Exhibit 10.1

 

 

 

BLACK DIAMOND, INC.

(a Delaware corporation)

7,750,000 Shares of Common Stock

UNDERWRITING AGREEMENT

 

 

 

Dated: February 16, 2012

 

 

 

 

BLACK DIAMOND, INC.

(a Delaware corporation)

7,750,000 Shares of Common Stock, par value $0.0001 per share

 

UNDERWRITING AGREEMENT

February 16, 2012

Piper Jaffray & Co.
as Representative of the several Underwriters
345 California Street, Suite 2400
San Francisco, CA 94104

Ladies and Gentlemen:

Black Diamond, Inc., a Delaware corporation (the “Company”), confirms its
agreement with Piper Jaffray & Co. (“PJC”) and each of the other Underwriters
named in Schedule A hereto (collectively, the “Underwriters,” which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom PJC is acting as representative (in such capacity, the
“Representative”), with respect to (i) the sale by the Company and the purchase
by the Underwriters, acting severally and not jointly, of the respective numbers
of shares of Common Stock, par value $0.0001 per share, of the Company (“Common
Stock”) set forth in Schedule A hereto and (ii) the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 1,162,500 additional shares
of Common Stock to cover overallotments, if any. The aforesaid 7,750,000 shares
of Common Stock (the “Initial Securities”) to be purchased by the Underwriters
and all or any part of the 1,162,500 shares of Common Stock subject to the
option described in Section 2(b) hereof (the “Option Securities”) are herein
called, collectively, the “Securities.”

The Company understands that the Underwriters propose to make a public offering
of the Securities as soon as the Representative deems advisable after this
Agreement has been executed and delivered.

At the request of the Company, the Company and the Underwriters agree that
1,333,333 shares of the Initial Securities to be purchased by the Underwriters
(the “Reserved Securities”) shall be reserved for sale by the Underwriters to
certain persons designated by the Company in writing (the “Invitees”) and in
allocations as set forth by the Company in writing, as part of the distribution
of the Securities by the Underwriters, subject to the terms of this Agreement,
the applicable rules, regulations and interpretations of the Financial Industry
Regulatory Authority, Inc. (“FINRA”) and all other applicable laws, rules and
regulations. The Company solely determined, without any direct or indirect
participation by the Underwriters, the Invitees who will purchase Reserved
Securities (including the amount to be purchased by such persons) sold by the
Underwriters. The Invitees have confirmed to the Underwriters the amounts to be
purchased by the Invitees at the public offering price. The Reserved Securities
shall not be subject to any underwriting discount or commission. The Initial
Securities that are not Reserved Securities shall be “Non-Reserved Securities.”

 

 

The Company has prepared and filed with the Securities and Exchange Commission
(the “Commission”) a shelf registration statement on Form S-3 (File No.
333-171164) covering the public offering and sale of certain securities,
including the Securities, under the Securities Act of 1933, as amended (the
“1933 Act”), and the rules and regulations promulgated thereunder (the “1933 Act
Regulations”), which shelf registration statement has been declared effective by
the Commission. Such registration statement, as of any time, means such
registration statement as amended by any post-effective amendments thereto to
such time, including the exhibits and any schedules thereto at such time, the
documents incorporated or deemed to be incorporated by reference therein at such
time pursuant to Item 12 of Form S-3 under the 1933 Act and the documents
otherwise deemed to be a part thereof as of such time pursuant to Rule 430B
under the 1933 Act Regulations (“Rule 430B”), and is referred to herein as the
“Registration Statement;” provided, however, that the “Registration Statement”
without reference to a time means such registration statement as amended by any
post-effective amendments thereto as of the time of the first contract of sale
for the Securities, which time shall be considered the “new effective date” of
such registration statement with respect to the Securities within the meaning of
paragraph (f)(2) of Rule 430B, including the exhibits and schedules thereto as
of such time, the documents incorporated or deemed incorporated by reference
therein at such time pursuant to Item 12 of Form S-3 under the 1933 Act and the
documents otherwise deemed to be a part thereof as of such time pursuant to the
Rule 430B. Each preliminary prospectus used in connection with the offering of
the Securities, including the documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, are collectively referred to herein as a “preliminary prospectus.” Promptly
after execution and delivery of this Agreement, the Company will prepare and
file a final prospectus relating to the Securities in accordance with the
provisions of Rule 424(b) under the 1933 Act Regulations (“Rule 424(b)”). The
final prospectus, in the form first furnished or made available to the
Underwriters for use in connection with the offering of the Securities,
including the documents incorporated or deemed to be incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, are collectively
referred to herein as the “Prospectus.” For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system (or any successor
system)(“EDGAR”).

As used in this Agreement:

“Applicable Time” means 8:00 A.M., New York City time, on February 16, 2012 or
such other time as agreed by the Company and the Representative.

“General Disclosure Package” means any Issuer General Use Free Writing
Prospectuses issued at or prior to the Applicable Time, the most recent
preliminary prospectus (including any documents incorporated therein by
reference) that is distributed to investors prior to the Applicable Time and the
information included on Schedule B-1 hereto, all considered together.

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 of the 1933 Act Regulations (“Rule 433”), including without
limitation any “free writing prospectus” (as defined in Rule 405 of the 1933 Act
Regulations (“Rule 405”)) relating to the Securities that is (i) required to be
filed with the Commission by the Company, (ii) a “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i), whether or not required
to be filed with the Commission, or (iii) exempt from filing with the Commission
pursuant to Rule 433(d)(5)(i) because it contains a description of the
Securities or of the offering that does not reflect the final terms, in each
case in the form filed or required to be filed with the Commission or, if not
required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g).

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“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors
(other than a “bona fide electronic road show,” as defined in Rule 433), as
evidenced by its being specified in Schedule B-2 hereto.

“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Use Free Writing Prospectus.

All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” (or other references of
like import) in the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to include all such financial statements and
schedules and other information incorporated or deemed incorporated by reference
in the Registration Statement, any preliminary prospectus or the Prospectus, as
the case may be, prior to the execution and delivery of this Agreement; and all
references in this Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to
include the filing of any document under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (collectively, the
“1934 Act”), incorporated or deemed to be incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be, at or after the execution and delivery of this Agreement.

SECTION 1. Representations and Warranties.

(a) Representations and Warranties by the Company. The Company represents and
warrants to each Underwriter as of the date hereof, and shall represent and
warrant as of the Applicable Time, the Closing Time (as defined below) and any
Date of Delivery (as defined below), in each case as applicable, and agrees with
each Underwriter, as follows:

(i) Registration Statement and Prospectuses. The Company meets the requirements
for use of Form S-3 under the 1933 Act. The Securities have been and remain
eligible for registration by the Company on such shelf registration statement.
The Registration Statement has become effective under the 1933 Act. No stop
order suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act, no order preventing or suspending the use of any preliminary
prospectus or the Prospectus has been issued and no proceedings for any of those
purposes have been instituted or are pending or, to the Company’s knowledge,
threatened. The Company has complied with each request (if any) from the
Commission for additional information.

