RELÌV INTERNATIONAL,
INC.
2,300,000 Shares *
Common Stock
($0.001 par value per share)
Canaccord Adams
Inc.
Avondale Partners, LLC
The Seidler Companies Incorporated
as Representatives
of the several
Underwriters named
in Schedule I hereto
c/o Canaccord
Adams Inc.
99 High Street, 11 th Floor
Boston, Massachusetts 02110
Relìv
International, Inc., a Delaware corporation (the “
Company ”), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several
underwriters named in Schedule I hereto (collectively,
the “ Underwriters ”) an aggregate of 2,300,000
shares of common stock, par value $0.001 per share, of the Company
(“ Common Stock ”), and the stockholders of the
Company named in Schedule II hereto (the “
Selling Stockholders ”) propose, subject to the terms
and conditions stated herein, to sell to the Underwriters an
aggregate of 2,000,000 shares and, at the election of the
Underwriters, up to 300,000 additional shares of Common Stock (as
and to the extent indicated in Schedule II hereto). The
aggregate of 2,000,000 shares to be sold by the Company and the
Selling Stockholders is herein called the “ Firm
Shares ” and the aggregate of 300,000 additional shares
to be sold by certain of the Selling Stockholders is herein called
the “ Optional Shares .” The Firm Shares and the
Optional Shares which the Underwriters elect to purchase pursuant
to Section 3 hereof are herein collectively called the “
Shares .”
1.
Representations and Warranties .
(a)
Representations and Warranties of the Company . The Company
represents and warrants to, and agrees with, each of the
Underwriters that:
(i)
A registration statement on Form S-3 (File No. 333-131974)
(the “ Initial Registration Statement ”) in
respect of the Shares has been filed with the Securities and
Exchange Commission (the “ Commission ”); the
Initial Registration Statement including any pre-effective
amendments thereto and any post-effective amendments thereto, each
in the form heretofore delivered to Canaccord Adams Inc. and,
excluding exhibits thereto, but including all documents
incorporated by reference in the prospectus contained therein,
delivered to Canaccord
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*
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Includes
300,000 shares subject to an option to purchase additional shares
to cover over-allotments.
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Adams Inc. for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if
any, increasing the size of the offering (a “
Rule 462(b) Registration Statement ”), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the “ Act ”), which became effective
upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference
therein has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or, to the Company’s
knowledge, threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of
the Commission under the Act is hereinafter called a “
Preliminary Prospectus ”); the various parts of the
Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits to the foregoing
(including any exhibits incorporated by reference) and
(i) including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) hereof or the Rule 462(b)
Registration Statement, if any, at the time it became effective and
(ii) the documents incorporated by reference in the prospectus
contained in the Initial Registration Statement at the time such
part of the Initial Registration Statement became effective, each
as amended at the time such part of such Initial Registration
Statement became effective, are hereinafter collectively called the
“ Registration Statement ”; such final
prospectus, in the form first filed pursuant to Rule 424(b) under
the Act, is hereinafter called the “ Prospectus
”; the term “ Pricing Prospectus ” as used
herein means the Preliminary Prospectus that was included in the
Registration Statement immediately prior to the Applicable Time (as
defined in Section 1(a)(ii) hereof); any reference herein to
“ Issuer Free Writing Prospectus ” refers to any
“issuer free writing prospectus” as defined in
Rule 433 under the Act; and any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may
be;
(ii)
For the purposes of this Agreement, the “ Applicable
Time ” is 4:00 p.m. (Eastern Time) on the date of this
Agreement; the Pricing Prospectus as supplemented by the Issuer
Free Writing Prospectuses, if any, and other documents listed on
Schedule III(a) hereto, taken together (collectively,
the “ Pricing Disclosure Package ”) as of the
Applicable Time, did not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and each Issuer Free Writing
Prospectus listed on Schedule III(a) or
Schedule III(b) hereto does not conflict with the
information contained in the Registration Statement, the Pricing
Prospectus or the Prospectus and each Issuer Free Writing
Prospectus listed on Schedule III(b) hereto, as
supplemented by and taken together with the Pricing Disclosure
Package as of the Applicable Time, did not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided , however , that this representation and
warranty shall not apply to any statements or omissions made in the
Pricing Prospectus or an Issuer Free Writing Prospectus in reliance
upon and in conformity with information furnished in writing to the
