EXHIBIT 1
3,000,000 Shares
1
Shoe Pavilion,
Inc.
Common Stock
UNDERWRITING
AGREEMENT
March , 2006
WEDBUSH MORGAN SECURITIES
INC.
ROTH CAPITAL PARTNERS,
LLC
As Representatives of the several
Underwriters
c/o Wedbush Morgan
Securities
1000 Wilshire Boulevard, 10th
Floor
Los Angeles, California
90017-2465
Ladies and Gentlemen:
Shoe Pavilion, Inc., a Delaware
corporation (the “ Company ”), and the selling
shareholder named in Schedule B hereto (the “ Selling
Stockholder ”) propose to sell to you and other firms and
corporations named in Schedule A attached hereto (the “
Underwriters ,” which term shall also include any
underwriter substituted as provided in Section 10 hereof), for
which you are acting as representatives (“
Representatives ”), 3,000,000 shares (the “
Primary Shares ”) of the Company’s Common Stock,
par value $0.001 per share (“ Common Stock ”).
In addition, the Selling Stockholder proposes to grant to the
Underwriters an option to purchase, for the purpose of covering
over-allotments, up to an additional 450,000 shares of the Common
Stock (the “ Over-Allotment Shares ”). The
Primary Shares and the Over-Allotment Shares are collectively
referred to below as the “ Shares .” The Company
and the Selling Stockholder agree with the several Underwriters as
set forth below.
1. Representations, Warranties
and Certain Covenants of the Company . The Company represents
and warrants to, and the Company also covenants and agrees with,
each of the Underwriters as follows:
(a) The Company has filed with the
Securities and Exchange Commission (the “ Commission
”) a registration statement on Form S-1 (No. 333-131915)
(“ Initial Registration Statement ”), including
a preliminary prospectus, relating to the Shares and such
amendments to the registration statement and prospectus included
therein as may have been required to the date hereof. The Company
will file with the Commission either: (i) prior to
effectiveness of such registration statement, a further amendment
thereto, including a form of prospectus, and if required after
effectiveness of such registration statement, a final prospectus in
accordance with Rule 424(b) of the rules and regulations (“
Rules and Regulations ”) under the Securities Act of
1933, as amended (the “ Act ”), or
(ii) after effectiveness of such registration statement, a
final prospectus in accordance with Rules 430A and 424(b) of the
Rules and Regulations. Any such preliminary prospectus and any
prospectus included in the registration statement at the time it
becomes effective that omits information pursuant to Rule 430A
of the Rules and Regulations, is referred to herein as a “
preliminary prospectus ”; such registration statement,
as it may have been amended at the time when it becomes effective,
including financial statements, exhibits and the information, if
any, deemed to be a part of such registration statement by virtue
of Rule 430A of the Rules and Regulations, is referred to herein as
the “ Registration Statement ”; such final form
of
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1
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Plus an option to purchase from the
Selling Stockholder up to an aggregate of 450,000 additional shares
to cover over-allotments.
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1.
prospectus, in the form in which it
was first filed pursuant to Rule 424(b) of the Rules and
Regulations or, if no filing pursuant to Rule 424(b) of the
Rules and Regulations is made, in the form included in the
Registration Statement at the time it becomes effective, is
referred to herein as the “ Prospectus ”; and
any “issuer free writing prospectus” as defined in Rule
433 under the Act relating to the Shares is hereinafter called an
“ Issuer Free Writing Prospectus ”. If the
Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b)
under the Act (the “ Rule 462 Registration Statement
”), then any reference herein to the term “Registration
Statement” shall be deemed to include such Rule 462
Registration Statement. Any references herein to the preliminary
prospectus, Prospectus or Registration Statement shall be deemed to
include all documents incorporated by reference therein.