Each of the Registration Statement and any post-effective amendment thereto, at
the time of its effectiveness and at each deemed effective date with respect to
the Underwriters pursuant to Rule 430B(f)(2) under the 1933 Act Regulations,
complied in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations. Each preliminary prospectus, the Prospectus and any
amendment or supplement thereto, at the time each was filed with the Commission,
complied in all material respects with the requirements of the 1933 Act
Regulations and each preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.

The documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, when they became effective or at the
time they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission under the 1934 Act (the “1934 Act
Regulations”).

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(ii) Accurate Disclosure. Neither the Registration Statement nor any amendment
thereto, at its effective time, at the Closing Time or at any Date of Delivery,
contained, contains or will contain an untrue statement of a material fact or
omitted, omits or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. As of the
Applicable Time, neither (A) the General Disclosure Package nor (B) any
individual Issuer Limited Use Free Writing Prospectus, when considered together
with the General Disclosure Package, included, includes or will include an
untrue statement of a material fact or omitted, omits or will 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. Neither the
Prospectus nor any amendment or supplement thereto (including any prospectus
wrapper), as of its issue date, at the time of any filing with the Commission
pursuant to Rule 424(b), at the Closing Date or at any Date of Delivery,
included, includes or will include an untrue statement of a material fact or
omitted, omits or will 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 documents incorporated or deemed to be incorporated by
reference in the Registration Statement, the General Disclosure Package and the
Prospectus, at the time the Registration Statement became effective or when such
documents incorporated by reference were filed with the Commission, as the case
may be, when read together with the other information in the Registration
Statement, the General Disclosure Package or the Prospectus, as the case may be,
did not and will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.

The representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement (or any amendment
thereto), the General Disclosure Package or the Prospectus (or any amendment or
supplement thereto) made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through PJC expressly
for use therein. For purposes of this Agreement, the only information so
furnished shall be the information in the first paragraph under the heading
“Underwriting–Commissions and Discounts,” the information in the second, third
and fourth paragraphs under the heading “Underwriting–Price Stabilization and
Short Positions” and the information under the heading “Underwriting–Electronic
Distribution” in each case contained in the Prospectus (collectively, the
“Underwriter Information”).

(iii) Issuer Free Writing Prospectuses. No Issuer Free Writing Prospectus
conflicts or will conflict with the information contained in the Registration
Statement or the Prospectus, including any document incorporated by reference
therein, and any preliminary or other prospectus deemed to be a part thereof
that has not been superseded or modified. No offer that is a written
communication relating to the Securities was made prior to the initial filing of
the Registration Statement by the Company or any person acting on its behalf.

(iv) Company Not Ineligible Issuer. At the time of filing the Registration
Statement and any post-effective amendment thereto, at the earliest time
thereafter that the Company or another offering participant made or makes a bona
fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of
the Securities and at the date hereof, 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.

(v) Independent Accountants. KPMG LLP, which expressed its opinion with respect
to the consolidated financial statements of the Company as of December 31, 2010
and 2009, and for the years ended December 31, 2010, 2009 and 2008 (the term
“consolidated financial statements” as used in this Agreement includes the
related notes and schedules thereto) included in the Registration Statement, the
General Disclosure Package and the Prospectus is, to the knowledge of the
Company, an independent registered public accounting firm as required by the
1933 Act, the 1933 Act Regulations, the 1934 Act Regulations and the Public
Company Accounting Oversight Board. KPMG LLP, which expressed its opinion with
respect to the consolidated financial statements of Black Diamond Equipment,
Ltd. for the period from July 1, 2009 to May 28, 2010 included in the
Registration Statement, the General Disclosure Package and the Prospectus was,
to the knowledge of the Company, an independent public accountant with respect
to Black Diamond Equipment, Ltd. as of March 15, 2011 and during the period
covered by such financial statements as required by the 1933 Act, the 1933 Act
Regulations, the 1934 Act Regulations and the Public Company Accounting
Oversight Board. Tanner LLC (formerly Tanner LC), which expressed its opinion
with respect to the consolidated financial statements of Black Diamond
Equipment, Ltd. as of June 30, 2009 and for the years ended June 30, 2009 and
2008 included in the Registration Statement, the General Disclosure Package and
the Prospectus was, to the knowledge of the Company, an independent public
accountant with respect to Black Diamond Equipment, Ltd. as of September 15,
2009 and during the period covered by such financial statements as required by
the 1933 Act, the 1933 Act Regulations, the 1934 Act Regulations and the Public
Company Accounting Oversight Board.

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(vi) Financial Statements; Non-GAAP Financial Measures. The financial statements
of the Company included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus, together with the
related schedules and notes, present fairly in all material respects the
financial position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders’ equity and cash flows
of the Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with U.S. generally
accepted accounting principles (“GAAP”) applied on a consistent basis throughout
the periods involved (except as noted therein). The supporting schedules, if
any, present fairly in accordance with GAAP the information required to be
stated therein. The financial statements of Black Diamond Equipment, Ltd.
included or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus, together with the related schedules and
notes, present fairly in all material respects the financial position of Black
Diamond Equipment, Ltd. and its consolidated subsidiaries at the dates indicated
and the statement of operations, stockholders’ equity and cash flows of Black
Diamond Equipment, Ltd. and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with GAAP
applied on a consistent basis throughout the periods involved (except as noted
therein). The supporting schedules, if any, present fairly in accordance with
GAAP the information required to be stated therein. The selected financial data
and the summary financial information included in the Registration Statement,
the General Disclosure Package and 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 therein
(except as noted therein). Except as included therein, no historical or pro
forma financial statements or supporting schedules are required to be included
or incorporated by reference in the Registration Statement, the General
Disclosure Package or the Prospectus under the 1933 Act or the 1933 Act
Regulations. All disclosures contained in the Registration Statement, the
General Disclosure Package or the Prospectus, or incorporated by reference
therein, regarding “non-GAAP financial measures” (as such term is defined by the
rules and regulations of the Commission) comply with Regulation G of the 1934
Act and Item 10(e) of Regulation S-K of the 1933 Act, to the extent applicable.

(vii) No Material Adverse Change in Business. Except as otherwise stated
therein, since the respective dates as of which information is given in the
Registration Statement, the General Disclosure Package or the Prospectus,
(A) there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a “Material Adverse Effect”),
(B) there have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.