Company by an Underwriter through Canaccord Adams Inc. expressly
for use therein or by a Selling Stockholder expressly for use in
the preparation of the answers therein to Item 7 of Form
S-3;
(iii)
No order preventing or suspending the use of any Preliminary
Prospectus or any Issuer Free Writing Prospectus has been issued by
the Commission, and each Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder, and 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; provided , however , that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through
Canaccord Adams Inc. expressly for use therein or by a Selling
Stockholder expressly for use in the preparation of the answers
therein to Item 7 of Form S-3;
(iv)
The documents incorporated by reference in any Preliminary
Prospectus or the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the Securities Exchange
Act of 1934, as amended (the “ Exchange Act ”),
and the rules and regulations of the Commission thereunder, and
none of such documents contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading;
(v)
The Registration Statement and all Preliminary Prospectuses
conform, and the Prospectus and any further amendments or
supplements to the Registration Statement, any Preliminary
Prospectus or the Prospectus will conform, in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder; the Registration Statement, any Preliminary
Prospectus and the Prospectus do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto, as of the applicable filing date as to any
Preliminary Prospectus, and as of the applicable filing date and
the applicable Time of Delivery (as hereinafter defined) as to the
Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material
fact, in the case of the Registration Statement or any amendment
thereto, required to be stated therein or necessary to make the
statements therein not misleading and, in the case of any
Preliminary Prospectus or the Prospectus or any supplement thereto,
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided , however , that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Canaccord Adams
Inc. expressly for use therein or by a Selling Stockholder
expressly for use in the preparation of the answers therein to
Item 7 of Form S-3;
(vi)
There are no contracts or other documents required to be described
in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the rules and regulations
thereunder which have not been described in, filed as exhibits to,
or incorporated by reference in the Registration Statement, as
required; the contracts so described in the Pricing Prospectus and
the Prospectus to which the Company or any of its subsidiaries is a
party have been duly authorized, executed and delivered by the
Company or its subsidiaries, constitute valid and binding
agreements of the Company or its subsidiaries and are enforceable
against the Company or its subsidiaries in accordance with their
respective terms, except as such
enforceability
may be limited by (i) applicable bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or similar laws
in effect which affect the enforcement of creditors’ rights
generally, (ii) general principles of equity, whether
considered in a proceeding at law or in equity and (iii) state
or federal securities laws or policies relating to the
non-enforceability of the indemnification provisions contained
therein, and, to the Company’s knowledge, such contracts are
enforceable in accordance with their respective terms by the
Company against the other parties thereto, except as such
enforceability may be limited by (x) applicable bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or
similar laws in effect which affect the enforcement of
creditors’ rights generally, (y) general principles of
equity, whether considered in a proceeding at law or in equity and
(z) state or federal securities laws or policies relating to
the non-enforceability of the indemnification provisions contained
therein, and such contracts are in full force and effect on the
date hereof; and neither the Company nor any of its subsidiaries,
nor, to the best of the Company’s knowledge, any other party
thereto, is in breach of or default under any of such contracts,
except for such breaches or defaults that will not result in a
material adverse change in the general affairs, business, assets,
management, financial position, stockholders’ equity or
results of operations of the Company and its subsidiaries taken as
a whole;
(vii)
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 Pricing 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 is
in each case material to the Company and its subsidiaries taken as
a whole, otherwise than as set forth or contemplated in the Pricing
Prospectus; and, since the respective dates as of which information
is given in the Registration Statement and the Pricing Prospectus,
(i) there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
material adverse change or any development involving a prospective
material adverse change, in or affecting the general affairs,
business, assets, management, financial position,
stockholders’ equity or results of operations of the Company
and its subsidiaries taken as a whole, and (ii) the Company or
