by reference in the Registration Statement, the
Time of Sale Prospectus and the Prospectus, if any, comply with the requirements
of the Securities Act and the Exchange Act, and the assumptions used in the
preparation of such pro forma financial statements and data are reasonable, the
pro forma adjustments used therein are appropriate to give effect to the
transactions or circumstances described therein and the pro forma adjustments
have been properly applied to the historical amounts in the compilation of those
statements and data; the other financial and statistical data contained or
incorporated by reference in the Registration Statement, the Time of Sale
Prospectus and the Prospectus are accurately and fairly presented and prepared
on a basis consistent with the financial statements and books and records of the
Company; there are no financial statements (historical or pro forma) that are
required to be included or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus or the Prospectus that are not included
or incorporated by reference as required; the Company and its subsidiaries do
not have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not described in the Time of Sale
Prospectus and the Prospectus; and all disclosures contained or incorporated by
reference in the Time of Sale Prospectus and the Prospectus regarding “non-GAAP
financial measures” (as such term is defined by the rules and regulations of the
Commission) comply with Regulation G under the Exchange Act and Item 10 of
Regulation S-K under the Securities Act, to the extent applicable.
(r) All
statistical or market-related data included or incorporated by reference in the
Time of Sale Prospectus, the Prospectus and the Permitted Free Writing
Prospectuses are based on or derived from sources that the Company reasonably
believes to be reliable and accurate, and the Company has obtained the written
consent to the use of such data from such sources to the extent required. Each
“forward-looking statement” (within the meaning of Section 27A of the Securities
Act or Section 21E of the Exchange Act) contained or incorporated by reference
in the Registration Statement, the Time of Sale Prospectus, the Prospectus and
the Permitted Free Writing Prospectuses has been made or reaffirmed with a
reasonable basis and in good faith.
(s) The
Company and its subsidiaries (i) are 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)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are 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 have a
material adverse effect. 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 have a material adverse effect.
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(t) 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.
(u) Subsequent
to the respective dates as of which information is given in each of the
Registration Statement, the Time of Sale Prospectus and the Prospectus, (i)
there has not occurred any material adverse change, or any development involving
a prospective material adverse change, in the assets, business, condition
(financial or otherwise), management, operations or earnings of the Company and
its subsidiaries, taken as a whole; (ii) the Company and its subsidiaries have
not incurred any material liability or obligation, direct or contingent, nor
entered into any material transaction; (iii) 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 other than ordinary
and customary dividends; and (iv) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its
subsidiaries, except in each case as described in each of the Registration
Statement, the Time of Sale Prospectus and the Prospectus,
respectively.
(v) The
Company and its subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by
them which is material to the business of the Company and its subsidiaries, in
each case free and clear of all liens, encumbrances and defects except such as
are described in the Time of Sale Prospectus or liens or encumbrances granted to
secure borrowings under the agreements listed on Exhibit C attached hereto, 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
its subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the Time of
Sale Prospectus.
(w) Each
of the Company and its subsidiaries owns or possesses all inventions, patent
applications, patents, trademarks (both registered and unregistered), trade
names, service names, copyrights, trade secrets and other proprietary
information described in the Registration Statement, the Time of Sale Prospectus
and the Prospectus as being owned or licensed by it or which is necessary for
the conduct of, or material to, its businesses (collectively, the “Intellectual Property”), and
the Company is unaware of any claim to the contrary or any challenge by any
other person to the rights of the Company or any of its subsidiaries with
respect to the Intellectual Property that has had or could reasonably be
expected to have, individually or in the aggregate, a material adverse
effect. Neither the Company nor any of its subsidiaries has infringed
or is infringing in any material respect the intellectual property of a third
party, and neither the Company nor any of its subsidiaries has received notice
of a claim by a third party to the contrary.
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(x) No
material labor dispute with the employees of the Company or any of its
subsidiaries exists, except as described in the Time of Sale Prospectus, 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 and its subsidiaries, taken as a
whole. Neither the Company nor any of its subsidiaries is in
violation of any provision of the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations promulgated thereunder, except
for such violations as would not have a material adverse effect.
(y) The
Company and each of its subsidiaries are insured by 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; neither
the Company nor any of its subsidiaries has been refused any insurance coverage
sought or applied for; and neither the Company nor any of its subsidiaries 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.
(z) The
Company and its subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse
effect.
(aa) Except
as otherwise would not have a material adverse effect, no subsidiary of the
Company is subject to any material direct or indirect prohibition on paying any
dividends to the Company, on making any other distribution on such subsidiary’s
capital stock, on repaying to the Company any loans or advances to such
subsidiary from the Company or on transferring any of such subsidiary’s property
or assets to the Company or any other subsidiary of the Company, except as
described in the Time of Sale Prospectus.
(bb) The
Company maintains “internal control over financial reporting” (as defined in
Rules 13a-15 and 15d-15 under the Exchange Act) in compliance with the
requirements of the Exchange Act. The Company’s internal control over
financial reporting has been designed by the Company’s principal executive
officer and principal financial officer, or under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and is effective in performing the
functions for which it was established. Except as described in the
Time of Sale Prospectus, since the end of the Company’s most recent audited
fiscal year, there has been (i) no significant deficiency or material weakness
in the design or operation of the Company’s internal control over financial
reporting (whether or not remediated) which is reasonably likely to adversely
affect the Company’s ability to record, process, summarize and report financial
information, and (ii) no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting.
