EXHIBIT 1.1
HURON CONSULTING GROUP
INC.
Shares
Common Stock
($0.01 Par Value)
UNDERWRITING
AGREEMENT
,
2006
UNDERWRITING
AGREEMENT
,
2006
UBS Securities LLC
William Blair & Company,
L.L.C.
Deutsche Bank Securities
Inc.
Robert W. Baird & Co.
Incorporated
as Representatives
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171
Ladies and Gentlemen:
HCG Holdings LLC (the “Selling
Stockholder”) proposes to sell to you, as representatives
(the “Representatives”) of the underwriters named in
Schedule A annexed hereto (the “Underwriters”), an
aggregate of
shares (the “Firm Shares”) of Common Stock, $0.01 par
value (the “Common Stock”), of Huron Consulting Group
Inc., a Delaware corporation (the “Company”). In
addition, solely for the purpose of covering over-allotments, the
Selling Stockholder proposes to grant to the Underwriters the
option to purchase from the Selling Stockholder up to an additional
shares of Common Stock (the “Additional Shares”). The
Firm Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the “Shares.” The Shares are
described in the Prospectus that is referred to below.
The Company has filed, in accordance
with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations thereunder (collectively, the
“Act”), with the Securities and Exchange Commission
(the “Commission”) a registration statement on Form S-1
(File No. 333-130951) including a prospectus, relating to the
Shares. Except where the context otherwise requires,
“Registration Statement” as used herein, means the
registration statement, as amended at the time of such registration
statement’s effectiveness for purposes of Section 11 of
the Act, as such section applies to the respective Underwriters
(the “Effective Time”), including (i) all
documents filed as a part thereof, (ii) any information
contained in a prospectus filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the
registration statement at the Effective Time pursuant to
Rule 430A or Rule 430C under the Act and (iii) any
registration statement filed pursuant to Rule 462(b) under the Act
relating to the same offering of the Shares.
The Company has furnished to you,
for use by the Underwriters and by dealers in connection with the
offering of the Shares, copies of one or more preliminary
prospectuses relating to the Shares. Except where the context
otherwise requires, “Preliminary Prospectus,” as used
herein, means each such preliminary prospectus, in the form so
furnished. Except where the context otherwise requires,
“Pre-Pricing Prospectus,” as used herein, means the
Preliminary Prospectus dated January 25, 2006, copies of which
were furnished to you for physical distribution in connection with
the offering of the Shares prior to the Effective Time.
Except where the context otherwise
requires, “Prospectus,” as used herein, means the final
prospectus used in connection with the offer and sale of Shares
filed by the Company with the
Commission pursuant to Rule 424(b) under
the Act on or before the second business day after the date hereof
(or such earlier time as may be required under the Act) or, if no
such filing is required, the final prospectus included in the
Registration Statement at the Effective Time, in each case in the
form furnished by the Company to you for use by the Underwriters
and by dealers in connection with the offering of the
Shares.
“Permitted Free Writing
Prospectuses,” as used herein, means the documents listed on
Schedule B attached hereto and each “road show”(as
defined in Rule 433 under the Act), if any, related to the offering
of the Shares contemplated hereby that is a “written
communication” (as defined in Rule 405 under the Act) (each
such road show, a “Road Show”).
“Disclosure Package,” as
used herein, means, as of any date, the Pre-Pricing Prospectus
together with all of the Permitted Free Writing Prospectuses in
existence as of such date, if any.
As used herein, “business
day” shall mean a day on which the New York Stock
Exchange is open for trading, and “Exchange Act” shall
mean collectively the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder. The terms
“herein,” “hereto,” “hereof,”
“hereinafter” and similar terms, as used in this
Agreement, shall in each case refer to this Agreement as a whole
and not to any particular section paragraph, sentence or other
subdivision of this Agreement. The term “or,” as used
herein, is not exclusive.
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The Company, the Selling Stockholder
and the Underwriters agree as follows:
1. Sale and Purchase . Upon
the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Selling Stockholder
agrees to sell to the respective Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from
the Selling Stockholder, the respective number of Firm Shares as
set forth opposite the name of such Underwriter in Schedule A,
subject to adjustment in accordance with Section 10 hereof, in
each case at a purchase price of $
per Share.
The Company and the Selling Stockholder are advised by you that the
Underwriters intend (i) to make a public offering of their
respective portions of the Firm Shares as soon after the effective
date of the Registration Statement as in your judgment is advisable
and (ii) initially to offer the Firm Shares upon the terms set
forth in the Prospectus. You may from time to time increase or
decrease the public offering price after the initial public
offering to such extent as you may determine.
