Exhibit 1.1
KANBAY INTERNATIONAL, INC.
__ Shares
Common Stock
$0.001 Par Value
UNDERWRITING AGREEMENT
December __, 2004
UNDERWRITING AGREEMENT
December __, 2004
UBS Securities LLC
Xxxxxx X. Xxxxx & Co. Incorporated
Xxxxxx Xxxxxxxxxx Xxxxx LLC
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
The persons named in Schedule B annexed hereto (the "SELLING
STOCKHOLDERS") propose to sell, to the underwriters named in Schedule A annexed
hereto (the "UNDERWRITERS"), for whom you are acting as representatives, an
aggregate of __ shares (the "FIRM SHARES") of Common Stock, $0.001 par value
(the "COMMON STOCK"), of Kanbay International, Inc., a Delaware corporation (the
"COMPANY"). Such shares are to be sold by the Selling Stockholders in the
respective amounts set forth under the caption "Firm Shares" in Schedule B
hereto. In addition, solely for the purpose of covering over-allotments, the
Selling Stockholders propose to grant to the Underwriters the option to purchase
from the Company up to an additional __ shares of Common Stock (the "ADDITIONAL
SHARES") in the respective amounts set forth under the caption "Additional
Shares" in Schedule B hereto. The Firm Shares and the Additional Shares are
hereinafter collectively sometimes referred to as the "SHARES." The Shares are
described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "ACT"), with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-1 (File No. 333-119986)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each such preliminary prospectus, being herein called
a "PRELIMINARY PROSPECTUS") relating to the Shares. Except where the context
otherwise requires, the registration statement, as amended when it became or
becomes effective, including all documents filed as a part thereof, and
including any information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 424(b) under the Act and deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act and also including any registration statement filed pursuant to Rule
462(b) under the Act, is herein called the "REGISTRATION STATEMENT," and the
prospectus, in the form filed by the Company with the Commission pursuant to
Rule 424(b) under the Act on or before the second business day after the date
hereof (or such earlier time as may be required under the Act) or, if no such
filing is required, the form of final prospectus included in the Registration
Statement at the time it became effective, is herein called the "PROSPECTUS." As
used herein, "BUSINESS DAY" shall mean a day on which the New York Stock
Exchange is open for trading.
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The Company, the Selling Stockholders and the Underwriters agree as
follows:
1. SALE AND PURCHASE. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, each
Selling Stockholder hereby agrees to sell the number of Firm Shares set forth
opposite its name in Schedule B hereto, severally and not jointly, to the
several Underwriters, and each of the Underwriters, severally and not jointly,
agrees to purchase the number of Firm Shares set forth opposite such
Underwriter's name in Schedule A hereto, subject to adjustment in accordance
with Section 11 hereof, in each case at a purchase price of $__ per Share. The
Company and each Selling Stockholder is advised by you that the Underwriters
intend (i) to make a public offering of their respective portions of the Firm
Shares as soon after the effective date of the Registration Statement as in your
judgment is advisable and (ii) initially to offer the Firm Shares upon the terms
set forth in the Prospectus. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
In addition, the Selling Stockholders hereby grant to the several
Underwriters the option to purchase, and, upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Selling Stockholders, ratably in accordance with the number of Firm Shares
to be purchased by each of them, all or a portion of the Additional Shares as
may be necessary to cover over-allotments made in connection with the offering
of the Firm Shares, at the same purchase price per share to be paid by the
Underwriters to the Selling Stockholders for the Firm Shares. This option may be
exercised by UBS Securities LLC ("UBS") on behalf of the several Underwriters at
any time and from time to time on or before the thirtieth day following the date
of the Prospectus, by written notice to the Company and the Selling Stockholders
listed on Schedule B hereto. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised, and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to as the "ADDITIONAL TIME OF PURCHASE"); PROVIDED, HOWEVER,
that the additional time of purchase shall not be earlier than the time of
purchase (as defined below) nor earlier than the second business day after the
date on which the option shall have been exercised nor later than the tenth
business day after the date on which the option shall have been exercised. The
number of Additional Shares to be sold to each Underwriter shall be the number
which bears the same proportion to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule A hereto bears to the total number of Firm Shares
(subject, in each case, to such adjustment as you may determine to eliminate
fractional shares), subject to adjustment in accordance with Section 11 hereof.
The number of Additional Shares to be sold by each Selling Stockholder shall be
a number equal to the number of Additional Shares as to which the option is
being exercised multiplied by a fraction, the numerator of which shall be the
maximum number of Additional Shares listed on Schedule B to be sold by such
Selling Stockholder and the denominator of which shall be the aggregate number
of Additional Shares listed on Schedule B hereto (subject, in each case, to such
adjustment as you may determine to eliminate fractional Shares).
Pursuant to powers of attorney, which in each case shall be
satisfactory to counsel for the Underwriters, granted by each Selling
Stockholder other than Household Investment Funding, Inc,
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("HIFI") (the "OTHER SELLING STOCKHOLDERS"), to Xxxxxxx X. Xxxxxxxx and Xxxxxx
X. Xxxxxxxx, each of whom will have full power and authority to act as
representative of the Other Selling Stockholders. The foregoing representatives
(the "REPRESENTATIVES OF THE OTHER SELLING STOCKHOLDERS") are authorized, on
behalf of each Other Selling Stockholder, to execute any documents necessary or
desirable in connection with the sale of the Shares to be sold hereunder by each
Other Selling Stockholder, to instruct the custodian with respect to (i) the
delivery of the certificates for such Shares and (ii) the transmission of the
proceeds of the sale of such Shares and to pay therefrom the expenses to be
borne by each Other Selling Stockholder in connection with the sale of the
Shares, to distribute the balance of such proceeds to each Other Selling
Stockholder in proportion to the number of Shares sold by each Selling
Stockholder, to acknowledge notices on behalf of each Selling Stockholder and to
take such other action as may be necessary or desirable in connection with the
transactions contemplated by this Agreement.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Shares shall be made to the custodian by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of The Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on December __, 2004 (unless another time shall be agreed to by you,
HIFI and the Representatives of the Other Selling Stockholders or unless
postponed in accordance with the provisions of Section 11 hereof). The time at
which such payment and delivery are to be made is hereinafter sometimes called
"the time of purchase." Electronic transfer of the Firm Shares shall be made to
you at the time of purchase in such names and in such denominations as you shall
specify.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the additional time of purchase in such names and in
such denominations as you shall specify.
Deliveries of the documents described in Section 9 hereof with respect
to the purchase of the Shares shall be made at the offices of Winston & Xxxxxx
LLP, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has been declared effective under the
Act; no stop order of the Commission preventing or suspending the use of
any Preliminary Prospectus or the effectiveness of the Registration
Statement has been issued and no proceedings for such purpose have been
instituted or, to the Company's knowledge, are contemplated by the
Commission; each Preliminary Prospectus, at the time of filing thereof,
complied in all material respects to the requirements of the Act and the
last Preliminary Prospectus distributed in connection with the offering of
the Shares did not, as of its date, and does not contain an untrue
statement of a material fact or omit to state a material fact required to
be
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stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; the Registration
Statement complied when it became effective, complies and will comply, as
amended or supplemented, if applicable, in all material respects with the
requirements of the Act and the Prospectus will comply, as of its date and
as amended or supplemented, if applicable, in all material respects with
the requirements of the Act and any statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement have been and will be so described or filed; the Registration
Statement did not when it became effective, and will not, as amended or
supplemented, if applicable, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and the Prospectus will not,
as of its date and as amended or supplemented, if applicable, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representation or warranty
with respect to any statement or omission in any Preliminary Prospectus,
the Registration Statement or the Prospectus in reliance upon and in
conformity with information concerning (i) an Underwriter and furnished in
writing by or on behalf of such Underwriter through you to the Company
expressly for use in any Preliminary Prospectus, the Registration Statement
or the Prospectus or (ii) a Selling Stockholder and furnished in writing by
or on behalf of such Selling Stockholder to the Company expressly for use
in any Preliminary Prospectus, the Registration Statement or the
Prospectus; and the Company has not distributed and will not distribute any
offering material in connection with the offering or sale of the Shares
other than the Registration Statement, the then most recent Preliminary
Prospectus and the Prospectus;
(b) as of the date of this Agreement, the Company has an authorized
and outstanding capitalization as set forth under the heading "actual" in
the section of the Registration Statement and the Prospectus entitled
"Capitalization," and, as of the time of purchase shall have an authorized
and outstanding capitalization as set forth under the heading "as adjusted"
in the section of the Registration Statement and the Prospectus (subject,
in each case, to the issuance of shares of Common Stock upon exercise of
stock options disclosed as outstanding in the Registration Statement and
the Prospectus and grant of options under equity compensation plans
described in the Registration Statement and the Prospectus); all of the
issued and outstanding shares of capital stock, including the Common Stock,
of the Company have been duly authorized and validly issued and are fully
paid and non-assessable, have been issued in compliance with all federal
and state securities laws and were not issued in violation of any
preemptive right, resale right, right of first refusal or similar right;
(c) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein;
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(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, have a