its subsidiaries have not entered into material transaction or
incurred any material obligation outside of the ordinary course of
business, otherwise than as set forth in the Pricing
Prospectus;
(viii)
The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to
all other tangible properties and assets described in the Pricing
Prospectus as owned by it, in each case free and clear of all
liens, charges, claims, encumbrances or restrictions, except such
as (i) are described in the Pricing Prospectus or (ii) do
not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; any real property and
buildings held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by
the Company and its subsidiaries; the Company and its subsidiaries
own or lease all such properties as are necessary to its operations
as now conducted or as proposed to be conducted;
(ix)
Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its
respective
jurisdiction of organization, each with full power and authority
(corporate and otherwise) to own its properties and conduct its
business as described in the Pricing Prospectus, and each has been
duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where the
failure to be so qualified or in good standing would not result in
any material liability or disability to the Company or such
subsidiary;
(x)
The Company has an authorized capitalization as set forth in the
Pricing Prospectus and the Prospectus, and all the issued shares of
capital stock of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and conform to the
descriptions thereof contained or incorporated by reference in the
Pricing Prospectus and the Prospectus; all of the issued shares of
capital stock of each subsidiary of the Company (i) have been
duly and validly authorized and issued, are fully paid and
non-assessable and (ii) except as disclosed in the Pricing
Prospectus and the Prospectus, are owned directly by the Company,
free and clear of all liens, encumbrances, equities or claims;
except as disclosed in or contemplated by the Pricing Prospectus
and the Prospectus and the consolidated financial statements of the
Company, and the related notes thereto, contained or incorporated
by reference in the Pricing Prospectus and the Prospectus, neither
the Company nor any subsidiary has outstanding any options to
purchase, or any preemptive rights or other rights to subscribe for
or to purchase any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible securities
or obligations; and the description of the Company’s stock
option and stock purchase plans and the options or other rights
granted and exercised thereunder set forth in the Pricing
Prospectus and the Prospectus accurately and fairly presents the
information required by the Act and the published rules and
regulations of the Commission thereunder to be shown with respect
to such plans, options and rights;
(xi)
The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided
herein, will be duly and validly issued and fully paid and
non-assessable and will conform to the description of the Common
Stock contained or incorporated by reference in the Pricing
Prospectus and the Prospectus; no preemptive rights or other rights
to subscribe for or purchase exist with respect to the issuance and
sale of the Shares by the Company pursuant to this Agreement; no
stockholder of the Company has any right, which has not been
waived, to require the Company to register the sale of any shares
of capital stock owned by such stockholder under the Act in the
public offering contemplated by this Agreement; and no further
approval or authority of the stockholders or the Board of Directors
of the Company will be required for the issuance and sale of the
Shares to be sold by the Company as contemplated herein;
(xii)
The Company has full corporate power and authority to enter into
this Agreement; and this Agreement has been duly authorized,
executed and delivered by the Company, constitutes a valid and
binding obligation of the Company and is enforceable against the
Company in accordance with its terms;
(xiii)
The issue and sale of the Shares by the Company and the compliance
by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not
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 or other
material agreement or material instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor
will any such actions result in any violation of the provisions of
the Certificate of Incorporation or By-laws of the Company as
currently in effect or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the
Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws or the bylaws and rules of the National
Association of Securities Dealers, Inc. (“ NASD
”) in connection with the purchase and distribution of the
Shares by the Underwriters;
(xiv)
Neither the Company nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be
bound;
(xv)
The statements set forth in the Pricing Prospectus and the
Prospectus under the caption “Underwriting,” insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(xvi)
Except as disclosed in the Pricing Prospectus, there are no
material legal or governmental actions, suits or proceedings
pending or, to the best of the Company’s knowledge,