(b) The Commission has not issued an
order preventing or suspending the use of any preliminary
prospectus or Issuer Free Writing Prospectus, and no proceedings
for such purpose are pending before or, to the Company’s
knowledge, threatened or contemplated by the Commission, and the
Company has complied with all requests by the Commission for
additional information in connection therewith. Each such
preliminary prospectus, as of its date, has conformed in all
material respects to the requirements of the Act and the Rules and
Regulations and has not included any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading. Each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this
offering will be substantially identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T. At the
date of this Agreement, at the date the Registration Statement
becomes effective and at the Closing Date (as defined below)
(i) the Registration Statement, each preliminary prospectus
and Prospectus and any amendments or supplements thereto will in
all material respects conform to the requirements of the Act and
the Rules and Regulations, (ii) the Registration Statement
will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading,
(iii) each preliminary prospectus and the Prospectus, as
amended or supplemented, if applicable, will not include any untrue
statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (iv) each document,
if any, filed or to be filed pursuant to the Securities Exchange
Act of 1934, as amended (the “ Exchange Act ”)
and incorporated by reference in the Prospectus was filed or will
be filed in a timely manner, complied or will comply when so filed
in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder; provided
, however , that the Company makes no representations,
warranties or agreements as to information contained in or omitted
from the Registration Statement, each preliminary prospectus or
Prospectus or any such amendment or supplement in reliance upon,
and in conformity with, written information furnished to the
Company by the Underwriters expressly for use therein, it being
understood and agreed that the only such information is that
described as such in Section 8(d) hereof.
(c) The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as
required by the Act and the Rules and Regulations. The consolidated
financial statements of the Company set forth in the Registration
Statement and Prospectus, together with the related notes thereto,
present fairly the financial condition of the Company and its
subsidiaries as of the dates indicated and the results of
operations and cash flows for the periods therein specified in
conformity with United States generally accepted accounting
principles (“ GAAP ”) consistently applied
throughout the periods involved (except as otherwise stated
therein). The selected financial data and the summary financial
information included in the Prospectus present fairly in all
material respects the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The schedules
set forth in the Registration Statement present fairly the
information required to be stated therein in conformity with GAAP.
All disclosures contained in the Registration Statement or the
Prospectus regarding “ non-GAAP financial measures
” (as such term is defined by rules and regulations of the
Commission) comply in all material respects with Regulation G of
the Exchange Act and Item 10 of Regulation S-K under the
Act, to the extent applicable.
2.
(d) There are no contracts or
documents that are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations
that have not been so filed.
(e) The Company has been duly
organized and is validly existing in good standing under the laws
of the State of Delaware. The Company has all requisite power and
authority to own, lease and operate its properties and to conduct
its business as is described in each preliminary prospectus and the
Prospectus. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in
which such qualification is required, except where the failure to
so qualify or be in good standing would not result in a material
adverse effect on the condition (financial or otherwise), business,
prospects or results of operations of the Company and its
subsidiaries taken as a whole (a “ Material Adverse
Effect ”).
(f) Each of the material
subsidiaries of the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in each preliminary prospectus and the
Prospectus and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which
such qualification is required, except where the failure so to
qualify or to be in good standing would not result in a Material
Adverse Effect. Except as set forth in the Registration Statement,
the Company does not own any shares of capital stock or any other
securities of any corporation, nor does it have any equity
interest, direct or indirect, in any firm, partnership, association
or other entity or subsidiary.