material adverse effect on the business, properties, management, financial
condition, results of operations or prospects of the Company and the
Subsidiaries (as hereinafter defined), taken as a whole (a "Material
Adverse Effect");
(e) the Company has no majority-owned subsidiaries (as defined in the
Act) other than the majority-owned subsidiaries listed on Schedule C-1
hereto (collectively, the "Subsidiaries"); the Company owns, directly or
indirectly, the percentage of the issued and outstanding capital stock,
partnership interests or membership interests, as the case may be, of each
of the Subsidiaries as reflected on Schedule C-1; except as reflected on
Schedules C-1 and C-2, the Company does not own, directly or indirectly,
any shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity; complete and correct copies of the
charters and by-laws (or equivalent constitutive documents) of the Company
and the Subsidiaries and all amendments thereto have been made available to
you, and except as set forth in the exhibits to the Registration Statement,
no changes therein will be made subsequent to the date hereof and prior to
the time of purchase or, if later, the additional time of purchase; each
Subsidiary that is a corporation has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; each Subsidiary that is a partnership has
been duly organized and is validly existing as a partnership in good
standing under the laws of its jurisdiction of formation; each Subsidiary
that is a limited liability company has been duly organized and is validly
existing as a limited liability company in good standing under the laws of
its jurisdiction of formation; each Subsidiary has the power and authority
to own, lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus; each Subsidiary
is duly qualified to do business as a foreign entity and is in good
standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect; all of
the issued and outstanding shares of capital stock of the Subsidiaries that
are corporations have been duly authorized and validly issued and are fully
paid and non-assessable, and the percentages of such shares as reflected on
Schedule C-1 are owned, directly or indirectly, by the Company subject to
no security interest, other encumbrance or adverse claims (other than all
of the issued and outstanding shares of capital stock of Kanbay
Incorporated, which the Company has pledged to Silicon Valley Bank pursuant
to that certain Stock Pledge Agreement dated as of April 19, 2000); all of
the issued and outstanding partnership interests of the Subsidiaries that
are partnerships have been duly and validly issued, and the percentages of
such partnership interests as reflected on Schedule C-1 are owned, directly
or indirectly, by the Company subject to no security interest, other
encumbrance or adverse claims; all of the issued and outstanding membership
interests of the Subsidiaries that are limited liability companies have
been duly and validly issued, and the percentages of such membership
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interests as reflected on Schedule C-1 are owned, directly or indirectly,
by the Company subject to no security interest, other encumbrance or
adverse claims; and no options or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligation into
shares of capital stock, partnership interests or membership interests, as
the case may be, in the Subsidiaries are outstanding;
(f) the Shares have been duly and validly authorized and are validly
issued, fully paid and non-assessable and free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and similar
rights;
(g) the capital stock of the Company, including the Shares, shall
conform in all material respects as of the time of purchase and as of the
additional time of purchase, if applicable, to the description thereof set
forth in the section of the Registration Statement and the Prospectus
entitled "Description of Capital Stock," the form of specimen certificate
for the Shares is in due and proper form and the holders of the Shares will
not be subject to personal liability for the obligations of the Company by
reason of ownership of such Shares;
(h) this Agreement has been duly authorized, executed and delivered
by the Company;
(i) neither the Company nor any of the Subsidiaries is in breach or
violation of or in default under (nor has any event occurred which with
notice, lapse of time or both would result in any breach or violation of,
constitute a default under or give the holder of any indebtedness (or a
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness under) its
respective charter or by-laws, or, except for such breaches, violations or
defaults that would not, individually or in the aggregate, have a Material
Adverse Effect, any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their
properties may be bound or affected, and the execution, delivery and
performance of this Agreement and the sale of the Shares and the
consummation of the transactions contemplated hereby will not conflict
with, result in any breach or violation of or constitute a default under
(nor constitute any event which with notice, lapse of time or both would
result in any breach or violation of or constitute a default under) the
charter or by-laws of the Company or any of the Subsidiaries, or, except
for such breaches, violations or defaults that would not, individually or
in the aggregate, have a Material Adverse Effect, any indenture, mortgage,
deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound or
affected, or any federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to the Company or any of the
Subsidiaries;
(j) no approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or
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agency is required in connection with the sale of the Shares or the
consummation by the Company of the transactions contemplated hereby other
than registration of the Shares under the Act, which has been or will be
effected, and any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Shares are being offered by
the Underwriters or under the rules and regulations of the NASD;
(k) except as set forth in the Registration Statement and the
Prospectus or otherwise waived in writing or terminated prior to the date
hereof, (i) no person has the right, contractual or otherwise, to cause the
Company to issue or sell to it any shares of Common Stock or shares of any
other capital stock or other equity interests of the Company, (ii) no
person has any preemptive rights, resale rights, rights of first refusal or
other rights to purchase any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, and (iii) no person
has the right to act as an underwriter or as a financial advisor to the
Company in connection with the offer and sale of the Shares, in the case of
each of the foregoing clauses (i), (ii) and (iii), whether as a result of
the filing or effectiveness of the Registration Statement or the sale of
the Shares as contemplated thereby or otherwise; except as set forth in the
Registration Statement and the Prospectus or otherwise waived in writing or
terminated prior to the date hereof, no person has the right, contractual
or otherwise, to cause the Company to register under the Act any shares of
Common Stock or shares of any other capital stock or other equity interests
of the Company, or to include any such shares or interests in the
Registration Statement or the offering contemplated thereby, whether as a
result of the filing or effectiveness of the Registration Statement or the
sale of the Shares as contemplated thereby or otherwise;
(l) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation
or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its respective business,
except where the absence of any such license, authorization, consent,
approval or filing would not, individually or in the aggregate, have a
Material Adverse Effect; neither the Company nor any of the Subsidiaries is
in violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, except where such violation, default,
revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions, contracts, licenses, agreements, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(n) except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits, claims, investigations or
proceedings (i) pending, to which the Company or
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any of the Subsidiaries or, to the Company's knowledge, any of their
respective directors or officers is a party (in such person's capacity as a
director or officer) or to which any of their respective properties is, or
(ii) to the Company's knowledge, threatened, to which the Company or any of
the Subsidiaries or any of their respective directors or officers would be
a party (in such person's capacity as a director or officer) or to which
any of their respective properties would be, subject at law or in equity,
before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency, except any such
action, suit, claim, investigation or proceeding which would not result in
a judgment, decree or order having, individually or in the aggregate, a
Material Adverse Effect or preventing consummation of the transactions
contemplated hereby;
(o) Ernst & Young LLP, whose report on the consolidated financial
statements of the Company and the Subsidiaries is filed with the Commission
as part of the Registration Statement and the Prospectus, are independent
public accountants as required by the Act;
(p) the audited financial statements of the Company included in the
Registration Statement and the Prospectus, together with the related notes
and schedules, present fairly in all material respects the consolidated
financial position of the Company as of the dates indicated and the
consolidated results of operations and cash flows of the Company for the
periods specified and, except as otherwise set forth in the Registration
Statement and the Prospectus, have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved; the other financial and statistical data set
forth in the Registration Statement and the Prospectus are fairly presented
and prepared on a basis consistent with the financial statements and books
and records of the Company; there are no financial statements (historical
or pro forma) that are required to be included in the Registration
Statement and the Prospectus that are not included as required; and the
Company and the Subsidiaries do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet
obligations), not disclosed in the Registration Statement and the
Prospectus;
(q) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth
in the Registration Statement and the Prospectus, there has not been (i)
any material adverse change, or any development involving a prospective
material adverse change, in the business, properties, management, financial
condition or results of operations of the Company and the Subsidiaries
taken as a whole (ii) any transaction which is material to the Company and
the Subsidiaries taken as a whole, (iii) any obligation, direct or
contingent (including any off-balance sheet obligations), incurred by the
Company or the Subsidiaries, which is material to the Company and the
Subsidiaries taken as a whole, (iv) any change in the capital stock or
outstanding indebtedness of the Company or the Subsidiaries or (v) any
dividend or distribution of any kind declared, paid or made on the capital
stock of the Company;
(r) the Company has obtained for the benefit of the Underwriters the
agreement (a "Lock-Up Agreement"), in substantially the form set forth as
Exhibit A hereto, of each of
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its directors and officers (except for Xxxxxx X. Xxxxxxxx and Xxxxxxx X.
