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Execution Copy
On2 Technologies, Inc.
13,000,000 Shares
Common Stock ($0.01 par v a
lue)
Underwriting Agreement
New
York, New York
October
17, 2007
ThinkEquity
Partners LLC
Merriman
Curhan Ford & Co.
As
Representatives of the several Underwriters
c/o
ThinkEquity Partners LLC
600
Montgomery Street, 8
th Floor
San
Francisco, California 94111
Ladies
and Gentlemen:
On2
Technologies, Inc., a corporation organized under the laws of
the State of Delaware (the “
Company ”),
proposes to sell to the several underwriters named in
Schedule I hereto
(the “
Underwriters ”),
for whom you (the “
Representatives ”)
are acting as representatives, 13,000,000 shares of Common Stock,
$0.01 par value per share (“
Common Stock ”),
of the Company (said shares to be issued and sold by the Company
being hereinafter called the “
Firm Shares ”).
The Company also proposes to grant to the Underwriters an option
(the “
Over-Allotment Option ”)
to purchase up to 1,950,000 additional shares of Common Stock (as
may be adjusted to give effect to any stock split, reverse stock
split or recapitalization effected by the Company prior to the
exercise of such option) to cover over-allotments (the
“
Option Shares ”;
the Option Shares, together with the Firm Shares, being hereinafter
called the “
Securities ”)
on the terms set forth in Section 3. To the extent there are
no additional Underwriters listed on
Schedule I other
than you, the term Representatives as used herein shall mean you,
as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires.
The use of the neuter in this Agreement shall include the feminine
and masculine wherever appropriate. Certain terms used herein are
defined in Section 20 hereof.
1.
Representations and Warranties .
The
Company represents, warrants and agrees as
follows:
(a)
The
Company has prepared and filed with the Commission a
registration statement (file number 333-142336) on Form S-3,
including a related base prospectus, for registration under
the Act of the offering and sale of the Securities. Such
Registration Statement, including any amendments thereto filed
prior to the Execution Time, has become effective. The Company
may have filed one or more amendments thereto, including a
related preliminary prospectus, each of which has previously
been furnished to you. The Company will file with the
Commission a final prospectus in accordance with Rule 424(b).
As filed, such final prospectus shall conform in all material
respects with the applicable requirements of the Act and the
rules thereunder, on the Effective Date and at the Execution
Time, and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all material
respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary
Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
(b)
On
the Effective Date, the Registration Statement did, and when
the Prospectus is first filed in accordance with Rule 424(b)
and on the Closing Date (as defined herein) and on any date on
which Option Shares are purchased, if such date is not the
Closing Date (a “
settlement date ”),
the Prospectus (and any supplements thereto) will, conform in all
material respects with the applicable requirements of the Act and
the rules thereunder; on the Effective Date and at the Execution
Time, the Registration Statement did 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; and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date and any settlement date, the
Prospectus (together with any supplement thereto) will not, include
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;
provided ,
however ,
that the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement
or the Prospectus (or any supplement thereto) in reliance upon and
in conformity with information furnished in writing to the Company
by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto), it being understood and
agreed that the only such information furnished by any Underwriter
consists of the information described as such in Section 8(b)
hereof.
(c)
The
Disclosure Package as of the Effective Date and at the
Execution Time does not contain 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. The
preceding sentence does not apply to statements in or
omissions from the Disclosure Package based upon and in
conformity with written information furnished to the Company
by any Underwriter through the Representatives specifically
for use therein, it being understood and agreed that the only
such information furnished by or on behalf of any Underwriter
consists of the information described as such in
Section 8(b) hereof.
(d)
(i) At
the time of filing the Registration Statement and (ii) as
of the Execution Time (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), without taking account of any determination by the
Commission pursuant to Rule 405 that it is not necessary that
the Company be considered an Ineligible Issuer.