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(cc) The
Company maintains “disclosure controls and procedures” (as such term is defined
in Rules 13a-15 and 15d-15 under the Exchange Act); such disclosure controls and
procedures are designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the Company’s
Chief Executive Officer and Chief Financial Officer by others within those
entities, and such disclosure controls and procedures are effective in
performing the functions for which they were established; the principal
executive officers (or their equivalents) and principal financial officers (or
their equivalents) of the Company have made all certifications required by the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and any related rules and regulations promulgated by
the Commission (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”), and the
statements made in each such certification are accurate; the Company, its
subsidiaries and its directors and officers are each in compliance in all
material respects with the applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act.
(dd) Except
as disclosed in the Time of Sale Prospectus and the Prospectus, neither the
Company nor any of its subsidiaries has sent or received any communication
regarding termination of, or intent not to renew, any of the contracts or
agreements referred to or described in the Time of Sale Prospectus or the
Prospectus, or referred to or described in, or filed as an exhibit to, the
Registration Statement, and no such termination or non-renewal has been
threatened by the Company or any of its subsidiaries or, to the Company’s
knowledge, any other party to any such contract or agreement.
(ee) All
tax returns required to be filed by the Company or any of its subsidiaries have
been timely filed, and all taxes and other assessments of a similar nature
(whether imposed directly or through withholding) including any interest,
additions to tax or penalties applicable thereto due or claimed to be due from
such entities have been timely paid, other than those being contested in good
faith and for which adequate reserves have been provided.
(ff) Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is aware of or has taken any action, directly or indirectly, that
would result in a violation by such persons of the Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder; and the Company
and its subsidiaries have instituted and maintain policies and procedures
designed to ensure continued compliance therewith, including without limitation
a system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management’s
general or specific authorization, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(gg) Except
as described in the Time of Sale Prospectus, the Company has not sold, issued or
distributed any shares of 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 Securities 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.
-10-
(hh) Neither
the Company nor any of its subsidiaries nor any of their respective directors,
officers, affiliates or controlling persons has taken, directly or indirectly,
any action designed, or which has constituted or might 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
Shares.
2. Agreements to Sell and
Purchase. The Company hereby agrees to issue and sell
1,800,000 Shares to the several Underwriters at a price of $7.896 per share (the
“Purchase Price”), and
each Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions herein set forth, agrees, severally and
not jointly, to purchase from the Company at the Purchase Price the number of
Firm Shares (subject to such adjustments to eliminate fractional shares as ▇▇▇▇▇
may determine) set forth opposite the name of such Underwriter set forth in
Schedule I hereto.
Moreover,
the Company hereby agrees to issue and sell up to 270,000 Additional Shares to
the Underwriters at the Purchase Price, and the Underwriters, upon the basis of
the representations and warranties contained herein, but subject to the terms
and conditions herein set forth, shall have the right (but not the obligation)
to purchase, severally and not jointly, up to the Additional Shares at the
Purchase Price. ▇▇▇▇▇ may exercise this right on behalf of the
Underwriters in whole or from time to time in part by giving written notice not
later than 30 days after the date of this Agreement. Any exercise
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. Each purchase date must be at least one business day after
the written notice is given and may not be earlier than the closing date for the
Firm Shares or later than ten business days after the date of such
notice. Additional Shares may be purchased as provided in Section 4
hereof solely for the purpose of covering over allotments made in connection
with the offering of the Firm Shares. On each day, if any, that
Additional Shares are to be purchased (an “Option Closing Date”), each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
▇▇▇▇▇ may determine) that bears the same proportion to the total number of
Additional Shares to be purchased on such Option Closing Date as the number of
Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter
bears to the total number of Firm Shares.
3. Terms of Public
Offering. The Company is advised by the Underwriters that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after this Agreement have become effective as in the
Underwriters’ judgment is advisable. The Company is further advised
by the Underwriters that the Shares are to be offered to the public initially at
$8.40 per share (the “Public
Offering Price”) and to certain dealers selected by ▇▇▇▇▇ at a price that
represents a concession not in excess of $0.3024 per share under the Public
Offering Price, and that any Underwriter may allow, and such dealers may reallow
a concession, not in excess of $0.10 per share, to any Underwriter or to certain
other dealers.
-11-
4. Payment and
Delivery. Payment for the Firm Shares to be sold by the
Company shall be made to the Company in Federal or other funds immediately
available in Milwaukee, Wisconsin against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., Central Time, on
May 14, 2010, or at such other time on the same or such other date, not later
than May 14, 2010, as shall be designated in writing by ▇▇▇▇▇. The
time and date of such payment are hereinafter referred to as the “Closing Date.”
Payment
for any Additional Shares shall be made to the Company in Federal or other funds
immediately available in Milwaukee, Wisconsin against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., Central Time, on the date specified in the corresponding notice
described in Section 2 or at such other time on the same or on such other date,
in any event not later than June 23, 2010, as shall be designated in writing by
▇▇▇▇▇.
