8,500,000 Shares HORIZON OFFSHORE, INC. Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
8,500,000 Shares
HORIZON OFFSHORE, INC.
Common Stock
June 22, 2006
▇▇▇▇▇▇ Brothers Inc.
As Representative of the several
As Representative of the several
Underwriters named in Schedule 1 attached hereto,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Horizon Offshore, Inc., a Delaware corporation (the “Company”), and certain stockholders of
the Company signatory hereto (the “Selling Stockholders”), propose to sell an aggregate of
8,500,000 shares (the “Firm Stock”) of the Company’s common stock, par value $0.00001 per share
(the “Common Stock”). Of the 8,500,000 shares of the Firm Stock, 2,000,000 are being sold by the
Company and 6,500,000 by the Selling Stockholders. In addition, the Selling Stockholders propose to
grant to the underwriters (the “Underwriters”) named in Schedule 1 attached to this
agreement (this “Agreement”) an option to purchase up to an aggregate of 1,275,000 additional
shares of the Common Stock on the terms set forth in Section 3 (the “Option Stock”). The Firm
Stock and the Option Stock, if purchased, are hereinafter collectively called the “Stock.” This is
to confirm the agreement concerning the purchase of the Stock from the Company and the Selling
Stockholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The Company represents,
warrants and agrees that:
(a) Registration statements on Form S-3 relating to the Stock have (i) been prepared by
the Company in conformity with the requirements of the Securities Act of 1933, as amended
(the “Securities Act”), and the rules and regulations (the “Rules and Regulations”) of the
Securities and Exchange Commission (the “Commission”) thereunder; (ii) been filed with the
Commission under the Securities Act; and (iii) become effective under the Securities Act.
Copies of such registration statements and any amendments thereto have been delivered by the
Company to you as the representative (the “Representative”) of the Underwriters. As used in
this Agreement:
(i) “Applicable Time” means 5:00 p.m. (New York City time) on the date of this
Agreement;
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(ii) “Effective Date” means any date as of which any part of any registration
statement relating to the Stock became, or is deemed to have become, effective under
the Securities Act in accordance with the Rules and Regulations;
(iii) “Issuer Free Writing Prospectus” means each “free writing prospectus” (as
defined in Rule 405 of the Rules and Regulations) prepared by or on behalf of the
Company or used or referred to by the Company in connection with the offering of the
Stock;
(iv) “Preliminary Prospectus” means any preliminary prospectus relating to the
Stock included in such registration statement or filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations, including any preliminary prospectus
supplement thereto relating to the Stock;
(v) “Pricing Disclosure Package” means, as of the Applicable Time, the most
recent Preliminary Prospectus, together with each Issuer Free Writing Prospectus
filed or used by the Company on or before the Applicable Time, other than a road
show that is an Issuer Free Writing Prospectus but is not required to be filed under
Rule 433 of the Rules and Regulations;
(vi) “Prospectus” means the final prospectus relating to the Stock, including
any prospectus supplement thereto relating to the Stock, as filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations; and
(vii) “Registration Statement” means, collectively, the various parts of such
registration statement, each as amended as of the Effective Date for such part,
including any Preliminary Prospectus or the Prospectus and all exhibits to such
registration statement.
Any reference to any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to Form S-3 under the
Securities Act as of the date of such Preliminary Prospectus or the Prospectus, as the case
may be. Any reference to the “most recent Preliminary Prospectus” shall be deemed to refer
to the latest Preliminary Prospectus included in the Registration Statement or filed
pursuant to Rule 424(b) prior to or on the date hereof (including, for purposes hereof, any
documents incorporated by reference therein prior to or on the date hereof). Any reference
to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any document filed under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such Preliminary Prospectus
or the Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to include any annual report of the Company on Form
10-K filed with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after
the Effective Date that is incorporated by reference in the Registration Statement. The
Commission has not issued any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending the effectiveness of the Registration Statement,
and no proceeding or
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examination for such purpose has been instituted or, to the Company’s knowledge, threatened
by the Commission.
(b) The Company was not at the time of initial filing of the Registration Statement and
at the earliest time thereafter that the Company or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2) of the Rules and Regulations) of the Stock,
is not on the date hereof and will not be on the applicable Delivery Date an “ineligible
issuer” (as defined in Rule 405). The Company was at each time of filing of the
Registration Statement and, since the most recent time of filing of the Registration
Statement, has been and continues to be eligible to use Form S-3 for the offering of the
Stock.
(c) The Registration Statement conformed and will conform in all material respects on
the Effective Date and on the applicable Delivery Date, and any amendment to the
Registration Statement filed after the date hereof will conform in all material respects
when filed, to the requirements of the Securities Act and the Rules and Regulations. The
Preliminary Prospectus conformed, and the Prospectus will conform, in all material respects
when filed with the Commission pursuant to Rule 424(b) and on the applicable Delivery Date
to the requirements of the Securities Act and the Rules and Regulations. The documents
incorporated by reference in any Preliminary Prospectus or the Prospectus conformed, and any
further documents so incorporated will conform, when filed with the Commission, in all
material respects to the requirements of the Exchange Act or the Securities Act, as
applicable, and the rules and regulations of the Commission thereunder.
(d) The Registration Statement did not, as of the Effective Date, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided that no representation
or warranty is made as to information contained in or omitted from the Registration
Statement in reliance upon and in conformity with written information furnished to the
Company through the Representative by or on behalf of any Underwriter specifically for
inclusion therein, which information is specified in Section 10(f).
(e) The Prospectus will not, as of its date and on the applicable Delivery Date,
contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the Prospectus in reliance
upon and in conformity with written information furnished to the Company through the
Representative by or on behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 10(f).
(f) The documents incorporated by reference in any Preliminary Prospectus or the
Prospectus did not, and any further documents filed and incorporated by reference therein
will not, when filed with the Commission, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
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make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(g) The Pricing Disclosure Package did not, as of the Applicable Time, contain an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the price of the Stock and disclosures
directly relating thereto will be included on the cover page of the Prospectus; provided
that no representation or warranty is made as to information contained in or omitted from
the Pricing Disclosure Package in reliance upon and in conformity with written information
furnished to the Company through the Representative by or on behalf of any Underwriter
specifically for inclusion therein, which information is specified in Section 10(f).
(h) Each Issuer Free Writing Prospectus (including, without limitation, any road show
that is a free writing prospectus under Rule 433), when considered together with the Pricing
Disclosure Package as of the Applicable Time, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made,
not misleading, except that the price of the Stock and disclosures directly relating thereto
will be included on the cover page of the Prospectus.
(i) Each Issuer Free Writing Prospectus conformed or will conform in all material
respects to the requirements of the Securities Act and the Rules and Regulations on the date
of first use, and the Company has complied with all prospectus delivery and any filing
requirements applicable to such Issuer Free Writing Prospectus pursuant to the Rules and
Regulations. The Company has not made any offer relating to the Stock that would constitute
an Issuer Free Writing Prospectus without the prior written consent of the Representative.
The Company has retained in accordance with the Rules and Regulations all Issuer Free
Writing Prospectuses that were not required to be filed pursuant to the Rules and
Regulations.
(j) The Company is a corporation duly organized and validly existing in good standing
under the laws of the State of Delaware with full corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Registration Statement and the most recent Preliminary Prospectus, and is duly registered
and qualified to conduct its business and is in good standing as a foreign corporation in
each jurisdiction or place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure so to register or
qualify could not, in the aggregate, reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), results of operations, stockholders’
equity, properties, business or prospects of the Company and its subsidiaries taken as a
whole (a “Material Adverse Effect”);
(k) Each of the Company’s subsidiaries has been duly formed and is validly existing and
in good standing as a corporation or other business enterprise in accordance with the laws
of its jurisdiction of incorporation or formation, with full corporate or other
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requisite power and authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and the most recent Preliminary
Prospectus, and is duly registered and qualified to conduct business in each jurisdiction
where the nature of its properties or the conduct of its business requires such registration
or qualification, except where the failure so to register or qualify could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect; none of the
subsidiaries of the Company (other than Horizon Offshore Contractors, Inc., Horizon Vessels,
Inc., Horizon Marine Construction Ltd. and Horizon Vessels International Ltd.) is a
“significant subsidiary” (as defined in Rule 405).
(l) The Company has an authorized capitalization as set forth in each of the most
recent Preliminary Prospectus and the Prospectus, and all of the issued shares of capital
stock of the Company have been duly authorized and validly issued, are fully paid and
non-assessable, conform, in all material respects, to the description thereof contained in
each of the most recent Preliminary Prospectus and the Prospectus and were issued in
compliance with U.S. federal and state securities laws and not in violation of any
preemptive right, resale right, right of first refusal or similar right. All of the
Company’s options, warrants and other rights to purchase or exchange any securities for
shares of the Company’s capital stock have been duly authorized and validly issued, conform,
in all material respects, to the description thereof contained in each of the most recent
Preliminary Prospectus and the Prospectus and were issued in compliance with federal and
state securities laws. All of the issued shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued, are fully paid and non-assessable and
(except for directors’ qualifying shares for foreign subsidiaries and except as set forth in
each of the most recent Preliminary Prospectus and the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities or claims,
except for such liens, encumbrances, equities or claims as could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(m) The shares of the Stock to be issued and sold by the Company to the Underwriters
hereunder have been duly authorized and, upon payment and delivery in accordance with this
Agreement, will be validly issued, fully paid and non-assessable, will conform, in all
material respects, to the description thereof contained in each of the most recent
Preliminary Prospectus and the Prospectus, will be issued in compliance with federal and
state securities laws and will be free of statutory and contractual preemptive rights,
rights of first refusal and similar rights. The shares of Stock to be sold by the Selling
Stockholders have been registered under the Registration Statement and, assuming compliance
by the Selling Stockholders and the Underwriters with their obligations hereunder, will be
sold in compliance with federal and state securities laws.
(n) The Company has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(o) None of the issuance and sale of the Stock, the execution, delivery and performance
of this Agreement by the Company, the consummation of the transactions contemplated hereby
or the application of the proceeds from the sale of the Stock as
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described under “Use of Proceeds” in each of the most recent Preliminary Prospectus and
the Prospectus (i) requires any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except as may be required for the registration of the
Stock under Securities Act and the Exchange Act and compliance with the securities and “blue
sky” laws of various jurisdictions, all of which have been or will be effected in accordance
with this Agreement) (ii) conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, any agreement, indenture, lease or other instrument to
which the Company or any of its subsidiaries is a party or by which any of them or any of
their respective properties may be bound, or violates or will violate any statute, law,
regulation or filing, judgment, injunction, order or decree applicable to the Company or any
of its subsidiaries or any of their respective properties, or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to the terms of any agreements or instruments to which any
of them is a party or by which any of them may be bound or to which any of the property or
assets of any of them is subject or (iii) results or will result in any violation of the
provisions of the charter or bylaws (or similar organizational documents) of the Company or
any of its subsidiaries.