In addition, the Selling Stockholder
hereby grants to the several Underwriters the option to purchase,
and upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not
jointly, from the Selling Stockholder, ratably in accordance with
the number of Firm Shares to be purchased by each of them, all or a
portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm
Shares, at the same purchase price per share to be paid by the
Underwriters to the Selling Stockholder for the Firm Shares. This
option may be exercised by UBS Securities LLC (“UBS”)
on behalf of the several Underwriters at any time and from time to
time on or before the thirtieth day following the date hereof, by
written notice to the Company and the Selling Stockholder. Such
notice shall set forth the aggregate number of Additional Shares as
to which the option is being exercised, and the date and time when
the Additional Shares are to be delivered (such date and time being
herein referred to as the “additional time of
purchase”); provided , however , that the
additional time of purchase shall not be earlier than the time of
purchase (as defined below) nor earlier than the second business
day after the date on which the option shall have been exercised
nor later than the tenth business day after the date on which the
option shall have been exercised. At any additional time of
purchase, and upon the basis of the representations and warranties
and subject to the terms and conditions herein set forth, the
Selling Stockholder agrees to sell to the respective Underwriters,
and each of the Underwriters, severally and not jointly, agrees to
purchase from the Selling Stockholder, the respective number of
Additional Shares that bears the same proportion to the aggregate
number of Additional Shares being purchased at such additional time
of purchase as the number of Firm Shares set forth opposite the
name of such Underwriter on Schedule A hereto bears to the
total number of Firm Shares (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares),
subject to adjustment in accordance with Section 10
hereof.
2. Payment and Delivery .
Payment of the purchase price for the Firm Shares shall be made to
the Custodian (as defined below), on the Selling
Stockholder’s behalf, by federal funds wire transfer, against
delivery of certificates for the Firm Shares to be sold by the
Selling Stockholder, and delivered by the Custodian on the Selling
Stockholder’s behalf, in each case for the respective
accounts of the Underwriters. Such payment and delivery shall be
made at 10:00 A.M., New York City time, on
, 2006 (unless another time
shall be agreed to by you and the Selling Stockholder or unless
postponed in accordance with the provisions of Section 10
hereof). The time at which such payment and delivery are to be made
is hereinafter sometimes called “the time of purchase.”
Delivery of the Firm
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Shares shall be made to you at the time of
purchase in such names and in such denominations as you shall
specify. Certificates in negotiable form representing the Shares to
be sold by the Selling Stockholder hereunder have been placed in
custody, for delivery under this Agreement, pursuant to a Custody
Agreement by and between the Selling Stockholder and LaSalle Bank
National Association (the “Custodian”), as custodian
(the “Custody Agreement”).
Payment of the purchase price for
the Additional Shares shall be made at the additional time of
purchase in the same manner and at the same office as the payment
for the Firm Shares. Delivery of the Additional Shares shall be
made to you at the additional time of purchase in such names and in
such denominations as you shall specify.
Deliveries of the documents
described in Section 8 hereof with respect to the purchase of
the Shares shall be made at the offices of Katten Muchin Rosenman
LLP, 525 West Monroe Street, Chicago, Illinois 60661, at
9:00 A.M., New York City time, on the date of the closing
of the purchase of the Firm Shares or the Additional Shares, as the
case may be.
3. Representations and Warranties
of the Company . The Company represents and warrants to and
agrees with each of the Underwriters that:
(a) the Registration Statement has
been declared effective under the Act or, with respect to any
registration statement to be filed to register the offer and sale
of Shares pursuant to Rule 462(b) under the Act, will be filed with
the Commission and become effective under the Act no later than
10:00 P.M. New York City time, on the date of determination of the
public offering price for the Shares; no stop order of the
Commission preventing or suspending the use of any document that is
part of the Disclosure Package or the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purpose are pending or, to the Company’s knowledge, are
threatened or contemplated by the Commission;
(b) the Registration Statement
complied when it became effective, complies as of the date hereof
and, as amended or supplemented, at the time of purchase and each
additional time of purchase, if any, will comply in all material
respects with the requirements of the Act; the Registration
Statement did not, as of the Effective 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 not misleading; the Pre-Pricing Prospectus complied as of
its date and complies as of the date hereof in all material
respects with the requirements of the Act; as of its date, the
Pre-Pricing Prospectus did not, and as of the date hereof, the
Pre-Pricing Prospectus does not, contain an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; the Disclosure Package
complied, at the date of each document that is part of the
Disclosure Package, and complies, as of the date hereof, in all