(e)
Each
Issuer Free Writing Prospectus, when considered together with
the Disclosure Package as of the Effective Date and at the
Execution Time, did not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein,
in the light of the circumstances under which they were made,
not misleading, except that the price of the Securities and
disclosures directly relating thereto will be included on the
cover page of the Prospectus. The foregoing sentence does not
apply to statements in or omissions from any Issuer Free
Writing Prospectus based upon and in conformity with written
information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it
being understood and agreed that the only such information
furnished by any Underwriter consists of the information
described as such in Section 8(b) hereof.
(f)
Each
of the Company and its Subsidiaries (as defined in Section
1(h)) has been duly organized and is validly existing as a
corporation or limited liability company (as applicable) in
good standing under the laws of the jurisdiction in which it
is chartered or organized with full corporate or limited
liability company (as applicable) power and authority to own
or lease, as the case may be, and to operate its properties
and conduct its business as described in the Disclosure
Package and the Prospectus, and is duly qualified to do
business as a foreign corporation or limited liability company
(as applicable) and is in good standing under the laws of each
jurisdiction which requires such qualification, except where
the failure to be so qualified or in good standing could not
reasonably be expected, individually or in the aggregate, to
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business
(a “
Material Adverse Effect ”),
except as set forth in or contemplated in the Disclosure Package
and the Prospectus (exclusive of any supplement
thereto).
(g)
All
the outstanding shares of capital stock or other equity
interests of each Subsidiary of the Company have been duly
authorized and validly issued and are fully paid and
nonassessable, and, except as otherwise set forth in the
Disclosure Package and the Prospectus, all outstanding shares
of capital stock or other equity interests of the Subsidiaries
of the Company are owned by the Company either directly or
through its wholly owned subsidiaries free and clear of any
security interests, claims, liens or
encumbrances.
(h)
The
entities listed on
Annex A attached
hereto are the only subsidiaries of the Company as defined by Rule
1-02 of Regulation S-X (the “
Subsidiaries ”).
(i)
The
Company’s authorized equity capitalization is as set
forth in the Disclosure Package and the Prospectus; the
capital stock of the Company conforms in all material respects
to the description thereof contained in the Disclosure Package
and the Prospectus; the outstanding shares of Common Stock
have been duly and validly authorized and issued and are fully
paid and nonassessable; the Securities being issued and sold
hereunder by the Company have been duly and validly
authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; subject to the matters disclosed in
the Current Report on Form 8-K filed by the Company with the
Commission on October 10, 2007, the Securities shall, when
issued, be duly listed, and admitted and authorized for
trading, subject to official notice of issuance, on the
American Stock Exchange; the certificates for the Securities
have been duly approved and adopted by the Company and are in
valid and sufficient form and comply with the requirements of
the American Stock Exchange; the holders of outstanding shares
of capital stock of the Company are not entitled to preemptive
or other rights to subscribe for the Securities; and, except
as set forth in the Disclosure Package and the Prospectus, no
options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are
outstanding.
(j)
There
is no contract or other document that is required to be
described in the Prospectus or filed as an exhibit to the
Registration Statement under the Act or rules and regulations
thereunder that has not been described in the Prospectus or
filed as an exhibit to the Registration
Statement.
(k)
This
Agreement has been duly authorized, executed and delivered by
the Company.
(l)
The
Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds
thereof as described in the Disclosure Package and the
Prospectus, will not be an “investment company” as
defined in the Investment Company Act of 1940, as
amended.
(m)
No
consent, approval, authorization, filing with or order of any
court or Governmental Authority is required in connection with
the transactions contemplated herein, except for the
registration of the Securities under the Act and such
consents, approvals, authorizations, registrations, or
qualifications as may be required under the Exchange Act, by
the Financial Industry Regulatory authority (“
FINRA ”),
and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of
the Securities by the Underwriters in the manner contemplated
herein and in the Disclosure Package and the
Prospectus.