(p) Except as set forth in the registration rights agreements identified in the most
recent Preliminary Prospectus, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(q) The Company has not sold or issued any securities that would be integrated with the
offering of the Stock contemplated by this Agreement pursuant to the Securities Act, the
Rules and Regulations or the interpretations thereof by the Commission.
(r) Except as described in the most recent Preliminary Prospectus, neither the Company
nor any of its subsidiaries has sustained, since the date of the latest audited financial
statements included or incorporated by reference in the most recent Preliminary Prospectus,
any loss or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, and since such date, there has not been any change in the capital
stock, long-term debt, net current assets or short-term debt of the Company or any of its
subsidiaries or any adverse change, or any development involving a prospective adverse
change, in or affecting the condition (financial or otherwise), results of operations,
stockholders’ equity, properties, management, business or prospects of the Company and its
subsidiaries taken as a whole, in each case except as could not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect.
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(s) Since the date as of which information is given in the most recent Preliminary
Prospectus and except as may otherwise be described in the most recent Preliminary
Prospectus, the Company has not (i) incurred any material liability or obligation, direct or
contingent, other than liabilities and obligations that were incurred in the ordinary course
of business, (ii) entered into any material transaction not in the ordinary course of
business or (iii) declared or paid any dividend on its capital stock.
(t) The historical financial statements (including the related notes and supporting
schedules) included or incorporated by reference in the most recent Preliminary Prospectus
comply as to form in all material respects with the requirements of Regulation S-X under the
Securities Act and present fairly the financial condition, results of operations and cash
flows of the entities purported to be shown thereby at the dates and for the periods
indicated and have been prepared in conformity with accounting principles generally accepted
in the United States applied on a consistent basis throughout the periods involved, except
as otherwise stated therein.
(u) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who has certified certain financial statements of the Company
and its consolidated subsidiaries, whose report appears in the most recent Preliminary
Prospectus or is incorporated by reference therein and who have delivered the initial letter
referred to in Section 9(h) hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations; and PricewaterhouseCoopers LLP, whose report
appears in the most recent Preliminary Prospectus or is incorporated by reference therein
and who have delivered the initial letter referred to in Section 9(h) hereof, were
independent as required by the Securities Act and the Rules and Regulations during the
periods covered by the financial statements on which they reported contained or incorporated
by reference in the most recent Preliminary Prospectus.
(v) The Company and each of its subsidiaries have good and marketable title to all real
property and personal property owned by them, in each case free and clear of all liens,
encumbrances and defects, except such as are described in the most recent Preliminary
Prospectus or such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and all assets held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases, with such
exceptions as do not materially interfere with the use made and proposed to be made of such
assets by the Company and its subsidiaries.
(w) Except as disclosed in the most recent Preliminary Prospectus, the Company and each
of its subsidiaries carry, or are covered by, insurance from insurers of recognized
financial responsibility in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective properties and as
is customary for companies within its industry. All policies of insurance of the Company
and its subsidiaries are in full force and effect; the Company and its subsidiaries are in
compliance with the terms of such policies in all material respects; and neither the Company
nor any of its subsidiaries has received written notice from any insurer or agent of such
insurer that capital improvements or other expenditures
8
are required or necessary to be made in order to continue such insurance; except as
described in the most recent Preliminary Prospectus, there are no claims by the Company or
any of its subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause; and neither
the Company nor any such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a cost that
could not reasonably be expected to have a Material Adverse Effect.
(x) Neither the Company nor any subsidiary is now, and after the sale of the Stock to
be sold by the Company hereunder and the application of the net proceeds from such sale as
described in the most recent Preliminary Prospectus under the caption “Use of Proceeds” will
not be (i) an “investment company” within the meaning of such term under the Investment
Company Act of 1940, as amended (the “Investment Company Act”), and the rules and
regulations of the Commission thereunder or (ii) a “business development company” as defined
in Section 2(a)(48) of the Investment Company Act.
(y) There are no legal or governmental proceedings pending or, to the knowledge of the
Company, threatened, against the Company or any of its subsidiaries, or to which the Company
or any of its subsidiaries, or any of their respective properties is subject, that are
required to be described in the Registration Statement or the most recent Preliminary
Prospectus but are not described as required and there are no material agreements,
contracts, indentures, leases or other instruments that are required to be described in the
Registration Statement or the most recent Preliminary Prospectus or required to be filed as
an exhibit to the Registration Statement or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the Rules and Regulations.
(z) No labor disturbance by the employees of the Company or its subsidiaries exists or,
to the knowledge of the Company, is imminent that could, individually or in the aggregate,
have or reasonably be expected to have a Material Adverse Effect.
(aa) (i) Each “employee benefit plan” (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) for which the Company
or any member of its “Controlled Group” (defined as any organization which is a member of a
controlled group of corporations within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended (the “Code”)) would have any liability (each a “Plan”) has, in all
material respects, been maintained in compliance with its terms and with the requirements of
all applicable statutes, rules and regulations including ERISA and the Code; (ii) with
respect to each Plan subject to Title IV of ERISA (a) no “reportable event” (within the
meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur, (b) no
“accumulated funding deficiency” (within the meaning of Section 302 of ERISA or Section 412
of the Code), whether or not waived, has occurred or is reasonably expected to occur, (c)
the fair market value of the assets under each Plan exceeds the present value of all
benefits accrued under such Plan (determined based on those assumptions used to fund such
Plan) and (d) neither the Company or any member of its Controlled Group has incurred, or
9
reasonably expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC in the ordinary course and without
default) in respect of a Plan (including a “multiemployer plan”, within the meaning of
Section 4001(c)(3) of ERISA); and (iii) each Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(bb) The Company and each of its subsidiaries have filed all tax returns required to be
filed, which returns are complete and correct, and neither the Company nor any subsidiary is
in default in the payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto, which could, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect.
(cc) There are no transfer taxes or other similar fees or charges under Federal law or
the laws of any state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Stock.
(dd) Neither the Company nor any of its subsidiaries (i) is in violation of its charter
or by-laws (or similar organizational documents), (ii) is in default, and no event has
occurred that, with notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, license or other agreement or instrument to which
it is a party or by which it is bound or to which any of its properties or assets is subject
or (iii) is in violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over it or its property or assets or has
failed to obtain any license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to the conduct of its
business, except in the case of clauses (ii) and (iii), to the extent any such conflict,
breach, violation or default could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(ee) Except as described in the most recent Preliminary Prospectus, the Company and
each of its subsidiaries (i) make and keep accurate books and records and (ii) maintain and
has maintained effective internal control over financial reporting as defined in Rule 13a-15
under the Exchange Act and a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance with management’s
general or specific authorization, (B) transactions are recorded as necessary to permit
preparation of the Company’s financial statements in conformity with accounting principles
generally accepted in the United States and to maintain accountability for its assets, (C)
access to the Company’s assets is permitted only in accordance with management’s general or
specific authorization and (D) the recorded accountability for the Company’s assets is
compared with existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ff) The Company and each of its subsidiaries have established and maintain disclosure
controls and procedures (as such term is defined in Rule 13a-15 under the
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Exchange Act), (ii) such disclosure controls and procedures are designed to ensure that
the information required to be disclosed by the Company and its subsidiaries in the reports
they will file or submit under the Exchange Act is accumulated and communicated to the
management of the Company and its subsidiaries, including their respective principal
executive officers and principal financial officers, as appropriate, to allow timely
decisions regarding required disclosure to be made and (iii) such disclosure controls and
procedures are effective in all material respects to perform the functions for which they
were established.
(gg) Since the date of the most recent balance sheet of the Company and its
consolidated subsidiaries reviewed or audited by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and the audit committee
of the board of directors of the Company, (i) the Company has not been advised of (A) any
significant deficiencies in the design or operation of internal controls that could
adversely affect the ability of the Company and each of its subsidiaries to record, process,
summarize and report financial data, or any material weaknesses in internal controls and (B)
any fraud, whether or not material, that involves management or other employees who have a
significant role in the internal controls of the Company and each of its subsidiaries, and
(ii) since that date, there have been no significant changes in internal controls or in
other factors that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses.
(hh) There is and has been no material failure on the part of the Company and any of
the Company’s directors or officers, in their capacities as such, to comply with the
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated in
connection therewith.
(ii) The Company and each of its subsidiaries have such permits, licenses, franchises
and authorizations of governmental or regulatory authorities (“permits”) as are necessary
under applicable law to own its respective properties and to conduct its business in the
manner described in the most recent Preliminary Prospectus, except for any of the foregoing
that could not, individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect, and subject to such qualifications as may be set forth in the most
recent Preliminary Prospectus; the Company and each of its subsidiaries has fulfilled and
performed all of its material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the right of the holder
of any such permit, except for any of the foregoing that could not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect, and subject in
each case to such qualification as may be set forth in the most recent Preliminary
Prospectus; and, except as described in the most recent Preliminary Prospectus, none of such
permits contains any restriction that is materially burdensome to the Company or any of its
subsidiaries.
(jj) Except as described in the most recent Preliminary Prospectus, the Company and its
subsidiaries own or possess all patents, trademarks, trademark registrations, service marks,
service ▇▇▇▇ registrations, trade names, copyrights, licenses,
11
inventions, trade secrets and rights described in the most recent Preliminary
Prospectus as being owned by them or any of them or necessary for the conduct of their
respective businesses as currently conducted, and the Company is not aware of any claim to
the contrary or any challenge by any other person to the rights of the Company and its
subsidiaries with respect to the foregoing, except as could not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect.