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(viii) Good Standing of the Company. The Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement, the General Disclosure Package and the Prospectus and to
enter into and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect.

(ix) Good Standing of Subsidiaries. Each “significant subsidiary” of the Company
(as such term is defined in Rule 1-02 of Regulation S-X and identified on
Schedule D hereto) (each, a “Subsidiary” and, collectively, the “Subsidiaries”)
has been duly incorporated or organized and is validly existing in good standing
under the laws of the jurisdiction of its incorporation or organization, has
corporate or similar power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement, the General Disclosure Package and the Prospectus and is duly
qualified 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, except where the failure to so
qualify or to be in good standing would not result in a Material Adverse Effect.
Except as otherwise disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, all of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. None of the outstanding shares of capital stock of
any Subsidiary were issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary. The only subsidiaries of the Company are
(A) the Subsidiaries listed on Schedule D hereto and (B) certain other
subsidiaries which, considered in the aggregate as a single subsidiary, do not
constitute a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X.

(x) Capitalization. The authorized, issued and outstanding shares of capital
stock of the Company are as set forth in the Registration Statement, the General
Disclosure Package and the Prospectus in the column entitled “Actual” under the
caption “Capitalization” (except for subsequent issuances, if any, pursuant to
this Agreement, pursuant to reservations, agreements or employee benefit plans
referred to in the Registration Statement, the General Disclosure Package and
the Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Registration Statement, the General Disclosure Package and
the Prospectus). The outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-assessable.
None of the outstanding shares of capital stock of the Company were issued in
violation of the preemptive or other similar rights of any securityholder of the
Company.

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(xi) Absence of Ratings. Neither the Company nor any of its Subsidiaries has any
securities that are rated by any “nationally recognized statistical rating
organization” (as defined in Section 3(a)(62) of the 1934 Act).

(xii) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.

(xiii) Authorization and Description of Securities. The Securities to be
purchased by the Underwriters from the Company have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement against payment
of the consideration set forth herein, will be validly issued and fully paid and
non-assessable; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company. The
Common Stock conforms to all statements relating thereto contained in the
Registration Statement, the General Disclosure Package and the Prospectus and
such description conforms to the rights set forth in the instruments defining
the same. No holder of Securities will be subject to personal liability by
reason of being such a holder.

(xiv) Registration Rights. There are no persons with registration rights or
other similar rights to have any securities registered for sale pursuant to the
Registration Statement or otherwise registered for sale or sold by the Company
under the 1933 Act pursuant to this Agreement, other than those rights that have
been disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, including ongoing rights arising under the Registration Rights
Agreement, dated as of May 28, 2010, among Clarus Corporation, and each of the
Investors named therein, the form of which was incorporated by reference as an
exhibit in the Registration Statement, and the Registration Rights Agreement,
dated as of May 28, 2010, among Clarus Corporation, Kanders GMP Holdings, LLC
and Schiller Gregory Investment Company, LLC, the form of which was incorporated
by reference as an exhibit in the Registration Statement (collectively, the
“Registration Rights Agreements”). The Company has registered all of the
Registrable Securities (as such term is defined in the respective Registration
Rights Agreements) under the Registration Rights Agreements pursuant to a
“shelf” registration statement and has filed a prospectus supplement with the
Commission relating to the Registrable Securities.

(xv) Absence of Violations, Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is (A) in violation of its charter, by-laws or similar
organizational document, (B) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which it or any of them may be bound or to which any of the
properties or assets of the Company or any Subsidiary is subject (collectively,
“Agreements and Instruments”), except for such defaults that would not, singly
or in the aggregate, result in a Material Adverse Effect, or (C) in violation of
any law, statute, rule, regulation, judgment, order, writ or decree of any
arbitrator, court, governmental body, regulatory body, administrative agency or
other authority, body or agency having jurisdiction over the Company or any of
its subsidiaries or any of their respective properties, assets or operations
(each, a “Governmental Entity”), except for such violations that would not,
singly or in the aggregate, result in a Material Adverse Effect. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein and in the Registration Statement, the General
Disclosure Package and the Prospectus (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described therein under the caption “Use of Proceeds”) and compliance by the
Company with its obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or any Subsidiary pursuant to, the
Agreements and Instruments (except for such conflicts, breaches, defaults or
Repayment Events or liens, charges or encumbrances that would not, singly or in
the aggregate, result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter, by-laws or similar
organizational document of the Company or any of its subsidiaries or, except for
such violations as would not, singly or in the aggregate, result in a Material
Adverse Effect, any law, statute, rule, regulation, judgment, order, writ or
decree of any Governmental Entity. As used herein, a “Repayment Event” means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder’s behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its Subsidiaries.

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(xvi) Absence of Labor Dispute. No labor dispute with the employees of the
Company or any of its Subsidiaries exists or, to the knowledge of the Company,
is threatened, which would result in a Material Adverse Effect.

(xvii) Absence of Proceedings. Except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, there is no
action, suit, proceeding, inquiry or investigation before or brought by any
Governmental Entity now pending or, to the knowledge of the Company, threatened,
against or affecting the Company or any of its Subsidiaries, which might
reasonably be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect their respective
properties or assets or the consummation of the transactions contemplated in
this Agreement or the performance by the Company of its obligations hereunder;
and the aggregate of all pending legal or governmental proceedings to which the
Company or any such Subsidiary is a party or of which any of their respective
properties or assets is the subject which are not described in the Registration
Statement, the General Disclosure Package and the Prospectus, including ordinary
routine litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.

(xviii) Accuracy of Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement, the General Disclosure
Package or the Prospectus or to be filed as exhibits to the Registration
Statement which have not been so described and filed as required.

(xix) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
Governmental Entity is necessary or required for the performance by the Company
of its obligations hereunder, in connection with the offering, issuance or sale
of the Securities hereunder or the consummation of the transactions contemplated
by this Agreement, except such as have been already obtained or as may be
required under the 1933 Act, the 1933 Act Regulations, the rules of the NASDAQ
Stock Market LLC, state securities laws or the rules of Financial Industry
Regulatory Authority, Inc. (“FINRA”).

(xx) Possession of Licenses and Permits. The Company and its Subsidiaries
possess such permits, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate Governmental
Entities necessary to conduct the business now operated by them, except where
the failure so to possess would not, singly or in the aggregate, result in a
Material Adverse Effect. The Company and its Subsidiaries are in compliance with
the terms and conditions of all Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, result in a Material Adverse
Effect. All of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not, singly or in the
aggregate, result in a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries has received any notice of, or has actual knowledge of,
proceedings relating to the revocation or modification of any Governmental
Licenses which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.