material respects with the requirements of the Act; the Disclosure
Package did not, at the date of each document that is part of the
Disclosure Package, the Disclosure Package does not, as of the date
hereof, and the Disclosure Package will not, as of the time of sale
(as defined under the Act) of the Shares, include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; the
Prospectus will comply, as of its date, the time of purchase and
each additional time of purchase, if any, in all material respects,
with the requirements of the Act (including,
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without limitation,
Section 10(a) of the Act); the Prospectus will not, as of its
date, the time of purchase and each additional time of purchase and
at all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172
under the Act) in connection with the sale of Shares, contain an
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided , however , that the Company makes no
warranty or representation with respect to any statement contained
in, or omission from, the Registration Statement, the Pre-Pricing
Prospectus, the Disclosure Package or the Prospectus based upon and
in conformity with information concerning an Underwriter and
furnished in writing by or on behalf of such Underwriter through
you to the Company expressly for use in the Registration Statement,
the Disclosure Package or the Prospectus, it being understood and
agreed that the only such information is that described in
Section 12(a);
(c) prior to the execution of this
Agreement, the Company has not, directly or indirectly, offered or
sold any Shares by means of any “prospectus” (within
the meaning of the Act) or used any “prospectus”
(within the meaning of the Act) in connection with the offer or
sale of the Shares, in each case other than the Disclosure Package;
the Company has not, directly or indirectly, used or referred to
any Permitted Free Writing Prospectus except in compliance with
Rules 164 and 433 under the Act; assuming that such Permitted Free
Writing Prospectus is accompanied or preceded by the most recent
Preliminary Prospectus or the Prospectus, as the case may be, and
that such Permitted Free Writing Prospectus is so sent or given
after the Registration Statement was filed with the Commission (and
after such Permitted Free Writing Prospectus was, if required
pursuant to Rule 433(d) under the Act, filed with the Commission),
the sending or giving by any Underwriter of any Permitted Free
Writing Prospectus will satisfy the provisions of Rule 164 or Rule
433 (without reliance on subsections (b), (c) and (d) of
Rule 164); the Pre-Pricing Prospectus is a prospectus that, other
than by reason of Rule 433 or Rule 431 under the Act, satisfies the
requirements of Section 10 of the Act, including a price range
where required by rule; the Company is not an “ineligible
issuer” (as defined in Rule 405 under the Act) as of the time
of initial filing of the Registration Statement and is not an
“excluded issuer” as described in Rule 164(f); the
offering of the Shares is not an “excluded offering” as
described in Rule 164(g), the parties hereto agree and understand
that the content of any and all Road Shows is solely the property
of the Company;
(d) the authorized, issued and
outstanding capitalization of the Company is as set forth in the
sections of the Registration Statement, each Preliminary Prospectus
and the Prospectus entitled “Capitalization” and
“Description of Capital Stock” (and any similar
sections or information, if any, contained in any Permitted Free
Writing Prospectus), and as of the time of purchase and any
additional time of purchase, as the case may be, the Company shall
have an authorized and outstanding capitalization as set forth in
the sections of the Registration Statement and the Prospectus
entitled “Capitalization” and Description of Capital
Stock” (and any similar sections or information, if any,
contained in any Permitted Free Writing Prospectus), as of their
respective dates, (subject in each case to the issuance of shares
of Common Stock upon exercise of stock options disclosed as
outstanding in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the Prospectus, as
applicable, and the grant of restricted stock awards described in
the Registration Statement (excluding the exhibits thereto), each
Preliminary Prospectus and Prospectus, as applicable); all of the
issued and
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outstanding shares of capital stock
of the Company, including the issued and outstanding Shares to be
sold by the Selling Stockholder, have been duly authorized and
validly issued and are fully paid and non-assessable, have been
issued in compliance with all federal and state securities laws and
were not issued in violation of any preemptive right, resale right,
right of first refusal or similar right;
(e) the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, and has the
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Registration Statement, the Disclosure Package and the Prospectus
and to execute and deliver this Agreement;
(f) the Company is duly qualified to
do business as a foreign corporation and is in good standing in
each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not, individually or in the aggregate, have a
material adverse effect on the business, properties, financial
condition, results of operations or prospects of the Company and
the Subsidiaries (as hereinafter defined) taken as a whole
(a ”Material Adverse Effect”);
(g) the Company has no subsidiaries
(as defined in Rule 405 of the Act) other than Huron Consulting
Services LLC (“HCG LLC”), Speltz & Weis LLC
(“S&W”), Huron Consulting Group Holdings (UK) Ltd.