(kk) The Company and each of its subsidiaries (i) are, and at all times prior hereto
were, in compliance with all applicable federal, state, local and foreign laws, regulations,
ordinances, rules, orders, judgments, decrees, permits or other legal requirements relating
to the protection of human health or safety, the environment, natural resources, or
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”),
which compliance includes, without limitation, obtaining, maintaining and complying with all
permits and authorizations and approvals required by Environmental Laws to conduct their
respective businesses, and (ii) have not received notice of any actual or alleged violation
of Environmental Laws, or of any potential liability for or other obligation concerning the
presence, disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except in the case of clause (i) or (ii) where such non-compliance, violation,
liability, or other obligation could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect; and neither the Company nor any of its subsidiaries has been named
as a “potentially responsible party” under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any other similar Environmental Law,
except with respect to any matters that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Except as described in the most
recent Preliminary Prospectus, (A) there are no proceedings that are pending, or known to be
contemplated, against the Company or any of its subsidiaries under Environmental Laws in
which a governmental authority is also a party, other than such proceedings regarding which
it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (B) the
Company and its subsidiaries are not aware of any issues regarding compliance with
Environmental Laws, or liabilities or other obligations under Environmental Laws or
concerning hazardous or toxic substances or wastes, pollutants or contaminants, that could
reasonably be expected to have a material effect on the capital expenditures, earnings or
competitive position of the Company and its subsidiaries, and (C) none of the Company and
its subsidiaries anticipates material capital expenditures relating to Environmental Laws.
(ll) Except as described in the most recent Preliminary Prospectus, neither the Company
nor any of its subsidiaries, nor, to the knowledge of the Company, any director, officer,
agent, employee or other person associated with or acting on behalf of the Company or any of
its subsidiaries, has (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
12
(mm) The operations of the Company and its subsidiaries are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened, except, in each
case, as would not reasonably be expected to have a Material Adverse Effect.
(nn) 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 currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
(oo) The Company has not distributed and, prior to the later to occur of any Delivery
Date and completion of the distribution of the Stock, will not distribute any offering
material in connection with the offering and sale of the Stock other than any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus to which the Representative
has consented in accordance with Section 1(i) or 6(a)(vi).
(pp) The Company has not taken and will not take, directly or indirectly, any action
designed to or that has constituted or that could 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 of the Stock.
(qq) The Stock has been approved for inclusion, subject to official notice of issuance,
in The Nasdaq National Market.
Any certificate signed by any officer of the Company and delivered to the Representative or
counsel for the Underwriters in connection with the offering of the Stock shall be deemed a
representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
2. Representations, Warranties and Agreements of the Selling Stockholders. Each Selling
Stockholder, severally and not jointly, represents, warrants and agrees that:
(a) Neither the Selling Stockholder nor any person acting on behalf of the Selling
Stockholder (other than, if applicable, the Company and the Underwriters) has used or
referred to any “free writing prospectus” (as defined in Rule 405 of the Rules and
Regulations), relating to the Stock.
13
(b) The Selling Stockholder has, and immediately prior to any Delivery Date on which the
Selling Stockholder is selling shares of Stock, the Selling Stockholder will have, good and
valid title to, or a valid “security entitlement” within the meaning of Section 8-501 of the
New York Uniform Commercial Code (the “UCC”) in respect of, the shares of Stock to be sold by
the Selling Stockholder hereunder on such Delivery Date, free and clear of all liens,
encumbrances, equities or claims.
(c) The Stock to be sold by the Selling Stockholder hereunder is subject to the interest
of the Underwriters and the obligations of the Selling Stockholder hereunder shall not be
terminated by any act of the Selling Stockholder, by operation of law, by the death or
incapacity of any individual Selling Stockholder or, in the case of a trust, by the death or
incapacity of any executor or trustee or the termination of such trust, or the occurrence of
any other event.
(d) Upon payment for the Stock to be sold by such Selling Stockholder, delivery of such
Stock, as directed by the Underwriters, to Cede & Co. (“Cede”) or such other nominee as may
be designated by The Depository Trust Company (“DTC”), registration of such Stock in the name
of Cede or such other nominee and the crediting of such Stock on the books of DTC to
securities accounts of the Underwriters (assuming that neither DTC nor any such Underwriter
has notice of any adverse claim (within the meaning of Section 8-105 of the UCC) to such
Stock), (i) DTC shall be a “protected purchaser” of such Stock within the meaning of Section
8-303 of the UCC, (ii) under Section 8-501 of the UCC, the Underwriters will acquire a valid
security entitlement in respect of such Stock and (iii) no action based on any “adverse
claim,” within the meaning of Section 8-102 of the UCC, to such Stock may be asserted against
the Underwriters with respect to such security entitlement. For purposes of this
representation, such Selling Stockholder may assume that when such payment, delivery and
crediting occur, (A) such Shares will have been registered in the name of Cede or another
nominee designated by DTC, in each case on the Company’s share registry in accordance with
its certificate of incorporation, bylaws and applicable law, (B) DTC will be registered as a
“clearing corporation” within the meaning of Section 8-102 of the UCC and (C) appropriate
entries to the accounts of the several Underwriters on the records of DTC will have been made
pursuant to the UCC.
(e) The Selling Stockholder has full right, power and authority, corporate or otherwise,
to enter into this Agreement.
(f) This Agreement has been duly and validly authorized, executed and delivered by or on
behalf of the Selling Stockholder.
(g) The execution, delivery and performance of this Agreement by the Selling Stockholder
and the consummation by the Selling Stockholder of the transactions contemplated hereby do
not and will not (i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, license or other agreement or instrument to which the Selling Stockholder is a
party or by which the Selling Stockholder is bound or to which any of the property or assets
of the Selling Stockholder is subject, (ii) result in any violation of the
14
provisions of the charter or by-laws, partnership agreement, deed of trust or similar
organizational documents of the Selling Stockholder or (iii) result in any violation of any
statute or any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Selling Stockholder or the property or assets of the Selling
Stockholder, except in the case of clauses (i) or (iii), for such conflicts, breaches,
violations or defaults as could not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the ability of such Selling Stockholder to consummate
the transactions contemplated by this Agreement.
(h) No consent, approval, authorization or order of, or filing or registration with, any
court or governmental agency or body having jurisdiction over the Selling Stockholder or the
property or assets of the Selling Stockholder is required for the execution, delivery and
performance of this Agreement by the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby, except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state or foreign
securities laws in connection with the purchase and sale of the Stock by the Underwriters.
(i) To the knowledge of the Selling Stockholder, none of (i) the Registration Statement,
as of the Effective Date, (ii) in the Prospectus, as of its date and on the applicable
Delivery Date, (iii) in the Pricing Disclosure Package, as of the Applicable Time or (iv) the
documents incorporated by reference in any Preliminary Prospectus or the Prospectus, as of
the date they were filed with the Commission, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that the untrue
statement or omission has been made or incorporated therein by reference in reliance upon and
in conformity with written information furnished to the Company by such Selling Stockholder
specifically stating that it is for use in preparation thereof.
(j) The Selling Stockholder has not taken and will not take, directly or indirectly, any
action that is designed to or that has constituted or that could 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 of the Stock.
(k) The Selling Stockholder is not prompted to sell shares of Common Stock by any
information concerning the Company that is not set forth in the Registration Statement, the
Pricing Disclosure Package and the Prospectus.
Any certificate signed by any officer of any Selling Stockholder and delivered to the
Representative or counsel for the Underwriters in connection with the offering of the Stock shall
be deemed a representation and warranty by such Selling Stockholder, as to matters covered thereby,
to each Underwriter.
3. Purchase of the Stock by the Underwriters. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this Agreement, the Company
agrees to sell 2,000,000 shares of the Firm Stock and each Selling
15
Stockholder agrees to sell the number of shares of the Firm Stock set forth opposite its name
in Schedule 2 hereto, severally and not jointly, to the several Underwriters, and each of
the Underwriters, severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter’s name in Schedule 1 hereto. Each Underwriter
shall be obligated to purchase from the Company, and from each Selling Stockholder, that number of
shares of the Firm Stock that represents the same proportion of the number of shares of the Firm
Stock to be sold by the Company and by each Selling Stockholder as the number of shares of the Firm
Stock set forth opposite the name of such Underwriter in Schedule 1 represents of the total
number of shares of the Firm Stock to be purchased by all of the Underwriters pursuant to this
Agreement. The respective purchase obligations of the Underwriters with respect to the Firm Stock
shall be rounded among the Underwriters to avoid fractional shares, as the Representative may
determine.
In addition, each Selling Stockholder grants to the Underwriters an option to purchase up to
the number of shares of Option Stock set forth opposite such Selling Stockholder’s name in
Schedule 2 hereto, severally and not jointly. Such option is exercisable in the event that
the Underwriters sell more shares of Common Stock than the number of Firm Shares in the offering
and as set forth in Section 5 hereof. Any such election to purchase Option Stock shall be made in
proportion to the maximum number of shares of Option Stock to be sold by each Selling Stockholder
as set forth in Schedule 2 hereto. Each Underwriter agrees, severally and not jointly, to
purchase the number of shares of Option Stock (subject to such adjustments to eliminate fractional
shares as the Representative may determine) that bears the same proportion to the total number of
shares of Option Stock to be sold on such Delivery Date as the number of shares of Firm Stock set
forth in Schedule 1 hereto opposite the name of such Underwriter bears to the total number
of shares of Firm Stock.
The price of both the Firm Stock and any Option Stock purchased by the Underwriters shall be
$19.35 per share.
The Company and the Selling Stockholders shall not be obligated to deliver any of the Firm
Stock or Option Stock to be delivered on the applicable Delivery Date, except upon payment for all
such Stock to be purchased on such Delivery Date as provided herein.
4. Offering of Stock by the Underwriters. Upon authorization by the Representative of
the release of the Firm Stock, the several Underwriters propose to offer the Firm Stock for sale
upon the terms and conditions to be set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment for the Firm Stock
shall be made at 10:00 A.M., New York City time, on the fourth full business day following the date
of this Agreement or at such other date or place as shall be determined by agreement between the
Representative and the Company. This date and time are sometimes referred to as the “Initial
Delivery Date.” Delivery of the Firm Stock shall be made to the Representative for the account of
each Underwriter against payment by the several Underwriters through the Representative of the
respective aggregate purchase prices of the Firm Stock being sold by the Company and the Selling
Stockholders to or upon the order of the Company and the Selling Stockholders of the purchase price
by wire transfer in immediately available funds to the accounts specified by the Company and the
Selling Stockholders. Time shall be of the essence,
16
and delivery at the time and place specified pursuant to this Agreement is a further condition
of the obligation of each Underwriter hereunder. The Company and the Selling Stockholders shall
deliver their respective portions of the Firm Stock through the facilities of DTC unless the
Representative shall otherwise instruct.