Xxxxxxx, each of whom is subject to a prior lock-up with the
Representatives that expires on July 17, 2005) and each Selling Stockholder
listed on Schedule D hereto;
(s) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(t) the Company and the Subsidiaries have good and marketable title
to all property (real and personal) described in the Registration Statement
and in the Prospectus as being owned by them, free and clear of all liens,
claims, security interests or other encumbrances, except as set forth in
the Registration Statement and except as would not, individually or in the
aggregate, have a Material Adverse Effect; all the property described in
the Registration Statement and the Prospectus as being held under lease by
the Company or a Subsidiary is, assuming due and valid execution by the
lessor, held thereby under valid, subsisting and enforceable leases;
(u) (i) the Company and the Subsidiaries own, or have obtained valid
and enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and
unregistered), tradenames, copyrights, trade secrets and other proprietary
information described in the Registration Statement and the Prospectus as
being owned or licensed by them or which are necessary for the conduct of
their respective businesses, except where the failure to own, license or
have such rights would not, individually or in the aggregate, have a
Material Adverse Effect (collectively, "Intellectual Property"); (ii) to
the Company's knowledge, there are no third parties who have rights to any
Intellectual Property, except for the ownership rights of the owners of the
Intellectual Property which is licensed to the Company and except for the
rights of third parties that would not have a Material Adverse Effect;
(iii) to the Company's knowledge, there is no infringement by third parties
of any Intellectual Property; (iv) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any Intellectual Property; (v)
there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of
any Intellectual Property; (vi) there is no pending or, to the Company's
knowledge, threatened material action, suit, proceeding or claim by others
that the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others and, to the
Company's knowledge, it does not infringe or otherwise violate any patent,
trademark, copyright, trade secret or other proprietary rights of others;
and (vii) to the Company's knowledge, there is no patent or patent
application that contains claims that interfere with the issued or pending
claims of any of the Intellectual Property;
(v) neither the Company nor any of the Subsidiaries is engaged in any
unfair labor practice; except for matters which would not, individually or
in the aggregate, have a
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Material Adverse Effect, (i) there is (A) no unfair labor practice
complaint pending or, to the Company's knowledge, threatened against the
Company or any of the Subsidiaries before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under
collective bargaining agreements pending or, to the Company's knowledge,
threatened, (B) no strike, labor dispute, slowdown or stoppage pending or,
to the Company's knowledge, threatened against the Company or any of the
Subsidiaries and (C) to the Company's knowledge, no union representation
dispute currently existing concerning the employees of the Company or any
of the Subsidiaries, and (ii) to the Company's knowledge, (A) no union
organizing activities are currently taking place concerning the employees
of the Company or any of the Subsidiaries and (B) there has been no
violation of any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees, any applicable
wage or hour laws or any provision of the Employee Retirement Income
Security Act of 1974 or the rules and regulations promulgated thereunder
concerning the employees of the Company or any of the Subsidiaries;
(w) the Company and the Subsidiaries and their properties, assets and
operations are in compliance with, and the Company and the Subsidiaries
hold all permits, authorizations and approvals required under,
Environmental Laws (as defined below), except to the extent that failure to
so comply or to hold such permits, authorizations or approvals would not,
individually or in the aggregate, have a Material Adverse Effect; neither
the Company nor any of the Subsidiaries (i) is, to the Company's knowledge,
the subject of any investigation, (ii) has received any notice or claim,
(iii) is a party to or affected by any pending or, to the Company's
knowledge, threatened action, suit or proceeding, (iv) is bound by any
judgment, decree or order or (v) has entered into any agreement, in each
case relating to any alleged violation of any Environmental Law or any
actual or alleged release or threatened release or cleanup at any location
of any Hazardous Materials (as defined below) (as used herein,
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, order, decree, judgment, injunction,
permit, license, authorization or other binding requirement, or common law,
relating to health, safety or the protection, cleanup or restoration of the
environment or natural resources, including those relating to the
distribution, processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of
Hazardous Materials, and "Hazardous Materials" means any material
(including, without limitation, pollutants, contaminants, hazardous or
toxic substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law);
(x) all tax returns required to be filed by the Company and each of
the Subsidiaries have been filed (other than tax returns required to be
filed by Kanbay (Japan) Incorporated, the failure to file of which has not
and will not have a Material Adverse Effect), and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have been
paid, other than those being contested in good faith or for which adequate
reserves have been provided on the books and records of the Company and its
Subsidiaries;
- 11 -
(y) the Company and each of the Subsidiaries maintains insurance
covering its properties, operations, personnel and businesses as the
Company deems adequate; such insurance insures against such losses and
risks to an extent which is adequate in accordance with customary industry
practice to protect the Company and the Subsidiaries and their businesses;
all such insurance is fully in force on the date hereof;
(z) neither the Company nor any of the Subsidiaries has sustained
since the date of the last audited financial statements included in the
Registration Statement and the Prospectus any materially adverse loss or
interference with its respective business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, except as set
forth in the Registration Statement and the Prospectus;
(aa) the Company has not sent or received any communication regarding
termination of, or intent not to renew, any of the contracts filed as an
exhibit to the Registration Statement, and no such termination or
non-renewal has been threatened by the Company or, to the Company's
knowledge, any other party to any such contract;
(bb) the Company and each of the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(cc) the Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 and 15d-15 under the
Securities Exchange Act of 1934 (the "Exchange Act")); such disclosure
controls and procedures are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made
known to the Company's Chief Executive Officer and its Chief Financial
Officer by others within those entities, and such disclosure controls and
procedures are effective to perform the functions for which they were
established; the Company's auditors and the Audit Committee of the Board of
Directors have been advised by the Company of: (i) any significant
deficiencies in the design or operation of internal controls which could
adversely affect the Company's ability to record, process, summarize, and
report financial data; and (ii) any fraud, whether or not material, that
involves management or other employees who have a role in the Company's
internal controls; any material weaknesses in internal controls have been
identified for the Company's auditors; and since the date of the most
recent evaluation of such disclosure controls and procedures, there have
been no significant changes in internal controls or in other factors that
could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses;
- 12 -
(dd) the Company has made available to you true, correct, and complete
copies of all documentation pertaining to any extension of credit in the
form of a personal loan made, directly or indirectly, by the Company to any
director or executive officer of the Company, or to any family member or
affiliate of any director or executive officer of the Company; and since
July 30, 2002, the Company has not, directly or indirectly, including
through any Subsidiary: (i) extended credit, arranged to extend credit, or
renewed any extension of credit, in the form of a personal loan, to or for
any director or executive officer of the Company, or to or for any family
member or affiliate of any director or executive officer of the Company; or
(ii) made any material modification, including any renewal thereof, to any
term of any personal loan to any director or executive officer of the
Company, or any family member or affiliate of any director or executive
officer, which loan was outstanding on July 30, 2002;
(ee) there is no failure on the part of the Company or any of the
Company's directors or officers, in their capacities as such, to comply
with any provision of the Xxxxxxxx-Xxxxx Act of 2002, as amended, and the
rules and regulations promulgated in connection therewith that would have a
Material Adverse Effect;
(ff) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from such
sources to the extent required;
(gg) neither the Company nor any of the Subsidiaries, has made any
payment of funds of the Company or the Subsidiaries or received or retained
any funds in violation of any law, rule or regulation, including, without
limitation, the Foreign Corrupt Practices Act, as amended; to the Company's
knowledge, no employee or agent of the Company or the Subsidiaries has made
any payment of funds of the Company or the Subsidiaries or received or
retained any funds in violation of any law, rule or regulation, including,
without limitation, the Foreign Corrupt Practices Act, as amended;
(hh) neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any of their respective directors, officers,
affiliates or controlling persons has taken, directly or indirectly, any
action designed to cause or result in, or which has constituted under the
Exchange Act or otherwise, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Shares; and
(ii) to the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's
officers, directors or securityholders, except as set forth in the
Registration Statement and the Prospectus or as disclosed to you in writing
prior to the date hereof.
In addition, any certificate signed by any officer of the Company or
any of the Subsidiaries and delivered to the Underwriters or counsel for the
Underwriters in connection with the offering of the Shares shall be deemed to be
a representation and warranty by the Company or Subsidiary, as the case may be,
as to matters covered thereby, to each Underwriter.
- 13 -
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter that:
(a) to the extent that such Selling Stockholder will be delivering
certificate(s) representing and/or notice(s) to exercise options
exercisable for Common Stock to American Stock Transfer & Trust Company
(the "CUSTODIAN"), such Selling Stockholder now is and, at the time of
delivery of notice(s) to exercise (whether the time of purchase or
additional time of purchase), will be the lawful owner of the options
exercisable for the number of Shares to be sold by such Selling Stockholder
pursuant to this Agreement;
(b) to the extent that such Selling Stockholder will be delivering
Common Stock to the Custodian, such Selling Stockholder now is the lawful
owner of the number of Shares to be sold by such Selling Stockholder
pursuant to this Agreement and has valid and marketable title to, or a
valid "security entitlement" within the meaning of Section 8-501 of the New
York Uniform Commercial Code in respect of, such Shares;
(c) such Selling Stockholder at the time of delivery of such Shares
(whether the time of purchase or additional time of purchase, as the case
may be) will be the lawful owner of the number of Shares to be sold by such
Selling Stockholder pursuant to this Agreement and will have valid and
marketable title to, or a valid "security entitlement" within the meaning
of Section 8-501 of the New York Uniform Commercial Code in respect of,
such Shares, and upon delivery of and payment for such Shares (whether at
the time of purchase or the additional time of purchase, as the case may
be), the Underwriters will acquire valid and marketable title to, or a
valid "security entitlement" within the meaning of Section 8-501 of the New
York Uniform Commercial Code in respect of, such Shares free and clear of
any claim, lien, encumbrance, security interest, community property right,
restriction on transfer or other defect in title;
(d) to the extent that such Selling Stockholder will be delivering
certificates representing and/or notice(s) to exercise options exercisable
for Common Stock to the Custodian, such Selling Stockholder has and at the
time of delivery of such certificates and/or notice(s) to exercise (whether
the time of purchase or the additional time of purchase, as the case may
be) will have, full legal right, power and capacity, and any approval
required by law (other than those imposed by the Act and the securities or
blue sky laws of certain jurisdictions), to sell, assign, transfer and
deliver such options exercisable for the number of Shares to be sold by
such Selling Stockholder pursuant to this Agreement.
(e) such Selling Stockholder has and at the time of delivery of such
Shares (whether the time of purchase or additional time of purchase, as the
case may be) will have, full legal right, power and capacity, and any
approval required by law (other than those imposed by the Act and the
securities or blue sky laws of certain jurisdictions), to sell, assign,
transfer and deliver such Shares in the manner provided in this Agreement;
(f) this Agreement and each Custody Agreement among the Custodian,
and the Selling Stockholders (each, a "Custody Agreement") have been duly
executed and delivered
- 14 -
by such Selling Stockholder and, with respect to the Custody Agreement
assuming due authorization, execution and delivery by the custodian, each
is a legal, valid and binding agreement of such Selling Stockholder
enforceable in accordance with its terms;
(g) when the Registration Statement becomes effective and at all
times subsequent thereto through the latest of the time of purchase,
additional time of purchase or the termination of the offering of the
Shares, the Registration Statement and Prospectus, and any supplements or
amendments thereto, as they relate to such Selling Stockholder, will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing
representation and warranty, as it relates to such Selling Stockholder, is
limited to information included in the Registration Statement and
Prospectus, and any supplements or amendments thereto, concerning such
Selling Stockholder furnished in writing by or on behalf of such Selling
Stockholder to the Company expressly for use therein;
(h) such Other Selling Stockholder has duly and irrevocably
authorized the Representatives of the Other Selling Stockholders, on behalf
of such Other Selling Stockholder to execute and deliver this Agreement and
any other document necessary or desirable in connection with the
transactions contemplated hereby and to deliver the Shares to be sold by
such Other Selling Stockholder and receive payment therefor pursuant
hereto;
(i) the sale of such Selling Stockholder's Shares pursuant to this
Agreement is not prompted by any information concerning the Company which
is not set forth in the Prospectus;
(j) the execution, delivery and performance of this Agreement by or
on behalf of such Selling Stockholder, the compliance by the undersigned
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not (i) conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the organizational
documents of such Selling Stockholder, if such Selling Stockholder is not
an individual, or any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder or any property of such Selling Stockholder
is bound or (ii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body
or agency having jurisdiction over such Selling Stockholder or any property
of such Selling Stockholder; and
(k) such Selling Stockholder has not taken, directly or indirectly,
any action designed to cause or result in, or which has constituted under
the Exchange Act or otherwise, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares.