(“HCG UK”) and Huron Consulting Group Ltd. (“HCG
Ltd.” and, together with HCG UK, the “UK
Subsidiaries”) (collectively, the
“Subsidiaries”); the Company owns 100% of the
outstanding equity interest of HCG LLC, S&W and HCG UK, and HCG
UK owns 100% of the outstanding equity interest of HCG Ltd.; other
than the equity interest of the Subsidiaries, the Company does not
own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture,
association or other entity; complete and correct copies of the
certificates of incorporation and the by-laws, the certificate of
formation and limited liability company agreement or equivalent
organizational documents of the Company and the Subsidiaries, as
the case may be, and all amendments thereto have been delivered to
you or your counsel, and no changes therein will be made subsequent
to the date hereof and through and including the time of purchase
or, if later, the additional time of purchase; HCG LLC has been
duly organized and is validly existing as a limited liability
company in good standing under the laws of the State of Delaware,
with full limited liability company power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement, the Disclosure Package and
the Prospectus; S&W has been duly organized and is validly
existing as a limited liability company in good standing under the
laws of the State of New Hampshire, with full limited liability
company power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement, the Disclosure Package and the Prospectus,
each UK Subsidiary is a limited company incorporated under English
law, does not have any material assets or any material liabilities
or obligations, direct or contingent, and has conducted no
operations, other than those incidental to its formation; each of
HCG LLC and S&W is duly qualified to do business as a limited
liability company and is in good standing in each jurisdiction
where the ownership or leasing of its
6
respective properties or the conduct
of its respective business requires such qualification, except to
the extent that the failure to be so qualified or in good standing
would not, individually or in the aggregate, have a Material
Adverse Effect; all of the outstanding equity interests of HCG LLC
and S&W have been duly authorized and validly issued and are
owned by the Company subject to no lien, security interest, other
encumbrance or adverse claims; and no options, warrants or other
rights to purchase, agreements or other obligations to issue or
other rights to convert any obligation into equity or ownership
interests in the Subsidiaries are outstanding;
(h) the capital stock of the
Company, including the Shares, conforms in all material respects to
the description thereof contained in the Registration Statement,
the Disclosure Package and the Prospectus and the certificates for
the Shares comply with the applicable requirements of the
Company’s certificate of incorporation (as amended and
restated, the “Charter”) and bylaws, applicable law and
the rules of the NASDAQ National Market (“NASDAQ”), and
the holders of the Shares will not be subject to personal liability
for the debts or obligations of the Company by reason of being such
holders;
(i) this Agreement has been duly
authorized, executed and delivered by the Company;
(j) none of the Company, HCG LLC or
S&W is in breach or violation of its respective charter or
by-laws, certificate of formation or limited liability company
agreement, as the case may be; neither the Company nor any of the
Subsidiaries is (i) in breach or violation of, or in default
under (nor has any event occurred which with notice, lapse of time
or both would result in any breach or violation of, constitute a
default under or give the holder of any indebtedness (or a person
acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such
indebtedness under), any indenture, mortgage, deed of trust, bank
loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which any
of them or any of their properties may be bound or affected, except
for any breach, violation or default that would not have a Material
Adverse Effect or (ii) in contravention of any federal, state,
local or foreign law, regulation or rule, including, without
limitation, any regulation or rule of any self-regulatory
organization or other non-governmental regulatory authority, or any
decree, judgment or order applicable to the Company or any
Subsidiary, except any contravention that would not have a Material
Adverse Effect;
(k) the execution and delivery of
this Agreement by the Company, the consummation by the Company of
the transactions contemplated hereby and its performance hereunder
will not (i) result in any breach or violation of the Charter
or by-laws of the Company, or the certificate of incorporation or
bylaws, or certificate of formation or limited liability company
agreement, or equivalent organizational documents, as the case may
be, of any of the Subsidiaries, (ii) result in any breach or
violation of, or constitute a default under (nor constitute any
event which with notice, lapse of time or both would result in any
breach or violation of or constitute a default under) any
indenture, mortgage, deed of trust, bank loan or credit agreement
or other evidence of indebtedness, or any license, lease, contract
or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or affected, except for
any
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breach, violation or default that
would not have a Material Adverse Effect or prevent consummation of
the transactions contemplated hereby or (iii) contravene any
federal, state, local or foreign law, regulation or rule,
including, without limitation, any regulation or rule of any
self-regulatory organization or other non-governmental regulatory
authority, or any decree, judgment or order applicable to the
Company or any of the Subsidiaries;
(l) no approval, authorization,
license, consent or order of, or filing with, any federal, state,
local or foreign governmental or regulatory commission, board,
body, court, authority or agency is required in connection with the
consummation by the Company of the transactions contemplated hereby
other than (i) registration of the Shares under the Act, which
has been effected (or, with respect to any registration statement
to be filed hereunder pursuant to Rule 462(b) under the Act, will
be effected in accordance herewith), (ii) any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the
Underwriters and (iii) under the rules and regulations of the
NASD, Inc. (the “NASD”);
(m) except as set forth in the
Registration Statement (excluding the exhibits thereto), each