The option granted in Section 3 will expire 30 days after the date of this Agreement and may
be exercised in whole or from time to time in part by written notice being given to the Company and
the Selling Stockholders by the Representative; provided that if such date falls on a day that is
not a business day, the option granted in Section 3 will expire on the next succeeding business
day. Such notice shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to be registered, the
denominations in which the shares of Option Stock are to be issued and the date and time, as
determined by the Representative, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the Initial Delivery Date nor earlier
than the second business day after the date on which the option shall have been exercised nor later
than the fifth business day after the date on which the option shall have been exercised. Each
date and time the shares of Option Stock are delivered is sometimes referred to as an “Option Stock
Delivery Date,” and the Initial Delivery Date and any Option Stock Delivery Date are sometimes each
referred to as a “Delivery Date.”
Delivery of the Option Stock by the Selling Stockholders and payment for the Option Stock by
the several Underwriters through the Representative shall be made at 10:00 A.M., New York City
time, on the date specified in the corresponding notice described in the preceding paragraph or at
such other date or place as shall be determined by agreement between the Representative and the
Company. On the Option Stock Delivery Date, the Selling Stockholders shall deliver or cause to be
delivered the Option Stock to the Representative for the account of each Underwriter against
payment by the several Underwriters through the Representative and of the aggregate purchase price
of the Option Stock being sold by the Selling Stockholders to or upon the order of the Selling
Stockholders of the purchase price by wire transfer in immediately available funds to the accounts
specified by the Selling Stockholders. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. The Selling Stockholders shall deliver the Option Stock through the
facilities of DTC unless the Representative shall otherwise instruct.
6. Further Agreements of the Company and the Underwriters. (a) The Company agrees:
(i) To prepare the Prospectus in a form approved by the Representative and to file such
Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s
close of business on the second business day following the execution and delivery of this
Agreement; to make no further amendment or any supplement to the Registration Statement or
the Prospectus prior to the last Delivery Date except as provided herein; to advise the
Representative, promptly after it receives notice thereof, of the time when any amendment or
supplement to the Registration Statement or the Prospectus has been filed and to furnish the
Representative with copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be
17
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 is required in connection with the offering or sale of the Stock; to advise
the Representative, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of the
Prospectus or any Issuer Free Writing Prospectus, of the suspension of the qualification of
the Stock for offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding or examination for any such purpose or of any request by the Commission for the
amending or supplementing of the Registration Statement, the Prospectus or any Issuer Free
Writing Prospectus or for additional information; and, in the event of the issuance of any
stop order or of any order preventing or suspending the use of the Prospectus or any Issuer
Free Writing Prospectus or suspending any such qualification, to use promptly its reasonable
best efforts to obtain its withdrawal;
(ii) To furnish promptly to the Representative and to counsel for the Underwriters a
signed copy of the Registration Statement as originally filed with the Commission, and each
amendment thereto filed with the Commission, including all consents and exhibits filed
therewith;
(iii) To deliver promptly to the Representative such number of the following documents
as the Representative shall reasonably request: (A) conformed copies of the Registration
Statement as originally filed with the Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement and the computation of per share earnings), (B)
each Preliminary Prospectus, the Prospectus and any amended or supplemented Prospectus, (C)
each Issuer Free Writing Prospectus and (D) any document incorporated by reference in any
Preliminary Prospectus or the Prospectus; and, if the delivery of a prospectus is required
at any time after the date hereof in connection with the offering or sale of the Stock or
any other securities relating thereto and if at such time any events shall have occurred as
a result of which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Securities Act or
the Exchange Act, to notify the Representative and, upon its request, to file such document
and to prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representative may from time to time reasonably request of
an amended or supplemented Prospectus that will correct such statement or omission or effect
such compliance;
(iv) To file promptly with the Commission any amendment or supplement to the
Registration Statement or the Prospectus that may, in the judgment of the Company or the
Representative, be required by the Securities Act or requested by the Commission;
(v) Prior to filing with the Commission any amendment or supplement to the Registration
Statement or the Prospectus, any document incorporated by reference in the Prospectus or any
amendment to any document incorporated by reference in the
18
Prospectus, to furnish a copy thereof to the Representative and counsel for the
Underwriters and obtain the consent (not to be unreasonably withheld or delayed) of the
Representative to the filing;
(vi) Not to make any offer relating to the Stock that would constitute an Issuer Free
Writing Prospectus without the prior written consent of the Representative.
(vii) To retain in accordance with the Rules and Regulations all Issuer Free Writing
Prospectuses not required to be filed pursuant to the Rules and Regulations; and if at any
time after the date hereof any events shall have occurred as a result of which any Issuer
Free Writing Prospectus, as then amended or supplemented, would conflict with the
information in the Registration Statement, the most recent Preliminary Prospectus or the
Prospectus or would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, if for any other reason it
shall be necessary to amend or supplement any Issuer Free Writing Prospectus, to notify the
Representative and, upon its request, to file such document and to prepare and furnish
without charge to each Underwriter as many copies as the Representative may from time to
time reasonably request of an amended or supplemented Issuer Free Writing Prospectus that
will correct such conflict, statement or omission or effect such compliance;
(viii) As soon as practicable after the Effective Date and in any event not later than
16 months after the date hereof, to make generally available to the Company’s security
holders and to deliver to the Representative an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations;
(ix) Promptly from time to time to take such action as the Representative may
reasonably request to qualify the Stock for offering and sale under the securities laws of
such jurisdictions as the Representative may 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 Stock; provided that in connection
therewith the Company shall not be required to (i) qualify as a foreign corporation in any
jurisdiction in which it would not otherwise be required to so qualify, (ii) file a general
consent to service of process in any such jurisdiction or (iii) subject itself to taxation
in any jurisdiction in which it would not otherwise be subject;
(x) For a period commencing on the date hereof and ending on the 90th day after the
date of the Prospectus (the “Lock-Up Period”), not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at any time in
the future of) any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the Stock and shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans existing on the date
hereof or pursuant to currently outstanding options, warrants or rights), or sell or grant
options, rights or warrants with respect to any shares of Common
19
Stock or securities convertible into or exchangeable for Common Stock (other than the
grant of options pursuant to option plans existing on the date hereof), (2) enter into any
swap or other derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, (3) file or cause to be filed a
registration statement, including any amendments, with respect to the registration of any
shares of Common Stock or securities convertible, exercisable or exchangeable into Common
Stock or any other securities of the Company or (4) publicly disclose the intention to do
any of the foregoing, in each case without the prior written consent of ▇▇▇▇▇▇ Brothers
Inc., on behalf of the Underwriters, and to cause each officer and director of the Company
set forth on Schedule 3 hereto to furnish to the Representative, prior to the
Initial Delivery Date, a letter or letters, substantially in the form of Exhibit A
hereto (the “Lock-Up Agreements”);
(xi) Notwithstanding the foregoing, if (1) during the last 17 days of the Lock-Up
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 Lock-Up Period, the Company
announces that it will release earnings results during the 16-day period beginning on the
last day of the Lock-Up Period, then the restrictions imposed in Section 6(x) shall continue
to apply until the expiration of the 18-day period beginning on the issuance of the earnings
release or the announcement of the material news or the occurrence of the material event,
unless ▇▇▇▇▇▇ Brothers Inc., on behalf of the Underwriters, waives such extension in
writing; provided, however, that this paragraph shall not apply if the Underwriters publish
or distribute any research regarding an earnings release, material news or a material event,
and such research complies with Rule 139 of the Securities Act and the Common Stock is
“actively traded” as defined in Rule 101(c)(1) of Regulation M under the Exchange Act;
(xii) To apply the net proceeds from the sale of the Stock being sold by the Company as
set forth in the Prospectus; and
(xiii) To notify certain stockholders who are parties to the Amended and Restated
Registration Rights Agreement, dated as of December 19, 2005, among the Company and the
initial holders named therein (the “Registration Rights Agreement”), that pursuant to the
terms of the Registration Rights Agreement, none of the shares of the Common Stock held by
such stockholders may be sold or otherwise transferred or disposed of during the 10-day
period prior to, and during the 60-day period beginning on, the Initial Delivery Date and
(ii) to impose a stop-transfer instruction with the Company’s transfer agent in order to
enforce the lock-up provision imposed pursuant to the Registration Rights Agreement with
respect to each stockholder subject to the Registration Rights Agreement.
(b) Each Underwriter severally agrees that such Underwriter shall not include any “issuer
information” (as defined in Rule 433) in any “free writing prospectus” (as defined in Rule 405)
used or referred to by such Underwriter without the prior consent of the Company (any such issuer
information with respect to whose use the Company has given its consent,
20
“Permitted Issuer Information”); provided that (i) no such consent shall be required with
respect to any such issuer information contained in any document filed by the Company with the
Commission prior to the use of such free writing prospectus and (ii) “issuer information,” as used
in this Section 6(b), shall not be deemed to include information prepared by or on behalf of such
Underwriter on the basis of or derived from issuer information.
7. Further Agreements of the Selling Stockholders. Each Selling Stockholder agrees:
(a) For a period commencing on the date hereof and ending on the 60th day after the
date of the Prospectus (the “Selling Stockholder Lock-Up Period”), not to, directly or
indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other than the Stock), (2)
enter into any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise, (3) make any demand for
or exercise any right or file or cause to be filed a registration statement, including any
amendments, with respect to the registration of any shares of Common Stock or securities
convertible, exercisable or exchangeable into Common Stock or any other securities of the
Company or (4) publicly disclose the intention to do any of the foregoing, in each case
without the prior written consent of ▇▇▇▇▇▇ Brothers Inc., on behalf of the Underwriters;
(b) Notwithstanding the foregoing, if (1) during the last 17 days of the Selling
Stockholder Lock-Up 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 Selling
Stockholder Lock-Up Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the Selling Stockholder Lock-Up
Period, then the restrictions imposed in Section 7(a) shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings release or the
announcement of the material news or the occurrence of the material event, unless ▇▇▇▇▇▇
Brothers Inc., on behalf of the Underwriters, waive such extension in writing; provided,
however, that this paragraph shall not apply if the Underwriters publish or distribute any
research regarding an earnings release, material news or a material event, and such research
complies with Rule 139 of the Securities Act and the Common Stock is “actively traded” as
defined in Rule 101(c)(1) of Regulation M under the Exchange Act; provided further, however,
that if the Representative releases any Selling Stockholder from the restrictions imposed by
Section 7(a), in whole or in part, the Representative will be required to provide notice of
such release contemporaneously to the other Selling Stockholders and release each of the
other Selling Stockholders to sell the same pro rata portion of the remaining shares of
Common Stock then owned by such other Selling Stockholder;
21
(c) That the Stock to be sold by the Selling Stockholder hereunder is subject to the
interest of the Underwriters and that the obligations of the Selling Stockholder hereunder
shall not be terminated by any act of the Selling Stockholder, by operation of law, by the
death or incapacity of any individual Selling Stockholder or, in the case of a trust, by the
death or incapacity of any executor or trustee or the termination of such trust, or the
occurrence of any other event;
(d) Neither the Selling Stockholder nor any person acting on behalf of the Selling
Stockholder (other than, if applicable, the Company and the Underwriters) shall use or refer
to any “free writing prospectus” (as defined in Rule 405), relating to the Stock;
(e) To deliver to the Representative prior to the Initial Delivery Date a properly
completed and executed United States Treasury Department Form W-8 (if the Selling
Stockholder is a non-United States person) or Form W-9 (if the Selling Stockholder is a
United States person).