threatened to which the Company or any of its subsidiaries is or
may be a party or of which property owned or leased by the Company
or any of its subsidiaries is or may be the subject, or related to
environmental or discrimination matters; no labor disturbance by
the employees of the Company or any of its subsidiaries exists or,
to the knowledge of the Company, is imminent; and neither the
Company nor any of its subsidiaries is a party or subject to the
provisions of any material injunction, judgment, decree or order of
any court, regulatory body;
(xvii)
The Company and its subsidiaries possess all licenses,
certificates, authorizations or permits issued by the appropriate
governmental or regulatory agencies or authorities that are
necessary to enable them to own, lease and operate their respective
properties and to carry on their respective businesses as presently
conducted; and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or
permit;
(xviii)
The Company and its subsidiaries (i) are in compliance in all
material respects with any and all applicable foreign, federal,
state and local laws and regulations
relating to the
protection of human health and safety, including, without
limitation, those relating to occupational safety and health, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants, including, without limitation, those relating to
the storage, handling or transportation of hazardous or toxic
materials (collectively, “ Environmental Laws ”)
and (ii) are in compliance with all terms and conditions of
any such permit, license or approval. The Company, in its
reasonable judgment, has concluded that any costs or liabilities
associated with Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) would
not, singly or in the aggregate, reasonably be expected to result
in a material adverse change in the general affairs, business,
assets, management, financial position, stockholders’ equity
or results of operations of the Company and its subsidiaries taken
as a whole;
(xix)
Ernst & Young LLP, who have audited certain financial
statements of the Company, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder and have been appointed by an Audit Committee comprised
entirely of independent directors of the Board of Directors of the
Company;
(xx)
The consolidated financial statements and schedules of the Company,
and the related notes thereto, included or incorporated by
reference in the Registration Statement and the Pricing Prospectus
present fairly the financial position of the Company as of the
respective dates of such financial statements and schedules, and
the results of operations and cash flows of the Company for the
respective periods covered thereby; such statements, schedules and
related notes have been prepared in accordance with generally
accepted accounting principles in the United States applied on a
consistent basis as certified by the independent public accountants
named in paragraph above; no other financial statements or
schedules are required to be included or incorporated by reference
in the Registration Statement; and the selected financial data set
forth in the Pricing Prospectus under the captions
“Capitalization,” “Selected Consolidated
Financial Data” and “Prospectus Summary—Summary
Consolidated Financial Data” fairly present the information
set forth therein on the basis stated in the Registration
Statement;
(xxi)
The Company owns, or possesses and/or has been granted valid and
enforceable licenses for, all registered patents, patent
applications, trademarks, trademark applications, tradenames,
servicemarks and copyrights necessary to the conduct of its
business as such business is described in the Pricing Prospectus
(collectively, the “ Registered Intellectual Property
”). The Company has no knowledge of any material infringement
or misappropriation by third parties of (a) any of the
Registered Intellectual Property, or (b) any material
inventions, manufacturing processes, formulae, trade secrets,
know-how, unregistered trademarks, and other intangible property
and assets necessary to the conduct of its business as such
business is described in the Pricing Prospectus (collectively, the
“ Other Intellectual Property ,” and together
with the Registered Intellectual Property, the “
Intellectual Property ”), nor is there any pending or,
to the best knowledge of the Company, threatened material action,
suit, proceeding or claim by others challenging the Company’s
rights of title or other interest in or to any Intellectual
Property and the Company does not know of any facts which would
form a reasonable basis for any such claim. There is no pending or,
to the best knowledge of the
Company,
threatened material action, suit, proceeding or claim by others
challenging the validity and scope of any Intellectual Property and
the Company does not know of any facts which would form a
reasonable basis for any such claim. There is no pending or, to the
best knowledge of the Company, threatened material action, suit,
proceeding or claim by others that the Company or any of its
products or processes or the Intellectual Property infringe or
otherwise violate any patent, trademark, servicemark, copyright,
trade secret or other proprietary right of others and the Company