Preliminary Prospectus and the Prospectus, (i) no person has
the right, contractual or otherwise, to cause the Company to issue
or sell to it any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company,
(ii) no person has any preemptive rights, resale rights,
rights of first refusal or other rights to purchase any shares of
Common Stock or shares of any other capital stock or other equity
interests of the Company, and (iii) no person has the right to
act as an underwriter or as a financial advisor to the Company in
connection with the offer and sale of the Shares, in the case of
each of the foregoing clauses (i), (ii), and (iii), whether as a
result of the filing or effectiveness of the Registration Statement
or the sale of the Shares as contemplated thereby or otherwise;
except as set forth in the Registration Statement (excluding the
exhibits thereto), each Preliminary Prospectus and the Prospectus,
no person has the right, contractual or otherwise, to cause the
Company to register under the Act any shares of Common Stock or
shares of any other capital stock or other equity interests of the
Company, or to include any such shares or interests in the
Registration Statement or the offering contemplated thereby,
including as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated
thereby or otherwise;
(n) each of the Company and the
Subsidiaries has all necessary licenses, authorizations, consents
and approvals and has made all necessary filings required under any
federal, state, local or foreign law, regulation or rule, and has
obtained all necessary licenses, authorizations, consents and
approvals from other persons, in order to conduct its respective
business, except where the failure to have or obtain such licenses,
authorizations, consents and approvals or make such filings would
not have a Material Adverse Effect; neither the Company nor any of
the Subsidiaries is in violation of, or in default under, or has
received notice of any proceedings relating to revocation or
modification of, any such license, authorization, consent or
approval, except where such violation, default, revocation or
modification would not, individually or in the aggregate, have a
Material Adverse Effect;
(o) all legal or governmental
proceedings, affiliate transactions, off-balance sheet
transactions, contracts, licenses, agreements, leases or documents
of a character required to be
8
described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as
required;
(p) there are no actions, suits,
claims, investigations or proceedings pending or, to the
Company’s knowledge, threatened or contemplated to which the
Company, the Subsidiaries or, to the Company’s knowledge, any
of the Company’s officers or members of the Company’s
board of directors or members of any Subsidiary’s board of
managers or board of directors in their capacities as such officers
or members, is a party or of which any of their respective
properties is subject at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory
commission, board, body, court, authority or agency, except any
such action, suit, claim, investigation or proceeding that would
not result in a judgment, decree or order having, individually or
in the aggregate, a Material Adverse Effect or preventing
consummation of the transactions contemplated hereby;
(q) PricewaterhouseCoopers LLP,
whose report on the consolidated financial statements of the
Company and the Subsidiaries and whose report on the financial
statements of S&W are filed with the Commission as part of the
Registration Statement, the Preliminary Prospectuses and the
Prospectus, is an independent registered public accounting firm as
required by the Act and by the rules of the Public Company
Accounting Oversight Board;
(r) the consolidated financial
statements included in each of the Registration Statement, the
Disclosure Package and the Prospectus, together with the related
notes, present fairly, in all material respects, the consolidated
financial position of the Company and the Subsidiaries as of the
dates indicated and the consolidated results of operations and cash
flows of the Company and the Subsidiaries for the periods specified
and have been prepared in compliance with the requirements of the
Act and in conformity with U.S. generally accepted accounting
principles applied on a consistent basis during the periods
involved; the financial statements included in each of the
Registration Statement, the Disclosure Package and the Prospectus
of S&W, together with the related notes, present fairly, in all
material respects, the financial position of S&W as of the
dates indicated and the results of operations and cash flows of
S&W for the periods specified and have been prepared in
compliance with the requirements of the Act and in conformity with
U.S. generally accepted accounting principals applied on a
consistent basis during the periods involved; any pro forma
financial statements or data included in each of the Registration
Statement, the Disclosure Package and the Prospectus comply, in all
material respects, with the requirements of Regulation S-X of the
Act and the assumptions used in the preparation of such pro forma
financial statements and data are reasonable, the pro forma
adjustments used therein are appropriate to give effect to the
transactions or circumstances described therein and the pro forma
adjustments have been properly applied to the historical amounts in
the compilation of those statements and data; the other financial
data and other operating data set forth in each of the Registration
Statement, the Disclosure Package and the Prospectus present
fairly, in all material respects, the information included therein
and have been prepared on a basis consistent with the financial
statements and books and records of the Company and, to the extent
described in each of the Registration Statement, the Disclosure
Package and the Prospectus, on a basis consistent with such
description; there are no financial statements (historical or pro
forma) that are required to be included in the Registration
Statement, the Disclosure Package or the Prospectus that are not
included as required; the
9
Company and the Subsidiaries do not
have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not disclosed in the
Registration Statement, each Preliminary Prospectus and the
Prospectus; and all disclosures contained in the Registration
Statement, the Disclosure Package or the Prospectus regarding
non-GAAP financial measures (as such term is defined by the rules
and regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act to
the extent applicable.