(g) The authorized, issued and
outstanding capital stock of the Company conforms to the
description thereof contained in each preliminary prospectus and
the Prospectus. The issued and outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable. The sale of the Shares by the Company has been duly
authorized and after issuance of and payment for such Shares in
accordance with this Agreement, such Shares will be validly issued,
fully paid and nonassessable; the Shares to be sold by the Selling
Stockholder have been duly authorized and validly issued and are
fully paid and non-assessable; the Underwriters will acquire good
and marketable title to the Shares to be sold by the Company, free
and clear of any adverse claims whatsoever, and the holders of the
Common Stock are not entitled to any preemptive rights with respect
to the Shares to be sold by the Company. The issued and outstanding
shares of the capital stock of each of the subsidiaries of the
Company have been duly authorized and validly issued, are fully
paid and nonassessable and are owned beneficially and of record,
directly or indirectly, by the Company free and clear of all liens,
claims or encumbrances whatsoever. None of the outstanding shares
of capital stock of the Company or any of its subsidiaries was
issued in violation of the preemptive or similar rights of any
securityholder arising by operation of law, under the certificate
of incorporation or by-laws of the Company or its subsidiaries or
under any agreement or obligation to which the Company or any of
its subsidiaries is a party or by which any of them are bound. The
Common Stock is listed for trading on the Nasdaq National
Market.
(h) Except as disclosed in each
preliminary prospectus and the Prospectus and the financial
statements of the Company and the related notes thereto included in
each preliminary prospectus and the Prospectus, and except for
options to purchase 431,000 shares of Common Stock issued by the
Company in the ordinary course of business and outstanding as of
February 24, 2006, and warrants to purchase 142,857 shares of
Common Stock issued by the Company and outstanding as of
February 24, 2006, neither the Company nor any of its
subsidiaries has outstanding any options or warrants to purchase,
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, warrants, rights, convertible securities
or obligations. Except as described in the Registration Statement,
each preliminary prospectus and Prospectus, there are no persons
with registration rights or other similar rights to have any
securities registered by the Company pursuant to the Registration
Statement or otherwise registered by the Company under the
Act.
(i) Except as contemplated in each
preliminary prospectus and the Prospectus, subsequent to the
respective dates as of which information is given in the
Registration Statement, each preliminary prospectus and the
Prospectus, neither the Company nor any of its subsidiaries has
incurred any liabilities
3.
or obligations, direct or contingent
(including any off-balance sheet obligations or any “
variable interest entities ” within the meaning of
Financial Accounting Standards Board Interpretation No. 46),
or entered into any transactions, not in the ordinary course of
business, that are material to the Company and its subsidiaries
taken as a whole, and there has not been any dividend or
distribution of any kind declared, paid or made by the Company on
any class of its capital stock, any material change in the capital
stock, short-term debt or long-term debt of the Company, or any
Material Adverse Effect.
(j) Except as set forth in each
preliminary prospectus and the Prospectus, there are no pending
actions, suits or proceedings against the Company, any of its
subsidiaries or any of their respective properties that, if
determined adversely to the Company or its subsidiaries, could
reasonably be expected, individually or in the aggregate, to result
in a Material Adverse Effect, or would materially and adversely
affect the ability of the Company to perform its obligations under
this Agreement, or that are otherwise material in the context of
the sale of the Shares by the Company; and no such actions, suits
or proceedings are, to the Company’s knowledge, threatened or
contemplated.
(k) Except as set forth in each
preliminary prospectus and the Prospectus, the Company and its
subsidiaries own or have valid leasehold interests in all material
properties and assets required for the operation of their business
as now conducted or as presently proposed to be conducted,
including those described in the Registration Statement, each
preliminary prospectus and the Prospectus as being owned by them;
and each of the Company and its subsidiaries has good and
marketable title to all properties and assets owned by it material
to its business in each case free from liens, encumbrances and
defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by the
Company or its subsidiaries. All real property leases to which the
Company or any of its subsidiaries is a party are valid, subsisting
and, to the knowledge of the Company, enforceable by the Company or
such subsidiary, in each case with no exceptions that would
materially interfere with the use made or to be made thereof by the
Company or its subsidiaries and each of the Company and its
subsidiaries enjoys peaceful and undisturbed possession under all
such leases to which it is a party as lessee.
(l) The Company has full right,
power and authority to enter into this Agreement and to perform all
of its obligations hereunder. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and binding obligation of the Company in accordance with its
terms.