is unaware of any facts which would form a reasonable basis for any
such claim. The Company is not aware of (i) any grounds for an
interference proceeding before the United States Patent and
Trademark Office in relation to any of the patents or patent
applications currently owned by the Company, or (ii) any facts
which would bar the grant of a patent from each of the patent
applications described in the Pricing Prospectus. There is no
pending or, to the best knowledge of the Company, threatened
action, suit proceeding or claim by any current or former employee,
consultant or agent of the Company seeking either ownership rights
to any invention or other intellectual property right or
compensation from the Company for any invention or other
intellectual property right made by such employee, consultant or
agent in the course of his/her employment with the Company or
otherwise. There is no act or omission by the Company or its agents
or representatives of which the Company has knowledge that may
render any patent or patent application within the Intellectual
Property unpatentable, unenforceable or invalid. Each of the
Pricing Prospectus fairly and accurately describes in all material
respects the Company’s rights with respect to the
Intellectual Property;
(xxii)
The Company and each of its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns, each
of which has been true and correct in all material respects, and
have paid all taxes shown as due thereon; and the Company has no
knowledge of any material tax deficiency which has been or might be
asserted or threatened against the Company or any of its
subsidiaries;
(xxiii)
The Company is not an “investment company” or an
“affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment
company”, as such terms are defined in the Investment Company
Act of 1940, as amended (the “ Investment Company Act
”);
(xxiv)
Each of the Company and its subsidiaries maintains insurance of the
types and in the amounts which it deems adequate for its business,
including, but not limited to, insurance covering real and personal
property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in
full force and effect;
(xxv)
Neither the Company nor any of its subsidiaries has at any time
during the last five years (i) made any unlawful contribution
to any candidate for foreign office, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment
to any foreign, federal or state governmental officer or official,
or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United
States, any foreign government or any respective jurisdiction
thereof;
(xxvi)
The Company has not taken and will not take, directly or indirectly
through any of its directors, officers or controlling persons, any
action which is designed to or
which has
constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares;
(xxvii)
The Common Stock of the Company has been registered pursuant to
Section 12(g) of the Exchange Act and the Company is not required
to take any further action for the inclusion of the Shares on the
Nasdaq National Market;
(xxviii)
There are no business relationships or related-party transactions
involving the Company or any subsidiary or any other person
required to be described in the Pricing Prospectus which have not
been described as required;
(xxix)
The Company maintains a system of internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the
Exchange Act) that complies with the requirements of the Exchange
Act and has been designed by the Company’s principal
executive officer and principal financial officer, or under their
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles. Except as disclosed in the Pricing
Prospectus, the Company’s internal control over financial
reporting is effective and the Company is not aware of any material
weaknesses in its internal control over financial
reporting;
(xxx)
Since the date of the latest audited financial statements included
or incorporated by reference in the Pricing Prospectus, there has
been no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control
over financial reporting;
(xxxi)
The principal executive officers (or their equivalents) and
principal financial officers (or their equivalents) of the Company
have duly 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 any such certification are complete and
correct as of the respective dates thereof. The Company has
established and maintains and evaluates “disclosure controls
and procedures” (as such term is defined in
Rule 13a-15(e) under the Exchange Act); such disclosure
controls and procedures are designed to ensure that material
information relating to the Company is made known to the
Company’s principal executive officer and principal financial
officer by others within those entities, and such disclosure
controls and procedures are effective to perform the functions for
which they were established;
(xxxii)
The Company is in compliance in all material respects with all
applicable provisions of the Sarbanes-Oxley Act and all rules and
regulations promulgated thereunder that are then in effect, is
implementing the provisions thereof in accordance thereof, and is
actively taking steps to ensure that it will be in compliance with