8. Expenses. The Company agrees, whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, to pay all costs, expenses, fees and
taxes incident to and in connection with (a) the authorization, issuance, sale and delivery of the
Stock and any stamp duties or other taxes payable in that connection, and the preparation and
printing of certificates for the Stock; (b) the preparation, printing and filing under the
Securities Act of the Registration Statement (including any exhibits thereto), any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment or supplement
thereto; (c) the distribution of the Registration Statement (including any exhibits thereto), any
Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment or
supplement thereto, or any document incorporated by reference therein, all as provided in this
Agreement; (d) the production and distribution of this Agreement, any supplemental agreement among
Underwriters, and any other related documents in connection with the offering, purchase, sale and
delivery of the Stock; (e) any required review by the National Association of Securities Dealers,
Inc. (the “NASD”) of the terms of sale of the Stock (including related fees and expenses of counsel
to the Underwriters); (f) the inclusion of the Stock on The Nasdaq National Market and/or any other
exchange; (g) the qualification of the Stock under the securities laws of the several jurisdictions
as provided in Section 6(a)(ix) and the preparation, printing and distribution of a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters); (h) the investor
presentations on any “road show” undertaken in connection with the marketing of the Stock,
including, without limitation, expenses associated with any electronic roadshow, and travel and
lodging expenses of the representatives and officers of the Company; (i) one-half of the cost of
any aircraft chartered and related expenses in connection with the road show; and (j) all other
costs and expenses incident to the performance of the obligations of the Company and the Selling
Stockholders under this Agreement; provided that, except as provided in this Section 8 and in
Section 13, the Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Stock which they may sell and the expenses of
advertising any offering of the Stock made by the Underwriters, and the Selling Stockholders shall
pay any transfer taxes payable in connection with their respective sales of Stock to the
Underwriters.
22
9. Conditions of Underwriters’ Obligations. The respective obligations of the Underwriters
hereunder are subject to the accuracy, when made and on each Delivery Date, of the representations
and warranties of the Company and the Selling Stockholders contained herein, to the performance by
the Company and the Selling Stockholders of their respective obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in accordance with
Section 6(a)(i); the Company shall have complied with all filing requirements applicable to
any Issuer Free Writing Prospectus used or referred to after the date hereof; no stop order
suspending the effectiveness of the Registration Statement or preventing or suspending the
use of the Prospectus or any Issuer Free Writing Prospectus shall have been issued and no
proceeding or examination for such purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company on or prior to
such Delivery Date that the Registration Statement, the Prospectus or the Pricing Disclosure
Package, or any amendment or supplement thereto, contains an untrue statement of a fact
which, in the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, counsel for the Underwriters, is material or
omits to state a fact which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the authorization,
form and validity of this Agreement, the Stock, the Registration Statement, the Prospectus
and any Issuer Free Writing Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company and the Selling
Stockholders shall have furnished to such counsel all documents and information that they
may reasonably request to enable them to pass upon such matters.
(d) Jones, Walker, Waechter, Poitevent, Carrère & ▇▇▇▇▇▇▇, L.L.P. shall have furnished
to the Representative its written opinion, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably satisfactory to
the Representative, substantially in the form attached hereto as Exhibit B-1.
(e) The Company’s local counsel shall have furnished to the Representative its written
opinion, as counsel to the Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the Representative, substantially in
the form attached hereto as Exhibit B-2.
(f) The respective counsel for each of the Selling Stockholders shall have furnished to
the Representative their written opinion, as counsel to each of the Selling Stockholders for
whom they are acting as counsel, addressed to the Underwriters and
23
dated such Delivery Date, in form and substance reasonably satisfactory to the
Representative, substantially in the form attached hereto as Exhibit B-3.
(g) The Representative shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, counsel for the
Underwriters, such opinion or opinions, dated such Delivery Date, with respect to the
issuance and sale of the Stock, the Registration Statement, the Prospectus and the Pricing
Disclosure Package and other related matters as the Representative may reasonably require,
and the Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the Representative shall have received
from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and PricewaterhouseCoopers LLP a letter or letters, in form and
substance satisfactory to the Representative, addressed to the Underwriters and dated the
date hereof (i) confirming that they are independent public accountants (or, in the case of
PricewaterhouseCoopers LLP, independent) within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, and (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since the respective dates as
of which specified financial information is given in the most recent Preliminary Prospectus,
as of a date not more than three days prior to the date hereof), the firm’s conclusions and
findings with respect to the financial information and other matters ordinarily covered by
accountants’ “comfort letters” to underwriters in connection with registered public
offerings.
(i) With respect to the letter or letters of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and
PricewaterhouseCoopers LLP referred to in the preceding paragraph and delivered to the
Representative concurrently with the execution of this Agreement (the “initial letter”), the
Company shall have furnished to the Representative a letter or letters (the “bring-down
letter”) of such accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants (or, in the case of
PricewaterhouseCoopers LLP, independent) within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the Prospectus, as
of a date not more than three days prior to the date of the bring-down letter), the firm’s
conclusions and findings with respect to the financial information and other matters covered
by the initial letter and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
(j) The Company shall have furnished to the Representative a certificate, dated such
Delivery Date, of its Chief Executive Officer and its Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the Company in Section 1
are true and correct on and as of such Delivery Date, and the Company
24
has complied with all its agreements contained herein and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to such
Delivery Date;
(ii) No stop order suspending the effectiveness of the Registration Statement
has been issued; and no proceedings or examination for that purpose have been
instituted or, to the knowledge of such officers, threatened; and
(iii) They have carefully examined the Registration Statement, the Prospectus
and the Pricing Disclosure Package, and, in their opinion, (A) (1) the Registration
Statement, as of the Effective Date, (2) the Prospectus, as of its date and on the
applicable Delivery Date, or (3) the Pricing Disclosure Package, as of the
Applicable Time, did not and do not contain any untrue statement of a material fact
and did not and do not omit to state a material fact required to be stated therein
or necessary to make the statements therein (except in the case of the Registration
Statement, in the light of the circumstances under which they were made) not
misleading, except, in the case of the Pricing Disclosure Package, that the price of
the Stock and disclosures directly relating thereto are included on the cover page
of the Prospectus, and (B) since the Effective Date, no event has occurred that
should have been set forth in a supplement or amendment to the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus that has not been so
set forth;
(k) Each Selling Stockholder shall have furnished to the Representative on such
Delivery Date a certificate, dated such Delivery Date, signed by, or on behalf of, the
Selling Stockholder stating that the representations, warranties and agreements of the
Selling Stockholder contained herein are true and correct on and as of such Delivery Date
and that the Selling Stockholder has complied with all its agreements contained herein and
has satisfied all the conditions on its part to be performed or satisfied hereunder at or
prior to such Delivery Date.
(l) Except as described in the most recent Preliminary Prospectus, (i) neither the
Company nor any of its subsidiaries shall have sustained, since the date of the latest
audited financial statements included or incorporated by reference in the most recent
Preliminary Prospectus, any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree or (ii) since such date there shall not have
been any change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), results of operations, stockholders’
equity, properties, management, business or prospects of the Company and its subsidiaries
taken as a whole, the effect of which, in any such case described in clause (i) or (ii), is,
in the judgment of the Representative, so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the Stock being
delivered on such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
25
(m) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall
have occurred in the rating accorded the Company’s debt securities or preferred stock by any
“nationally recognized statistical rating organization” (as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Rules and Regulations), and (ii) no such
organization shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company’s debt securities or
preferred stock.
(n) Subsequent to the execution and delivery of this Agreement there shall not have
occurred any of the following: (i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market, shall have been
suspended or materially limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such exchange or
such market by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in hostilities involving the United
States or there shall have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change in general economic,
political or financial conditions, including, without limitation, as a result of terrorist
activities after the date hereof (or the effect of international conditions on the financial
markets in the United States shall be such), as to make it, in the judgment of the
Representative, impracticable or inadvisable to proceed with the public offering or delivery
of the Stock being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(o) The Nasdaq National Market, Inc. shall have approved the Stock for inclusion,
subject only to official notice of issuance.
(p) The Lock-Up Agreements between the Representative and the officers and directors of
the Company set forth on Schedule 3, delivered to the Representative on or before
the date of this Agreement, shall be in full force and effect on such Delivery Date.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its directors,
officers and employees and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and sales of Stock),
to which that Underwriter, director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
26
damage, liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in (A) any Preliminary Prospectus,
the Registration Statement, the Prospectus or in any amendment or supplement thereto, (B)
any Issuer Free Writing Prospectus or in any amendment or supplement thereto or (C) any
Permitted Issuer Information used or referred to in any “free writing prospectus” (as
defined in Rule 405) used or referred to by any Underwriter, (D) any “road show” (as defined
in Rule 433) not constituting an Issuer Free Writing Prospectus (a “Non-Prospectus Road
Show”) or (E) any Blue Sky application or other document prepared or executed by the Company
(or based upon any written information furnished by the Company for use therein)
specifically for the purpose of qualifying any or all of the Stock under the securities laws
of any state or other jurisdiction (any such application, document or information being
hereinafter called a “Blue Sky Application”) or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer
Free Writing Prospectus or in any amendment or supplement thereto or in any Permitted Issuer
Information, any Non-Prospectus Road Show or any Blue Sky Application, any material fact
required to be stated therein or necessary to make the statements therein not misleading,
and shall reimburse each Underwriter and each such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses reasonably incurred
by that Underwriter, director, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the Registration Statement,
the Prospectus, any Issuer Free Writing Prospectus or in any such amendment or supplement
thereto or in any Permitted Issuer Information, any Non-Prospectus Road Show or any Blue Sky
Application, in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representative by or on behalf of any
Underwriter specifically for inclusion therein, which information consists solely of the
information specified in Section 10(f). The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to any Underwriter or to any director,
officer, employee or controlling person of that Underwriter.