The Firm
Shares and Additional Shares shall be registered in such names and in such
denominations as the Underwriters shall request in writing not later than one
full business day prior to the Closing Date or the applicable Option Closing
Date, as the case may be. The Firm Shares and Additional Shares shall
be delivered to the Underwriters on the Closing Date or an Option Closing Date,
as the case may be, 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.
5. Conditions to the Underwriters’
Obligations. The several obligations of the Underwriters are
subject to the condition that all representations and warranties on the part of
the Company contained in this Agreement are, on the date hereof, on the Closing
Date and on each Option Closing Date, if any, true and correct, the condition
that the Company has performed its obligations required to be performed prior to
the Closing Date and the following further conditions:
(a) Subsequent
to the execution and delivery of this Agreement and prior to the Closing Date
and each Option Closing Date, if any:
(i) 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 securities of the Company or any of its subsidiaries by any
“nationally recognized statistical rating organization,” as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there
shall not have occurred any change, or any development involving a prospective
change, in the assets, business, condition (financial or otherwise), management,
operations, earnings or prospects of the Company and its subsidiaries, taken as
a whole, from that set forth in the Time of Sale Prospectus that, in ▇▇▇▇▇’▇
judgment, is material and adverse and that makes it, in ▇▇▇▇▇’▇ judgment,
impracticable or inadvisable to offer or sell the Shares on the terms and in the
manner contemplated in the Time of Sale Prospectus.
-12-
(b) The
Underwriters shall have received on the Closing Date and each Option Closing
Date, if any, a certificate, dated the Closing Date or such Option Closing Date,
as the case may be, and signed by the Chief Executive Officer and Chief
Financial Officer of the Company, to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as of
the Closing Date or such Option Closing Date, as the case may be, 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 or such Option Closing Date, as the case may be, and as to such
other matters as ▇▇▇▇▇ may reasonably request. The delivery of the
certificate provided for in this Section 5(b) shall constitute a representation
and warranty of the Company as to the statements made in such
certificate.
(c) The
Underwriters shall have received on the Closing Date and each Option Closing
Date, if any, an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, outside
counsel for the Company, dated the Closing Date or such Option Closing Date, as
the case may be, in form and substance reasonably satisfactory to counsel for
the Underwriters to the effect set forth in Exhibit A hereto. In
rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, may rely as to
matters of fact (but not as to legal conclusions), to the extent they deem
proper, on certificates of responsible officers of the Company and its
subsidiaries and of public officials. The opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
(d) The
Underwriters shall have received on the Closing Date and each Option Closing
Date, if any, an opinion of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC, counsel for the Underwriters,
dated the Closing Date or such Option Closing Date, as the case may be, in form
and substance satisfactory to the Underwriters. In rendering such opinion,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC, may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Company and its subsidiaries and of public
officials.
(e) The
Underwriters shall have received, on each of the date hereof, the Closing Date
and each Option Closing Date, if any, a letter dated the date hereof, the
Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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, the Time of Sale Prospectus and the Prospectus; provided that the letter
delivered on the Closing Date shall use a “cut-off date” not earlier than the
date hereof.
(f) No
stop order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any Preliminary Prospectus, the Time of Sale
Prospectus or the Prospectus shall have been issued, and no proceedings for such
purpose shall have been instituted or threatened by the Commission; no notice of
objection of the Commission to the use of the Registration Statement shall have
been received; and all requests for additional information on the part of the
Commission shall have been complied with to the Underwriters’
satisfaction.
(g) The
“lock-up” agreements, each substantially in the form of Exhibit B hereto,
between the Underwriters and certain shareholders, officers and directors of the
Company relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to the Underwriters on or before
the date hereof, shall be in full force and effect on the Closing
Date.
-13-
(h) The
Shares shall have been approved for listing on NASDAQ.
(i) FINRA
shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions,
contemplated hereby.
The
several obligations of the Underwriters to purchase Additional Shares hereunder
are subject to the delivery to the Underwriters on the applicable Option Closing
Date of such documents as the Underwriters may reasonably request, including
certificates of officers of the Company, legal opinions and an accountants’
comfort letter, and other matters related to the issuance of such Additional
Shares.
6. Covenants of the
Company. The Company covenants with each Underwriter as
follows:
(a) To
furnish to ▇▇▇▇▇, without charge, two 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 the Underwriters, without charge, prior to 10:00 a.m.
Central Time on the business day next succeeding the date of this Agreement and
during the period mentioned in Section 6(f) or 6(g) below, as many copies of the
Time of Sale Prospectus, the Prospectus and any supplements and amendments
thereto or to the Registration Statement as the Underwriters may reasonably
request.
(b) Before
amending or supplementing the Registration Statement, the Time of Sale
Prospectus or the Prospectus, to furnish to ▇▇▇▇▇ a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which ▇▇▇▇▇ objects, 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) To
furnish to the Underwriters a copy of each proposed free writing prospectus to
be prepared by or on behalf of, used by, or referred to by the Company and not
to use or refer to any proposed free writing prospectus to which ▇▇▇▇▇
objects.
(d) Not
to take any action that would result in an Underwriter or the Company being
required to file with the Commission pursuant to Rule 433(d) under the
Securities Act a free writing prospectus prepared by or on behalf of the
Underwriter that the Underwriter otherwise would not have been required to file
thereunder.
