Exhibit 10.1
Underwriting
Agreement
December 20, 2006
ROBERT W. BAIRD & CO.
INCORPORATED
227 West Monroe Street
Suite 2100
Chicago, Illinois 60606
Ladies and Gentlemen:
Sonic Foundry, Inc., a Maryland
corporation (the “Company”), proposes to issue and sell
to Robert W. Baird & Co. Incorporated
(“Baird”) 3,000,000 shares (the “Shares”)
of its common stock, par value $0.01 per share (the “Common
Stock”).
The Company hereby confirms its
agreement with Baird as follows:
SECTION 1.
Representations and Warranties of the Company.
The Company represents, warrants and
covenants to Baird as follows:
(a) Filing of the Registration
Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (File No. 333-138769),
which contains a form of base prospectus to be used in connection
with the public offering and sale of the Shares. Such
registration statement, as amended, including the financial
statements, exhibits and schedules thereto, and the documents
incorporated by reference in the prospectus contained in the
registration statement at the time such registration statement
became effective, in the form in which it was declared effective by
the Commission under the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder
(collectively, the “Securities Act”), and including any
required information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430A, Rule 430B or
Rule 430C under the Securities Act, or pursuant to the
Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder (collectively, the “Exchange
Act”), is called the “Registration Statement.”
The form of final prospectus included in the Registration Statement
at the effective date of the Registration Statement and any
prospectus supplement relating to the Shares are collectively
referred to as the “Prospectus.” All references in
this Agreement to the Registration Statement, the Company’s
preliminary prospectus included in the Registration Statement (each
a “preliminary prospectus”), the Prospectus, or any
amendments or supplements to any of the foregoing, shall include
any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System
(“EDGAR”). 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 Securities Act, as of the
date of such preliminary prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any preliminary
prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such preliminary
prospectus or Prospectus, as the case may be, under the Exchange
Act and
incorporated by reference in such preliminary
prospectus or Prospectus, as the case may be; and any reference to
any amendment to the Registration Statement shall be deemed to
refer to and include any report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated
by reference in the Registration Statement.
(b) Compliance with Registration
Requirements. The Company meets the requirements for use
of Form S-3 under the Securities Act. The Registration Statement
has been declared effective by the Commission under the Securities
Act. The Company has complied to the Commission’s
satisfaction with all requests of the Commission for additional or
supplemental information. No stop order preventing or
suspending the effectiveness of the Registration Statement is in
effect and no proceedings for such purpose have been instituted or
are pending or, to the best knowledge of the Company, are
contemplated or threatened by the Commission.
Each preliminary prospectus and the
Prospectus when filed complied in all material respects with the
Securities Act and, if filed by electronic transmission pursuant to
EDGAR (except as may be permitted by Regulation S-T under the
Securities Act), was identical in content to the copy thereof
delivered to Baird for use in connection with the offer and sale of
the Shares. Each of the Registration Statement, the Prospectus
and any post-effective amendment thereto, at the time it became
effective and at all subsequent times, complied and will comply in
all material respects with the Securities Act and did 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 to
make the statements therein not misleading. The Prospectus
(including any Prospectus wrapper), as amended or supplemented, as
of its date and at all subsequent times, did not and will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in
the two immediately preceding sentences do not apply to statements
in or omissions from the Registration Statement or any
post-effective amendment thereto, or the Prospectus, or any
amendments or supplements thereto, made in reliance upon and in
conformity with information relating to Baird furnished to the
Company in writing by Baird expressly for use therein, it being
understood and agreed that the only such information furnished by
Baird consists of the information described as such in
Section 8 hereof. There are no contracts or other
documents required to be described in the Prospectus or to be filed
as exhibits to the Registration Statement that have not been
described or filed as required.
The documents incorporated by
reference in 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 Act or the
Exchange Act, as applicable, 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; and any further documents so
filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the
Securities Act or the Exchange
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Act, as applicable, and the rules and
regulations of the Commission thereunder and will 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 not misleading.