(s) subsequent to the respective
dates as of which information is given in the Registration
Statement, the Disclosure Package and the Prospectus, except as
disclosed therein, in each case excluding any amendments or
supplements to the foregoing made after execution of this
Agreement, (i) there has not been any material adverse change,
or any development involving a prospective material adverse change,
in the business, properties, management, financial condition or
results of operations of the Company and the Subsidiaries taken as
a whole, (ii) neither the Company nor any of the Subsidiaries
has entered into any transaction that is material to the Company
and the Subsidiaries taken as a whole, other than transactions in
the ordinary course that are not material and adverse to the
Company and the Subsidiaries, taken as a whole, (iii) neither
the Company nor any of Subsidiaries has incurred any obligation,
direct or contingent (including any off-balance sheet obligations)
that is material to the Company and the Subsidiaries, taken as a
whole, (iv) there has not been any material change in the
capital stock or outstanding indebtedness of the Company or the
Subsidiaries and (v) there has not been any dividend or
distribution of any kind declared, paid or made on the capital
stock of the Company;
(t) the Company has obtained for the
benefit of the Underwriters the agreement (a “Lock-Up
Agreement”), substantially in the form set forth as
Exhibit A hereto, of each member of the Company’s
board of directors and each of the Company’s executive
officers, and the parties hereto acknowledge and agree that the
lock-up agreement by and between the Selling Stockholder and the
Underwriters entered into in connection with this offering is
hereby superseded by Sections 6(a) and 6(b) hereof;
(u) the Company is not and at the
time of purchase and each additional time of purchase, if any, will
not be an “investment company” or,
“controlled” by an entity subject to registration as an
“investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended (the “Investment
Company Act”);
(v) the Company and each of the
Subsidiaries (i) do not own any real property and
(ii) have good and marketable title to all personal property
described in each of the Registration Statement, the Disclosure
Package or the Prospectus as being owned by each of them, free and
clear of all liens, claims, security interests or other
encumbrances, except as disclosed in the Registration Statement,
the Disclosure Package or the Prospectus, as applicable, and as do
not materially affect the value of such property and do not
interfere with the use made of such property by the Company and the
Subsidiaries, taken as a whole; all the property described in the
Registration Statement, the Disclosure Package and the Prospectus
as being held under lease by the Company or a Subsidiary is held
thereby under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use
made of such property by the Company and the
Subsidiaries;
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(w) except as disclosed in the
Registration Statement, the Disclosure Package or the Prospectus,
(i) the Company and the Subsidiaries own, or have obtained
valid and enforceable licenses for, or other rights to use, the
inventions, patent applications, patents, trademarks (both
registered and unregistered), tradenames, copyrights, trade secrets
and other proprietary information described in the Registration
Statement, the Disclosure Package or the Prospectus as being owned
or licensed by them or that are necessary for the conduct of their
respective businesses (collectively, “Intellectual
Property”), except where the failure to own, license or have
such rights would not, individually or in the aggregate, have a
Material Adverse Effect; (ii) there are no third parties who
have or, to the Company’s knowledge, will be able to
establish rights to any Intellectual Property, except for the
ownership rights of the owners of the Intellectual Property that is
licensed to the Company; (iii) to the Company’s
knowledge, there is no infringement by third parties of any
Intellectual Property; (iv) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
claim by others challenging the Company’s rights in or to any
Intellectual Property, and the Company is unaware of any facts that
could form a reasonable basis for any such action, suit, proceeding
or claim; (v) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any Intellectual Property, and
the Company is unaware of any facts that could form a reasonable
basis for any such action, suit, proceeding or claim; and
(vi) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others that the
Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and
the Company is unaware of any facts that could form a reasonable
basis for any such claim;
(x) neither the Company nor any of
the Subsidiaries is engaged in any unfair labor practice; except
for matters that would not, individually or in the aggregate, have
a Material Adverse Effect, (i) there is (A) no unfair
labor practice complaint pending or, to the Company’s
knowledge, threatened against the Company or any of the
Subsidiaries before the National Labor Relations Board, and no
grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending, or to the
Company’s knowledge, threatened, (B) no strike, labor
dispute, slowdown or stoppage pending or, to the Company’s
knowledge, threatened against the Company or any of the
Subsidiaries and (C) no union representation dispute currently
existing concerning the employees of the Company or any of the
Subsidiaries, and (ii) to the Company’s knowledge
(A) no union organizing activities are currently taking place
concerning the employees of the Company or any of the Subsidiaries
and (B) there has been no violation of any federal, state,
local or foreign law relating to discrimination in the hiring,
promotion or pay of employees, any applicable wage or hour laws or
any provision of the Employee Retirement Income Security Act of
1974 or the rules and regulations promulgated thereunder concerning
the employees of the Company or any of the Subsidiaries;
(y) the Company and the Subsidiaries
and their properties, assets and operations are in compliance with,
and hold all permits, authorizations and approvals required under,
Environmental Laws (as defined below), except to the extent that
failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, have a
Material Adverse Effect; there are no past, present or, to the
Company’s knowledge, reasonably anticipated future events,
conditions, circumstances, activities, practices, actions,