- 15 -
5. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states or other jurisdictions as you
may designate and to maintain such qualifications in effect so long as you
may request for the distribution of the Shares; PROVIDED that the Company
shall not be required to qualify as a foreign corporation or to consent to
the service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the Shares);
and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon
as practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many copies
of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may
request for the purposes contemplated by the Act; in case any Underwriter
is required to deliver a prospectus after the nine-month period referred to
in Section 10(a)(3) of the Act in connection with the sale of the Shares,
the Company will prepare, promptly upon request such amendment or
amendments to the Registration Statement and the Prospectus as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of
the Act;
(c) if, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or any post-effective amendment
thereto to be declared effective before the Shares may be sold, the Company
will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and the Company will
advise you promptly and, if requested by you, will confirm such advice in
writing, (i) when the Registration Statement and any such post-effective
amendment thereto has become effective, and (ii) if Rule 430A under the Act
is used, when the Prospectus is filed with the Commission pursuant to Rule
424(b) under the Act (which the Company agrees to file in a timely manner
under such Rule);
(d) to advise you, HIFI and the Representatives of the Other Selling
Stockholders promptly, confirming such advice in writing, of any request by
the Commission for amendments or supplements to the Registration Statement
or the Prospectus or for additional information with respect thereto, or of
notice of institution of proceedings for, or the entry of a stop order,
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to use its best efforts to obtain the lifting or
removal of such order as soon as possible; to advise you, HIFI and the
Representatives of the Other Selling Stockholders promptly of any proposal
to amend or supplement the Registration Statement or the Prospectus and to
provide you, HIFI, the Representatives of the Other Selling Stockholders
and Underwriters' counsel copies of any such documents for review and
comment a
- 16 -
reasonable amount of time prior to any proposed filing and to file no such
amendment or supplement to which you, HIFI or the Representatives of the
Other Selling Stockholders shall reasonably object in writing;
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the
Commission in order to comply with the Exchange Act subsequent to the date
of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares; and to
provide you with a copy of such reports and statements and other documents
to be filed by the Company pursuant to Section 13, 14 or 15(d) of the
Exchange Act during such period a reasonable amount of time prior to any
proposed filing, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(g) to advise the Underwriters promptly of the happening of any event
within the time during which a prospectus relating to the Shares is
required to be delivered under the Act which could require the making of
any change in the Prospectus then being used so that the Prospectus would
not include an untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading, and, during such
time, subject to Section 5(d) hereof, to prepare and furnish, to the
Underwriters promptly such amendments or supplements to such Prospectus as
may be necessary to reflect any such change;
(h) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act) covering a period of twelve
months beginning after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act) as soon as is reasonably practicable
after the termination of such twelve-month period but not later than the
45th day following the end of the fiscal quarter first occurring after the
first anniversary of the effective date of the Registration Statement;
(i) to furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a consolidated balance
sheet and statements of income, stockholders' equity and cash flow of the
Company and the Subsidiaries for such fiscal year, accompanied by a copy of
the certificate or report thereon of nationally recognized independent
certified public accountants);
(j) to furnish to you five conformed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto) and sufficient conformed copies of
the foregoing (other than exhibits) for distribution of a conformed copy to
each of the other Underwriters;
- 17 -
(k) to the extent not otherwise available on XXXXX and upon request,
to furnish promptly to you and to each of the other Underwriters for a
period of two years from the date of this Agreement (i) copies of any
reports, proxy statements, or other communications which the Company shall
send to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed
with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar
forms as may be designated by the Commission, (iii) copies of documents or
reports filed with any national securities exchange on which any class of
securities of the Company is listed, and (iv) such other information as you
may reasonably request regarding the Company or the Subsidiaries;
(l) to furnish to you as early as practicable prior to the time of
purchase and any additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim and monthly consolidated financial statements, if any, of
the Company and the Subsidiaries which have been read by the Company's
independent certified public accountants, as stated in their letter to be
furnished pursuant to Section 9(g) hereof;
(m) not to (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of
or agree to dispose of, directly or indirectly, any Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock
or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock,
or (ii) file or cause to be declared effective a registration statement
under the Act relating to the offer and sale of any shares of Common Stock
or securities convertible into or exercisable or exchangeable for Common
Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock,
or (iii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or any other securities of the Company that
are substantially similar to Common Stock, whether such transaction is to
be settled by delivery of Common Stock or such other securities or
otherwise, or (iv) publicly announce an intention to effect any transaction
specified in clause (i), (ii) or (iii) of this Section 5(m), for a period
of 90 days after the date hereof (the "LOCK-UP PERIOD"), without the prior
written consent of UBS, except for (i) the registration of the Shares and
the sales to the Underwriters pursuant to this Agreement, (ii) issuances of
Common Stock upon the exercise of options disclosed as outstanding in the
Registration Statement and the Prospectus, (iii) grants of stock options
not exercisable during the Lock-Up Period pursuant to equity compensation
plans described in the Registration Statement and the Prospectus, (iv) the
registration of the offer and sale of shares of Common Stock upon exercise
of options, and (v) issuances of Common Stock pursuant to the employee
stock purchase plan; PROVIDED, HOWEVER, if (i) during the period that
begins on the date that is 15 calendar days plus 3 business days before the
last day of the 90-day restricted period and ends on the last day 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 (ii)
prior to the expiration of the 90-day restricted period, the Company
announces that it will release
- 18 -
earnings results during the 16-day period beginning on the last day of the
90-day period, the restrictions imposed by this subsection shall continue
to apply until the expiration of the date that is 15 calendar days plus 3
business days after the date on which the issuance of the earnings release
or the material news or material event occurs.
(n) to use its best efforts to cause the Common Stock to be listed
for quotation on NASDAQ; and
(o) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common
Stock.
6. COVENANT OF CERTAIN SELLING STOCKHOLDERS. Each of the Selling
Stockholders listed on Schedule D agree with each Underwriter to execute a
Lock-Up Agreement.
7. EXPENSES. The Company and the Selling Stockholders (excluding HIFI and
Xxxxxx & Xxxxxxxx LLC) agree to pay all costs, expenses, fees and taxes (other
than any fees and disbursements of counsel for the Underwriters, except as set
forth in Section 8 hereof and clauses (iv), (vi) and (ix) below) in connection
with (i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares including any stock or
transfer taxes and stamp or similar duties payable upon the sale, issuance or
delivery of the Shares to the Underwriters, (iii) the producing, word processing
and/or printing of this Agreement, any Agreement Among Underwriters, any dealer
agreements, any Powers of Attorney and any closing documents (including
compilations thereof) and the reproduction and/or printing and furnishing of
copies of each thereof to the Underwriters and (except closing documents) to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state or foreign laws and the determination
of their eligibility for investment under state or foreign law as aforesaid
(including the legal fees and filing fees and other disbursements of counsel for
the Underwriters incurred in connection with such qualification and
determination, which legal fees shall not exceed $10,000 and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to the
Underwriters and to dealers, (v) any listing of the Shares on any securities
exchange or qualification of the Shares for quotation on the National
Association of Securities Dealers Automated Quotation National Market System
("NASDAQ") and any registration thereof under the Exchange Act, (vi) any filing
for review of the public offering of the Shares by the NASD, including the legal
fees and filing fees and other disbursements of counsel to the Underwriters
incurred in connection with such filing, which legal fees shall not exceed
$35,000, (vii) the fees and disbursements of any transfer agent or registrar for
the Shares, (viii) the costs and expenses of the Company relating to
presentations or meetings undertaken in connection with the marketing of the
offering and sale of the Shares to prospective investors and the Underwriters'
sales forces, 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 and travel,
lodging and other expenses incurred by the officers of the Company and any such
consultants; provided, however, that the Underwriters agree to pay the cost of
all food service (including, without
- 19 -
limitation, all breakfasts, lunches and dinners) provided at presentations or
meetings undertaken in connection with the marketing of the offering and sale of
the Shares to prospective investors and the Underwriters' sales forces; and
provided further, however, that the Underwriters agree to pay their pro rata
share of the cost of any aircraft chartered in connection with the road show (it
being understood that, for purposes of this clause (viii), the Underwriters' pro
rata share shall be determined by dividing the number of representatives of the
Underwriters on the aircraft by the sum of (1) the number of representatives of
the Underwriters and (2) the number of representatives of the Company on the
aircraft; for example, if there are two representatives of the Underwriters and
three representatives of the Company on the aircraft, the Underwriters agree to
pay 40% of the cost of the aircraft), and (ix) the performance of the Company's
other obligations hereunder;
8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to (a) the fifth paragraph of Section 11 hereof, (b) clauses 10(i), (iii), (iv)
or (v) of the second paragraph of Section 10 or (c) the default by one or more
of the Underwriters in its or their respective obligations hereunder, the
Company and the Selling Stockholders shall, in addition to paying the amounts
described in Section 7 hereof, reimburse the Underwriters for all of their
out-of-pocket expenses, including the fees and disbursements of their counsel.