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(xxi) Title to Property. The Company and its Subsidiaries have good and
marketable title to all real property owned by them and good title to all other
properties owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of any
kind except such as (A) are described in the Registration Statement, the General
Disclosure Package and the Prospectus or (B) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company or any of its
Subsidiaries; and all of the leases and subleases under which the Company or any
of its Subsidiaries holds properties described in the Registration Statement,
the General Disclosure Package or the Prospectus, are in full force and effect,
except for such failures to be in full force and effect that would not result in
a Material Adverse Effect.

(xxii) Possession of Intellectual Property. The Company and its Subsidiaries own
or possess, or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or other intellectual
property (collectively, “Intellectual Property”) necessary to carry on the
business now operated by them, except for any failure to own, possess or acquire
Intellectual Property which, singly or in the aggregate, would not result in a
Material Adverse Effect, and neither the Company nor any of its Subsidiaries has
received any notice or has actual knowledge of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property invalid
or inadequate to protect the interest of the Company or any of its Subsidiaries
therein, and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.

(xxiii) Environmental Laws. Except as described in the Registration Statement,
the General Disclosure Package and the Prospectus or would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company nor any
of its Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products,
asbestos-containing materials or mold (collectively, “Hazardous Materials”) or
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, “Environmental
Laws”), (B) the Company and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or, to the
knowledge of the Company, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries and (D) there are no events or
circumstances that would reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or Governmental Entity, against or affecting the Company or any of its
Subsidiaries relating to Hazardous Materials or any Environmental Laws.

9

 

(xxiv) Accounting Controls and Disclosure Controls. The Company and each of its
Subsidiaries maintain effective internal control over financial reporting (as
defined under Rule 13-a15 and 15d-15 under the 1934 Act Regulations) and a
system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with management’s
general or specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (C) access to assets is permitted only in
accordance with management’s general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as described in the Registration Statement, the General
Disclosure Package and the Prospectus, since the end of the Company’s most
recent audited fiscal year, there has been (1) no material weakness in the
Company’s internal control over financial reporting (whether or not remediated)
and (2) no change in the Company’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting. The Company and each of its
Subsidiaries maintain a system of disclosure controls and procedures (as defined
in Rule 13a-15 and Rule 15d-15 under the 1934 Act Regulations) that are designed
to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the 1934 Act is accumulated and
communicated to the Company’s management, including its principal executive
officer or officers and principal financial officer or officers, as appropriate,
to allow timely decisions regarding disclosure; and such disclosure controls are
effective.

(xxv) Payment of Taxes. All United States federal income tax returns of the
Company and its Subsidiaries required by law to be filed have been filed and all
taxes shown by such returns or otherwise assessed, which are due and payable,
have been paid, except assessments against which appeals have been or will be
promptly taken and as to which adequate reserves have been provided or with
respect to which the failure to pay would not reasonably be expected to result
in a Material Adverse Effect. The United States federal income tax returns of
the Company through the fiscal year ended December 31, 2007 have been audited
and any assessment in connection therewith has been paid. The Company and its
Subsidiaries have filed all other tax returns that are required to have been
filed by them pursuant to applicable foreign, state, local or other law except
insofar as the failure to file such returns would not result in a Material
Adverse Effect, and has paid all taxes due pursuant to such returns or pursuant
to any assessment received by the Company and its Subsidiaries, except for such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been established by the Company or with respect to which the
failure to pay would not reasonably be expected to result in a Material Adverse
Effect. The charges, accruals and reserves on the books of the Company in
respect of any income and corporation tax liability for any years not finally
determined are adequate to meet any assessments or re-assessments for additional
income tax for any years not finally determined, except to the extent of any
inadequacy that would not result in a Material Adverse Effect.

10

 

(xxvi) Insurance. The Company and its Subsidiaries carry or are entitled to the
benefits of insurance, with reputable insurers, in such amounts and covering
such risks as the Company believes are adequate and customary in the businesses
in which it and its Subsidiaries are engaged, and all such insurance is in full
force and effect. The Company has no reason to believe that it or any of its
Subsidiaries will not be able (A) to renew its existing insurance coverage as
and when such policies expire or (B) 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 reasonably be expected to result in a
Material Adverse Effect. Neither of the Company nor any of its Subsidiaries has
been denied any insurance coverage which it has sought or for which it has
applied.

(xxvii) Investment Company Act. The Company is not required, and upon the
issuance and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Registration Statement, the
General Disclosure Package and the Prospectus will not be required, to register
as an “investment company” under the Investment Company Act of 1940, as amended
(the “1940 Act”).

(xxviii) Absence of Manipulation. Neither the Company nor any of its
subsidiaries, nor to the knowledge of the Company, any affiliate of the Company,
has taken, and the Company and its subsidiaries will not, and the Company will
use its commercially reasonable efforts to cause its affiliates not to, take,
directly or indirectly, any action which is designed, or would be expected, to
cause or result in, or which has constituted, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities or to result in a violation of Regulation M under the 1934 Act.

(xxix) Foreign Corrupt Practices Act. None of the Company, any of its
subsidiaries or, to the knowledge of the Company, any director, officer, agent,
employee, affiliate or other person acting on behalf of the Company or any of
its subsidiaries is aware of or has taken any action, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder (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
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA and the Company 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.

(xxx) Money Laundering Laws. The operations of the Company and its subsidiaries
are and have been conducted at all times in compliance 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 Entity (collectively, the “Money Laundering Laws”); and no
action, suit or proceeding by or before any Governmental Entity involving the
Company or any of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company, threatened.

11

 

(xxxi) OFAC. None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee, affiliate or other
person acting on behalf of the Company or any of its subsidiaries is currently
the subject of 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 sale of the Securities, or lend,
contribute or otherwise make available such proceeds to any of its subsidiaries,
joint venture partners or other person, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by
OFAC.

(xxxii) Lending Relationship. Except as disclosed in the Registration Statement,
the General Disclosure Package and the Prospectus, the Company (i) does not have
any material lending or other relationship with any bank or lending affiliate of
any Underwriter and (ii) does not intend to use any of the proceeds from the
sale of the Securities to repay any outstanding debt owed to any affiliate of
any Underwriter.

(xxxiii) Statistical and Market-Related Data. Any statistical and market-related
data included in the Registration Statement, the General Disclosure Package or
the Prospectus are based on or derived from sources that the Company believes,
after reasonable inquiry, to be reliable and accurate and, to the extent
required, the Company has obtained the written consent to the use of such data
from such sources.

(b) Officer’s Certificates. Any certificate signed by any officer of the Company
or any of its Subsidiaries delivered to the Representative or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.

SECTION 2. Sale and Delivery to Underwriters; Closing.