(c) Company Not Ineligible
Issuer . (i) At the time of filing the Registration
Statement and (ii) as of the date of the execution and
delivery of this Agreement (with such date being used as the
determination date for purposes of this clause (ii)), the Company
was not and is not an “ineligible issuer” (as defined
in Rule 405 of the Securities Act) (an “Ineligible
Issuer”), without taking account of any determination by the
Commission pursuant to Rule 405 of the Securities Act that it
is not necessary that the Company be considered an Ineligible
Issuer.
(d) Offering Materials Furnished
to Baird. The Company has delivered to Baird complete
manually signed copies of the Registration Statement and of each
consent and certificate of experts filed as a part thereof, and
conformed copies of the Registration Statement (without exhibits)
and preliminary prospectuses and the Prospectus, as amended or
supplemented, in such quantities and at such places as Baird has
reasonably requested.
(e) Distribution of Offering
Materials By the Company. The Company has not distributed
and will not distribute, prior to the later of the Closing Date (as
defined below) and the completion of Baird’s distribution of
the Shares, any offering materials in connection with the offering
and sale of the Shares other than a preliminary prospectus, the
Prospectus or the Registration Statement.
(f) The Underwriting
Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of,
the Company, enforceable in accordance with its terms, except as
rights to indemnification hereunder may be limited by applicable
law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
(g) Authorization of the
Shares. The Shares to be purchased by Baird from the
Company have been duly authorized for issuance and sale pursuant to
this Agreement and, when issued and delivered by the Company
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(h) No Applicable Registration or
Other Similar Rights. There are no persons with
registration or other similar rights to have any equity registered
for sale under the Registration Statement or included in the
offering contemplated by this Agreement.
(i) No Material Adverse
Change. Except as otherwise disclosed in the Registration
Statement, subsequent to the respective dates as of which
information is given in the Registration
Statement: (i) there has been no material adverse change,
or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise,
or in the earnings, business, operations or prospects, whether or
not arising from transactions in the ordinary course of business,
of the Company and its subsidiaries, considered as one entity (any
such change is called a “Material Adverse Change”);
(ii) the Company and its
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subsidiaries, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into
any material transaction or agreement not in the ordinary course of
business; and (iii) there has been no dividend or distribution
of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class
of capital stock.
(j) Independent
Accountants. Grant Thornton LLP, who have expressed their
opinion with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) filed
with the Commission as a part of the Registration Statement and
included in the Prospectus, is an independent registered public
accounting firm as required by the Securities Act and the Exchange
Act.
(k) Preparation of the Financial
Statements. The financial statements filed with the
Commission as a part of or incorporated by reference in the
Registration Statement, and included or incorporated by reference
in the Prospectus, present fairly the consolidated financial
position of the Company and its subsidiaries as of and at the dates
indicated and the results of their operations and cash flows for
the periods specified. Such financial statements comply as to
form with the applicable accounting requirements of the Securities
Act and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved, except as may be expressly stated in the related
notes thereto. No other financial statements or supporting
schedules are required to be included or incorporated by reference
in the Registration Statement.
(l) Incorporation and Good
Standing of the Company and its Subsidiaries. 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 the jurisdiction of its incorporation and has corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, in the
case of the Company, to enter into and perform its obligations
under this Agreement. The Company and each of its subsidiaries
is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business. All of the
issued and outstanding capital stock of each subsidiary has been
duly authorized and validly issued, is fully paid and nonassessable
and is owned by the Company, directly or through
subsidiaries. The outstanding capital stock of each of the
Company’s subsidiaries is free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim. The
Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the
subsidiaries listed in Exhibit 21.1 to the Company’s
Annual Report on Form 10-K for the fiscal year ended
September 30, 2006.