(n)
Neither
the issue and sale of the Securities nor the consummation of
any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will (i) conflict with or
result in a violation of the charter or by-laws of the Company
or any of the Subsidiaries or (ii) conflict with, result
in material breach or violation of, or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, (A) the
terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to
which its or their property is subject, or (B) any
statute, law, rule, regulation, judgment, order or decree of
any court, regulatory body, administrative agency,
Governmental Authority, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or
any of its or their properties.
(o)
No
holders of securities of the Company have rights to the
registration of such securities under the Registration
Statement except as set forth in the Disclosure Package and
Prospectus.
(p)
The
consolidated historical financial statements and schedules of
the Company and its consolidated Subsidiaries included in the
Disclosure Package, the Prospectus and the Registration
Statement present fairly in all material respects the
consolidated financial condition, results of operations and
cash flows of the Company and its Subsidiaries as of the
respective dates and for the respective periods indicated and
have been prepared in conformity with U.S. generally accepted
accounting principles applied on a consistent basis throughout
the periods involved (except as otherwise noted therein). The
selected financial data set forth under the caption
“Selected Consolidated Financial Data” in the
Disclosure Package, the Prospectus and the Registration
Statement present the information set forth therein on a basis
consistent with that of the audited financial statements
contained in the Registration Statement.
(q)
Except
as set forth in or contemplated in the Disclosure Package and
the Prospectus, there are no actions, suits or proceedings by
or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any of its
Subsidiaries or its or their property pending or, to the
Company’s knowledge, threatened that (i) could
reasonably be expected to have a material adverse effect on
the performance of this Agreement or the consummation of any
of the transactions contemplated hereby or (ii) could,
singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(r)
The
Company and each of the Subsidiaries have good and marketable
title in fee simple to all real property and good and valid
title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects, except
such as are described in the most recent Prospectus or such as
do not materially adversely affect the value of such property
and do not materially interfere with the use made and proposed
to be made of such property by the Company and the
Subsidiaries; and all assets held under lease by the Company
and the 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
the Subsidiaries.
(s)
Neither
the Company nor any Subsidiary (i) is in violation or
default of any provision of its charter or bylaws,
(ii) is in default in any material respect of the terms
of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or
bound or to which its property is subject, or
(iii) except as set forth in the Prospectus, is in
violation in any material respect of any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory
body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or such
subsidiary or any of its properties, as applicable, except
with respect to (ii) and (iii) above, for such violations or
defaults that would not, individually or in the aggregate,
have a Material Adverse Effect.
(t)
Eisner
LLP, who has certified certain financial statements of the
Company and its consolidated subsidiaries and delivered its
report with respect to the audited consolidated financial
statements and schedules included in the Disclosure Package
and the Prospectus, is an independent registered public
accounting firm with respect to the Company within the meaning
of the Act within the meaning of Rule 3600T of the Public
Company Accounting Oversight Board, and there has not been any
disagreement (within the meaning of National Policy Statement
No. 31) with the present or any former accountants of the
Company.
(u)
There
are no transfer taxes or other similar fees or charges under
U.S. federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with
the execution and delivery of this Agreement or the issuance
by the Company or sale by the Company of the
Securities.
(v)
Each
of the Company and the Subsidiaries has filed all Tax Returns
that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect, except as set forth
in or contemplated in the Disclosure Package and the
Prospectus (exclusive of any supplement thereto)) and has paid
all Taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested
in good faith or as would not have a Material Adverse Effect,
except as set forth in or contemplated in the Disclosure
Package and the Prospectus (exclusive of any supplement
thereto).
(w)
No
labor problem or dispute with the employees of the Company or
any of its Subsidiaries exists or, to the knowledge of the
Company, is threatened or imminent, and the Company is not
aware of any existing or imminent labor disturbance by the
employees of any of its or the Subsidiaries’ principal
suppliers, contractors or customers, that could have a
Material Adverse Effect, except as set forth in or
contemplated in the Disclosure Package and the Prospectus
(exclusive of any supplement thereto).