omissions or plans that could reasonably be expected to give rise
to any material costs or liabilities to the
11
Company or the Subsidiaries under,
or to interfere with or prevent compliance by the Company or the
Subsidiaries with, Environmental Laws; except as would not,
individually or in the aggregate, have a Material Adverse Effect,
neither the Company nor any of the Subsidiaries (i) is the
subject of any investigation, (ii) has received any notice or
claim, (iii) is a party to or affected by any pending or, to
the knowledge of the Company, threatened action, suit or
proceeding, (iv) is bound by any judgment, decree or order or
(v) has entered into any agreement, in each case relating to
any alleged violation of any Environmental Law or any actual or
alleged release or threatened release or cleanup at any location of
any Hazardous Materials (as defined below) (as used herein,
“Environmental Law” means any federal, state, local or
foreign law, statute, ordinance, rule, regulation, order, decree,
judgment, injunction, permit, license, authorization or other
binding requirement, or common law, relating to health, safety or
the protection, cleanup or restoration of the environment or
natural resources, including those relating to the distribution,
processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of
Hazardous Materials, and “Hazardous Materials” means
any material (including, without limitation, pollutants,
contaminants, hazardous or toxic substances or wastes) that is
regulated by or may give rise to liability under any Environmental
Law);
(z) all income tax and other
material tax returns required to be filed by the Company, HCG LLC
and S&W have been filed, and all income taxes and other
material taxes and other material assessments of a similar nature
(whether imposed directly or through withholding), including any
interest, additions to tax or penalties applicable thereto due or
claimed in writing to be due from such entities have been paid,
other than those being contested in good faith and for which
adequate reserves have been provided;
(aa) the Company and each of the
Subsidiaries maintain insurance covering their respective
properties, operations, personnel and businesses as the Company
deems adequate for the conduct of its business and the value of its
assets and as previously disclosed to the Underwriters; such
insurance insures against such losses and risks to an extent that
is generally deemed adequate and customary for companies engaged in
similar businesses in similar industries, except where the failure
to be so insured would not have a Material Adverse Effect; all such
insurance is fully in force on the date hereof and, to the
Company’s knowledge, will be fully in force at the time of
purchase and any additional time of purchase and the Company has no
reason to believe that it will not be able to renew any existing
insurance coverage (that is material to the operations of the
Company and the Subsidiaries taken as a whole) as and when such
coverage expires, or to obtain similar coverage from similar
insurers as may be necessary to continue its business and at a cost
that would not have a Material Adverse Effect;
(bb) neither the Company nor any of
the Subsidiaries has sustained since the date of the last audited
consolidated financial statements included in the Registration
Statement, any Preliminary Prospectus and the 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,
that resulted in a Material Adverse Effect;
(cc) except as disclosed in the
Registration Statement, the Disclosure Package or the Prospectus,
neither the Company nor any Subsidiary has sent or received any
communication
12
regarding termination of, or intent
not to renew, any of the contracts or agreements referred to or
described in the Disclosure Package or Prospectus or referred to or
described in, or filed as an exhibit to, the Registration
Statement, and no such termination or non-renewal has been
threatened by the Company, any Subsidiary or, to the
Company’s knowledge, any other party to any such contract or
agreement;
(dd) each of the Company and its
Subsidiaries, other than the UK Subsidiaries, maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance
with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences;
(ee) the Company has established and
maintains “disclosure controls and procedures” and
“internal control over financial reporting” (as such
terms are defined in Rule 13a-15 and 15d-15 under the Exchange
Act); such disclosure controls and procedures (i) are designed
to ensure that material information relating to the Company,
including its Subsidiaries, is made known to the Company’s
Chief Executive Officer and its Chief Financial Officer by others
within those entities, (ii) have been evaluated for
effectiveness as of the end of the period covered by the
Company’s most recent annual or quarterly report filed with
the Commission, and (iii) are effective to perform the
functions for which they were established; the Company’s
auditors and the Board of Directors have been advised of:
(x) any significant deficiencies in the design or operation of
internal controls that could adversely affect the Company’s
ability to record, process, summarize, and report financial data,
(y) any fraud, whether or not material, that involves
management or other employees who have a role in the
Company’s internal controls and (z) any material
weaknesses in internal controls; and since the date of the most
recent evaluation of such disclosure controls and procedures and
internal controls over financial reporting, 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; the principal executive officers (or their
equivalents) and principal financial officers (or their
equivalents) of the Company have made all certifications required
by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”) and any related rules and regulations promulgated by
the Commission, and the statements contained in each such
certification are complete and correct; and the Company, the
Subsidiaries and the Company’s directors and officers are
each in compliance, in all material respects, with all applicable
effective provisions of the Sarbanes-Oxley Act and the related
rules and regulations of the Commission and NASDAQ promulgated
thereunder; it being understood that the Company has not yet been
required to report, and has not reported, on its internal control
over financial reporting pursuant to Item 308 of Regulation
S-K promulgated by the Commission and PricewaterhouseCoopers LLP
has not yet audited the Company’s internal control over
financial reporting.