(m) Capitalization and Other
Capital Stock Matters. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus under the caption “Description of Capital
Stock” (other than for subsequent issuances, if any, pursuant
to employee benefit plans described in each of the Prospectus or
upon exercise of outstanding options or warrants described in the
Prospectus, as the case may be). The Common Stock (including
the
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Shares) conforms in all material respects to the
description thereof contained in the Prospectus. All of the
issued and outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and
have been issued in compliance with federal and state securities
laws. None of the outstanding shares of Common Stock were
issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital
stock of the Company or any of its subsidiaries other than those
accurately described in the Prospectus. The description of the
Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder,
set forth or incorporated by reference in the Prospectus,
accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and
rights.
(n) Quotation. The
Shares have been approved for quotation on the Nasdaq Global Market
under the symbol “SOFO.”
(o) Non-Contravention of Existing
Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its subsidiaries
is in violation of its articles of incorporation or bylaws or is in
default (or, with the giving of notice or lapse of time, would be
in default) (a “Default”) under any indenture,
mortgage, loan or credit agreement, note, contract, franchise,
lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound
(including, without limitation, such agreements and contracts filed
as exhibits to the Registration Statement or to which any of the
property or assets of the Company or any of its subsidiaries is
subject (each, an “Existing Instrument”)), except for
such Defaults as would not, individually or in the aggregate,
result in a Material Adverse Change. The Company’s
execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by the
Prospectus (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the
provisions of the articles of incorporation or bylaws of the
Company or any subsidiary, (ii) will not conflict with or
constitute a breach of, or Default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to, or
require the consent of any other party to, any Existing Instrument,
except for such conflicts, breaches, Defaults, liens, charges or
encumbrances as would not, individually or in the aggregate, result
in a Material Adverse Change and (iii) will not result in any
violation of any law, administrative regulation or administrative
or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order
of, or registration or filing with, any court or other governmental
or regulatory authority or agency, is required for the
Company’s execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby
and by the Prospectus, except the registration under the Securities
Act of the Common Stock and such as have been obtained or made by
the Company and are in full force and effect, applicable state
securities or blue sky laws and from the National Association of
Securities Dealers, Inc. (the “NASD”).
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(p) No Material Actions or
Proceedings. Except as otherwise disclosed in the
Prospectus, there are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company’s
knowledge, threatened (i) against or affecting the Company or
any of its subsidiaries, (ii) which has as the subject thereof
any officer or director (in such capacities) of, or property owned
or leased by, the Company or any of its subsidiaries or
(iii) relating to environmental or discrimination matters,
where in any such case (A) there is a reasonable possibility
that such action, suit or proceeding might be determined adversely
to the Company or such subsidiary and (B) any such action,
suit or proceeding, if so determined adversely, would reasonably be
expected to result in a Material Adverse Change or adversely affect
the consummation of the transactions contemplated by this
Agreement. No material labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the best of the
Company’s knowledge, is threatened or imminent except for
such disputes as would not, individually or in the aggregate,
result in a Material Adverse Change. The Company is not aware that
any key employee or significant group of employees of the Company
or any subsidiary plans to terminate employment with the Company or
any such subsidiary.
(q) Intellectual Property
Rights. The Company and its subsidiaries own or possess
sufficient trademarks, trade names, patent rights, copyrights,
domain names, licenses, approvals, trade secrets and other similar
rights (collectively, “Intellectual Property Rights”)
reasonably necessary to conduct their businesses as now conducted;
and the expected expiration of any of such Intellectual Property
Rights would not result in a Material Adverse Change. Neither
the Company nor any of its subsidiaries has received any notice of
infringement or conflict with the asserted Intellectual Property
Rights of others, which infringement or conflict, if the subject of
an unfavorable decision, would result in a Material Adverse
Change. The Company is not a party to or bound by any options,
licenses or agreements with respect to the Intellectual Property
Rights of any other person or entity that are required to be set
forth in the Prospectus and are not described in all material
respects. None of the technology employed by the Company has
been obtained or is being used by the Company in violation of any
contractual obligation binding on the Company or, to the
Company’s knowledge, any of its officers, directors or
employees or otherwise in violation of the rights of any
persons.