(x)
The
Company and each of the 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
businesses in which they are engaged; all policies of
insurance and fidelity or surety bonds insuring the Company or
any of the Subsidiaries or their respective businesses,
assets, employees, officers and directors are in full force
and effect; the Company and the Subsidiaries are in compliance
with the terms of such policies and instruments in all
material respects; and there are no claims by the Company or
any of the Subsidiaries under any such policy or instrument as
to which any insurance company is denying liability or
defending under a reservation of rights clause; neither the
Company nor any such Subsidiary has been refused any insurance
coverage sought or applied for; and neither the Company nor
any such Subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage or obtain
substantially equivalent insurance as and when such coverage
expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would
not have a Material Adverse Effect, except as set forth in or
contemplated in the Disclosure Package and the Prospectus
(exclusive of any supplement thereto).
(y)
No
Subsidiary is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any
other distribution on such Subsidiary’s capital stock,
from repaying to the Company any loans or advances to such
Subsidiary from the Company or from transferring any of such
Subsidiary’s property or assets to the Company or any
other Subsidiary of the Company, except as described in or
contemplated by the Disclosure Package and the Prospectus
(exclusive of any supplement thereto).
(z)
The
Company and the Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities
necessary to conduct their respective businesses, except for
any which the failure to possess could not reasonably be
expected to have a Material Adverse Effect, except as set
forth in or contemplated in the Disclosure Package and the
Prospectus (exclusive of any supplement thereto); and neither
the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in
the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect,
except as set forth in or contemplated in the Disclosure
Package and the Prospectus (exclusive of any supplement
thereto).
(aa)
The
Company and each of the Subsidiaries maintain a system 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 U.S. generally accepted accounting principles
and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the reported
accountability for assets is compared with the existing assets
at reasonable intervals.
(bb)
The
Company has not taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of
the Securities.
(cc)
The
Company and the Subsidiaries are (i) 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 ”)
except where such lack of compliance would not result in a Material
Adverse Effect, (ii) have received and are in compliance with
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses except where such lack of compliance would not result in
a Material Adverse Effect and (iii) have not received notice
of any actual or potential liability under any environmental law,
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 Effect, except as set forth in or contemplated in
the Disclosure Package and the Prospectus (exclusive of any
supplement thereto). Except as set forth in the Disclosure Package
and the Prospectus, neither the Company nor any of the Subsidiaries
has been named as a “potentially responsible party”
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(dd)
The
Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder
(“
ERISA ”);
no “reportable event” (as defined in ERISA) has
occurred with respect to any “pension plan” (as defined
in ERISA) for which the Company would have any liability; the
Company has not incurred and could not reasonably be expected to
incur liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any “pension
plan” or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the “
Code ”);
each “pension plan” for which the Company would have
any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification; and neither the Company nor any of
the Subsidiaries maintains or is required to contribute to a
“welfare plan” (as defined in Section 3(l) of
ERISA) which provides retiree or other post-employment welfare
benefits or insurance coverage (other than “continuation
coverage” (as defined in Section 602 of
ERISA).
(ee)
The
Company is in compliance in all material respects with all
presently effective provisions of the Sarbanes Oxley Act of
2002 and the rules and regulations promulgated in connection
therewith (the “
Sarbanes Oxley Act ”),
including Section 402 related to loans.
(ff)
Neither
the Company nor any of the Subsidiaries nor, to the knowledge
of the Company, any director, officer, agent, employee or
affiliate of the Company or any of the Subsidiaries is aware
of or has taken any action, directly or indirectly, that would
result in a violation by such persons of the FCPA, including,
without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property,
gift, promise to give, or authorization of the giving of
anything of value to any “foreign official” (as
such term is defined in the FCPA) or any non-U.S. political
party or official thereof or any candidate for non-U.S.
political office, in contravention of the FCPA and the
Company, the Subsidiaries and, to the knowledge of the
Company, its affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued
compliance therewith.
“
FCPA ”
means Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.