(b) The Selling Stockholders, severally in proportion to the number of shares of Stock
to be sold by each of them hereunder, shall indemnify and hold harmless each Underwriter,
its directors, officers and employees, and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, director, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto or in any Permitted Issuer
27
Information, any Non-Prospectus Road Show or any “free writing prospectus” (as defined
in Rule 405), prepared by or on behalf of the Selling Stockholder or used or referred to by
the Selling Stockholder in connection with the offering of the Stock in violation of Section
7(d) (a “Selling Stockholder Free Writing Prospectus”), but in each case only to the extent
that the untrue statement or alleged untrue statement has been made or incorporated therein
by reference in reliance upon and in conformity with written information furnished to the
Company by such Selling Stockholder specifically stating that it is for use in preparation
thereof, (ii) the omission or alleged omission to state in any Preliminary Prospectus,
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto or in any Permitted Issuer Information, any Non-Prospectus
Road Show or any Selling Stockholder Free Writing Prospectus, any material fact required to
be stated therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the omission or alleged omission has been made or incorporated
therein by reference in reliance upon and in conformity with written information furnished
to the Company by such Selling Stockholder specifically stating that it is for use in
preparation thereof, and shall reimburse each Underwriter, its directors, officers and
employees and each such controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Underwriter, its directors, officers and employees or
controlling persons in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are incurred or
(iii) any breach of any representation or warranty of the Selling Stockholders in this
Agreement or any certificate or other agreement delivered pursuant hereto or contemplated
hereby. The liability of the Selling Stockholder under the indemnity agreement contained in
this paragraph shall be limited to an amount equal to the total net proceeds from the
offering of the shares of the Stock purchased under the Agreement received by the Selling
Stockholder, as set forth in the table on the cover page of the Prospectus. The foregoing
indemnity agreement is in addition to any liability that the Selling Stockholder may
otherwise have to any Underwriter or any officer, employee or controlling person of that
Underwriter.
(c) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, each Selling Stockholder, their respective directors, officers and employees, and
each person, if any, who controls the Company or such Selling Stockholder within the meaning
of Section 15 of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company, such Selling
Stockholder or any such director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto or in any Non-Prospectus Road Show or Blue Sky Application,
or (ii) the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto or in any Non-Prospectus Road Show or Blue Sky Application,
any material fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the
28
extent that the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representative by or on behalf of that
Underwriter specifically for inclusion therein, which information is limited to the
information set forth in Section 10(f). The foregoing indemnity agreement is in addition to
any liability that any Underwriter may otherwise have to the Company, such Selling
Stockholder or any such director, officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party under this Section 10 of notice of
any claim or the commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under this Section 10, notify
the indemnifying party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has been
materially prejudiced by such failure and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 10. If any such claim or action shall
be brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the indemnified party
under this Section 10 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Representative shall have the right to employ
counsel to represent jointly the Representative and those other Underwriters and their
respective directors, officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company or any Selling Stockholder under this Section 10 if (i) the
Company, the Selling Stockholders and the Underwriters shall have so mutually agreed; (ii)
the Company and the Selling Stockholders have failed within a reasonable time to retain
counsel reasonably satisfactory to the Underwriters; (iii) the Underwriters and their
respective directors, officers, employees and controlling persons shall have reasonably
concluded that there may be legal defenses available to them that are different from or in
addition to those available to the Company and the Selling Stockholders; or (iv) the named
parties in any such proceeding (including any impleaded parties) include both the
Underwriters or their respective directors, officers, employees or controlling persons, on
the one hand, and the Company and the Selling Stockholders, on the other hand, and
representation of both sets of parties by the same counsel would be inappropriate due to
actual or potential differing interests between them, and in any such event the fees and
expenses of such separate counsel shall be paid by the Company. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the indemnified
parties are actual
29
or potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not include any findings of
fact or admissions of fault or culpability as to the indemnified party, or (ii) be liable
for any settlement of any such action effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment for the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from and against any loss
or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under Section 10(a),
10(b) or 10(c) in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each party providing indemnity under Section 10(a), 10(b)
or 10(c), as the case may be, shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Company and the Selling
Stockholders, on the one hand, and the Underwriters, on the other, from the offering of the
Stock or (ii) if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the Selling
Stockholders, on the one hand, and the Underwriters, on the other, with respect to the
statements or omissions that resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders, on the one hand, and the
Underwriters, on the other, with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock purchased under this
Agreement (before deducting expenses) received by the Company and the Selling Stockholders,
as set forth in the table on the cover page of the Prospectus, on the one hand, and the
total underwriting discounts and commissions received by the Underwriters with respect to
the shares of the Stock purchased under this Agreement, as set forth in the table on the
cover page of the Prospectus, on the other hand. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by the Company,
the Selling Stockholders or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Stockholders and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 10(e) were to be
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 into account the
equitable considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 10(e) shall be deemed to include, for purposes of this
Section 10(e), 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 10(e), no
30
Underwriter shall be required to contribute any amount in excess of the amount by which
the net proceeds from the sale of the Stock underwritten by it exceeds the amount of any
damages that such Underwriter has otherwise paid or become liable to pay by reason of any
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 Underwriters’ obligations to contribute as provided in this Section
10(e) are several in proportion to their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company and each Selling Stockholder
acknowledges and agrees that the statements regarding delivery of shares by the Underwriters
set forth on the cover page of, and the concession and reallowance figures and the paragraph
relating to stabilization by the Underwriters appearing under the caption “Underwriting” in,
the most recent Preliminary Prospectus and the Prospectus are correct and constitute the
only information concerning such Underwriters furnished in writing to the Company by or on
behalf of the Underwriters specifically for inclusion in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto or in any Non-Prospectus Road Show.
11. Defaulting Underwriters. If, on any Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Stock that the defaulting Underwriter agreed but failed to
purchase on such Delivery Date in the respective proportions which the number of shares of the Firm
Stock set forth opposite the name of each remaining non-defaulting Underwriter in Schedule
1 hereto bears to the total number of shares of the Firm Stock set forth opposite the names of
all the remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however, that
the remaining non-defaulting Underwriters shall not be obligated to purchase any of the Stock on
such Delivery Date if the total number of shares of the Stock that the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the number of shares of the Stock that it
agreed to purchase on such Delivery Date pursuant to the terms of Section 3. If the foregoing
maximums are exceeded, the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representative who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Stock to be purchased on
such Delivery Date. If the remaining Underwriters or other underwriters satisfactory to the
Representative do not elect to purchase the shares that the defaulting Underwriter or Underwriters
agreed but failed to purchase on such Delivery Date, this Agreement (or, with respect to any Option
Stock Delivery Date, the obligation of the Underwriters to purchase, and of the Selling
Stockholders to sell, the Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in Sections 8 and 13. As
used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless
the context requires otherwise,
31
any party not listed in Schedule 1 hereto that, pursuant to this Section 11, purchases
Stock that a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have
to the Company and the Selling Stockholders for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Stock of a defaulting or withdrawing
Underwriter, either the Representative or the Company may postpone the Delivery Date for up to
seven full business days in order to effect any changes that in the opinion of counsel for the
Company or counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may be terminated by the
Representative by notice given to and received by the Company and the Selling Stockholders prior to
delivery of and payment for the Firm Stock if, prior to that time, any of the events described in
Sections 9(m), 9(n) and 9(o) shall have occurred or if the Underwriters shall decline to purchase
the Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters’ Expenses. If (a) the Company or any Selling Stockholder
shall fail to tender the Stock for delivery to the Underwriters by reason of any failure, refusal
or inability on the part of the Company or the Selling Stockholders to perform any agreement on
their part to be performed, or because any other condition to the Underwriters’ obligations
hereunder required to be fulfilled by the Company or the Selling Stockholders is not fulfilled for
any reason or (b) the Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement, the Company will reimburse the Underwriters for all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Stock, and upon demand and
presentation of reasonable supporting documentation, the Company shall pay the full amount thereof
to the Representative. If this Agreement is terminated pursuant to Section 11 by reason of the
default of one or more Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
14. Research Analyst Independence. The Company acknowledges that the Underwriters’ research
analysts and research departments are required to be independent from their respective investment
banking divisions and are subject to certain regulations and internal policies, and that such
Underwriters’ research analysts may hold views and make statements or investment recommendations
and/or publish research reports with respect to the Company and/or the offering that differ from
the views of their respective investment banking divisions. The Company and the Selling
Stockholders hereby waive and release, to the fullest extent permitted by law, any claims that the
Company or the Selling Stockholders may have against the Underwriters with respect to any conflict
of interest that may arise from the fact that the views expressed by their independent research
analysts and research departments may be different from or inconsistent with the views or advice
communicated to the Company or the Selling Stockholders by such Underwriters’ investment banking
divisions. The Company and the Selling Stockholders acknowledge that each of the Underwriters is a
full service securities firm and as such from time to time, subject to applicable securities laws,
may effect transactions for its own account or the account of its customers and hold long or short
positions in debt or equity
32
securities of the companies that may be the subject of the transactions contemplated by this
Agreement.
15. No Fiduciary Duty. The Company and the Selling Stockholders acknowledge and agree that in
connection with this offering, sale of the Stock or any other services the Underwriters may be
deemed to be providing hereunder, notwithstanding any preexisting relationship, advisory or
otherwise, between the parties or any oral representations or assurances previously or subsequently
made by the Underwriters: (i) no fiduciary or agency relationship between the Company, Selling
Stockholders and any other person, on the one hand, and the Underwriters, on the other, exists;
(ii) the Underwriters are not acting as advisors, expert or otherwise, to either the Company or the
Selling Stockholders, including, without limitation, with respect to the determination of the
public offering price of the Stock, and such relationship between the Company and the Selling
Stockholders, on the one hand, and the Underwriters, on the other, is entirely and solely
commercial, based on arms-length negotiations; (iii) any duties and obligations that the
Underwriters may have to the Company or Selling Stockholders shall be limited to those duties and
obligations specifically stated herein; and (iv) the Underwriters and their respective affiliates
may have interests that differ from those of the Company and the Selling Stockholders. The Company
and the Selling Stockholders hereby waive any claims that the Company or the Selling Stockholders
may have against the Underwriters with respect to any breach of fiduciary duty in connection with
this offering.
16. Notices, Etc. All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or facsimile
transmission to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Registration (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of
any notice pursuant to Section 10(d), to the Director of Litigation, Office of the
General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
(b) if to the Company, shall be delivered or sent by mail or facsimile
transmission to the address of the Company set forth in the Registration Statement,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇); and
(c) if to any Selling Stockholder, shall be delivered or sent by mail or
facsimile transmission to such Selling Stockholder at the address set forth on
Schedule 2 hereto.
Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof. The Company and the Selling Stockholders shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the Underwriters by ▇▇▇▇▇▇
Brothers Inc., and the Company and the Underwriters shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the Selling Stockholders.
17. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company, the Selling Stockholders and
33
their respective personal representatives and successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company and the Selling Stockholders
contained in this Agreement shall also be deemed to be for the benefit of the directors, officers
and employees of the Underwriters and each person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Securities Act and (B) the indemnity agreement of the
Underwriters contained in Section 10(c) of this Agreement shall be deemed to be for the benefit of
the directors of the Company, the officers of the Company who have signed the Registration
Statement and any person controlling the Company within the meaning of Section 15 of the Securities
Act and any directors of a Selling Stockholder and any person controlling such Selling Stockholder
within the meaning of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in this Section 17, any
legal or equitable right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
18. Survival. The respective indemnities, representations, warranties and agreements of the
Company, the Selling Stockholders and the Underwriters contained in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall survive the delivery of and payment
for the Stock and shall remain in full force and effect, regardless of any investigation made by or
on behalf of any of them or any person controlling any of them.
19. Definition of the Terms “Business Day” and “Subsidiary”. For purposes of this Agreement,
(a) “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on
which banking institutions in New York are generally authorized or obligated by law or executive
order to close and (b) “subsidiary” has the meaning set forth in Rule 405 of the Rules and
Regulations.
20. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
21. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original but
all such counterparts shall together constitute one and the same instrument.
22. Headings. The headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement among the Company, the Selling
Stockholders and the Underwriters, please indicate your acceptance in the space provided for that
purpose below.
| Very truly yours, HORIZON OFFSHORE, INC. |
||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III | |||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III | |||
| Title: | Executive Vice President and General Counsel |
|||
| ▇▇▇▇▇▇▇ ASSOCIATES, L.P. |
||||
| By: | ▇▇▇▇▇▇▇ CAPITAL ADVISORS, | |||
| AS GENERAL PARTNER | ||||
| By: | ▇▇▇▇▇▇▇ ASSOCIATES, INC., | |||
| AS GENERAL PARTNER | ||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| Title: | Vice President | |||
| ▇▇▇▇▇▇▇ INTERNATIONAL, L.P. |
||||
| By: | ▇▇▇▇▇▇▇ INTERNATIONAL CAPITAL ADVISORS INC., | |||
| AS ATTORNEY-IN-FACT | ||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| Title: | Vice President | |||
| HIGHLAND CRUSADER OFFSHORE PARTNERS, L.P. |
||||
| By: | STRAND ADVISORS, INC., | |||
| AS GENERAL PARTNER | ||||
| By: | /s/ J. ▇▇▇▇▇ Clavarra | |||
| Name: | J. ▇▇▇▇▇ Clavarra | |||
| Title: | Officer | |||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III | ||||||||
| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III | ||||||||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III | ||||||||
| TRUST A-4 UNDER AMENDED
AND RESTATED TRUST U/A ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, DATED SEPTEMBER 20, 1983 |
||||||||
| By: | PNC BANK, N.A., TRUSTEE | |||||||
| By: | /s/ ▇▇▇▇▇▇ Aichotz | |||||||
| Title: Trust Officer | ||||||||
| TRUST C UNDER AMENDED
AND RESTATED TRUST U/A ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, DATED SEPTEMBER 20, 1983 |
||||||||
| By: | PNC BANK, N.A., TRUSTEE | |||||||
| By: | /s/ ▇▇▇▇▇▇ Aichotz | |||||||
| Title: Trust Officer | ||||||||
| MILFAM II, L.P. | ||||||||
| By: | MILFAM LLC, GENERAL PARTNER | |||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III | |||||||
| Title: Managing Member | ||||||||
Accepted:
▇▇▇▇▇▇ Brothers Inc.
For itself and as Representative
of the several Underwriters named
in Schedule 1 hereto
of the several Underwriters named
in Schedule 1 hereto
By: |
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
SCHEDULE 1
| Number of Shares | ||||
| Underwriters | of Firm Stock | |||
▇▇▇▇▇▇ Brothers Inc. |
5,525,000 | |||
▇▇▇▇▇▇▇▇ & Company, Inc. |
1,275,000 | |||
▇▇▇▇▇▇▇ ▇▇▇▇ & Company L.L.C |
1,275,000 | |||
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. |
425,000 | |||
Total |
8,500,000 | |||
SCHEDULE 2
| Number of Shares of | Number of Shares of | |||||||
| Name and Address of Selling Stockholder | Firm Stock | Option Stock | ||||||
▇▇▇▇▇▇▇ Associates, L.P. |
3,819,249 | 345,390 | ||||||
▇▇▇▇▇▇▇ International, L.P. |
582,775 | 518,085 | ||||||
Highland Crusader Offshore Partners, L.P. |
198,562 | 38,949 | ||||||
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III |
788,031 | 154,575 | ||||||
Trust A-4, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III |
594,978 | 116,707 | ||||||
Trust C, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III |
208,680 | 40,933 | ||||||
Milfam II, L.P. |
307,725 | 60,361 | ||||||
Total |
6,500,000 | 1,275,000 | ||||||
SCHEDULE 3
PERSONS DELIVERING LOCK-UP AGREEMENTS
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Exhibit A
LOCK-UP LETTER AGREEMENT
▇▇▇▇▇▇ Brothers Inc.
As Representative of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representative of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that you and certain other firms (the “Underwriters”) propose to
enter into an Underwriting Agreement (the “Underwriting Agreement”) providing for the purchase by
the Underwriters of shares (the “Stock”) of Common Stock, par value $0.00001 per share (the
“Common Stock”), of Horizon Offshore, Inc., a Delaware corporation (the “Company”), and that
the Underwriters propose to reoffer the Stock to the public (the “Offering”).
In consideration of the execution of the Underwriting Agreement by the Underwriters, and for
other good and valuable consideration, the undersigned hereby irrevocably agrees that, without the
prior written consent of ▇▇▇▇▇▇ Brothers Inc., on behalf of the Underwriters, the undersigned will
not, directly or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter
into any transaction or device that is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any shares of Common Stock (including,
without limitation, shares of Common Stock that may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the Securities and Exchange Commission
and shares of Common Stock that may be issued upon exercise of any options or warrants) or
securities convertible into or exercisable or exchangeable for Common Stock (other than the Stock),
(2) enter into any swap or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of shares of Common Stock, whether any
such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock
or other securities, in cash or otherwise, (3) make any demand for or exercise any right or cause
to be filed a registration statement, including any amendments thereto, with respect to the
registration of any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or any other securities of the Company or (4) publicly disclose the
intention to do any of the foregoing, for a period commencing on the date hereof and ending on the
90th day after the date of the Prospectus relating to the Offering (such 90-day period, the
“Lock-Up Period”). The foregoing sentence shall not apply to (A) bona fide gifts, sales or other
dispositions of shares of any class of the Company’s capital stock, in each case that are made
exclusively between and among the undersigned or members of the undersigned’s family, or affiliates
of the undersigned, including its partners (if a partnership) or members (if a limited liability
company), provided that it shall be a condition to any such transfer that (i) the transferee/donee
agrees to be bound
by the terms of the lock-up letter agreement (including, without limitation, the restrictions
set forth in the preceding sentence) to the same extent as if the transferee/donee were a party
hereto, (ii) no filing by any party (donor, donee, transferor or transferee) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), shall be required or shall be voluntarily
made in connection with such transfer or distribution (other than a filing on a Form 5, Schedule
13D or Schedule 13G (or 13D-A or 13G-A) made after the expiration of the 90-day period referred to
above), (iii) each party (donor, donee, transferor or transferee) shall not be required by law
(including without limitation the disclosure requirements of the Securities Act of 1933, as
amended, and the Exchange Act) to make, and shall agree to not voluntarily make, any public
announcement of the transfer or disposition, and (iv) the undersigned notifies ▇▇▇▇▇▇ Brothers Inc.
at least two business days prior to the proposed transfer or disposition or (B) the sale by the
undersigned of shares of Common Stock to the Company in satisfaction of tax liabilities associated
with the vesting of previously issued restricted shares of Common Stock owned by the undersigned.
Notwithstanding the foregoing, if (1) during the last 17 days of the Lock-Up 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 Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of the Lock-Up Period,
then the restrictions imposed by this Lock-Up Letter Agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings release or the
announcement of the material news or the occurrence of the material event, unless ▇▇▇▇▇▇ Brothers
Inc. waives such extension in writing. The undersigned hereby further agrees that, prior to
engaging in any transaction or taking any other action that is subject to the terms of this Lock-Up
Letter Agreement during the period from the date of this Lock-Up Letter Agreement to and including
the 34th day following the expiration of the Lock-Up Period, it will give notice thereof
to the Company and will not consummate such transaction or take any such action unless it has
received written confirmation from the Company that the Lock-Up Period (as such may have been
extended pursuant to this paragraph) has expired; provided, however, that this paragraph shall not
apply if the Underwriters publish or distribute any research regarding an earnings release,
material news or material event, and such research complies with Rule 139 of the Securities Act and
the Common Stock is “actively traded” as defined in Rule 101(c)(1) of Regulation M under the
Exchange Act.
In furtherance of the foregoing, the Company and its transfer agent are hereby authorized to
decline to make any transfer of securities if such transfer would constitute a violation or breach
of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies the Underwriters that it does not intend to
proceed with the Offering, 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
2
the Stock, the undersigned will be released from its obligations under this Lock-Up Letter
Agreement.
The undersigned understands that the Company and the Underwriters will proceed with
the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of factors, including market
conditions. Any Offering will only be made pursuant to an Underwriting Agreement, the terms of
which are subject to negotiation between the Company, the Selling Stockholders named therein and
the Underwriters.
[Signature page follows]
3
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Lock-Up Letter Agreement and that, upon request, the undersigned will
execute any additional documents necessary in connection with the enforcement hereof. Any
obligations of the undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
| Very truly yours, |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Dated: _______________, 2006
4
EXHIBIT B-1
FORM OF OPINION OF ISSUER’S COUNSEL
(i) Each of the Company and Horizon Offshore Contractors, Inc. (“Contractors”) and Horizon
Vessels, Inc. (together with Contractors, the “Subsidiaries” and each a “Subsidiary”) has been duly
organized, is validly existing and in good standing as a corporation or other business entity under
the laws of its jurisdiction of organization and is duly qualified to do business and in good
standing as a foreign corporation in jurisdictions where such qualification is required. Each of
the Company and the Subsidiaries has all power and authority necessary to own or hold its
properties and conduct the businesses in which it is engaged.