(m) The Company is not in, and the
execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated
herein and in the Registration Statement (including the issuance
and sale of the Shares and the use of the proceeds from the sale of
the Shares as described in each preliminary prospectus and the
Prospectus under the caption “Use of Proceeds”) and
compliance by the Company with its obligations hereunder do not and
will not, with or without the giving of notice or passage of time
or both, result in a violation, breach or conflict with the charter
or bylaws of the Company or any of its subsidiaries or any
agreement or 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 as to which any of their respective
properties is subject or any statute, 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,
except for any such violations, breaches or conflicts that could
not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect; and no consent, approval,
authorization or order of, or filing with, any court or
governmental agency or body is required in connection with the
transactions contemplated hereby except as have been obtained and
made under the Act and such as may be required under state
securities or “Blue Sky” laws.
(n) The Company, together with its
subsidiaries, owns or possesses, or can acquire on a timely basis
and on commercially reasonable terms, all material trademarks,
trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual
property (collectively, “ intellectual property rights
”) necessary to conduct the business now operated by it, and,
except as disclosed in each preliminary prospectus and the
Prospectus, neither the Company nor any of its subsidiaries has
received any notice or otherwise become aware of any infringement
of or conflict with asserted rights of others with respect to any
intellectual property rights, nor of any facts or
circumstances
4.
that would render any intellectual
property rights invalid or inadequate to protect the interest of
the Company or any of its subsidiaries therein, and which
infringement or conflict, if determined adversely to the Company or
its subsidiaries, or invalidity or inadequacy could reasonably be
expected, individually or in the aggregate, to result in a Material
Adverse Effect.
(o) Except as disclosed in each
preliminary prospectus and the Prospectus, there are no contracts,
agreements or understandings between the Company or any of its
subsidiaries and any person that would give rise to a valid claim
against the Company, any of its subsidiaries or any Underwriter for
a brokerage commission, finder’s fee or other like payment in
connection with this offering.
(p) The Company and its subsidiaries
possess all material certificates, authorities or permits issued by
appropriate governmental agencies or bodies and have made all
material filings required under any federal, state, local or
foreign law, rule or regulation necessary to conduct the business
now operated by them (the “ Permits ”) and have
not received any notice of proceedings relating to the revocation
or modification of any such Permit that, if determined adversely to
the Company or its subsidiaries, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse
Effect.
(q) No labor dispute with the
employees of the Company or any subsidiary exists or, to the
knowledge of the Company or its subsidiaries, is imminent that
could reasonably be expected to result in a Material Adverse
Effect.
(r) Except as disclosed in each
preliminary prospectus and the Prospectus, neither the Company nor
any subsidiary is in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “ environmental laws
”), owns or operates any real property contaminated with any
substance that is subject to any environmental laws, is liable for
any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any
environmental laws, which violation, contamination, liability or
claim could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect; and neither the
Company nor any subsidiary is aware of any pending investigation
that might lead to such a claim.
(s) The Company and its subsidiaries
maintain systems of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability; (iii) access to assets
is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. The Company and its subsidiaries maintain disclosure
controls and procedures (as such term is defined in Rule 13a-15(e)
and 15d-15(e) under the Exchange Act) that are designed to ensure
that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Commission,
including, without limitation, controls and procedures designed to
ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is
accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its
principal financial officer or officers, as appropriate to allow
timely decisions regarding required disclosure. The Company is
otherwise in compliance in all materials respects with all
applicable effective provisions of the Sarbanes-Oxley Act of 2002
and the rules and regulations issued thereunder by the
Commission.
(t) The Company and its subsidiaries
are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent
and customary in the business in which they are engaged; and the
Company has no reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be
necessary to continue its business, or that the cost of renewing
existing
5.
coverage or obtaining similar
coverage could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
(u) No relationship, direct or
indirect, exists among the Company or any of its subsidiaries, on
the one hand, and the directors, officers, customers, suppliers or,
to the Company’s knowledge, stockholders of the Company or
its subsidiaries, on the other, that is required by the Act to be
described in the Registration Statement and Prospectus and that is
not so described.