(e) To
advise ▇▇▇▇▇ promptly of any request by the Commission for amendments or
supplements to the Registration Statement, Base Prospectus, any Preliminary
Prospectus, Prospectus Supplement or Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for, or the
entry of a stop order, suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary Prospectus, the
Time of Sale Prospectus or the Prospectus; and if the Commission should enter
such a stop order, to use its best efforts to obtain the lifting or removal of
such order as soon as possible.
-14-
(f) If
the Time of Sale Prospectus is being used to solicit offers to buy the Shares at
a time when the Prospectus is not yet available to prospective purchasers and
any event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Time of Sale Prospectus in order to make the statements
therein, in the light of the circumstances, not misleading, or if any event
shall occur or condition exist as a result of which the Time of Sale Prospectus
conflicts with the information contained in the Registration Statement then on
file, or if, in the opinion of counsel for the Underwriters, it is necessary to
amend or supplement the Time of Sale Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own expense,
to the Underwriters and to any dealer upon request, either amendments or
supplements to the Time of Sale Prospectus so that the statements in the Time of
Sale Prospectus as so amended or supplemented will not, in the light of the
circumstances when delivered to a prospective purchaser, be misleading or so
that the Time of Sale Prospectus, as amended or supplemented, will no longer
conflict with the Registration Statement, or so that the Time of Sale
Prospectus, as amended or supplemented, will comply with applicable
law.
(g) 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 Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) under the Securities Act) is
required by law to be delivered in connection with sales by an Underwriter or
dealer, 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 (or in lieu
thereof the notice referred to in Rule 173(a) under the Securities Act) 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 ▇▇▇▇▇ will furnish to the Company) to which Shares may have been
sold by ▇▇▇▇▇ 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 (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act) is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with applicable law.
(h) If,
at the time this Agreement is executed and delivered, it is necessary or
appropriate for a post-effective amendment to the Registration Statement, or a
Registration Statement under Rule 462(b) under the Securities Act, to be filed
with the Commission and become effective before the Shares may be sold, the
Company will use its best efforts to cause such post-effective amendment or such
Registration Statement to be filed and become effective, and will pay any
applicable fees in accordance with the Securities Act, as soon as possible; and
the Company will advise ▇▇▇▇▇ promptly and, if requested by ▇▇▇▇▇, will confirm
such advice in writing, (i) when such post-effective amendment or such
Registration Statement has become effective, and (ii) if Rule 430A under the
Securities Act is used, when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Securities Act (which the Company agrees to
file in a timely manner in accordance with such Rules).
-15-
(i) If,
at any time during the period when a prospectus is required by the Securities
Act to be delivered (whether physically or through compliance with Rule 172
under the Securities Act or any similar rule) in connection with any sale of
Shares, the Registration Statement shall cease to comply with the requirements
of the Securities Act with respect to eligibility for the use of the form on
which the Registration Statement was filed with the Commission to (i) promptly
notify ▇▇▇▇▇, (ii) promptly file with the Commission a new registration
statement under the Act, relating to the Shares, or a post-effective amendment
to the Registration Statement, which new registration statement or
post-effective amendment shall comply with the requirements of the Securities
Act and shall be in a form satisfactory to ▇▇▇▇▇, (iii) use its best efforts to
cause such new registration statement or post-effective amendment to become
effective under the Securities Act as soon as practicable, (iv) promptly notify
the Underwriters of such effectiveness and (v) take all other action necessary
or appropriate to permit the public offering and sale of the Shares to continue
as contemplated in the Prospectus; all references herein to the Registration
Statement shall be deemed to include each such new registration statement or
post-effective amendment, if any;
(j) If
the third anniversary of the initial effective date of the Registration
Statement occurs before all the Shares have been sold by the Underwriters, prior
to the third anniversary to file a new shelf registration statement and to take
any other action necessary to permit the public offering of the Shares to
continue without interruption; references herein to the Registration Statement
shall include the new registration statement declared effective by the
Commission.
(k) To
file within the time period required by the Commission all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus (or, in lieu thereof, the notice referred to in Rule
173(a) under the Securities Act) is required in connection with the offering or
sale of the Shares.
(l) Promptly
to furnish such information or to take such action as ▇▇▇▇▇ may reasonably
request and otherwise to qualify the Shares for offer and sale under the
securities or “blue sky” laws of such jurisdictions as ▇▇▇▇▇ shall reasonably
request, and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares; provided, however, that the Company
shall not be required to qualify as a foreign corporation or to file a consent
to service of process in any jurisdiction (excluding service of process with
respect to the offer and sale of the Shares); and to promptly advise the
Underwriters of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Shares for offer or sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(m) To
make generally available to the Company’s security holders and to ▇▇▇▇▇ as soon
as practicable an earning statement covering a period of at least twelve months
beginning after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Securities Act), which shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder.
-16-
(n) To
use its best efforts to cause the Shares to be listed on NASDAQ and to maintain
the listing of the Common Stock, including the Shares, on NASDAQ.