The obligations of the Selling Stockholders shall be several in proportion to
the number of Firm Shares they are selling hereunder.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholders on the
date hereof, at the time of purchase and, if applicable, at the additional time
of purchase, the performance by the Company and each of the Selling Stockholders
of its obligations hereunder and to the following additional conditions
precedent:
(a) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxxx &
Xxxxxxxx LLC, counsel for the Company, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in
form and substance reasonably satisfactory to Xxxxx Xxxx & Xxxxxxxx,
counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein;
(ii) each of the Subsidiaries organized under the laws of a
jurisdiction in the United States (the "U.S. SUBSIDIARIES") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, with full corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and the Prospectus;
- 20 -
(iii) each of the Company and the U.S. Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing
in the jurisdictions in the United States set forth in Schedule E hereto;
(iv) all of the issued and outstanding shares of capital stock of
the Company, including the Shares to be sold by the Selling Stockholders,
have been duly authorized and validly issued, are fully paid and
non-assessable and are free of statutory preemptive rights and, to such
counsel's knowledge, contractual preemptive rights, resale rights, rights
of first refusal and similar rights; the form of specimen certificate for
the Shares filed as an exhibit to the Registration Statement is in due and
proper form and the holders of the Shares will not be subject to personal
liability for the obligations of the Company by reason of ownership of such
Shares;
(v) all of the outstanding shares of capital stock of each of
the U.S. Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable and, except as otherwise stated in the
Registration Statement and the Prospectus, are owned by the Company, in
each case, to such counsel's knowledge, subject to no security interest,
other encumbrance or adverse claim; and to such counsel's knowledge, no
options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation into shares
of capital stock or ownership interests in the U.S. Subsidiaries are
outstanding, except as reflected on Schedule F hereto;
(vi) the execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not conflict with, result in any breach
or violation of or constitute a default under (nor constitute any event
which with notice, lapse of time or both would result in any breach or
violation of or constitute a default under) the charter or by-laws of the
Company or any of the U.S. Subsidiaries, or any indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of indebtedness,
or any license, lease, contract or other agreement or instrument filed as
an exhibit to the Registration Statement, or any U.S. federal or state law,
regulation or rule (not including any federal or state securities law) or,
to such counsel's knowledge, any decree, judgment or order applicable to
the Company or any of the Subsidiaries;
(vii) to such counsel's knowledge, there are no actions, suits,
claims, investigations or proceedings pending, threatened or contemplated
to which the Company or any of the Subsidiaries or any of their respective
directors or officers is or would be a party (in such person's capacity as
a director or officer) or to which any of their respective properties is or
would be subject at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency, which have not been disclosed to the Underwriters; and
(viii)the Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act;
- 21 -
In addition, such counsel shall state that, in connection with the
preparation by the Company of the Registration Statement and Prospectus,
such counsel participated in conferences with certain officers and other
representatives of the Company, representatives of the independent public
accountants of the Company, representatives of the Underwriters and counsel
for the Underwriters at which the contents of the Registration Statement
and Prospectus and related matters were discussed and, although such
counsel did not independently verify such information and are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, on the basis of the foregoing (relying as to the factual
matters upon statements of officers and other representatives of the
Company and public officials), no facts have come to such counsel's
attention that caused such counsel to believe that the Registration
Statement (other than the financial statements and related notes thereto
and the other financial, statistical and accounting data included therein
or omitted therefrom, as to which such counsel need express no belief) or
any amendment thereto, as of the date the Registration Statement or
amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (other than the financial statements and related notes thereto
and the other financial, statistical and accounting data included therein
or omitted therefrom, as to which such counsel need express no belief), at
the time of purchase or the additional time of purchase, as the case may
be, as amended or supplemented, if applicable, included or includes an
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Winston &
Xxxxxx LLP, special counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the
case may be, with reproduced copies for each of the other Underwriters and
in form and substance reasonably satisfactory to Xxxxx Xxxx & Xxxxxxxx,
counsel for the Underwriters, stating that:
(i) this Agreement has been duly authorized, executed and
delivered by the Company;
(ii) the statements made in the Prospectus under the heading
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Company's capital stock, including the Shares,
constitute an accurate summary of the terms of such capital stock in all
material respects;
(iii) the Registration Statement, as of the date it became
effective, and the Prospectus, as of its date, complied as to form in all
material respects to the applicable requirements of the Act and the
applicable rules and regulations of the Commission thereunder, except that
such counsel need not express (A) any opinion as to the financial
statements and related notes thereto and the other financial, statistical
and accounting data included in the Registration Statement or omitted
therefrom or as to the exhibits to the Registration Statement or (B) any
- 22 -
opinion or assurance as to the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus;
(iv) no consent, approval, authorization, order or other action
by, or notice to or filing with, any federal or New York governmental or
regulatory body or authority or any Delaware governmental agency or body
acting pursuant to the Delaware General Corporation Law, as amended (the
"DGCL"), is required for the execution and delivery of this Agreement by
the Company or the compliance by the Company with all of the provisions of
this Agreement, except (A) those which have been obtained, taken or made or
(B) such as may be required by the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters;
(v) the statements made in the Prospectus under the heading
"Certain Material U.S. Income Tax Consequences to Non-U.S. Holders",
insofar as they purport to constitute a summary of the matters of United
States federal tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein in
all material respects; and
(vi) to such counsel's knowledge, the execution and delivery of
this Agreement by the Company, the issue, sale and delivery of the Shares
by the Company in accordance with this Agreement and the compliance by the
Company with all of the provisions of this Agreement do not violate any
federal or New York securities statute or any rule or regulation that has
been issued pursuant to any federal or New York securities statute.
In addition, such counsel shall state that, in connection with the
preparation by the Company of the Registration Statement and Prospectus,
such counsel participated in conferences with certain officers and other
representatives of the Company, representatives of the independent public
accountants of the Company, representatives of the Underwriters and counsel
for the Underwriters at which the contents of the Registration Statement
and Prospectus and related matters were discussed and, although such
counsel did not independently verify such information and are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (except to the extent specified in subparagraphs (ii) and (v)
above), on the basis of the foregoing (relying as to the factual matters
upon statements of officers and other representatives of the Company and
public officials), no facts have come to such counsel's attention that
caused such counsel to believe that the Registration Statement (other than
the financial statements and related notes thereto and the other financial,
statistical and accounting data included therein or omitted therefrom, as
to which such counsel need express no belief) or any amendment thereto, as
of the date the Registration Statement or amendment became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (other than the
financial statements and related notes thereto and the other financial,
statistical and accounting data included therein or omitted therefrom, as
to which such counsel need express no belief), at the time of purchase or
the
- 23 -
additional time of purchase, as the case may be, as amended or
supplemented, if applicable, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(c) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of P&A Law
Offices, special India counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form and substance reasonably satisfactory to Xxxxx
Xxxx & Xxxxxxxx, counsel for the Underwriters, stating that:
(i) Kanbay Software (India) Private Limited ("KANBAY INDIA") has
been duly incorporated and is validly existing as a limited liability
company under the laws of the Republic of India, with full corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus;
(ii) all of the outstanding equity shares of Kanbay India have
been duly authorized and validly issued and are fully paid up and are not
subject to any preemptive or similar rights under, to such counsel's
knowledge, any written agreement entered into by Kanbay India (such opinion
being limited to those written agreements identified in the list attached
to such opinion as an exhibit). Except as otherwise stated in the
Registration Statement and the Prospectus, to such counsel's knowledge,
there are no outstanding securities issued by Kanbay India that are
convertible into, or exchangeable for, or warrants, rights or options to
purchase from Kanbay India, the equity shares of Kanbay India;
(iii) the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated thereby will not conflict with, result in any breach or
violation of or constitute a default under (nor constitute any event which
with notice, lapse of time or both would result in any breach or violation
of or constitute default under): (A) the certificate of incorporation, the
memorandum of association and the articles of association of Kanbay India,
(B) any provision of applicable laws of the Republic of India, (C) to such
counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court in India that is binding on Kanbay India or its
property or (D) to such counsel's knowledge, any obligation or covenant
under any indenture, contract or agreement to which Kanbay India is a party
(such opinion being limited (1) to those orders, decrees, written
agreements or instruments (which orders, decrees, written agreements and
instruments have been certified by an officer of Kanbay India to be all of
the orders, decrees, agreements and instruments material to Kanbay India)
identified in the list attached to such opinion as an exhibit and (2) in
that such counsel expresses no opinion with respect to any violation not
readily ascertainable from the face of any such order, decree, agreement or
instrument, or arising under or based upon any cross default provision in
so far as it relates to a default under any agreement or instrument not so
identified on such exhibit to such opinion,
- 24 -
or arising as a result of any violation of any agreement or covenant based
on a failure to comply with any financial or numerical requirement
requiring computation); and
(iv) such counsel is not representing Kanbay India in any legal
proceedings other than the proceedings identified in the list attached to
such opinion as an exhibit, to which Kanbay India is a party or to which
any property of Kanbay India is subject (which legal proceedings have been
certified by an officer of Kanbay India to be all of the legal proceedings
to which Kanbay India is a party or to which any property of Kanbay India
is subject).
(d) HIFI shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxxxx X.
Xxxxxxxx, Vice President and Deputy General Counsel - Corporate and
Assistant Secretary, counsel for HIFI, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters, and in
form and substance reasonably satisfactory to Xxxxx Xxxx & Xxxxxxxx,
counsel for the Underwriters, stating that:
(i) this Agreement and the Custody Agreement have been duly
executed and delivered by or on behalf of HIFI;
(ii) HIFI has valid title to, or a valid security entitlement in
respect of, the Shares to be sold by HIFI free and clear of all security
interests, claims, liens, equities and other encumbrances; HIFI has full
legal right and power, and has obtained any authorization or approval
required by New York law (other than those imposed by the Act and the
securities or blue sky laws of New York), to sell, assign, transfer and
deliver the Shares to be sold by HIFI or a security entitlement in respect
of such Shares in the manner provided in this Agreement; and
(iii) delivery of stock certificates representing the Shares to
be sold by HIFI, endorsed to the Underwriters, and payment therefor
pursuant to this Agreement will pass valid title to such Shares, free and
clear of any adverse claim within the meaning of Section 8-102 of the
Uniform Commercial Code of New York, to each Underwriter who has purchased
such Shares without notice of an adverse claim.
(e) The Other Selling Stockholders (other than Kanbay Acquisition
L.L.C. and Kanbay Investment L.L.C.) shall furnish to you at the time of
purchase and, if applicable, at the additional time of purchase, an opinion
of Xxxxx & MacKenzie, special counsel for the Other Selling Stockholders
(other than Kanbay Acquisition L.L.C. and Kanbay Investment L.L.C.),
addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies for
each of the other Underwriters, and in form and substance reasonably
satisfactory to Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters,
stating that:
(i) this Agreement and Custody Agreement have been duly executed
and delivered by or on behalf of each Other Selling Stockholder that is a
natural person;
- 25 -
(ii) no governmental authorization or approval (other than any
authorization or approval under the federal securities laws and the
securities or blue sky laws of any state, as to which no opinion need be
expressed) is required to permit such Other Selling Stockholders to sell,
assign, transfer and deliver the Shares to be sold by such Other Selling
Stockholders, or security entitlements in respect of such Shares, in the
manner provided by this Agreement;
(iii) upon the delivery of stock certificates representing the
Shares to be sold by such Other Selling Stockholders duly indorsed to the
Underwriters, and upon payment therefor in accordance with this Agreement,
each Underwriter who purchases such Shares without notice of any adverse
claim (within the meaning Section 8-102 of the Uniform Commercial Code of
the State of New York) will acquire such Shares free and clear of any
adverse claim; and
(iv) each Power of Attorney constitutes the valid and binding
agreement of such Other Selling Stockholder party thereto, enforceable
against such Selling Stockholder in accordance with its terms.