(v) Nothing has come to the
attention of the Company that has caused the Company to believe
that the statistical and market-related data included in the
Registration Statement, each preliminary prospectus and the
Prospectus is not based on or derived from sources that are
reliable and accurate (in accordance with the methodologies used to
derive such statistical and market-related data set forth in the
underlying source material) in all material respects.
(w) The Company is not and, after
giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in each
preliminary prospectus and the Prospectus, will not be an “
investment company ” as defined in the Investment
Company Act of 1940.
(x) At the time of filing of the
Initial Registration Statement the Company was not and is not an
“ineligible issuer,” as defined under Rule 405 of the
Act.
(y) The Company has not made any
offer relating to the Shares that would constitute a “free
writing prospectus” as defined in Rule 405 under the
Act.
(z) The Company has complied with
the requirements of Rule 433 under the Act applicable to any Issuer
Free Writing Prospectus, including timely filing with the
Commission or retention where required and legending, and the
Company has satisfied all conditions of Rule 433 under the Act
necessary to avoid a requirement to file with the Commission any
electronic road show.
2. Representations, Warranties
and Covenants of the Selling Stockholder . The Selling
Stockholder represents and warrants to, and covenants and agrees
with, each of the Underwriters as follows:
(a) The Selling Stockholder is not
prompted to sell the Shares to be sold by the Selling Stockholder
hereunder by any information concerning the Company or any
subsidiary of the Company that is not set forth in each preliminary
prospectus and the Prospectus.
(b) The Selling Stockholder has full
power and authority to enter into this Agreement and the Custody
Agreement with Mellon Investor Services LLC, as Custodian, and
Wedbush Morgan (the “ Custody Agreement ”). All
authorizations and consents necessary for the execution and
delivery by or on behalf of the Selling Stockholder of this
Agreement and the Custody Agreement have been given. Each of this
Agreement and the Custody Agreement has been duly executed and
delivered by or on behalf of the Selling Stockholder and each of
this Agreement and the Custody Agreement constitutes a valid and
binding agreement of the Selling Stockholder and is enforceable
against the Selling Stockholder in accordance with the terms
hereof. The execution, delivery and performance of this Agreement
and the Custody Agreement by the Selling Stockholder do not and
will not, with or without the giving of notice or the passage of
time or both, violate, breach or conflict with any agreement to
which the Selling Stockholder is a party or by which the Selling
Stockholder or any of his properties is bound or any statute or
order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Selling Stockholder or any of his
properties.
(c) The Selling Stockholder now has,
and at the time of delivery thereof hereunder will have,
(i) good and marketable title to the Shares to be sold by the
Selling Stockholder hereunder, free and clear of all liens,
encumbrances and claims whatsoever (other than pursuant to the
Custody Agreement), and (ii) full legal right and power, and
all authorizations and approvals (other than those imposed by the
Act and the securities or “Blue Sky” laws of certain
jurisdictions) required by law, to sell, transfer and deliver
such
6.
Shares to the Underwriters hereunder
and to make the representations, warranties and agreements made by
the Selling Stockholder herein. Upon the delivery of and payment
for such Shares hereunder, the Selling Stockholder will deliver
good and marketable title thereto, free and clear of all liens,
encumbrances and claims whatsoever.
(d) On the Closing Date, all stock
transfer or other taxes (other than income taxes), if any, that are
required to be paid in connection with the sale and transfer of the
Shares to be sold by the Selling Stockholder to the several
Underwriters hereunder will have been fully paid or provided for by
the Selling Stockholder and all laws imposing such taxes will have
been fully complied with.
(e) No consent, approval,
authorization or order of, or any filing with, any court or
governmental agency or body is required for the consummation by the
Selling Stockholder of the transactions on its part contemplated in
this Agreement or the Custody Agreement, except as has been
obtained or made under the Act or as may be required by state
securities or “Blue Sky” laws.