(ii) The Company has an authorized capitalization as set forth in the Prospectus, and all of
the issued shares of capital stock of the Company have been duly authorized and validly issued, are
fully paid and non-assessable, conform to the description thereof contained in the Prospectus and
were not issued in violation of any preemptive right, resale right, right of first refusal or
similar right. All of the Company’s options, warrants and other rights to purchase or exchange any
securities for shares of the Company’s capital stock have been duly authorized and validly issued
and conform to the description thereof contained in the Prospectus. All of the issued shares of
capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid,
non-assessable and are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or adverse claims (within the meaning of Section 8-102 of the Uniform
Commercial Code), except for such liens, encumbrances, equities or adverse claims created pursuant
to the Company’s financing agreements which are filed as exhibits to, or incorporated by reference
into, the Registration Statement, or as could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(iii) The shares of Stock to be issued and sold by the Company to the Underwriters under the
Agreement have been duly authorized and, upon payment and delivery in accordance with the
Agreement, will be validly issued, fully paid and non-assessable and will conform to the
description thereof contained in the Prospectus. The shares of Stock to be sold by the Selling
Stockholders under the Agreement have been duly authorized, validly issued, are fully paid and
non-assessable and conform to the description thereof contained in the Prospectus.
(iv) There are no preemptive rights under federal law or under the Delaware General
Corporation Law to subscribe for or purchase shares of the Stock. Except as described in the
Prospectus, there are no preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any shares of the Stock pursuant to the Company’s
charter or by-laws (or similar organizational documents) or any agreement or other instrument known
to such counsel.
(v) The Agreement has been duly and validly authorized, executed and delivered by the Company.
(vi) The execution, delivery and performance of the Agreement by the Company, the consummation
of the transactions contemplated by the Agreement and the
B-1-1
application of the proceeds from the sale of the Stock as described under “Use of Proceeds” in
the Prospectus do not and will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, impose any lien, charge or encumbrance upon any property or assets of
the Company and the Subsidiaries, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement, license or other agreement or instrument known to such counsel to which the
Company or any of the Subsidiaries is a party or by which the Company or any of the Subsidiaries is
bound or to which any of the property or assets of the Company or any of the Subsidiaries is
subject; (ii) result in any violation of the provisions of the charter or by-laws (or similar
organizational documents) of the Company or any of the Subsidiaries; or (iii) result in any
violation of any statute or any rule or regulation, or any order known to such counsel issued by
any court or governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their properties or assets.
(vii) Except for the registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the purchase and sale of the Stock by
the Underwriters, no consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their properties or assets is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the transactions contemplated
hereby.
(viii) Except with respect to the existing registration rights agreements identified in the
Prospectus, to such counsel’s knowledge, 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 owned
or to be owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the Securities Act.
(ix) To such counsel’s knowledge, except as disclosed in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of the Subsidiaries is a party or of
which any property or assets of the Company or any of the Subsidiaries is the subject that could
reasonably be expected to have a Material Adverse Effect or could reasonably be expected to have a
material adverse effect on the performance of the Agreement or the consummation of the transactions
contemplated thereby; and, to such counsel’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or others.
(x) The Registration Statement was declared effective under the Securities Act as of the date
and time specified in such opinion, and the Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) of the Rules and Regulations specified in such opinion on the date
specified therein. To such counsel’s knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding or examination for such purpose has been
instituted or threatened by the Commission.
B-1-2
(xi) (A) The Registration Statement, on the Effective Date and on the applicable Delivery
Date, and (B) the Prospectus, when filed with the Commission pursuant to Rule 424(b) and on the
applicable Delivery Date, were, on their face, appropriately responsive, in all material respects,
to the requirements of the Securities Act and the Rules and Regulations, except that in each case
such counsel need express no opinion with respect to the financial statements or other financial
and related accounting data contained or incorporated by reference in or omitted from the
Registration Statement or the Prospectus.
(xii) The statements made in the Prospectus under the caption “Description of Capital Stock,”
insofar as they purport to constitute summaries of the terms of the Common Stock (including the
Stock), constitute accurate summaries of the terms of such Common Stock in all material respects.
(xiii) The statements made in the Prospectus under the captions “Summary,” “Risk Factors,”
“Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and “Business,” insofar as they purport to constitute summaries of the terms of
statutes, rules or regulations, legal and governmental proceedings or contracts and other
documents, constitute accurate summaries of the terms of such statutes, rules and regulations,
legal and governmental proceedings and contracts and other documents in all material respects.
(xiv) To such counsel’s knowledge, there are no contracts or other documents of a character
required to be described in the Registration Statement or Prospectus or to be filed as exhibits to
the Registration Statement or incorporated by reference therein that are not described and filed
therewith or incorporated by reference therein as required.
In rendering such opinion, such counsel may (i) state that its opinion is limited to matters
governed by the federal laws of the United States of America and the Delaware General Corporation
Law.
Such counsel shall also have furnished to the Representative a written statement, addressed to
the Underwriters and dated such Delivery Date, in form and substance satisfactory to the
Representative, to the effect that (x) such counsel has acted as counsel to the Company (A) within
a specifically defined scope of work, as requested by the Company from time to time pursuant to
such counsel’s engagement, (B) has acted as counsel to the Company in connection with previous
financing transactions and (C) has acted as counsel to the Company in connection with the
preparation of the Registration Statement, the Prospectus and the Pricing Disclosure Package, and
(y) based on the foregoing, nothing has come to the attention of such counsel that causes it to
believe that:
(a) the Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading;
(b) the Prospectus, as of its date and as of such Delivery Date, contained or contains
any untrue statement of a material fact or omitted or omits to state any material fact
B-1-3
required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; or
(c) the most recent Preliminary Prospectus, together with the Issuer Free Writing
Prospectuses set forth on a schedule to such opinion acceptable to counsel to the
Underwriters, as of the Applicable Time, and except that the price of the Stock and
disclosures directly relating thereto are included on the cover page of the Prospectus,
contained any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading,
except that in each case such counsel need express no opinion with respect to the financial
statements or other financial and related accounting data contained or incorporated by reference in
or omitted from the Registration Statement, the Prospectus or the most recent Preliminary
Prospectus. The foregoing opinion and statement may be qualified by a statement to the effect that
such counsel does not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the Prospectus or the most recent Preliminary
Prospectus, except to the extent set forth in paragraphs (xii) and (xiii) above.
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FORM OF OPINION OF FOREIGN SUBSIDIARIES’ COUNSEL
(i) Each of Horizon Marine Construction Ltd. (“Marine”) and Horizon Vessels International Ltd.
(together with Marine, the “Subsidiaries” and each a “Subsidiary”) has been duly organized, is
validly existing and in good standing as a corporation or other business entity under the laws of
its jurisdiction of organization and is duly qualified to do business and in good standing as a
foreign corporation in jurisdictions where such qualification is required. Each of the
Subsidiaries has all power and authority necessary to own or hold its properties and conduct the
businesses in which it is engaged.
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FORM OF OPINION OF SELLING STOCKHOLDER(S)’ COUNSEL
(i) The Selling Stockholder has full right, power and authority, corporate or otherwise, to
enter into the Underwriting Agreement. The execution, delivery and performance of the Underwriting
Agreement by the Selling Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby and thereby do not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under, any agreement
pertaining to the Company or loan agreement known to such counsel to which the Selling Stockholder
is a party or by which the Selling Stockholder is bound or to which any of the property or assets
of the Selling Stockholder is subject, (ii) result in any violation of the provisions of the
charter or by-laws, partnership agreement, deed of trust or similar organizational documents of the
Selling Stockholder or (iii) result in any violation of any statute or any rule or regulation, or
any order known to such counsel issued by any court or governmental agency or body having
jurisdiction over the Selling Stockholder or the property or assets of the Selling Stockholder,
except in the case of clauses (i) and (iii) for such conflicts, breaches, violations or defaults as
could not, individually or in the aggregate, reasonably be expected to have a material adverse
effect on the ability of such Selling Stockholder to consummate the transactions contemplated by
the Underwriting Agreement.
(ii) Except for the registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required under the Exchange
Act and applicable state or foreign securities laws in connection with the purchase and sale of the
Stock by the Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any court or governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder is required for the execution,
delivery and performance of the Underwriting Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated hereby and thereby.
(iii) The Underwriting Agreement has been duly and validly authorized, executed and delivered
by or on behalf of the Selling Stockholder.
(iv) Upon payment for the Common Stock to be sold by the Selling Stockholder, delivery of such
Common Stock, as directed by the Underwriters, to Cede & Co. (“Cede”) or such other nominee as may
be designated by the Depository Trust Company (“DTC”), registration of such Common Stock in the
name of Cede or such other nominee and the crediting of such Common Stock on the books of DTC to
“securities accounts” (within the meaning of Section 8-501(a) of the Uniform Commercial Code as in
effect in the State of New York (the “NY UCC”)) of the Underwriters (assuming that neither DTC nor
any such Underwriter has notice of any “adverse claim” (within the meaning of Section 8-105 of the
NY UCC to such Common Stock)), (i) the Underwriters will acquire a valid “security entitlement”
(within the meaning of Section 8-102(a)(17) of the NY UCC) in respect of such Common Stock and (ii)
no action based on any “adverse claim” (within the meaning of Section 8-102(a)(1) of the NY UCC) to
such Common Stock may be properly asserted against the Underwriters with respect to such “security
entitlement.” For purposes of this opinion, we assume that when such payment, delivery and
crediting occur, (A) such Common Stock will have been registered in the
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name of Cede or another nominee designated by DTC, in each case on the Company’s Common Stock
registry in accordance with its organizational documents and applicable law, (B) DTC will be
registered as a “clearing corporation” (within the meaning of Section 8-102(a)(5) of the NY UCC)
and (C) appropriate entries to the “securities accounts” of the several Underwriters on the records
of DTC will have been made pursuant to the NY UCC.
In rendering such opinion, such counsel may (i) state that its opinion is limited to matters
governed by the federal laws of the United States of America, the laws of [insert name of
jurisdiction in which such counsel practices (e.g., “the State of New York”)] and [insert
description of law (e.g., corporate, partnership, trust, etc.) of the jurisdiction in which the
selling stockholder is organized (e.g., “the Delaware General Corporation Law”)].
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