(f) Kanbay Acquisition L.L.C. and Kanbay Investment L.L.C. shall
furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Xxxxxxx Berlin Shereff Xxxxxxxx,
LLP, counsel to Kanbay Acquisition L.L.C. and Kanbay Investment L.L.C.,
addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies for
each of the other Underwriters, and in form and substance reasonably
satisfactory to Xxxxx Xxxx & Xxxxxxxx, counsel to the Underwriters, stating
that:
(i) this Agreement and the Custody Agreement have been duly
executed and delivered by or on behalf of each of Kanbay Acquisition L.L.C.
and Kanbay Investment L.L.C.;
(ii) Kanbay Acquisition L.L.C. and Kanbay Investment L.L.C. each
have a valid security entitlement in respect of, the Shares to be sold by
each of them free and clear of all security interests, claims, liens,
equities and other encumbrances; Kanbay Acquisition L.L.C. and Kanbay
Investment L.L.C. each have full legal right and power, and each have
obtained any authorization or approval required by New York law (other than
those imposed by the Act and the securities or blue sky laws of New York),
to sell, assign, transfer and deliver the Shares to be sold by each of them
or a security entitlement in respect of such Shares in the manner provided
in this Agreement;
(iii) delivery of stock certificates representing the Shares to
be sold by each of Kanbay Acquisition L.L.C. and Kanbay Investment L.L.C.,
endorsed to the Underwriters, and payment therefor pursuant to this
Agreement will pass valid title to such Shares, free and clear of any
adverse claim within the meaning of Section 8-102 of the Uniform Commercial
Code of New York, to each Underwriter who has purchased such Shares without
notice of an adverse claim; and
- 26 -
(iv) the Power of Attorney constitutes the valid and binding
agreement of each of Kanbay Acquisition L.L.C. and Kanbay Investment
L.L.C., enforceable against such party in accordance with its terms.
(g) You shall have received from Ernst & Young LLP letters dated,
respectively, the date of this Agreement, the time of purchase and, if
applicable, the additional time of purchase, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the
forms heretofore approved by UBS.
(h) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxx Xxxx &
Xxxxxxxx, counsel for the Underwriters, dated the time of purchase or the
additional time of purchase, as the case may be, with respect to such
matters as may be reasonably requested by the Underwriters.
(i) No Prospectus or amendment or supplement to the Registration
Statement or the Prospectus shall have been filed to which you object in
writing.
(j) The Registration Statement shall become effective not later than
5:30 P.M. New York City time, on the date of this Agreement and, if Rule
430A under the Act is used, the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act at or before 5:30 P.M.,
New York City time, on the second full business day after the date of this
Agreement and any registration statement pursuant to Rule 462(b) under the
Act required in connection with the offering and sale of the Shares shall
have been filed and become effective no later than 10:00 p.m., New York
City time, on the date of this Agreement.
(k) Prior to the time of purchase, and, if applicable, the additional
time of purchase, (i) no stop order with respect to the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto shall not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and (iii) the Prospectus and all amendments or supplements
thereto shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
are made, not misleading.
(l) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, no
material adverse change or any development involving a prospective material
adverse change in the business, properties, management, financial condition
or results of operations of the Company and the Subsidiaries taken as a
whole shall occur or become known.
(m) (i) The Company will, at the time of purchase and, if applicable,
at the additional time of purchase, deliver to you a certificate of its
Chief Executive Officer and its Chief Financial Officer in the form
attached as Exhibit B-1 hereto; and (ii) Kanbay India will,
- 27 -
at the time of purchase and, if applicable, at the additional time of
purchase, deliver to you a certificate of an officer of Kanbay India in the
form attached as Exhibit B-2 hereto.
(n) You shall have received signed Lock-up agreements referred to in
Section 3(r) hereof.
(o) The Company and the Selling Stockholders shall have furnished to
you such other documents and certificates as of the time of purchase and,
if applicable, the additional time of purchase, as you may reasonably
request.
(p) The Shares shall have been approved for quotation on NASDAQ,
subject only to notice of issuance at or prior to the time of purchase or
the additional time of purchase, as the case may be.
(q) The Company shall furnish to you executed copies of any waiver or
consent required under any agreement which would otherwise give any person
(i) any preemptive rights, resale rights, rights of first refusal or other
rights to purchase any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company or (ii) the right,
contractual or otherwise, to cause the Company to register under the Act
any shares of Common Stock or shares of any other capital stock or other
equity interests of the Company, or to include any such shares or interests
in the Registration Statement or the offering contemplated thereby, whether
as a result of the filing or effectiveness of the Registration Statement or
the sale of the Shares as contemplated thereby or otherwise.
(r) The Other Selling Stockholders will at the time of purchase and
the additional time of purchase, as the case may be, deliver to you
certificates of the Representatives on behalf of the Other Selling
Stockholders to the effect that the representations and warranties of the
Other Selling Stockholders as set forth in this Agreement are true and
correct as of each such date.
(s) HIFI will at the time of purchase deliver to you a certificate to
the effect that its representations and warranties as set forth in this
Agreement are true and correct as of such date.
10. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of UBS or any group of Underwriters
(which may include UBS) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if (x) since the time of execution of this Agreement or
the earlier respective dates as of which information is given in the
Registration Statement and the Prospectus, there has been any material adverse
change or any development involving a prospective material adverse change in the
business, properties, management, financial
- 28 -
condition or results of operations of the Company and the Subsidiaries taken as
a whole, which would, in UBS' judgment or in the judgment of such group of
Underwriters, make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus, or (y) since the
time of execution of this Agreement, there shall have occurred: (i) a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or NASDAQ; (ii) a suspension or material
limitation in trading in the Company's securities on NASDAQ; (iii) a general
moratorium on commercial banking activities declared by either federal or New
York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) an
outbreak or escalation of hostilities or acts of terrorism involving the United
States or a declaration by the United States of a national emergency or war; or
(v) any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in UBS' judgment or in the judgment of
such group of Underwriters makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus.
If UBS or any group of Underwriters elects to terminate this Agreement
as provided in this Section 10, the Company, HIFI, the Representatives of the
Other Selling Stockholders and each other Underwriter shall be notified promptly
in writing.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company or the
Selling Stockholders, as the case may be, shall be unable to comply with any of
the terms of this Agreement, the Company or the Selling Stockholders, as the
case may be, shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 7, 8 and 12 hereof), and the
Underwriters shall be under no obligation or liability to the Company and the
Selling Stockholders under this Agreement (except to the extent provided in
Section 13 hereof) or to one another hereunder.
11. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections 9 and 10
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 9 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 10
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm Shares set forth opposite the names of such
non-defaulting Underwriters in Schedule A.
- 29 -
Without relieving any defaulting Underwriter from its obligations
hereunder, each of the Selling Stockholders agrees with the non-defaulting
Underwriters that it will not sell any Firm Shares hereunder unless all of the
Firm Shares are purchased by the Underwriters (or by substituted Underwriters
selected by you with the approval of the Company or selected by the Company with
your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 11 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph, and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
12. INDEMNITY AND CONTRIBUTION.
(a) (1) The Company agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, any such Underwriter or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this
Section 12 being deemed to include any Preliminary Prospectus, the
Prospectus and the Prospectus as amended or supplemented by the Company),
or arises out of or is based upon any omission or alleged omission to state
a material fact required to be stated in either such Registration Statement
or such Prospectus or necessary to make the statements made therein not
misleading, except (A) insofar as any such loss, damage, expense, liability
or claim arises out of or is based upon any untrue statement or
- 30 -
alleged untrue statement of a material fact contained in and in conformity
with information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in
such Registration Statement or such Prospectus or arises out of or is based
upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading, and (B) insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or
arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated in a Preliminary Prospectus or
necessary to make the statements made therein not misleading, the indemnity
in this Section 12(a) shall not inure to the benefit of any Underwriter
from whom the person asserting any such loss, damage, expense, liability or
claim purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented) was timely
furnished by the Company to such Underwriter and the Prospectus (as so
amended or supplemented) was not sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of the
sale of the Shares to such person and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, damage,
expense, liability or claim, (ii) any material breach of any representation
and warranty made by the Company in Section 3 hereof or the failure by the
Company to perform in all material respects when and as required any
agreement or covenant of the Company contained herein or (iii) any untrue
statement or alleged untrue statement of a material fact contained in any
audio or visual materials provided by the Company or approved by the
Company, including, without limitation, slides, videos, films or tape
recordings, and used in connection with the marketing of the Shares.
The Company agrees to indemnify, defend and hold harmless each Selling
Stockholder, its partners, directors and officers, and any person who
controls any Selling Stockholder within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns of
all of the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, any such Selling Stockholder or any such person may
incur under the Act, the Exchange Act, the common law or otherwise, insofar
as such loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement
as amended by any post effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the
statements made therein not misleading, except insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained
in and in conformity with information concerning such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder to the
Company expressly for use in such Registration Statement or such Prospectus
or arises out of or is based upon any omission or alleged omission to state
a
- 31 -
material fact in connection with such information required to be stated in
such Registration Statement or such Prospectus or necessary to make such
information not misleading.
(2) HIFI severally agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any person
who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons, from and against any loss, damage,
expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or
any such person may incur under the Act, the Exchange Act, the common
law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post
effective amendment thereof by the Company) or in a Prospectus, or
arises out of or is based upon any omission or alleged omission to
state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the
statements made therein not misleading, except (A) insofar as any such
loss, damage, expense liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material
fact contained in and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in such Registration
Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection
with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading, (B) insofar as any such loss, damage, expense, liability
or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus or arises out of or is based upon any omission
or alleged omission to state a material fact required to be stated in
a Preliminary Prospectus or necessary to make the statements made
therein not misleading, the indemnity in this Section 12(a)(2) shall
not inure to the benefit of any Underwriter from whom the person
asserting any such loss, damage, expense, liability or claim purchased
Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented) was timely furnished by
the Company to such Underwriter and the Prospectus (as so amended or
supplemented) was not sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of
the sale of the Shares to such person and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to
such loss, damage, expense, liability or claim, (C) HIFI shall be
obligated to indemnify the Underwriters and any person controlling
each Underwriter pursuant to this Section 12(a)(2) only if the
indemnification of such persons by the Company pursuant to Section
12(a)(1) is insufficient to compensate such parties from and against
such losses, damages, expenses, liabilities and claims and (D) in any
event, HIFI shall not be responsible, either pursuant to this
indemnity or other provisions of this Section 12 or as a result of any
breach of this Agreement, for losses, damages, expenses, liability
- 32 -
or claims for an amount in excess of the net proceeds received by HIFI
from the sale of Shares hereunder.