other applicable provisions of the Sarbanes-Oxley Act not currently
in effect upon the effectiveness of such provisions;
(xxxiii)
As the time of filing of the Registration Statement, the Company
was not, and the Company on the date of this Agreement is not, an
“ineligible issuer” as defined in Rule 405 under
the Act;
(xxxiv)
Without the prior consent of Canaccord Adams Inc., the Company has
not made and will not make any offer relating to the Shares that
would constitute a “free writing prospectus” as defined
in Rule 405 under the Act; and any free writing prospectuses,
the use of which have been consented to by the Company and
Canaccord Adams Inc., are listed on Schedule III(a) or
III(b) hereto;
(xxxv)
The Company has complied and will comply with the requirements of
Rules 164 and 433 under the Act applicable to any Issuer Free
Writing Prospectus, including timely filing with the Commission or
retention where required and legending;
(xxxvi)
The Company has taken all actions necessary so that any “road
show” (as defined in Rule 433 under the Act) in
connection with the offering of the Shares will not be required to
be filed pursuant to the Act and the rules and regulations adopted
by the Commission thereunder; and
(xxxvii)
Except as otherwise disclosed in the Pricing Prospectus, the
Company and its subsidiaries and any “employee benefit
plan” (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “ ERISA
”)) established or maintained by the Company, its
subsidiaries or their ERISA Affiliates (as defined below) are in
compliance in all material respects with ERISA. “ ERISA
Affiliate ” means, with respect to the Company or a
subsidiary, any member of any group of organizations described in
Sections 414(b),(c),(m) or (o) of the Internal Revenue
Code of 1986, as amended, and the regulations and published
interpretations thereunder (the “ Code ”) of
which the Company or such subsidiary is a member. No
“reportable event” (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates. No
“employee benefit plan” established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates, if
such “employee benefit plan” were terminated, would
have any “amount of unfunded benefit liabilities” (as
defined under ERISA). Neither the Company, its subsidiaries nor any
of their ERISA Affiliates has incurred or reasonably expects to
incur any liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any “employee benefit
plan” or (ii) Sections 412, 4971, 4975 or 4980B of the
Code. Each “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of
the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would cause the loss of such
qualification.
(b)
Representations, Warranties and Covenants of the Selling
Stockholders . Each of the Selling Stockholders severally
represents and warrants to, and agrees with, each of the
Underwriters and the Company that:
(i)
All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this
Agreement and the Power of Attorney
and the Custody
Agreement hereinafter referred to, and for the sale and delivery of
the Shares to be sold by such Selling Stockholder hereunder, have
been obtained; and such Selling Stockholder has full right, power
and authority to enter into this Agreement, the Power of Attorney
and the Custody Agreement and to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder
hereunder;
(ii)
The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all
of the provisions of this Agreement, the Power of Attorney and the
Custody Agreement and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any statute, indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which
such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of
such Selling Stockholder is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation
or By-laws of such Selling Stockholder if such Selling Stockholder
is a corporation, the Partnership Agreement of such Selling
Stockholder if such Selling Stockholder is a partnership, the Trust
Agreement or Declaration of Trust of such Selling Stockholder if
such Selling Stockholder is a trust, the Certificate of Formation
or Limited Liability Company Agreement of such Selling Stockholder
if such Selling Stockholder is a limited liability company, or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder;
(iii)
Such Selling Stockholder has, and immediately prior to each Time of
Delivery such Selling Stockholder will have, good and valid title
to the Shares to be sold by such Selling Stockholder hereunder,
free and clear of all liens, encumbrances, equities or claims; and,
upon delivery of such Shares and payment therefor pursuant hereto,
such Selling Stockholder will transfer to the several Underwriters,
good and valid title to such Shares, free and clear of all liens,
encumbrances, equities or claims;
(iv)
Such Selling Stockholder is not prompted to sell shares of Common
Stock by any information concerning the Company that is not set
forth in the Pricing Prospectus;
(v)
During the period beginning from the date hereof and continuing to
and including the date 90 days after the date of the
Prospectus (the “ Lock-Up Period ”), such
Selling Stockholder will not, without the prior written consent of
Canaccord Adams Inc., (i) sell, offer to sell, contract or