(f) All information with respect to
the Selling Stockholder provided in writing to the Company by the
Selling Stockholder expressly for use in the Registration
Statement, each preliminary prospectus and the Prospectus, as of
the date hereof, the date the Registration Statement becomes
effective and the Closing Date, (i) complied and will comply
in all material respects with all applicable provisions of the Act
and the Rules and Regulations and (ii) does not and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein not misleading.
(g) Other than as permitted by the
Act and the Rules and Regulations, the Selling Stockholder has not
distributed and will not distribute any preliminary prospectus, the
Prospectus or any other offering material in connection with the
offering and sale of the Shares. The Selling Stockholder has not
taken, directly or indirectly, any action designed, or that might
reasonably be expected, to cause or result in, under the Act or
otherwise, or that has caused or resulted in, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(h) Certificates in negotiable form
for the Shares to be sold hereunder by the Selling Stockholder have
been placed in custody, for the purpose of making delivery of such
Shares under this Agreement and under the Custody Agreement for the
Selling Stockholder. The Selling Stockholder agrees that the Shares
represented by the certificates held in custody for him under the
Custody Agreement are for the benefit of and coupled with and
subject to the interest of the Custodian (as defined in the Custody
Agreement), the Underwriters and the Company, that the arrangements
made by the Selling Stockholder for such custody and the
appointment of the Custodian by the Selling Stockholder are
irrevocable, and that the obligations of the Selling Stockholder
hereunder shall not be terminated by operation of law, whether by
the death, disability, incapacity or liquidation of the Selling
Stockholder or the occurrence of any other event. If the Selling
Stockholder should die, become disabled or incapacitated or if any
other such event should occur before the delivery of the Shares
hereunder, certificates for the Shares shall be delivered by the
Custodian in accordance with the terms and conditions of the
Custody Agreement and this Agreement and actions taken by the
Custodian pursuant to the Custody Agreement shall be as valid as if
such death, disability, incapacity or other event had not occurred,
regardless of whether or not the Custodian shall have received
notice thereof.
(i) The Selling Stockholder does not
control, is not controlled by, is not under common control with and
has no other association with any member of the National
Association of Securities Dealers, Inc. or any affiliate of such
member. None of the proceeds received by the Selling Stockholder
from the sale of the Shares will be paid to a member of the
National Association of Securities Dealers, Inc. or any affiliate
of such member.
3. Sale and Purchase of the
Shares .
(a) The Company and the Selling
Stockholder hereby agree to sell the Primary Shares, with the
number of Primary Shares to be sold by the Selling Stockholder
being set forth opposite his name in
7.
Schedule B, to the several
Underwriters as set forth in Schedule A attached hereto, and the
several Underwriters, in reliance upon the representations,
warranties and agreements herein contained, but subject to the
conditions hereinafter stated, agree, severally and not jointly, to
purchase from the Company and the Selling Stockholder, at the place
and the time specified below, the respective aggregate numbers of
Primary Shares set forth in Schedule A opposite their respective
names, plus any additional Shares which such Underwriters may
become obligated to purchase pursuant to the provisions of
Section 3(b) hereof, at a price of
$ per
Share. The number of Primary Shares purchased by each Underwriter
from the Selling Stockholder hereunder shall bear the same
proportion to the total number of Primary Shares to be purchased by
such Underwriter hereunder as the number of Primary Shares being
sold by the Selling Stockholder bears to the total number of
Primary Shares being sold hereunder, subject to adjustment by the
Representatives to eliminate fractions.