(o) During
the period beginning on the date of the Underwriting Agreement and continuing to
and including 90 days after the date of the Prospectus, and without the prior
written consent of ▇▇▇▇▇ with the authorization to release the lock-up letter on
behalf of the Underwriters, not to (i) to issue, 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 Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, (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 such transaction described in clause (i)
or (ii) above is to be settled by delivery of the Common Stock or such other
securities, in cash or otherwise, (3) file any registration statement with the
Commission relating to the offering of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or
(4) publicly announce an intention to effect any transaction specified in clause
(1), (2) or (3). The restrictions contained in the preceding sentence
shall not apply to (i) the Shares to be sold hereunder, (ii) the grant of
options to purchase shares of Common Stock pursuant to the Company’s stock
option plans under the terms of such plans in effect on the date hereof,
provided such options are granted at fair market value and in amounts and with
exercise terms consistent with the Company’s past practice, or the sale of
shares of Common Stock to employees pursuant to the Company’s employee stock
purchase plans (or the filing of a registration statement on Form S-8 to
register shares of Common Stock issuable under such plans, or (iii) the issuance
by the Company of shares of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date of the
Underwriting Agreement of which ▇▇▇▇▇ has been advised in writing.
Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day
restricted period the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration of
the 90-day restricted period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
90-day period, the restrictions imposed by this agreement shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material
event. The Company shall promptly notify ▇▇▇▇▇ of any earnings
release, news or event that may give rise to an extension of the initial 90-day
restricted period.
(p) To
prepare, if ▇▇▇▇▇ so requests, a final term sheet relating to the offering of
the Shares, containing only information that describes the final terms of the
Shares or the offering in a form consented to by ▇▇▇▇▇, and to file such final
term sheet within the period required by Rule 433(d)(5)(ii) under the Securities
Act following the date the final terms have been established for the offering of
the Shares.
(q) To
comply with Rule 433(d) under the Securities Act (without reliance on Rule
164(b) under the Act) and with Rule 433(g) under the Securities
Act.
-17-
(r) Not
to take, directly or indirectly, any action designed, or which will constitute,
or has constituted, or might 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 Shares.
(s) Not,
at any time at or after the execution of this Agreement, to offer or sell any
Shares by means of any “prospectus” (within the meaning of the Securities Act)
or use any “prospectus” (within the meaning of the Securities Act) in connection
with the offer or sale of the Shares, except in each case other than the
Prospectus.
(t) To
maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock.
(u) To
apply the net proceeds to the Company from the sale of the Shares in the manner
set forth under the caption “Use of Proceeds” in the Prospectus
Supplement.
7. 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 its 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 Time of Sale Prospectus, the Prospectus, any free writing
prospectus prepared by or on behalf of, used by, or referred to by the Company
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 securities or blue sky memorandum in
connection with the offer and sale of the Shares under the securities laws of
the jurisdictions in which the Shares may be offered or sold and all expenses in
connection with the qualification of the Shares for offer and sale under such
securities laws as provided in Section 6(l) 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 FINRA, (v) all costs
and expenses incident to listing the Shares for quotation on NASDAQ, (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 preparation or
dissemination of any road show, expenses associated with the production of road
show slides and graphics, fees and expenses of 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) the document production charges and expenses
associated with printing this Agreement, (x) 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, 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.
-18-
The
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel (including but not limited to any travel and
lodging expenses of the Underwriter’s representatives in connection with any
road show), stock transfer taxes payable on resale of any of the Shares by them
and any advertising expenses connected with any offers they may
make. Notwithstanding the above, if the sale of the Shares provided
for herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 5 is not satisfied, because of any termination
of this Agreement by the Underwriters pursuant to Section 9 hereof or because of
any refusal, inability or failure on the part of the Company to perform any
obligation or covenant hereunder or comply with any provision hereof other than
by reason of a default by any of the Underwriters, the Company will reimburse
the Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering contemplated
hereby.
8. Indemnity and
Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter, 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, and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities 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, arising out of or based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, or 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, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Time of Sale Prospectus, any issuer
free writing prospectus as defined in Rule 433(h) under the Securities Act, any
issuer information that the Company has filed, or is required to file, pursuant
to Rule 433(d) of the Securities Act, any road show not constituting a free
writing prospectus, or the Prospectus or any amendment or supplement thereto, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which there were made, not misleading; provided, however, that
the Company shall not be liable under this Section 8(a) to the extent that such
losses, claims, damages or liabilities are caused by, arise out of or are based
upon any such untrue statement or omission or alleged untrue statement or
omission made therein in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through Baird expressly for use therein.
-19-
(b) 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 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, arising from or based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof or 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, or (ii) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule
433(h) under the Securities Act, any Company information that the Company has
filed, or is required to file, pursuant to Rule 433(d) of the Securities Act,
any road show not constituting a free writing prospectus, or the Prospectus or
any amendment or supplement thereto, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which there were made,
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or omission or alleged untrue statement or omission was made
therein in reliance upon and in conformity with information relating to such
Underwriter furnished to the Company in writing by such Underwriter through
Baird expressly for use therein.
(c) In
case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b) 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 or who are affiliates of any Underwriter within
the meaning of Rule 405 under the Securities 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 and affiliates of any Underwriters, such firm shall be
designated in writing by Baird. 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 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 and (ii) 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.