agree to sell, hypothecate, pledge, grant any option to purchase or
otherwise dispose of or agree to dispose of, directly or
indirectly, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, with respect
to any Common Stock or securities convertible into or exchangeable
or exercisable for Common Stock, (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of Common Stock or any
securities convertible into or exercisable or exchangeable for
Common Stock, whether any such transaction is to be settled by
delivery of Common Stock or any such securities, in cash or
otherwise, or (iii) publicly announce an intention to effect
any transaction specified in clause
(i) or
(ii) above, except the sale of shares by the Selling
Stockholder hereunder; provided, however, that if (a) during
the period that begins on the date that is 17 calendar days before
the last day of the Lock-Up Period and ends on the last day of the
Lock-Up Period, the Company issues an earnings release or material
news or a material event relating to the Company occurs, or (b)
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 clause (v) shall continue to
apply until the expiration of the date that is 18 calendar days
after the date of such issuance of the earnings release or the
material news or the material event occurs;
(vi)
Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares;
(vii)
To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto are made in reliance upon
and in conformity with written information furnished to the Company
by such Selling Stockholder expressly for use therein, such
Registration Statement and Preliminary Prospectus did not, and the
Prospectus and any further amendments or supplements to the
Registration Statement and the Prospectus, when they become
effective or are filed with the Commission, as the case may be,
will not, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(viii)
In order to document the Underwriters’ compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to Canaccord
Adams Inc. prior to or at the First Time of Delivery (as
hereinafter defined) a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu
thereof);
(ix)
Certificates in negotiable form representing all of the Shares to
be sold by such Selling Stockholder hereunder have been placed in
custody under a Custody Agreement, in the form heretofore furnished
to the Underwriters (the “ Custody Agreement ”),
duly executed and delivered by such Selling Stockholder to [
], as custodian (the “ Custodian ”), and such
Selling Stockholder has duly executed and delivered a Power of
Attorney, in the form heretofore furnished to Canaccord Adams Inc.
(the “ Power of Attorney ”), appointing the
persons indicated in Schedule II hereto, and each of
them, as such Selling Stockholder’s attorneys-in-fact (the
“ Attorneys-in-Fact ”) with authority to execute
and deliver this Agreement on behalf of such Selling Stockholder,
to determine the purchase price to be paid by the Underwriters to
the Selling Stockholders as provided in Section 3 hereof, to
authorize the delivery of the Shares to be sold by such Selling
Stockholder hereunder and otherwise to act on behalf of such
Selling Stockholder in connection with the transactions
contemplated by this Agreement and the Custody
Agreement;
(x)
The Shares represented by the certificates held in custody for such
Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by
such Selling Stockholder for such custody, and the appointment by
such Selling Stockholder of the Attorneys-in-Fact by the Power of
Attorney, are irrevocable to the extent provided thereunder,
subject to the terms and conditions of this Agreement; the
obligations of the Selling Stockholders hereunder shall not be
terminated by operation of law, whether by the death or incapacity
of any individual Selling Stockholder or, in the case of an estate
or trust, by the death or incapacity of any executor or trustee or
the termination of such estate or trust, or in the case of a
partnership or corporation, by the dissolution of such partnership
or corporation, or by the occurrence of any other event; if any
individual Selling Stockholder or any such executor or trustee
should die or become incapacitated, or if any such estate or trust
should be terminated, or if any such partnership or corporation
should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of the
Selling Stockholders, subject to and in accordance with, the terms
and conditions of this Agreement and of the Custody Agreements; and
actions taken by the Attorneys-in-Fact pursuant to the Powers of
Attorney shall be as valid as if such death, incapacity,
termination, dissolution or other event had not occurred,
regardless of whether or not the Custodian, the Attorneys-in-Fact,
or any of them, shall have received notice of such death,
incapacity, termination, dissolution or other event;
(xi)
Such Selling Stockholder is not a member of or an affiliate of or
associated with any member of the NASD; and
(xii)
Neither the Selling Stockholders nor any person acting on behalf of
the Selling Stockholders (other than, if applicable, the Company
and the Underwriters) has used or referred or will use or refer to
any “free writing prospectus” as defined in
Rule 405 under the Act, relating to the Shares.