(3) Each Selling Stockholder (other than HIFI whose indemnity
shall be covered by the preceding paragraph) severally agrees to
indemnify, defend and hold harmless each Underwriter, its partners,
directors and officers, and any person who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the Company, its directors and officers and any
person who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons, from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter, the
Company or any such person may incur under the Act, the Exchange Act,
the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
and in conformity with information concerning such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder to
the Company expressly for use in the Registration Statement (or in the
Registration Statement as amended by any post effective amendment
thereof by the Company) or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact
in connection with such information required to be stated in either
such Registration Statement or such Prospectus or necessary to make
such information not misleading, except (A) insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in such Registration
Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection
with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading, (B) insofar as any such loss, damage, expense, liability
or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus or arises out of or is based upon any omission
or alleged omission to state a material fact required to be stated in
a Preliminary Prospectus or necessary to make the statements made
therein not misleading, the indemnity in this Section 12(a)(3) shall
not inure to the benefit of any Underwriter from whom the person
asserting any such loss, damage, expense, liability or claim purchased
Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented) was timely furnished by
the Company to such Underwriter and the Prospectus (as so amended or
supplemented) was not sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of
the sale of the Shares to such person and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to
such loss, damage, expense, liability or claim, and (C) in any event,
no Selling Stockholder shall
- 33 -
be responsible, either pursuant to this indemnity or other provisions
of this Section 12 or as a result of any breach of this Agreement
(including in connection with clause (ii) below), for losses, damages,
expenses, liability or claims for an amount in excess of the net
proceeds received by such Selling Stockholder from the sale of Shares
hereunder or (ii) any material breach of any representation and
warranty made by such Selling Stockholder in Section 4 hereof or the
failure by such Selling Stockholder to perform in all material
respects when and as required any agreement or covenant of such
Selling Stockholder contained herein. For purposes of Sections 3, 4(g)
and 12(a)(3)(i) above, the statements set forth in paragraph (3) and
the principal and selling stockholder table under the caption
"Principal and Selling Stockholders" in the Prospectus constitute the
only information furnished by or on behalf of the Selling Stockholders
as such information is referred to in such sections.
(4) If any action, suit or proceeding (each, a "PROCEEDING") is
brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company or any Selling Stockholder
pursuant to one of the foregoing paragraphs, such Underwriter or such
person shall promptly notify the Company, HIFI and the Representatives
of the Other Selling Stockholders in writing of the institution of
such Proceeding and the Company or such Selling Stockholder, as the
case may be, shall assume the defense of such Proceeding, including
the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; PROVIDED, HOWEVER, that
the omission to so notify the Company, HIFI or the Representatives of
the Other Selling Stockholders shall not relieve the Company or such
Selling Stockholder from any liability which the Company or such
Selling Stockholder may have to any Underwriter or any such person or
otherwise, except to the extent the Company or such Selling
Stockholder is materially prejudiced by such omission. Such
Underwriter or such person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or of such person
unless the employment of such counsel shall have been authorized in
writing by the Company or such Selling Stockholder in connection with
the defense of such Proceeding or the Company or such Selling
Stockholder shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to defend such Proceeding
or such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different
from, additional to or in conflict with those available to the Company
or such Selling Stockholder (in which case the Company or such Selling
Stockholder shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties, but the
Company or such Selling Stockholder may employ counsel and participate
in the defense thereof but the fees and expenses of such counsel shall
be at the expense of the Company or such Selling Stockholder), in any
of which events such fees and expenses shall be borne by the Company
or such Selling Stockholder and paid as incurred (it being understood,
however, that the Company or such Selling Stockholder shall not be
liable for the expenses of more than one separate counsel (in addition
to
- 34 -
any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). The Company or such
Selling Stockholder shall not be liable for any settlement of any
Proceeding effected without its written consent but if settled with
the written consent of the Company or such Selling Stockholder, the
Company or such Selling Stockholder agrees to indemnify and hold
harmless any Underwriter and any such person from and against any loss
or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second sentence of
this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its
written consent if (i) such settlement is entered into more than 60
business days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have fully
reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall
have given the indemnifying party at least 30 days' prior notice of
its intention to settle. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement
of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault, culpability or
a failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and each Selling Stockholder, its partners,
directors and officers, and any person who controls any Selling Stockholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, and the successors and assigns of all of the foregoing persons, from
and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company,
any such Selling Stockholder or any such person may incur under the Act,
the Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained
in and in conformity with information concerning such Underwriter furnished
in writing by or on behalf of such Underwriter through you to the Company
expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading.
- 35 -
If any Proceeding is brought against the Company, any Selling
Stockholder or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Company,
any Selling Stockholder or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; PROVIDED, HOWEVER, that the omission to
so notify such Underwriter shall not relieve such Underwriter from any
liability which such Underwriter may have to the Company, any Selling
Stockholder or any such person or otherwise, except to the extent such
Underwriter is materially prejudiced by such omission. The Company, any
Selling Stockholder or such person shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of the Company, any Selling Stockholder or such person
unless the employment of such counsel shall have been authorized in writing
by such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to defend such Proceeding or
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to or in conflict with those available to such Underwriter (in
which case such Underwriter shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties, but such
Underwriter may employ counsel and participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne
by such Underwriter and paid as incurred (it being understood, however,
that such Underwriter shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding
or series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No Underwriter
shall be liable for any settlement of any such Proceeding effected without
the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Company, any Selling Stockholder and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for
any settlement of any Proceeding effected without its written consent if
(i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii)
such indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such Proceeding and does
not include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
- 36 -
(c) If the indemnification provided for in this Section 12 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 12 or insufficient to hold an indemnified party harmless in respect
of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above 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 and the Selling
Stockholders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
shall be deemed to be in the same respective proportions as the total
proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and the Selling
Stockholders and the total underwriting discounts and commissions received
by the Underwriters bear to the aggregate public offering price of the
Shares. The relative fault of the Company and the Selling Stockholders on
the one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission relates
to information supplied by the Company and/or the Selling Stockholders or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 12 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 that does not take account of the equitable considerations
referred to in subsection (c) above. Notwithstanding the provisions of this
Section 12, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by such Underwriter and distributed to the public were offered
to the public exceeds the amount of any damage which such Underwriter has
otherwise been required to pay by reason of such untrue statement or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 12 are several in proportion to their
respective underwriting commitments and not joint.
- 37 -
(e) The indemnity and contribution agreements contained in this
Section 12 and the covenants, warranties and representations of the Company
and the Selling Stockholders contained in this Agreement shall remain in
full force and effect regardless of any investigation made by or on behalf
of any Underwriter, its partners, directors or officers, or any person
(including each partner, officer or director of such person) who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, or by or on behalf of the Company, its directors or
officers or any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf
of any Selling Stockholder, its partners, directors and officers, and any
person who controls any Selling Stockholder within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares.
The Company, each of the Selling Stockholders and each Underwriter agree
promptly to notify each other of the commencement of any Proceeding against
it and, in the case of the Company or the Selling Stockholders, against any
of the Company's or any of the Selling Stockholders' officers or directors,
as the case may be, in connection with the issuance and sale of the Shares,
or in connection with the Registration Statement or the Prospectus.
13. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth in
the last paragraph on the cover page of the Prospectus, the statements set forth
in the paragraphs under the caption "Underwriting - Commissions and Discounts"
in the Prospectus and the statements set forth in the paragraphs under the
caption "Underwriting - Price Stabilization, Short Positions" in the Prospectus
constitute the only information furnished by or on behalf of the Underwriters as
such information is referred to in Sections 3 and 12 hereof.
14. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at Kanbay
International, Inc., 0000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxxx, Esq.; and if to the Selling Stockholders, shall
be sufficient in all respects if delivered or sent to the Representatives of the
Other Selling Stockholders at Kanbay International, Inc., 0000 Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Esq. and
Xxxxxxx X. Xxxxxxxx, and to HIFI at Household International, 0000 Xxxxxxx Xxxx,
Xxxxxxxx Xxxxxxx, XX 00000, Attention: Xxxxxxx X. Xxxxx, Esq.
15. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("CLAIM"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
- 38 -
16. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company and each of the Selling Stockholders hereby consent to
personal jurisdiction, service and venue in any court in which any Claim arising
out of or in any way relating to this Agreement is brought by any third party
against UBS or any indemnified party. Each of UBS, the Selling Stockholders and
the Company (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) waives all right to trial by jury in
any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company
and each of the Selling Stockholders agree that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive
and binding upon such party and may be enforced in any other courts to the
jurisdiction of which such party is or may be subject, by suit upon such
judgment.
17. PARTIES AT INTEREST. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Selling Stockholders and
the Company and to the extent provided in Section 12 hereof the controlling
persons, partners, directors and officers referred to in such section, and their
respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
18. COUNTERPARTS. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
19. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters, each of the Selling Stockholders and the Company and their
successors and assigns and any successor or assign of any substantial portion of
the Company's, any of the Selling Stockholders', and any of the Underwriters'
respective businesses and/or assets.
20. MISCELLANEOUS. UBS, an indirect, wholly owned subsidiary of UBS AG, is
not a bank and is separate from any affiliated bank, including any U.S. branch
or agency of UBS AG. Because UBS is a separately incorporated entity, it is
solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
- 39 -
If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholders and the several Underwriters, please so
indicate in the space provided below for that purpose, whereupon this agreement
and your acceptance shall constitute a binding agreement among the Company, the
Selling Stockholders and the Underwriters, severally.