(b) In addition, on the basis of the
representations and warranties herein contained, from time to time
upon not less than two days’ and not more than ten
days’ notice from the Representatives to the Company, or its
counsel, the Selling Stockholder agrees to sell to the Underwriters
(but only for the purpose of covering over-allotments in the sale
of the Primary Shares), all or any portion of the Over-Allotment
Shares, as specified by the Representatives in such notice, at the
purchase price stated in Section 3(a) hereof and the
Underwriters agree, severally and not jointly, to purchase such
Over-Allotment Shares. The Over-Allotment Shares may be purchased
on the Closing Date or at any time or times thereafter so long as
the notice to purchase is given not later than 30 days following
the date of the Prospectus. Over-Allotment Shares shall be
purchased by each Underwriter in the proportion that the number of
Primary Shares set opposite the name of each Underwriter in
Schedule A hereto bears to the total number of Primary Shares. No
Over-Allotment Shares shall be delivered to or for the accounts of
the Underwriters unless the Primary Shares shall be simultaneously
delivered and paid for or shall theretofore have been delivered and
paid for as herein provided.
(c) The respective purchase
obligation of each Underwriter shall be subject to such adjustments
as the Representatives may make in their absolute
discretion.
4. T erms of Offering and
Authority to Use Prospectus . The terms of the public offering
by the Underwriters of the Shares to be purchased by them shall be
as set forth in the Registration Statement, each preliminary
prospectus and the Prospectus. The Company and the Selling
Stockholder have authorized the Representatives to use preliminary
prospectuses and to make them available for use by prospective
Underwriters and dealers and authorize the Underwriters and all
dealers acquiring Shares from an Underwriter to use the Prospectus
(as amended or supplemented, if the Company shall have furnished
any amendments or supplements thereto) in connection with the sale
of the Shares until the earlier of the completion of the public
offering or the period as, in the opinion of counsel for the
Underwriters, the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer.
5. Payment and Delivery
.
(a) Payment for the Primary Shares
that the Underwriters agree to purchase hereunder shall be made to
the Company or the Selling Stockholder, as applicable, by wire
transfer of immediately available funds to bank accounts designated
by the Company and the Custodian pursuant to the Selling
Stockholder’s Custody Agreement, as the case may be, at 7:00
a.m., Pacific Time, on
,
2006 (unless postponed in accordance with the provisions of
Section 10 hereof), or at the time, date (not later than seven
full business days thereafter) and place agreed upon by the
Representatives and the Company, against delivery to the
Representatives for the respective accounts of the several
Underwriters of the Primary Shares in the form of certificates for
the securities comprising the Primary Shares. The date and time of
this payment and delivery (which may be postponed as provided in
Section 10 hereof) are sometimes referred to below as the
“ First Closing Date .”
(b) Payment for the Over-Allotment
Shares that the Underwriters have the right to purchase hereunder
shall be made to the Company or the Selling Stockholder, as
applicable, by wire transfer of immediately available funds to bank
accounts designated by the Company and the Custodian pursuant to
the Selling Stockholder’s Custody Agreement, as the case may
be, at the time or times and on the date or
8.
dates specified in the notice or
notices delivered by the Representatives against delivery to the
Representatives for the respective accounts of the several
Underwriters of the Over-Allotment Shares in the form of
certificates for the securities comprising the Over-Allotment
Shares. The dates and times of these payments and deliveries are
herein singularly or collectively sometimes referred to as “
Additional Closing Date .” The term “ Closing
Date ” refers to both the First Closing Date and the
Additional Closing Date.
(c) You, individually and not as
Representatives of the Underwriters, may (but shall not be
obligated to) make payment to the Company or the Selling
Stockholder, as applicable, for Shares to be purchased by any
Underwriter whose funds shall not have been received by you at the
date of payment therefor for the account of that Underwriter. Any
payment by a Representative shall not relieve that Underwriter from
any of its obligations hereunder.
(d) The certificates for the Shares
shall be registered in the name or names and shall be in the
denominations you, as Representatives, designate at least one full
business day prior to the First Closing Date, in the case of the
Primary Shares, and at least one full business day prior to any
Additional Closing Date, in the case of the Over-Allotment Shares.