(r) All Necessary
Permits. Except as otherwise disclosed in the Prospectus
or except as would not result in a Material Adverse Change, the
Company and each subsidiary possess such valid and current
certificates, licenses, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct their respective businesses, and neither the
Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could result in a Material Adverse
Change.
(s) Title to
Properties. The Company and each of its subsidiaries have
good and marketable title to all the properties and assets
reflected as owned in the financial statements referred to in
Section 1(k) above (or elsewhere in the Prospectus), in
each case free and clear of any security interests, mortgages,
liens, encumbrances, equities, claims and other defects, except
such as are referred to in such financial statements or Prospectus
or which are not material to the business of the Company or its
subsidiaries. The real property, improvements, equipment
and
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personal property held under lease by the
Company or any subsidiary are held under valid and enforceable
leases, with such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of
such real property, improvements, equipment or personal property by
the Company or such subsidiary.
(t) Tax Law Compliance.
The Company and its consolidated subsidiaries have filed all
necessary federal, state and foreign income and franchise tax
returns and have paid all taxes required to be paid by any of them
(other than with respect to any tax returns which the Company is
contesting in good faith and which are not material to the Company)
and, if due and payable, any related or similar assessment, fine or
penalty levied against any of them. The Company has made
adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(k) above in respect
of all federal, state and foreign income and franchise taxes for
all periods as to which the tax liability of the Company or any of
its consolidated subsidiaries has not been finally
determined.
(u) Company Not an
“Investment Company.” The Company has been
advised of the rules and requirements under the Investment
Company Act of 1940, as amended (the “Investment Company
Act”). The Company is not, and after receipt of payment
for the Shares and the application of the proceeds thereof as
contemplated under the caption “Use of Proceeds” in
each of the preliminary prospectus and the Prospectus will not be,
an “investment company” within the meaning of the
Investment Company Act and will conduct its business in a manner so
that it will not become subject to the Investment Company
Act.
(v) Insurance. Each of
the Company and its subsidiaries is insured by recognized,
financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as the
Company reasonably believes are adequate and customary for their
businesses including, but not limited to, policies covering real
and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism
and earthquakes. The Company reasonably believes that each of
it and its subsidiaries will be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be
necessary or appropriate to conduct its business as now conducted
and at a cost that would not result in a Material Adverse
Change. Neither of the Company nor any subsidiary has been
denied any insurance coverage which it has sought or for which it
has applied.
(w) No Price Stabilization or
Manipulation. The Company has not taken and will not
take, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in stabilization or
manipulation of the price of any securities of the Company to
facilitate the sale or resale of the Shares. The Company
acknowledges that Baird may engage in passive market making
transactions in the Shares on the Nasdaq Global Market in
accordance with Regulation M under the Exchange Act.
(x) Related Party
Transactions. 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 preliminary
prospectus or the Prospectus that have not been described as
required.
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(y) Disclosure Controls and
Procedures . The Company has established and maintains
disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) under the Exchange Act), which
(i) are designed to ensure that material information relating
to the Company, including its consolidated subsidiaries, is made
known to the Company’s principal executive officer and its
principal financial officer by others within those entities,
particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (ii) will
be evaluated for effectiveness as of the end of each fiscal quarter
and fiscal year of the Company and (iii) are effective in all
material respects to perform the functions for which they were
established. The Company is not aware of (a) any
significant deficiency in the design or operation of internal
controls which could adversely affect the Company’s ability
to record, process, summarize and report financial data or any
material weaknesses in internal controls or (b) any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal controls.