(gg)
The
operations of the Company and the Subsidiaries are and have
been conducted at all times in compliance in all material
respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any
Governmental Authority (collectively, the “
Money Laundering Laws ”)
and no action, suit or proceeding by or before any court or
Governmental Authority or any arbitrator involving the Company or
any of the Subsidiaries with respect to the Money Laundering Laws
is pending or, to the best knowledge of the Company, threatened in
each case, as would not be reasonably expected to have a Material
Adverse Effect.
(hh)
Neither
the Company nor any of the Subsidiaries nor, to the knowledge
of the Company, any director, officer, agent, employee or
affiliate of the Company or any of the Subsidiaries is
currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury
Department (“
OFAC ”);
and the Company will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such
proceeds to any Subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person who, to the Company’s knowledge, is currently subject
to any U.S. sanctions administered by OFAC.
(ii)
The
Company and the Subsidiaries own, possess, license or have
other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions,
trade secrets, technology, know-how and other intellectual
property (collectively, the “
Intellectual Property ”)
necessary for the conduct of the Company’s business as now
conducted as described in the Disclosure Package and the
Prospectus. Except as set forth in the Disclosure Package and the
Prospectus, (i) there is no material infringement by third
parties of any such Intellectual Property; (ii) there is no
pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the Company’s
rights in or to any such Intellectual Property; (iii) there is
no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or
scope of any such Intellectual Property; and (iv) there is no
pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes or
otherwise violates any patent, trademark, copyright, trade secret
or other proprietary rights of others.
(jj)
Neither
the Company nor any of the 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 the
Underwriters for a brokerage commission, finder’s fee or
like payment in connection with the offering and sale of the
Securities other than this Agreement.
Any
certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters in
connection with the offering of the Securities shall be deemed
a representation and warranty by the Company, as to matters
covered thereby, to each Underwriter.
2.
Purchase and Sale .
(a)
Subject
to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the
Company, at a purchase price of $0.94 per share, the amount of
the Firm Shares set forth opposite such Underwriter’s
name in
Schedule I hereto.
(b)
Subject
to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company
hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to 1,950,000 Option
Shares at the same purchase price per share as the
Underwriters shall pay for the Firm Shares. Said option may be
exercised only to cover over-allotments in the sale of the
Firm Shares by the Underwriters. Said option may be exercised
in whole or in part at any time on or before the 30th day
after the date of the Prospectus upon written or telegraphic
notice by the Representatives to the Company setting forth the
number of shares of the Option Shares as to which the several
Underwriters are exercising the option and the settlement
date. The number of Option Shares to be purchased by each
Underwriter shall be the same percentage of the total number
of shares of the Option Shares to be purchased by the several
Underwriters as such Underwriter is purchasing of the Firm
Shares, subject to such adjustments as the Representatives in
their absolute discretion shall make to eliminate any
fractional shares.
The
Company shall not be obligated to deliver any of the
Securities on the date required for delivery under
Section 3 except upon payment for all Securities to be
purchased on such delivery date as provided
herein.
3.
Delivery and Payment .
(a)
Delivery
of and payment for the Firm Shares and the Option Shares (if
the option provided for in Section 2(b) hereof shall have
been exercised on or before the fourth Business Day following
the date of this Agreement) shall be made at 10:00 a.m.,
New York City time, on October 23, 2007, or at such time on
such later date not more than four Business Days after the
foregoing date as the Representatives shall designate, which
date and time may be postponed by agreement between the
Representatives and the Company or as provided in
Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the
“
Closing Date ”).
Delivery of the Securities shall be made to the Representatives for
the respective accounts of the several Underwriters against payment
by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company by wire
transfer payable in same-day funds to an account specified in
writing by the Company. Delivery of the Firm Shares and the Option
Shares shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise
instruct.