The Company and the Selling Stockholder agree to cause certificates
for the Shares to be delivered pursuant to this Agreement at your
offices, at the offices of The Depository Trust Company, New York,
New York, or at such other places as may be designated by you as
Representatives, and to be made available for checking and
packaging at one of the above offices or such other places as may
be designated by you as the Representatives at least one full
business day prior to the First Closing Date in the case of the
Primary Shares, and at least one full business day prior to any
Additional Closing Date, in the case of the Over-Allotment
Shares.
6. Conditions of the
Underwriters’ Obligations . The several obligations of
the Underwriters hereunder are subject to the following
conditions:
(a) The Registration Statement shall
have become effective under the Act and, at the Closing Date, no
stop order suspending the effectiveness of the Registration
Statement or the qualifications of the Shares shall have been
issued and no proceedings for that purpose shall have been
instituted before or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission or any
state securities or “Blue Sky” commissioner or
authority.
(b) At each Closing Date,
(i) the representations and warranties of the Company and the
Selling Stockholder contained in this Agreement shall be true and
correct with the same effect as if made on and as of such Closing
Date and the Company and the Selling Stockholder shall have
performed all of the obligations and complied with all of the
conditions hereunder on their part to be performed or complied with
on or prior to the Closing Date; (ii) the Registration
Statement, each preliminary prospectus and the Prospectus and any
amendments or supplements thereto shall in all material respects
conform to the requirements of the Act and the Rules and
Regulations, and neither the Registration Statement, any
preliminary prospectus or the Prospectus, or any amendment or
supplement thereto, shall 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; (iii) there shall have been, since the respective
dates as of which information is given, no material adverse change
in the condition (financial or otherwise), business, prospects or
results of operations of the Company and its subsidiaries, taken as
a whole, from that set forth in the Registration Statement, each
preliminary prospectus and the Prospectus, except changes that the
Registration Statement indicates might occur after the effective
date of the Registration Statement, and neither the Company nor any
of its subsidiaries shall have incurred any material liabilities or
material obligations, direct or contingent, or entered into any
material transaction, contract or agreement not in the ordinary
course of business other than as referred to or contemplated in the
Registration Statement; and (iv) except as set forth in each
preliminary prospectus and the Prospectus, no action, suit or
proceeding at law or in equity shall be pending or threatened
against the Company or any of its subsidiaries that would be
required to be set forth in the Registration Statement, and no
proceedings shall be pending or threatened against the Company or
any of its subsidiaries before or by any commission, board or
administrative agency in the United States or elsewhere, wherein an
unfavorable decision, ruling or finding could reasonably be
expected, individually or in the aggregate, to result in a Material
Adverse Effect; and you shall have received at each Closing Date,
(1) a certificate of the principal executive officer and the
principal
9.
financial or accounting officer of
the Company, dated as of such Closing Date, evidencing compliance
with the provisions of this Subsection 6(b) applicable to the
Company, and confirming the accuracy of the representations of the
Company set forth in Section 1 hereof and confirming that all
conditions set forth herein to be met by the Company have been met
as of such date, and (2) a certificate from the Selling
Stockholder, dated as of such Closing Date, confirming the accuracy
of the representations of the Selling Stockholder set forth in
Section 2 hereof and confirming that all conditions set forth
herein to be met by the Selling Stockholder have been met as of
such date.
(c) No Underwriter shall have
discovered and disclosed to the Company prior to any Closing Date
that the Registration Statement, any preliminary prospectus or the
Prospectus or any amendment or supplement thereto, contains an
untrue statement of a fact that in the reasonable opinion of
counsel to the Representatives is material, or omits to state any
material fact required to be stated therein or necessary in order
to make the statements therein not misleading.
(d) On each Closing Date you shall
have received a signed opinion, dated as of such date, of Cooley
Godward LLP
, counsel to the se