(z) Company’s Accounting
System. The Company maintains a system of accounting
controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(aa) No Unlawful Contributions or
Other Payments. Neither the Company nor any of its
subsidiaries nor, to the best of the Company’s knowledge, any
employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for,
any federal, state or foreign office in violation of any law or of
the character required to be disclosed in the
Prospectus.
(bb) Compliance with
Environmental Laws. The Company and each of its
subsidiaries (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”), (ii) has received and is
in compliance with all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its
business and (iii) has not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Change, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated by the preliminary prospectus and the
Prospectus. The Company has not been named as a “Potentially
Responsible Party” under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as
amended.
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(cc) Employee Benefit Plan
Compliance. The Company, its subsidiaries and ERISA
Affiliates (as defined below), any employee benefit plan
(“Plan”) established, maintained, contributed to, or
required to be contributed to by the Company, its subsidiaries or
their ERISA Affiliates, and all fiduciaries of such Plans have
complied with and are in compliance in all material respects with
the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder
(collectively, “ERISA”), the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations
thereunder (the “Code”), and all other applicable
laws. “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 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
Plan. No Plan is a “multiemployer plan” as defined
under Section 3(37) of 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 any termination of, or withdrawal from,
any Plan, (ii) ERISA or the Code with respect to the funding
of any Plan, or (iii) Sections 412, 4971, 4975 or 4980B of the
Code. No Plan is currently under audit or review by any
governmental body. Each Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing
has occurred, whether by action or failure to act, which would
cause the loss of such qualification.
(dd) NASD Affiliation . There
are no affiliations with the NASD among the Company’s
officers, directors or, to the best of the knowledge of the
Company, any five percent or greater stockholder of the Company,
except as set forth in the preliminary prospectus, the Prospectus
or the Registration Statement or otherwise disclosed in writing to
Baird.
(ee) Stock Option Practices .
Each stock option (i) was granted in compliance with all
applicable laws and all of the terms and conditions of the
Company’s stock option plan pursuant to which it was issued,
(ii) has an exercise price per share of Common Stock equal to
or greater than the fair market value of such share at the close of
business on the date of such grant, (iii) has a grant date
identical to the date on which the Company’s board of
directors or any committee thereof actually awarded such stock
option, and (iv) qualifies for the tax and accounting
treatment afforded to such stock option as reflected in the
Company’s tax returns and financial statements.
(ff) Compliance with
Sarbanes-Oxley Act of 2002. The Company and, to the best
of its knowledge, its officers and directors, are in compliance
with applicable provisions of the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith
(the “Sarbanes-Oxley Act”) that are effective and are
actively taking steps to ensure that they will be in compliance
with other applicable provisions of the Sarbanes-Oxley Act upon the
effectiveness of such provisions.
(gg) Other than as contemplated by
this Agreement, neither the Company nor any of its subsidiaries is
a party to any contract, agreement or understanding with any person
that would give rise to a valid claim against the Company or Baird
for a brokerage commission, finder’s fee or like payment in
connection with the proposed offering of the Shares as contemplated
by this Agreement (the “Offering”).
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SECTION 2. Purchase, Sale and
Delivery of the Shares.
(a) The Shares. The
Company hereby authorizes Baird to act as its exclusive agent to
solicit offers for the purchase of all or part of the Shares from
the Company in connection with the Offering of the Shares. So long
as this Agreement shall remain in effect, the Company shall not,
without the prior consent of Baird, solicit or accept offers to
purchase any shares of the Common Stock otherwise than through
Baird.
(b) The Closing Date.
The Company hereby agrees to issue and sell 3,000,000 Shares to
Baird at a price of $3.75 per share (the “Purchase
Price”) upon the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein
set forth, and Baird agrees to purchase from the Company at the
Purchase Price the Shares. Payment for the Shares shall be made at
the offices of Godfrey & Kahn, S.C., 780 North Water
Street, Milwaukee, Wisconsin 53202 (or such other place as may be
agreed to by the Company and Baird) at 9:00 a.m. Central
time on December 27, 2006, or such other time and date as
Baird shall designate by notice to the Company (the time and date
of such closing are called the “Closing
Date”). The Company hereby acknowledges that
circumstances under which Baird may provide notice to postpone the
Closing Date as originally scheduled include, but are in no way
limited to, any determination by the Company or Baird to
recirculate to the public copies of an amended or supplemented
Prospectus.