(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the respective prices per share set forth in Schedule A, that number of
Non-Reserved Securities and that number of Reserved Securities set forth in
Schedule A opposite the name of such Underwriter, plus any additional number of
Initial Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof, subject, in each case, to such
adjustments among the Underwriters as the Representative in its sole discretion
shall make to eliminate any sales or purchases of fractional shares.

(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 1,162,500 shares of Common Stock at
the price per share set forth in Schedule A, less an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted may be exercised for 30 days after the date hereof and may be exercised
in whole or in part from time to time only for the purpose of covering
overallotments made in connection with the offering and distribution of the
Initial Securities upon notice by the Representative to the Company setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery (a “Date of
Delivery”) shall be determined by the Representative, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the total number of Initial Securities set
forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject, in each case, to such adjustments as the
Representative in its sole discretion shall make to eliminate any sales or
purchases of fractional shares.

12

 

(c) Payment. Payment of the purchase price for, and delivery of certificates
for, the Initial Securities shall be made at the offices of Sullivan & Cromwell
LLP, 125 Broad Street, New York, NY 10004, or at such other place as shall be
agreed upon by the Representative and the Company, at 9:00 A.M. (New York City
time) on the third (fourth, if the pricing occurs after 4:30 P.M. (New York City
time) on any given day) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than
ten business days after such date as shall be agreed upon by the Representative
and the Company (such time and date of payment and delivery being herein called
“Closing Time”).

In addition, in the event that any or all of the Option Securities are purchased
by the Underwriters, payment of the purchase price for, and delivery of
certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative
and the Company, on each Date of Delivery as specified in the notice from the
Representative to the Company.

Payment shall be made to the Company by wire transfer of immediately available
funds to a bank account designated by the Company against delivery to the
Representative for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. PJC, individually and not as representative of the Underwriters, may
(but shall not be obligated to) make payment of the purchase price for the
Initial Securities or the Option Securities, if any, to be purchased by any
Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder.

(d) Denominations; Registration. Certificates for the Initial Securities and the
Option Securities, if any, shall be in such denominations and registered in such
names as the Representative may request in writing at least one full business
day before the Closing Time or the relevant Date of Delivery, as the case may
be. The certificates for the Initial Securities and the Option Securities, if
any, will be made available for examination and packaging by the Representative
in The City of New York not later than 10:00 A.M. (New York City time) on the
business day prior to the Closing Time or the relevant Date of Delivery, as the
case may be.

SECTION 3. Covenants of the Company. The Company covenants with each Underwriter
as follows:

(a) Compliance with Securities Regulations and Commission Requests. The Company,
subject to Section 3(b), will comply with the requirements of Rule 430B, and
will notify the Representative promptly, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall become
effective or any amendment or supplement to the Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, including any document incorporated
by reference therein or for additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes or of any examination pursuant to Section 8(d) or 8(e) of the 1933
Act concerning the Registration Statement and (v) if the Company becomes the
subject of a proceeding under Section 8A of the 1933 Act in connection with the
offering of the Securities. The Company will effect all filings required under
Rule 424(b), in the manner and within the time period required by Rule 424(b)
(without reliance on Rule 424(b)(8)), and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
use commercially reasonable efforts to prevent the issuance of any stop order,
prevention or suspension and, if any such order is issued, to obtain the lifting
thereof promptly thereafter.

13

 

(b) Continued Compliance with Securities Laws. The Company will comply with the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations so
as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Registration Statement, the General
Disclosure Package and the Prospectus. If at any time when a prospectus relating
to the Securities is (or, but for the exception afforded by Rule 172 of the 1933
Act Regulations (“Rule 172”), would be) required by the 1933 Act to be delivered
in connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to (i) amend the Registration Statement in
order that the Registration Statement will not include 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 light of the circumstances in which
they were made, not misleading, (ii) amend or supplement the General Disclosure
Package or the Prospectus in order that the General Disclosure Package or the
Prospectus, as the case may be, 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 not misleading to a purchaser or (iii) amend the Registration
Statement or amend or supplement the General Disclosure Package or the
Prospectus, as the case may be, in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly (A) give the
Representative notice of such event, (B) prepare any amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement, the General Disclosure Package or the Prospectus comply
with such requirements and, a reasonable amount of time prior to any proposed
filing or use, furnish the Representative with copies of any such amendment or
supplement and (C) file with the Commission any such amendment or supplement;
provided that the Company shall not file or use any such amendment or supplement
to which the Representative or counsel for the Underwriters shall reasonably
object, except for such filings the Company reasonably deems necessary to comply
with federal or state securities laws or any rules of a stock exchange upon
which the Company’s securities are currently listed. The Company will furnish to
the Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request. The Company has given the Representative
notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations
within 48 hours prior to the Applicable Time; the Company will give the
Representative notice of its intention to make any such filing from the
Applicable Time to the Closing Time and will furnish the Representative with
copies of any such documents a reasonable amount of time prior to such proposed
filing, as the case may be, and will not file or use any such document to which
the Representative or counsel for the Underwriters shall reasonably object,
except for such filings the Company reasonably deems necessary to comply with
federal or state securities laws or any rules of a stock exchange upon which the
Company’s securities are currently listed.

(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representative and counsel for the Underwriters, without charge,
conformed or, upon request, signed copies of the Registration Statement as
originally filed and each amendment thereto (including exhibits filed therewith
or incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and facsimile signed copies of all consents
and certificates of experts, and will also deliver to the Representative,
without charge, a conformed copy of the Registration Statement as originally
filed and each amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.

14

 

(d) Delivery of Prospectuses. The Company has delivered to each Underwriter,
without charge, as many copies of each preliminary prospectus as such
Underwriter reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will furnish to
each Underwriter, without charge, during the period when a prospectus relating
to the Securities is (or, but for the exception afforded by Rule 172, would be)
required to be delivered under the 1933 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.

(e) Blue Sky Qualifications. The Company will use its commercially reasonable
efforts, in cooperation with the Underwriters, if necessary, to qualify the
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions (domestic or foreign) as the Representative may
designate and to maintain such qualifications in effect so long as required to
complete the distribution of the Securities; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.

(f) Rule 158. The Company will timely file such reports pursuant to the 1934 Act
as are necessary in order to make generally available to its securityholders as
soon as practicable an earnings statement for the purposes of, and to provide to
the Underwriters the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.

(g) Use of Proceeds. The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Registration
Statement, the General Disclosure Package and the Prospectus under “Use of
Proceeds.”

(h) Listing. The Company will use its commercially reasonable efforts to effect
and maintain the listing of the Securities on the Nasdaq Global Market.