Very truly yours,
KANBAY INTERNATIONAL, INC.
By:
-------------------------------------
Title:
HOUSEHOLD INVESTMENT FUNDING, INC.
By:
-------------------------------------
Title:
THE SELLING STOCKHOLDERS NAMED IN
SCHEDULE B ATTACHED HERETO (OTHER THAN
HOUSEHOLD INVESTMENT FUNDING, INC.)
By:
-------------------------------------
Attorney-in-Fact
- 40 -
Accepted and agreed to as of the
date first above written, on
behalf of themselves and the
other several Underwriters
named in Schedule A
UBS SECURITIES LLC
XXXXXX X. XXXXX & CO. INCORPORATED
XXXXXX XXXXXXXXXX XXXXX LLC
By: UBS SECURITIES LLC
By:
-------------------------------------
Title:
By:
-------------------------------------
Title:
SCHEDULE A
----------
Underwriter Firm Shares
----------- -----------
UBS SECURITIES LLC __
XXXXXX X. XXXXX & CO. INCORPORATED __
XXXXXX XXXXXXXXXX XXXXX LLC __
-----------
Total........ __
SCHEDULE B
----------
Firm Shares Additional Shares
----------- -----------------
Total........
SCHEDULE C-1
------------
Percentage
Subsidiaries Owned Jurisdiction
------------ ---------- ------------
Kanbay Incorporated 100% Illinois
Kanbay (Japan) Incorporated 100% Illinois
Kanbay (Singapore) Pte Ltd. 100% Singapore
Kanbay Limited 100% Bermuda
Kanbay (Asia) Limited 99.9% Mauritius
Kanbay Software (India) Private Limited 99.9% India
Kanbay Europe Ltd. 100% UK
Kanbay (HK) Ltd. 99.9% Hong Kong
Kanbay Australia Pty Ltd 100% Australia
Kanbay Pty Ltd 100% Australia
Kanbay Managed Solutions, Inc. 80% Illinois
Kanbay Managed Solutions Canada, Inc. 80% Canada
Kanbay Global Services, Inc. 100% Illinois
Kanbay Canada Inc. 100% Canada
SCHEDULE C-2
------------
Percentage Of
Equity Investments Equity Owned Jurisdiction
------------------ -------------- ------------
SSS Holding Corporation Ltd 48% UK
Strategic Systems Solutions Ltd 48% UK
Strategic Investments Solutions Ltd 24% UK
Strategic Training Solutions Ltd 48% UK
Strategic Systems Inc 48% South Carolina
Monocle 11.04% UK
Strategic Back-Office Solutions Ltd. 36% UK
Strategic Resourcing Solutions Ltd 50% UK
Principal
Debt Investments Security Amount Owned
---------------- -------- ------------
General Datacon Industries, Inc. 10% Adjustable Senior $119,606.92
Subordinated Debentures
Due 2008
SCHEDULE D
----------
Xxxx Xxxxxxx Perpetual Trust
Xxxxxxx Xxxx Sung Tak
Xxxxxxx X. Xxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx Perpetual Trust
Xxxxx Xxxxxxx Perpetual Trust
Xxxxxx & Xxxxxxxx LLC
Xxxxxx X. Xxxxxx
Xxxxxx Mck. Xxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxx
X. Xxxxx Xxxxxxx
Xxxxxxxx X. Xxxxx Family Trust
Kanbay Acquisition LLC (and members to be agreed upon)
Kanbay Investment LLC (and members to be agreed upon)
Kausani Trust
Kismet Exports & Investments Private Limited
Xxxxxx Xxxxxxx
Xxxxxxxx X. Xxxxx
Annapurna Investments Limited
Xxxxxxxxxxx Xxxxxxxxxxxx
Silicon Valley Bancshares
Xxxxx Xxxxxxx Perpetual Trust
Xxx Xxxxxxxxx
Xxxxxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxx Xxxxxxx
Xxxxx Xxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx Xxxxxxxx
SCHEDULE E
----------
U.S. FOREIGN JURISDICTION
COMPANY/U.S. SUBSIDIARIES QUALIFICATIONS
------------------------- -------------------------
Xxxxxx International, Inc. None
Kanbay Incorporated Oregon
Texas
Washington
California
New York
Missouri
Kanbay (Japan) Incorporated None
Kanbay Managed Solutions, Inc. None
Xxxxxx Global Services, Inc. None
SCHEDULE F
----------
The Company owns 80% of the issued and outstanding capital stock of Kanbay
Managed Solutions, Inc. ("KMS"). The remainder of the capital stock of KMS is
held by Xxxxxx Xxxxx.
EXHIBIT A
---------
Kanbay International, Inc.
Common Stock
($0.001 Par Value)
___________, 2004
UBS Securities LLC
Xxxxxx X. Xxxxx & Co. Incorporated
Xxxxxx Xxxxxxxxxx Xxxxx LLC
As Representatives of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed
Underwriting Agreement (the "
UNDERWRITING AGREEMENT") to be
entered into by Kanbay International, Inc. (the "COMPANY") and you, as
Representatives of the several Underwriters named therein, with respect to the
offering (the "OFFERING") of common stock, par value $0.001 per share, of the
Company (the "COMMON STOCK").
In order to induce you to enter into the
Underwriting Agreement, the
undersigned agrees that for a period beginning the date of the final prospectus
relating to the Offering and ending 90 days after such date the undersigned will
not, without the prior written consent of UBS Securities LLC ("UBS"), (i) sell,
offer to sell, contract or agree to sell, hypothecate, pledge, grant any option
to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, or file (or participate in the filing of) a registration statement
with the Securities and Exchange Commission (the "COMMISSION") in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder with respect to, any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or warrants or
other rights to purchase Common Stock, (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock, whether any such transaction is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise, or (iii)
publicly announce an intention to effect any transaction specified in clause (i)
or (ii). The foregoing sentence shall not apply to (a) the registration of or
sale to the Underwriters of any Common Stock
- 2 -
pursuant to the Offering and the
Underwriting Agreement, (b) bona fide gifts,
provided the recipient thereof agrees in writing with the Underwriters to be
bound by the terms of this Lock-Up Letter Agreement, (c) dispositions to any
trust for the direct or indirect benefit of the undersigned and/or the immediate
family of the undersigned, provided that such trust agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Letter Agreement, or (d)
the transfer or any shares of Common Stock by the undersigned to any affiliate
or, if the undersigned is a limited partnership or limited liability company,
the transfer of any shares of Common Stock by the undersigned to any limited or
general partner or member of the undersigned, provided that such transferee
agrees in writing with the Underwriters to be bound by the terms of this Lock-Up
Letter Agreement.
For the avoidance of doubt, it is understood that nothing in this
Lock-Up Letter Agreement shall be construed to restrict the undersigned's right
to exercise options disclosed as outstanding in the Registration Statement and
the Prospectus (each as defined in the
Underwriting Agreement) exercisable for
Common Stock, it being further understood that such Common Stock shall be
subject to the provisions of this Lock-Up Letter Agreement.
In addition, the undersigned hereby waives any rights the undersigned
may have to require registration of Common Stock in connection with the filing
of a registration statement relating to the Offering. The undersigned further
agrees that, for a period of 90 days after the date of the final prospectus
relating to the Offering, the undersigned will not, without the prior written
consent of UBS, make any demand for, or exercise any right with respect to, the
registration of Common Stock of the Company or any securities convertible into
or exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock.
If (i) during the period that begins on the date that is 15 calendar
days plus 3 business days before the last day of the 90-day restricted period
and ends on the last day 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 (ii) prior to the expiration of the 90-day restricted period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 90-day period, the restrictions imposed by this
letter shall continue to apply until the expiration of the date that is 15
calendar days plus 3 business days after the date on which the issuance of the
earnings release or the material news or material event occurs.
- 3 -
If (i) the Company notifies you in writing that it does not intend to
proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) for any reason the
Underwriting Agreement shall be terminated prior to the
time of purchase (as defined in the
Underwriting Agreement), this Lock-Up Letter
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder.
Yours very truly,
----------------------------------------
Name:
EXHIBIT B-1
-----------
Officers' Certificate
---------------------
Each of Xxxxxxx X. Xxxxxxx, Chief Executive Officer, and Xxxxxxx X.
Xxxxxxxx, Vice President and Chief Financial Officer, of Kanbay International,
Inc., a Delaware corporation (the "COMPANY"), do hereby certify on behalf of the
Company as follows:
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Company as set forth in this
Agreement are true and correct as of the time of purchase and, if
applicable, the additional time of purchase.
3. The Company has performed all of its obligations under this Agreement as
are to be performed at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (j) and (k) of Section 9 of this
Agreement have been met.
5. The financial statements and other financial information included in the
Registration Statement and the Prospectus fairly present in all material
respects the financial condition, results of operations, and cash flows of
the Company as of, and for, the periods presented in the Registration
Statement.
IN WITNESS WHEREOF, I have signed this certificate on behalf of the
Company.
Dated: _____________, 2004
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President and Chief
Financial Officer
EXHIBIT B-2
-----------
Officers' Certificate
---------------------
I, Xxxxxxx X'Xxxxx, Jt. Managing Director, of Kanbay Software (India)
Private Limited, a limited liability company incorporated under the laws of the
Republic of India ("KANBAY INDIA"), do hereby certify on behalf of Kanbay India
as follows:
1. I have reviewed the Registration Statement, the Prospectus and the opinion
(the "OPINION") of P&A Law Offices provided pursuant to Section 9(c) of
this Agreement.
2. The orders, decrees, written agreements and instruments identified in the
relevant exhibit to the Opinion are all of the orders, decrees, agreements
and instruments that are material to Kanbay India.
3. The legal proceedings identified in the relevant exhibit to the Opinion are
all legal proceedings to which Kanbay India is a party or to which any
property of Kanbay India is subject.
IN WITNESS WHEREOF, I have signed this certificate on behalf of Kanbay
India.
Dated: _____________, 2004
----------------------------------------
Name: Xxxxxxx X'Xxxxx
Title: Jt. Managing Director