13
(ff) the Company has provided you or
your counsel with true, correct, and complete copies of all
documentation pertaining to any extension of credit in the form of
a personal loan made, directly or indirectly, by the Company or any
Subsidiary to any director or executive officer of the Company, or
to any family member or affiliate of any director or executive
officer of the Company; and since July 30, 2002, the Company
has not, directly or indirectly, including through the
Subsidiaries: (i) extended credit, arranged to extend credit,
or renewed any extension of credit, in the form of a personal loan,
to or for any director or executive officer of the Company, or to
or for any family member or affiliate of any director or executive
officer of the Company; or (ii) made any material
modification, including any renewal thereof, to any term of any
personal loan to any director or executive officer of the Company,
or any family member or affiliate of any director or executive
officer, which loan was outstanding on July 30,
2002;
(gg) each “forward looking
statement” (within the meaning of Section 27A of the Act
or Section 21E of the Exchange Act) contained in the
Registration Statement, the Disclosure Package or the Prospectus
has been made or reaffirmed with a reasonable basis and in good
faith;
(hh) any statistical and
market-related data included in the Registration Statement, the
Disclosure Package or the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate, and
the Company has obtained the written consent to the use of such
data from such sources to the extent required;
(ii) neither the Company nor any of
the Subsidiaries nor, to the Company’s knowledge, any
employee or agent of the Company or the Subsidiaries has made any
payment of funds of the Company or the Subsidiaries or received or
retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character
required to be disclosed in the Registration Statement, the
Preliminary Prospectus or the Prospectus;
(jj) neither the Company nor any of
the Subsidiaries nor any of their respective directors, officers,
affiliates or controlling persons has taken, directly or
indirectly, any action designed, or that has constituted or might
reasonably be expected to cause or result in, under the Exchange
Act or otherwise, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Shares;
(kk) no Subsidiary is currently
prohibited, directly or indirectly, from paying any dividends to
the Company, from making any other distribution on such
Subsidiary’s capital stock, from repaying to the Company any
loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary’s property or assets to
the Company or any other Subsidiary of the Company, except as
described in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the
Prospectus;
(ll) to the Company’s
knowledge, there are no affiliations or associations between any
member of the NASD and any of the Company’s officers,
directors or 5% or greater securityholders, except as set forth in
the Registration Statement, the Disclosure Package or the
Prospectus; and
14
(mm) the Shares are duly listed and
admitted and authorized for trading on the NASDAQ National
Market.
In addition, any certificate signed
by any officer of the Company or any of the Subsidiaries and
delivered to the Underwriters or counsel for the Underwriters in
connection with the offering of the Shares shall be deemed to be a
representation and warranty by the Company or such Subsidiary, as
the case may be, as to matters covered thereby, to each
Underwriter.
4. Representations and Warranties
of the Selling Stockholder . The Selling Stockholder represents
and warrants to each Underwriter that:
(a) the Selling Stockholder now is,
and at the time of delivery of such Shares (whether the time of
purchase or additional time of purchase, as the case may be) will
be, the lawful owner of the number of Shares to be sold by the
Selling Stockholder pursuant to this Agreement and has, and at the
time of delivery thereof will have, valid and unencumbered title to
the Shares. The Selling Stockholder is not aware of any adverse
claim to the Shares within the meaning of Section 8-102(a)(1)
of the Uniform Commercial Code as in effect on the date hereof in
the State of Illinois (the “UCC”). Assuming no
Underwriter has notice of any adverse claims with respect to the
Shares to be sold by the Selling Stockholder hereunder, then, upon
delivery of the certificate(s) evidencing such Shares indorsed to
UBS or indorsed in blank by an effective indorsement in return for
payment for such Shares (whether at the time of purchase or the
additional time of purchase, as the case may be), UBS will acquire
valid title to such certificates(s) (and the Shares represented
thereby) free of any adverse claim under Section 8-303 of the
UCC;
(b) the Selling Stockholder has been
duly formed and is validly existing as a limited liability company,
in good standing under the laws of the State of Delaware, and has
the limited liability company power and authority to execute and
deliver this Agreement and the Custody Agreement and to sell and
deliver the Shares to be sold by it as contemplated
herein;
(c) this Agreement and the Custody
Agreement have been duly authorized, executed and delivered by the
Selling Stockholder;
(d) as of its date, the Pre-Pricing
Prospectus did not, and as of the date hereof, the Pre-Pricing
Prospectus does not, contain an untrue statement of a material fact
relating to the Selling Stockholder or omit to state a material
fact relating to the Selling Stockholder necessary to make the
statements relating to the Selling Stockholder therein, in light of
the circumstances under which they were made, not misleading; the
Disclosure Package (the term Disclosure Package for purposes of
this Section 4(d) being deemed not to include any Road Show)
did not, at the date of each document that is part of the
Disclosure Package, the Disclosure Package, does not, as of the
date hereof, and the Disclosure Package will not, as of the time of
sale (as defined under the Act) of the Shares, contain an untrue
statement of a material fact relating to