2.
Shares Subject to Sale . On the basis of the
representations, warranties and agreements contained herein, and
subject to the terms and conditions of this Agreement:
(a)
The Company and each of the Selling Stockholders agree, severally
and not jointly (in accordance with the allocation set forth in
Schedule II hereto), to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and each of the Selling
Stockholders, at the First Time of Delivery, at a purchase price
per share of $[
], the number of Firm Shares (to be adjusted by Canaccord Adams
Inc. so as to eliminate fractional shares) determined in each case
by multiplying the aggregate number of Shares to be sold by the
Company and each of the Selling Stockholders as set forth opposite
their respective names in Schedule II hereto by a
fraction, the numerator of which is the aggregate number of Firm
Shares to be purchased by such Underwriter as set forth opposite
the name of such Underwriter in Schedule I hereto and
the denominator of which is the aggregate number of Firm Shares to
be purchased by all of the Underwriters from the Company and all of
the Selling Stockholders hereunder; and
(b)
In the event and to the extent that the Underwriters shall exercise
the election to purchase Optional Shares as provided below, certain
of the Selling Stockholders (as
and to the
extent indicated in Schedule II hereto) agree,
severally and not jointly, to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to
purchase from such Selling Stockholders, at the Second Time of
Delivery, at the purchase price per share set forth in clause
(a) of this Section 2, that number of Optional Shares
determined by multiplying the number of Optional Shares as to which
such election shall have been exercised (to be adjusted by
Canaccord Adams Inc. so as to eliminate fractional shares) by a
fraction, the numerator of which is the maximum number of Optional
Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I
hereto and the denominator of which is the maximum number of
Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The certain
Selling Stockholders, as and to the extent indicated in
Schedule II hereto, hereby grant, severally and not
jointly, to the Underwriters the right to purchase at their
election up to 300,000 Optional Shares, at the purchase price per
share set forth in clause (a) of this Section 2, for the
sole purpose of covering sales of shares in excess of the number of
Firm Shares. Any such election to purchase Optional Shares shall be
made in proportion to the maximum number of Optional Shares to be
sold by each Selling Stockholder as set forth in Schedule II
hereto. Any such election to purchase Optional Shares may be
exercised only by written notice (the “ Election
Notice ”) from Canaccord Adams Inc. to the Selling
Stockholders, given within a period of 30 calendar days after the
date of this Agreement and setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by Canaccord Adams Inc.
but in no event earlier than the First Time of Delivery or, unless
Canaccord Adams Inc. and the Selling Stockholders otherwise agree
in writing, earlier than two or later than ten business days after
the date of such notice.
3.
Offering . Upon the authorization by Canaccord Adams Inc. of
the release of the Firm Shares, the several Underwriters propose to
offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
4.
Closing . Certificates in definitive form for the Shares to
be purchased by each Underwriter hereunder, and in such
denominations and registered in such names as Canaccord Adams Inc.
may request upon at least forty-eight hours’ prior notice to
the Company and the Selling Stockholders, shall be delivered by or
on behalf of the Company and the Selling Stockholders to Canaccord
Adams Inc. for the account of such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price therefor by
wire transfer of same day funds to the account specified by the
Company and the Custodian, as their interests may appear, all at
the office of Canaccord Adams Inc., 99 High Street, Boston,
Massachusetts 02110. The time and date of such delivery and payment
shall be, with respect to the Firm Shares, 9:30 a.m., Boston time,
on [
], 2006 or such other time and date as Canaccord Adams Inc. and the
Company may agree upon in writing, and, with respect to the
Optional Shares, 9:30 a.m., Boston time, on the date
specified
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