(c) [Intentionally left
blank]
(d) Public Offering of the
Shares. Baird hereby advises the Company that Baird
intends to offer for sale to the public, as described in the
Prospectus, the Shares as soon after this Agreement has been
executed as Baird, in its sole judgment, has determined is
advisable and practicable.
(e) Payment for the
Shares. Payment for the Shares to be sold by the Company
shall be made at the Closing Date by wire transfer of immediately
available funds to the order of the Company equal to 6.00% of the
aggregate sales price of the Shares on the Closing Date.
(f) Delivery of the
Shares. Delivery of the Shares shall be made through the
facilities of The Depository Trust Company unless Baird shall
otherwise instruct. Time shall be of the essence, and delivery
at the time and place specified in this Agreement is a further
condition to the obligations of Baird.
(g) Delivery of Prospectus to
Baird. The Company will deliver to Baird as soon as
practicable after the date of this Agreement copies of the
Prospectus (including all documents incorporated by reference
therein) in such quantities and at such places as Baird may
reasonably request.
10
SECTION 3. Covenants of the
Company.
The Company covenants and agrees
with Baird as follows:
(a) Baird’s Review of
Proposed Amendments and Supplements. During the period
beginning at the initial sale time and ending on the later of the
Closing Date or such date as, in the opinion of counsel for Baird,
the Prospectus is no longer required by law to be delivered in
connection with sales by Baird or a dealer, including under
circumstances where such requirement may be satisfied pursuant to
Rule 172 under the Securities Act (the “Prospectus
Delivery Period”), prior to amending or supplementing the
Registration Statement or the Prospectus, including any amendment
or supplement through incorporation by reference of any report
filed under the Exchange Act, the Company shall furnish to Baird
for review a copy of each such proposed amendment or supplement,
and the Company shall not file any such proposed amendment or
supplement to which Baird reasonably objects.
(b) Securities Act
Compliance. After the date of this Agreement, the Company
shall promptly advise Baird in writing (i) of the receipt of
any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of
any filing of any post-effective amendment to the Registration
Statement or any amendment or supplement to any preliminary
prospectus or the Prospectus, (iii) of the time and date that
any post-effective amendment to the Registration Statement becomes
effective and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of any order
or notice preventing or suspending the use of the Registration
Statement, any preliminary prospectus or the Prospectus, or of any
proceedings to remove, suspend or terminate from listing or
quotation the Common Stock from any securities exchange upon which
it is listed for trading or included or designated for quotation,
or of the threatening or initiation of any proceedings for any of
such purposes. The Company shall use its best efforts to
prevent the issuance of any such stop order or prevention or
suspension of such use. If the Commission shall enter any such
stop order or order or notice of prevention or suspension at any
time, the Company will use its best efforts to obtain the lifting
of such order at the earliest possible moment, or will file a new
registration statement and use its best efforts to have such new
registration statement declared effective as soon as
practicable. Additionally, the Company agrees that it shall
comply with the provisions of Rules 424(b) and 430A, as
applicable, under the Securities Act, including with respect to the
timely filing of documents thereunder, and will use its reasonable
best efforts to confirm that any filings made by the Company under
such Rule 424(b) were received in a timely manner by the
Commission.
(c) Amendments and Supplements to
the Registration Statement, Prospectus and Other Securities Act
Matters. If, during the Prospectus Delivery Period, any
event or development shall occur or condition exist as a result of
which the Prospectus as then amended or supplemented would 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, as the
ca