(b)
If
the option provided for in Section 2(b) hereof is
exercised after the fourth Business Day following the date of
this Agreement, the Company will deliver (at the expense of
the Company) to the Representatives, at 600 Montgomery Street,
8
th Floor,
San Francisco, California 94111, on the date specified by the
Representatives (which shall be within three Business Days after
exercise of said option), certificates for the Option Shares in
such names and denominations as the Representatives shall have
requested for the respective accounts of the several Underwriters,
against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order
of the Company. If settlement for the Option Shares occurs after
the Closing Date, the Company will deliver to the Representatives
on the settlement date for the Option Shares, and the obligation of
the Underwriters to purchase the Option Shares shall be conditioned
upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters
delivered on the Closing Date pursuant to Section 6
hereof.
4.
Offering by Underwriters .
It is understood that the several Underwriters propose to offer the
Securities for sale to the public upon the terms and conditions as
set forth in the Prospectus as soon after this Agreement has been
executed and as the Representatives, in their sole judgment, have
determined is advisable and practicable.
5.
Agreements .
(i)
The
Company agrees with the several Underwriters
that:
(a)
Prior
to the termination of the offering of the Securities, the
Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any
such proposed amendment or supplement to which you reasonably
object. The Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed in a form
approved by the Representatives with the Commission pursuant
to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to
the Representatives of such timely filing. The Company will
promptly advise the Representatives (1) when the
Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or
when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (2) when, prior to termination
of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become
effective, (3) of any request by the Commission or its
staff for any amendment of the Registration Statement, or any
Rule 462(b) Registration Statement, or for any supplement to
the Prospectus or for any additional information, (4) of
the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any
notice objecting to its use or the institution or threatening
of any proceeding for that purpose and (5) of the receipt
by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in
any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or the
occurrence of any such suspension or objection and, upon such
issuance, occurrence or objection, to obtain as soon as
possible the withdrawal thereof of such stop order or relief
from such occurrence or objection, including, if necessary, by
filing an amendment to the Registration Statement or a new
registration statement and using its best efforts to have such
amendment or new registration statement declared effective as
soon as practicable.
(b)
If,
at any time, prior to the filing of the Prospectus pursuant to
Rule 424(b), any event occurs as a result of which the
Disclosure Package would include any untrue statement of a
material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances
under which they were made at such time not misleading, the
Company will: (1) notify promptly the Representatives so
that any use of the Disclosure Package may cease until it is
amended or supplemented; (2) amend or supplement the
Disclosure Package to correct such statement or omission; and
(3) supply any amendment or supplement to you in such
quantities as you may reasonably request.
(c)
If,
at any time when a prospectus relating to the Securities is
required to be delivered under the Act (including in
circumstances where such requirements may be satisfied
pursuant to Rule 172 of the Act), any event which becomes
known to the Company occurs as a result of which the
Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of
the circumstances under which they were made at such time not
misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Prospectus to comply
with the Act or the rules thereunder, the Company promptly
will (1) notify the Representatives of any such event,
(2) prepare and file with the Commission, subject to the
second sentence of paragraph (i)(a) of this Section 5, an
amendment or supplement which will correct such statement or
omission or effect such compliance and (3) supply any
supplemented Prospectus to you in such quantities as you may
reasonably request.
(d)
As
soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the
Act and Rule 158 under the Act.
(e)
The
Company will furnish to the Representatives and counsel for
the Underwriters signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto)
and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act (including the circumstances
where such requirement may be satisfied pursuant to Rule 172),
as many copies of each Preliminary Prospectus, the Prospectus
and each Issuer Free Writing Prospectus and any supplement
thereto as the Representatives may reasonably
request.
(f)
The
Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions
as the Representatives may designate and will maintain such
qualifications in effect so long as required for the
distribution of the Securities;
provided ,
that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified, to
subject itself to taxation in any foreign jurisdiction or to take
any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the
Securities, in any jurisdiction where it is not now so
subject.
(g)
The
Company will not, without the prior written consent of
ThinkEquity Partners LLC, offer, sell, contract to sell,
pledge, or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to,
result in the disposit
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