-20-
(d) To
the extent the indemnification provided for in 8(a) or 8(b) 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 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 Public Offering Price of the
Shares. 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 8 are several in proportion to the
respective number of Shares they have purchased hereunder, and not
joint.
(e) The
Company and the Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in Section 8(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in Section 8(d) 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 8, 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 8 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.
-21-
(f) The
indemnity and contribution provisions contained in this Section 8 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, any
person controlling any Underwriter or any affiliate of any Underwriter, or the
Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares.
9. Termination. The
Underwriters may terminate this Agreement by notice given by Baird to the
Company, if after the execution and delivery of this Agreement and prior to the
Closing Date (a) trading generally shall have been suspended or materially
limited or minimum prices shall have been established on, or by, as the case may
be, any of the New York Stock Exchange, the American Stock Exchange, or the
NASDAQ Global Market, (b) trading of any securities of the Company shall have
been suspended or materially limited on any exchange or in any over-the-counter
market, (c) a material disruption in securities settlement, payment or clearance
services in the United States shall have occurred, (d) any moratorium or
material limitation on commercial banking activities shall have been declared by
Federal, Illinois/Wisconsin or New York state authorities, (e) there
shall have occurred any outbreak or escalation of hostilities, act of terrorism
involving the United States or declaration by the United States of a national
emergency or war, or (f) any other calamity or crisis or any change in
financial, political or economic conditions in the United States or elsewhere,
if the effect of any such event specified in clause (e) or (f), in ▇▇▇▇▇’▇
judgment, is material and adverse and makes it, in ▇▇▇▇▇’▇ judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Shares on the terms and in the manner contemplated in the Time of Sale
Prospectus or the Prospectus (exclusive of any supplement thereto).
10. Effectiveness; Defaulting
Underwriters. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
-22-
If, on
the Closing Date or an 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 I 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 Baird 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 on such date, and arrangements
satisfactory to Baird 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 Baird or the Company shall have the
right to postpone the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the Registration Statement, in
the Time of Sale Prospectus, in the Prospectus or in any other documents or
arrangements may be effected. If, on an 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 on such Option Closing Date, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase the
Additional Shares to be sold on such Option Closing Date 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.
11. Representations and Indemnities to
Survive. The respective agreements, representations,
warranties, indemnities and other statements of the Company and the Underwriters
set forth or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of the officers, directors, employees, agents or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Shares. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this
Agreement.
12. Entire
Agreement. (a) This Agreement, together with any
contemporaneous written agreements and any prior written agreements (to the
extent not superseded by this Agreement) that relate to the offering of the
Shares, represents the entire agreement between the Company, on the one hand,
and the Underwriters, on the other, with respect to the preparation of any
Preliminary Prospectus, the Time of Sale Prospectus, the Prospectus, the conduct
of the offering, and the purchase and sale of the Shares.
(b) The
Company acknowledges that in connection with the offering of the
Shares: (i) the Underwriters have acted at arm’s length, are not
agents of, and owe no fiduciary duties to, the Company or any other person; (ii)
the Underwriters owe the Company only those duties and obligations set forth in
this Agreement and prior written agreements (to the extent not superseded by
this Agreement), if any; and (iii) the Underwriters may have interests that
differ from those of the Company. The Company waives to the full
extent permitted by applicable law any claims it may have against the
Underwriters arising from an alleged breach of fiduciary duty in connection with
the offering of the Shares.
-23-
13. Counterparts. This
Agreement may be signed by facsimile signature and in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
14. Applicable
Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
15. Headings. The
headings of the sections of this Agreement have been inserted for convenience of
reference only and shall not be deemed a part of this Agreement.
16. Notices. All
communications hereunder shall be in writing and effective only upon receipt and
if to the Underwriters shall be delivered, mailed or sent to (i) Baird at ▇▇▇▇▇▇
▇. ▇▇▇▇▇ & Co. Incorporated, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, with a copy to
the Legal Department, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated,
Fax: (▇▇▇) ▇▇▇-▇▇▇▇, and (ii) D.A. Davidson at ▇.▇. ▇▇▇▇▇▇▇▇ &
Co., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇ North, The Davidson Building, Great Falls, Montana 59401
Attention: ▇▇▇▇▇ ▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇, and if to the Company shall be
delivered, mailed or sent to ▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Fax: (▇▇▇)
▇▇▇-▇▇▇▇.
|
Very
truly yours,
|
||
|
By:
|
/s/ ▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name: ▇▇▇▇
▇▇▇▇▇▇
|
||
|
Title: Chief
Executive Officer
|
||
-24-
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇ & CO. INCORPORATED
|
|
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
|
Name: ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
|
|
Title: Director
|
|
|
▇.▇.
▇▇▇▇▇▇▇▇ & CO.
|
|
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
|
|
Name: ▇▇▇▇▇
▇. ▇▇▇▇
|
|
|
Title: Managing
Director
|
|
-25-
SCHEDULE
I
|
Underwriter
|
Number of Firm
Shares To Be
Purchased
|
Number of
Additional Shares
To Be Purchased
|
||||||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇ & Co. Incorporated
|
1,440,000 | 216,000 | ||||||
|
▇.▇.