(i) Restriction on Sale of Securities. During a period of 90 days from the date
of the Prospectus, the Company will not, without the prior written consent of
PJC, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the 1933
Act with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Securities to be
sold hereunder, (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof and referred to in the Registration Statement, the General
Disclosure Package and the Prospectus, (C) any shares of Common Stock issued or
options to purchase Common Stock granted pursuant to existing employee benefit
plans of the Company referred to in the Registration Statement, the General
Disclosure Package and the Prospectus; (D) any shares of Common Stock issued
pursuant to any non-employee director stock plan or dividend reinvestment plan
referred to in the Registration Statement, the General Disclosure Package and
the Prospectus or (E) issuances of Common Stock, or of options, warrants or
other securities convertible or exchangeable into Common Stock, in connection
with any acquisition of a business, by purchase, merger or otherwise, by the
Company or any of its wholly-owned subsidiaries, provided that each recipient of
such Common Stock, options, warrants or securities executes an agreement stating
that the recipient is acquiring the securities subject to the restrictions set
forth in this clause 3(i). Notwithstanding the foregoing, if (1) during the last
17 days of the 90-day restricted period the Company issues an earnings release
or material news or a material event relating to the Company occurs or (2) prior
to the expiration of the 90-day restricted period, the Company announces that it
will issue an earnings release or becomes aware that material news or a material
event will occur during the 16-day period beginning on the last day of the
90-day restricted period, the restrictions imposed in this clause (i) shall,
subject to the exceptions in clauses (A) through (E) above, continue to apply
until the expiration of the 18-day period beginning on the date of the issuance
of the earnings release or the occurrence of the material news or material
event, unless PJC waives, in writing, such extension.

15

 

(j) Reporting Requirements. The Company, during the period when a Prospectus
relating to the Securities is (or, but for the exception afforded by Rule 172,
would be) required to be delivered under the 1933 Act, will file all documents
required to be filed with the Commission pursuant to the 1934 Act within the
time periods required by the 1934 Act and 1934 Act Regulations.

(k) Issuer Free Writing Prospectuses. The Company agrees that, unless it obtains
the prior written consent of the Representative, it will not make any offer
relating to the Securities that would constitute an Issuer Free Writing
Prospectus or that would otherwise constitute a “free writing prospectus,” or a
portion thereof, required to be filed by the Company with the Commission or
retained by the Company under Rule 433; provided that the Representative will be
deemed to have consented to the Issuer Free Writing Prospectuses listed on
Schedule B-2 hereto and any “road show that is a written communication” within
the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representative.
The Company represents that it has treated or agrees that it will treat each
such free writing prospectus consented to, or deemed consented to, by the
Representative as an “issuer free writing prospectus,” as defined in Rule 433,
and that it has complied and will comply with the applicable requirements of
Rule 433 with respect thereto, including timely filing with the Commission where
required, legending and record keeping. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement, any
preliminary prospectus or the Prospectus or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at that subsequent time, not misleading, the Company will
promptly notify the Representative and will promptly amend or supplement, at its
own expense, such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.

SECTION 4. Payment of Expenses.

(a) Expenses. The Company will pay or cause to be paid all expenses incident to
the performance of their obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of
copies of each preliminary prospectus, each Issuer Free Writing Prospectus and
the Prospectus and any amendments or supplements thereto and any costs
associated with electronic delivery of any of the foregoing by the Underwriters
to investors, (iii) the preparation, issuance and delivery of the certificates
for the Securities to the Underwriters, including any stock or other transfer
taxes and any stamp or other duties payable upon the sale, issuance or delivery
of the Securities to the Underwriters, (iv) the fees and disbursements of the
Company’s counsel, accountants and other advisors, (v) the qualification of the
Securities under securities laws in accordance with the provisions of
Section 3(e) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the fees and expenses of any transfer agent or registrar for the
Securities, (vii) the costs and expenses of the Company relating to investor
presentations on any “road show” undertaken in connection with the marketing of
the Securities, including without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants and the cost of aircraft and other travel chartered in connection
with the road show, (viii) the filing fees incident to, and the reasonable fees
and disbursements of counsel to the Underwriters in connection with, the review
by FINRA of the terms of the sale of the Securities, (ix) the fees and expenses
incurred in connection with the listing of the Securities on the Nasdaq Global
Select Market, and (x) the costs and expenses (including, without limitation,
any damages or other amounts payable in connection with legal or contractual
liability) associated with the reforming of any contracts for sale of the
Securities made by the Underwriters caused by a breach of the representation
contained in the third sentence of Section 1(a)(ii).

16

 

 (b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5, Section 9(a)(i)
or (iii), Section 10 or Section 11 hereof, the Company shall reimburse the
Underwriters (except for any defaulting Underwriters) for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.

SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Closing Time as though then made or in certificates of any
officer of the Company or any of its subsidiaries delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:

(a) Effectiveness of Registration Statement. The Registration Statement has
become effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto has been
issued under the 1933 Act, no order preventing or suspending the use of any
preliminary prospectus or the Prospectus has been issued and no proceedings for
any of those purposes have been instituted or are pending or, to the Company’s
knowledge, threatened; and the Company has complied with each request (if any)
from the Commission for additional information.

(b) Opinion of Counsel for Company. At the Closing Time, the Representative
shall have received the favorable opinion, dated the Closing Time, of Kane
Kessler, P.C., counsel for the Company, in form and substance reasonably
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters substantially to the
effect set forth in Exhibit A hereto.

(c) Opinion of Counsel for Underwriters. At the Closing Time, the Representative
shall have received the favorable opinion, dated the Closing Time, of Sullivan &
Cromwell LLP, counsel for the Underwriters together with signed or reproduced
copies of such letter for each of the other Underwriters, with respect to such
matters as the Representative may require. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York, the General Corporation Law of the State of
Delaware and the federal securities laws of the United States, upon the opinions
of counsel satisfactory to the Representative. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers and other representatives
of the Company and its subsidiaries and certificates of public officials.

17

 

(d) Officers’ Certificate. At the Closing Time, there shall not have been, since
the date hereof or since the respective dates as of which information is given
in the Registration Statement, the General Disclosure Package or the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Representative shall have received a
certificate of the Chief Executive Officer or the President of the Company and
of the chief financial or chief accounting officer of the Company, dated the
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties of the Company in this Agreement
are true and correct with the same force and effect as though expressly made at
and as of the Closing Time, (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement under the 1933 Act has been issued, no order
preventing or suspending the use of any preliminary prospectus or the Prospectus
has been issued and no proceedings for any of those purposes have been
instituted or are pending or, to their knowledge, threatened.

(e) KPMG’s Comfort Letter. At the time of the execution of this Agreement, the
Representative shall have received from KPMG LLP a letter or letters, dated such
date, in form and substance reasonably satisfactory to the Representative,
together with signed or reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement, the General Disclosure Package and the Prospectus.