▇▇▇▇▇▇▇▇ & Co.
|
360,000 | 54,000 | ||||||
|
Total:
|
1,800,000 | 270,000 | ||||||
S-1
SCHEDULE
II
TIME
OF SALE PROSPECTUS
|
1.
|
Preliminary
Prospectus, including Preliminary Prospectus Supplement dated
May 10, 2010 and Base Prospectus dated May 6,
2010
|
|
2.
|
Number
of Shares to be
Sold: 1,800,000
|
Offering
size (assuming no exercise of overallotment option): $15,120,000
Estimated
net proceeds to the Company (after underwriting discounts and commissions and
offering expenses) (assuming no exercise of overallotment option):
$14,112,800
Public
offering price per share: $8.40
Underwriting
discount and commissions per share: $0.504
Trade
date: May 11, 2010
Closing
date: May 14, 2010
S-2
EXHIBIT
A
FORM
OF OPINION OF COMPANY’S COUNSEL
TO
BE DELIVERED PURSUANT TO SECTION 5(c)
1. The
Company has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation and has the
corporate power and authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and is duly qualified to transaction
business and is in good standing in the jurisdictions specified in such
opinion;
2. Each
subsidiary of the Company, other than those that are organized under the laws of
a foreign country (the “Domestic Entities”) has been duly organized, is validly
existing as a corporation or limited liability company in good standing under
the laws of the jurisdiction of its organization, has the corporate power and
authority to own its property and to conduct its business as described in the
Time of Sale Prospectus and is duly qualified to transaction business and is in
good standing in the jurisdictions specified in such opinion;
3. The
Company has an authorized capitalization as set forth in the Time of Sale
Prospectus and the Prospectus, and the authorized capital stock of the Company
conforms as to legal matters to the description thereof contained in each of the
Time of Sale Prospectus and the Prospectus;
4. The
shares of Common Stock outstanding prior to the issuance of the Shares to be
sold by the Company have been duly authorized and are validly issued, fully paid
and non assessable;
5. The
Shares to be sold by the Company 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 pursuant to Ohio law, the
Company’s articles of incorporation or code of regulations, or any agreements or
instruments filed as an exhibit to the Registration Statement;
6. This
Agreement has been duly authorized, executed and delivered by the
Company;
7. Neither
the execution and delivery by the Company of, nor the performance by the Company
of its obligations under, this Agreement will conflict with, contravene, result
in a breach or violation of, or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries, or
constitute a default under (i) any statute, law, rule, regulation, judgment,
order or decree of any governmental body, regulatory or administrative agency or
court having jurisdiction over the Company or any subsidiary; (ii) the articles
of incorporation or certificate of formation, as applicable, code of regulations
or operating agreement, as applicable, of the Company or any of the Domestic
Entities; or, to the best of such counsel’s knowledge, (iii) any contract,
agreement, obligation, covenant or instrument to which the Company or any of its
subsidiaries (or any of their respective assets) is subject or bound and which
is filed as an exhibit to the Registration Statement; 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 jurisdictions in connection with the offer and sale of the
Shares;
8. No
approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency, or of or with any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, NASDAQ),
or approval of the shareholders of the Company, is required in connection with
the issuance and sale of the Shares or the consummation of the transactions
contemplated hereby, other than (i) registration of the Shares under the
Securities Act, which has been effected (or, with respect to any Rule 462
Registration Statement, will be effected in accordance Rule 462(b) under the
Securities Act), (ii) any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Shares are being offered by
the Underwriters, or (iii) under the NASD Conduct Rules;
9. The
statements relating to legal matters, documents or proceedings included in (A)
the Base Prospectus under “Description of Capital Stock,” “Plan of
Distribution,” and “Description of Capital Stock”, and (B) the Registration
Statement in Items 14 and 15, in each case fairly and accurately summarize in
all material respects such matters, documents or proceedings;
10. After
due inquiry, such counsel does not know of any 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;
11. 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, required to register as an “investment company” as such term is defined
in the Investment Company Act of 1940, as amended; and
12. (A)
in the opinion of such counsel (1) each document filed pursuant to the Exchange
Act and incorporated by reference in the Registration Statement, the Time of
Sale Prospectus and the Prospectus (except for the financial statements and
financial schedules and other financial and statistical data included therein,
as to which such counsel need not express any opinion) appeared on its face to
be appropriately responsive as of its filing date in all material respects to
the requirements of the Exchange Act and the applicable rules and regulations of
the Commission thereunder and (2) the Registration Statement, the Time of Sale
Prospectus and the Prospectus (except for the financial statements and financial
schedules and other financial and statistical data included therein, as to which
such counsel need not express any belief) appear on their face to be
appropriately responsive in all material respects to the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder, and (B) nothing has come to the attention of such counsel that
causes such counsel to believe that (1) the Registration Statement or the
prospectus included therein (except for the financial statements and financial
schedules and other financial and statistical data included therein, as to which
such counsel need not express any belief) at the time the Registration Statement
became effective for purposes of Section 11 of the Securities Act (as such
section relates to the Underwriters) 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, (2) the Time of Sale
Prospectus (except for the financial statements and financial schedules and
other financial and statistical data included therein, as to which such counsel
need not express any belief) as of the Time of Sale or, as amended or
supplemented, if applicable, as of the Closing Date contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (3) the Prospectus
(except for the financial statements and financial schedules and other financial
and statistical data included therein, as to which such counsel need not express
any belief) as of its date or, as amended or supplemented, if applicable, as of
the Closing Date contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
A-2
EXHIBIT
B
[FORM
OF LOCK-UP LETTER TO BE SIGNED BY OFFICERS AND DIRECTORS]
May 10,
2010
▇▇▇▇▇▇ ▇.