(f) KPMG’s Bring-down Comfort Letter. At the Closing Time, the Representative
shall have received from KPMG LLP a letter or letters, dated as of the Closing
Time, to the effect that they reaffirm the statements made in the letter or
letters furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Time.

(g) Tanner Comfort Letter. At the time of the execution of this Agreement, the
Representative shall have received from Tanner LLC a letter, dated such date, in
form and substance reasonably satisfactory to the Representative, together with
signed or reproduced copies of such letter for each of the other Underwriters
containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement, the General Disclosure Package and the Prospectus.

(h) Tanner Bring-down Comfort Letter. At the Closing Time, the Representative
shall have received from Tanner LLC a letter, dated as of the Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (g) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Time.

(i) Approval of Listing. At the Closing Time, the Securities shall have been
approved for listing on the Nasdaq Global Market, subject only to official
notice of issuance.

18

 

(j) No Objection. FINRA has confirmed that it has not raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements relating to the offering of the Securities.

(k) Lock-up Agreements. At the date of this Agreement, the Representative shall
have received an agreement substantially in the form of Exhibit B hereto signed
by the persons listed on Schedule C hereto.

(l) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company and any of its subsidiaries hereunder shall be true and correct
as of each Date of Delivery and, at the relevant Date of Delivery, the
Representative shall have received:

(i) Officers’ Certificate. A certificate, dated such Date of Delivery, of the
President or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company confirming that the certificate delivered at
the Closing Time pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.

(ii) Opinion of Counsel for Company. If requested by the Representative, the
favorable opinion of Kane Kessler, P.C., counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion required by
Section 5(b) hereof.

(iii) Opinion of Counsel for Underwriters. If requested by the Representative,
the favorable opinion of Sullivan & Cromwell LLP, counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.

(iv) KPMG Bring-down Comfort Letter. If requested by the Representative, a
letter or letters from KPMG LLP, in form and substance reasonably satisfactory
to the Representative and dated such Date of Delivery, substantially in the same
form and substance as the letter or letters furnished to the Representative
pursuant to Section 5(e) hereof, except that the “specified date” in the letter
or letters furnished pursuant to this paragraph shall be a date not more than
three business days prior to such Date of Delivery.

(v) Tanner Bring-down Comfort Letter. If requested by the Representative, a
letter from Tanner LLC, in form and substance reasonably satisfactory to the
Representative and dated such Date of Delivery, substantially in the same form
and substance as the letter furnished to the Representative pursuant to
Section 5(g) hereof, except that the “specified date” in the letter furnished
pursuant to this paragraph shall be a date not more than three business days
prior to such Date of Delivery.

(m) Additional Documents. At the Closing Time and at each Date of Delivery (if
any) counsel for the Underwriters shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be reasonably satisfactory in form and substance to
the Representative and counsel for the Underwriters.

19

 

(n) Termination of Agreement. If any condition specified in this Section shall
not have been fulfilled when and as required to be fulfilled, this Agreement,
or, in the case of any condition to the purchase of Option Securities on a Date
of Delivery which is after the Closing Time, the obligations of the several
Underwriters to purchase the relevant Option Securities, may be terminated by
the Representative by notice to the Company at any time at or prior to Closing
Time or such Date of Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 6, 7, 15, 16, 17 and, in the event that there has
been payment and delivery of any Securities, Sections 1 and 8, shall survive any
such termination and remain in full force and effect.

SECTION 6. Indemnification.

(a) Indemnification of Underwriters. The Company agrees to indemnify and hold
harmless each Underwriter, its affiliates (as such term is defined in Rule
501(b) under the 1933 Act (each, an “Affiliate”)), its selling agents and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, arising out of any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement (or any amendment
thereto), including any information deemed to be a part thereof pursuant to Rule
430B, or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a material
fact included (A) in any preliminary prospectus, any Issuer Free Writing
Prospectus, the General Disclosure Package or the Prospectus (or any amendment
or supplement thereto) or (B) in any materials or information provided to
investors by, or with the approval of, the Company in connection with the
marketing of the offering of the Stock (“Marketing Materials”), including any
roadshow or investor presentations made to investors by the Company (whether in
person or electronically), or the omission or alleged omission in any
preliminary prospectus, Issuer Free Writing Prospectus, Prospectus or in any
Marketing Materials of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;

(ii) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company;

(iii) against any and all expense whatsoever, as incurred (including the
reasonable fees and disbursements of counsel chosen by PJC), reasonably incurred
in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in the
Registration Statement (or any amendment thereto), including any information
deemed to be a part thereof pursuant to Rule 430B, the General Disclosure
Package or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with the Underwriter Information.

20

 

(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including any information deemed to be a part
thereof pursuant to Rule 430B, the General Disclosure Package or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
the Underwriter Information.

(c) Actions against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by PJC, and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the indemnified
parties shall be selected by the Company, provided, that in each case such
counsel shall be reasonably satisfactory to the indemnifying parties. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.

(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.

SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and of the
Underwriters, on the other hand, in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.

21

 

The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company, on the one hand, and the total underwriting discount received by
the Underwriters, on the other hand, in each case as set forth on the cover of
the Prospectus, bear to the aggregate initial public offering price of the
Securities as set forth on the cover of the Prospectus.

The relative fault of the Company, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Shares underwritten by it
and distributed to the public.

No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

For purposes of this Section 7, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
and each Underwriter’s Affiliates and selling agents shall have the same rights
to contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company. The Underwriters’ respective obligations to contribute pursuant to
this Section 7 are several in proportion to the total number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.

SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Underwriter or its
Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors, or any person controlling the Company and (ii) delivery
of and payment for the Securities.

22

 

SECTION 9. Termination of Agreement.

(a) Termination. The Representative may terminate this Agreement, by notice to
the Company, at any time at or prior to the Closing Time (i) if there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Registration Statement, the General
Disclosure Package or the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, which is
such as to make it, in the judgment of the Representative, impracticable or
inadvisable to proceed with the completing of the offering contemplated hereby,
or (ii) if there has occurred any material adverse change in the financial
markets in the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representative,
impracticable or inadvisable to proceed with the completion of the offering or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the Nasdaq Global Market, or (iv) if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq Global
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by order of the Commission, FINRA or any other
governmental authority, or (v) if a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United
States or with respect to Clearstream or Euroclear systems in Europe, or (vi) if
a banking moratorium has been declared by either Federal or New York
authorities.

(b) Liabilities. If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 6, 7, 15, 16,
17 and, in the event that there has been payment and delivery of any Securities,
Sections 1 and 8, shall survive such termination and remain in full force and
effect.

SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
“Defaulted Securities”), the Representative shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then:

(i) if the number of Defaulted Securities does not exceed 10% of the number of
Securities to be purchased on such date, each of the non-defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or

(ii) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase, and the Company to sell, the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter or the Company.

23

 

No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.

In the event of any such default which does not result in a termination of this
Agreement or, in the case of a Date of Delivery which is after the Closing Time,
which does not result in a termination of the obligation of the Underwriters to
purchase and the Company to sell the relevant Option Securities, as the case may
be, either the (i) Representative or (ii) the Company shall have the right to
postpone Closing Time or the relevant Date of Delivery, as the case may be, for
a period not exceeding seven days in order to effect any required changes in the
Registration Statement, the General Disclosure Package or the Prospectus or in
any other documents or arrangements. As used herein, the term “Underwriter”
includes any person substituted for an Underwriter under this Section 10.

SECTION 11. Default by the Company. If the Company shall fail at the Closing
Time or a Date of Delivery, as the case may be, to sell the number of Securities
that it is obligated to sell hereunder, then this Agreement shall terminate
without any liability on the part of any nondefaulting party; provided, however,
that the provisions of Sections 1, 4, 6, 7, 8, 15, 16 and 17 shall remain in
full force and effect. No action taken pursuant to this Section shall relieve
the Company from liability, if any, in respect of such default.

SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to PJC at 800 Nicollet Mall, Minneapolis, MN 55402, attention of
Syndicate Department, with a copy to General Counsel Department; notices to the
Company shall be directed to it at Black Diamond, Inc., 2084 East 3900 South,
Salt Lake City, Utah 84124, attention of Peter Metcalf, President & Chief
Executive Officer, and Robert N. Peay, Chief Financial Officer.

SECTION 13. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the initial public offering price of
the Securities and any related discounts and commissions, is an arm’s-length
commercial transaction between the Company, on the one hand, and the several
Underwriters, on the other hand, (b) in connection with the offering of the
Securities and the process leading thereto, each Underwriter is and has been
acting solely as a principal and is not the agent or fiduciary of the Company,
any of its subsidiaries or their respective stockholders, creditors, employees
or any other party, (c) no Underwriter has assumed or will assume an advisory or
fiduciary responsibility in favor of the Company with respect to the offering of
the Securities or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company or any of its
subsidiaries on other matters) and no Underwriter has any obligation to the
Company with respect to the offering of the Securities except the obligations
expressly set forth in this Agreement, (d) the Underwriters and their respective
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company, and (e) the Underwriters have
not provided any legal, accounting, regulatory or tax advice with respect to the
offering of the Securities and the Company has consulted its own respective
legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.

SECTION 14. Parties. This Agreement shall each inure to the benefit of and be
binding upon the Underwriters and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.

24

 

SECTION 15. Trial by Jury. The Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and affiliates) and
each of the Underwriters hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.

SECTION 16. GOVERNING LAW. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE
ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW YORK WITHOUT REGARD TO ITS
CHOICE OF LAW PROVISIONS.

SECTION 17. Consent to Jurisdiction; Waiver of Immunity. Any legal suit, action
or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby (“Related Proceedings”) shall be instituted in (i) the
federal courts of the United States of America located in the City and County of
New York, Borough of Manhattan or (ii) the courts of the State of New York
located in the City and County of New York, Borough of Manhattan (collectively,
the “Specified Courts”), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of
a judgment of any such court (a “Related Judgment”), as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party’s address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.

SECTION 18. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

SECTION 19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.

SECTION 20. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.

25

 

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters and the Company in accordance with its terms.

 

  Very truly yours,
 
BLACK DIAMOND, INC.       By:  /s/ Robert Peay     Title: Chief Financial
Officer

 

CONFIRMED AND ACCEPTED,
as of the date first above written:
 
PIPER JAFFRAY & CO.   By:  /s/ Christie L. Christina   Name: Christie L.
Christina
Title: Managing Director

  

For itself and as Representative of the other
Underwriters named in Schedule A hereto.

 

26

 

SCHEDULE A

The initial public offering price per share for the Securities shall be $7.50.

The purchase price per share for the Non-Reserve Securities and the Option
Securities to be paid by the several Underwriters shall be $7.05, being an
amount equal to the initial public offering price set forth above less $0.45 per
share, subject to adjustment in accordance with Section 2(b) for dividends or
distributions declared by the Company and payable on the Initial Securities but
not payable on the Option Securities. The purchase price per share for the
Reserved Securities to be paid by the several Underwriters shall be $7.50, being
an amount equal to the initial public offering price.

Name of Underwriter  Number of
Non-Reserve Securities   Number of
Reserve Securities            Piper Jaffray & Co.   7,450,000    1,117,500  Wm
Smith & Co.   300,000    45,000  Total   7,750,000    1,162,500 

 

Sch A-1

 

SCHEDULE B-1

Pricing Terms

1. The Company is selling 7,750,000 shares of Common Stock.

2. The Company has granted an option to the Underwriters, severally and not
jointly, to purchase up to an additional 1,162,500 shares of Common Stock.

3. The initial public offering price per share for the Securities shall be
$7.50.

4. The number of Reserved Securities to be sold by the Company to certain
employees, directors and officers is 1,333,333 shares of Common Stock.

 

Sch B-1-1

 

SCHEDULE B-2

Free Writing Prospectuses

None.

 

Sch B-2-1

 

SCHEDULE C

List of Persons and Entities Subject to Lock-up

Warren B. Kanders

Kanders GMP Holdings, LLC

Robert R. Schiller

Nicholas Sokolow

Donald L. House

Philip N. Duff

Michael A. Henning

Peter Metcalf

Robert N. Peay

Richard S. Luskin

Aaron Kuehne

Bill Kulczycki

Chris Grover

Mark Ritchie

Rosalie Mark

Ryan Gellert

Scott Carlson

Christian Jaeggi

Ethan R. Schiller UTMA, Robert Schiller

Jonah A. Schiller UTMA, Robert Schiller

Robert R. Schiller Cornerstone Trust

Robert R. Schiller Revocable Trust

Robert R. Schiller Roth IRA

Samuel M. Schiller UTMA, Robert R. Schiller

Schiller Gregory Investment Corp LLC

ST Investors Fund, LLC

 

Sch C-1

 

SCHEDULE D

List of “Significant Subsidiaries” of the Company

Subsidiary Jurisdiction of Incorporation     Black Diamond Equipment, Ltd.
Delaware     Gregory Mountain Products, LLC Delaware     Black Diamond Equipment
AG Switzerland    

Black Diamond Equipment Asia Ltd.

(a/k/a Black Diamond Sporting Equipment

(ZFTZ) Co. Ltd.)

China    

 

Sch D-1