▇▇▇▇▇ & CO. INCORPORATED
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.
▇▇▇▇▇▇▇▇ & CO.
8 Third
Street North
The
Davidson Building
Great
Falls, Montana 59401
Ladies
and Gentlemen:
The
undersigned understands that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated (“Baird”) and ▇.▇. ▇▇▇▇▇▇▇▇
& Co. (individually, an “Underwriter” and collectively,
with Baird, the “Underwriters”), propose to
enter into an Underwriting Agreement (the “Underwriting Agreement”) with
Rocky Brands, Inc., an Ohio corporation (the “Company”), providing for the
public offering (the “Public
Offering”) by the Underwriters, of 1,800,000 shares (the “Shares”) of the common stock,
without par value, of the Company (the “Common Stock”).
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 Baird on behalf of the Underwriters,
it will not, during the period commencing on the date hereof and ending 90 days
after the date of the final prospectus relating to the Public Offering (the
“Restricted Period”),
(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 Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, (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 Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise, (3) file any registration
statement with the Commission relating to the offering of any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or (4) publicly announce an intention to effect any transaction
specified in clause (1), (2) or (3). The foregoing sentence shall not
apply to (a) transactions relating to shares of Common Stock or other securities
acquired in open market transactions after the completion of the Public
Offering, (b) transfers of shares of Common Stock or any security convertible
into Common Stock as a bona fide gift, (c) transfers by will or intestate
succession to the undersigned’s family or to a trust, the beneficiaries of which
are exclusively the undersigned or members of the undersigned’s family, (d)
distributions of shares of Common Stock or any security convertible into Common
Stock to limited partners or stockholders of the undersigned, (e) sales of
shares of Common Stock pursuant to trading plans that existed prior to May 6,
2010, and that comply with the requirements of Rule 10b5-1 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or (f) the
establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act
for the sale of shares of Common Stock, provided that such plan does not provide
for the transfer of shares of Common Stock during the Restricted Period; provided that in the case of
any transfer or distribution pursuant to clause (b), (c) or (d), (i) each donee
or distributee shall sign and deliver a lock up letter substantially in the form
of this letter and (ii) no filing under Section 16(a) of the Exchange Act,
reporting a reduction in beneficial ownership of shares of Common Stock, shall
be required or shall be voluntarily made during the restricted period referred
to in the foregoing sentence. In addition, the undersigned agrees
that, without the prior written consent of Baird on behalf of the Underwriters,
it will not, during the Restricted Period, make any demand for or exercise any
right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common
Stock. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company’s transfer agent and registrar against
the transfer of the undersigned’s shares of Common Stock except in compliance
with the foregoing restrictions.
If:
(1) during
the last 17 days of the Restricted Period the Company issues an earnings release
or material news or a material event relating to the Company occurs;
or
(2) prior
to the expiration of the Restricted Period, the Company announces that it will
release earnings results during the 16 day period beginning on the last day of
the restricted period;
then the
restrictions imposed by this agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event.
The
undersigned shall not engage in any transaction that may be restricted by this
agreement during the 34-day period beginning on the last day of the Restricted
Period unless the undersigned requests and receives prior written confirmation
from the Company or Baird that the restrictions imposed by this agreement have
expired.
The
undersigned understands that the Company and the Underwriters are relying upon
this agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this agreement is
irrevocable and shall be binding upon the undersigned’s heirs, legal
representatives, successors and assigns.
The
undersigned understands that, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Shares to be sold thereunder, the undersigned shall be
released from all obligations under this agreement.
B-2
Whether
or not the Public Offering actually occurs depends on a number of factors,
including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
[signature page immediately
follows]
B-3
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Very
truly yours,
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(Name)
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(Address)
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B-4
EXHIBIT
C
AGREEMENTS
CREATING LIENS AGAINST CAPITAL STOCK
OF
COMPANY SUBSIDIARIES
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1.
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Amended
and Restated Loan and Security Agreement, dated as of May 25, 2007, by and
among Rocky Brands, Inc., Lifestyle Footwear, Inc., Rocky Brands Wholesale
LLC, and Rocky Brands Retail LLC, as Borrowers, the financial institutions
party thereto (each a “Lender” and collectively, the “Lenders”), and GMAC
Commercial Finance LLC, as administrative agent and sole lead arranger for
the Lenders, as amended by Amendment No. 2 to the Amended and Restated
Loan and Security Agreement, dated as of March 31,
2009.
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2.
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Note
Purchase Agreement, dated as of May 25, 2007, by and among Rocky Brands,
Inc., Lifestyle Footwear, Inc., Rocky Brands Wholesale LLC, and Rocky
Brands Retail LLC, as the Loan Parties, the purchasers party thereto (each
a “Purchaser” and collectively, the “Purchasers”), and Laminar Direct
Capital L.P., as collateral agent for the
Purchasers.
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