Exhibit 1.1
STRIDE & ASSOCIATES, INC.
4,350,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
June __, 0000
XXXXXXXXX & XXXXX LLC
BANCBOSTON XXXXXXXXX XXXXXXXX
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Stride & Associates, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell 4,350,000 shares (the "Company Shares") of its authorized but
unissued Common Stock, $0.01 par value per share (the "Common Stock") (said
4,350,000 shares of Common Stock being herein called the "Underwritten Stock").
The Company proposes to grant to the Underwriters (as hereinafter defined) an
option to purchase up to 652,500 additional shares of Common Stock (herein
called the "Option Stock" and, together with the Underwritten Stock, the
"Stock"). The Common Stock is more fully described in the Registration Statement
and the Prospectus hereinafter mentioned.
The Company hereby confirms the agreements made with respect to the purchase
of the Stock by the several underwriters, for whom you are acting, named in
SCHEDULE I hereto (herein collectively called the "Underwriters," which term
shall also include any underwriter purchasing Stock pursuant to Section 3(b)
hereof). Xxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxx Xxxxxxxx and Xxxxxxx Xxxxxxxxx (each
a "Founder" and collectively the "Founders"), hereby make representations and
warranties pursuant to Section 2(b) hereof and are subject to Sections 7 and
11 hereof. Certain investment funds affiliated with Summit Partners, named in
SCHEDULE II hereto (herein collectively called "Summit Partners"), hereby make
representations and warranties pursuant to Section 2(b) hereof and are subject
to Sections 7 and
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(1) Plus an option to purchase from the Company up to 652,500 additional
shares to cover over-allotments, if any.
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11 hereof. You represent and warrant that you have been authorized by each of
the other Underwriters to enter into this Agreement on its behalf and to act for
it in the manner herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1 (No.
333-75301), including the related preliminary prospectus, for the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of the
Stock. Copies of such registration statement and of each amendment thereto, if
any, including the related preliminary prospectus (meeting the requirements of
Rule 430A of the rules and regulations of the Commission (the "Rules and
Regulations")) heretofore filed by the Company with the Commission have been
delivered to you.
The term Registration Statement as used in this agreement shall mean such
registration statement, including all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations with respect to the Stock (a "Rule 462(b) registration statement"),
and, in the event of any amendment thereto after the effective date of such
registration statement (the "Effective Date"), shall also mean (from and after
the effectiveness of such amendment) such registration statement as so amended
(including any Rule 462(b) registration statement). The term Prospectus as used
in this Agreement shall mean the prospectus relating to the Stock first filed
with the Commission pursuant to Rule 424(b) and Rule 430A (or if no such filing
is required, as included in the Registration Statement) and, in the event of any
supplement or amendment to such prospectus after the Effective Date, shall also
mean (from and after the filing with the Commission of such supplement or the
effectiveness of such amendment) such prospectus as so supplemented or amended.
The term Preliminary Prospectus as used in this Agreement shall mean each
preliminary prospectus included in such registration statement prior to the time
it becomes effective.
The Registration Statement has been declared effective under the Securities
Act, and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The Company has caused to be delivered
to you copies of the Preliminary Prospectus and has consented to the use of such
copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY, THE FOUNDERS AND
SUMMIT PARTNERS.
(a) The Company hereby represents and warrants as follows:
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(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement and the Prospectus and as being conducted, and is duly qualified
as a foreign corporation and in good standing in all jurisdictions in which
the character of the property owned or leased or the nature of the business
transacted by it makes qualification necessary (except where the failure to
be so qualified would not have a material adverse effect on the business,
properties, financial condition or results of operations of the Company (as
defined in subparagraph (iv) below), taken as a whole) (a "Material Adverse
Effect"). The Company is in compliance with all authorizations, licenses,
certificates, consents, orders and permits from foreign, federal, state and
other regulatory authorities, except when the failure to be in compliance
would not have a Material Adverse Effect. The Company is not in violation of
its charter or bylaws, each as amended to date, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any bond, debenture, note or other evidence of
indebtedness, or in any lease, contract, indenture, mortgage, deed of trust,
loan agreement, joint venture or other agreement or instrument to which the
Company is a party or by which the Company, or its properties may be bound;
and the Company is not in violation of any law, order, rule, regulation,
writ, injunction, judgment or decree of any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over
the Company, or over its respective properties; except for any such
violations or defaults which, individually or in the aggregate, would not
have a Material Adverse Effect.
(ii) The Registration Statement and the Prospectus comply, and on
the Closing Date (as hereinafter defined) and any later date on which Option
Stock is to be purchased, the Prospectus will comply, in all material
respects, with the provisions of the Securities Act and the Rules and
Regulations; on the Effective Date, the Registration Statement did not
contain any untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, on the Effective Date the
Prospectus did not and, on the Closing Date and any later date on which
Option Stock is to be purchased, will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that none of the
representations and warranties in this subparagraph (ii) shall apply to
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon and in conformity with information herein
or otherwise furnished in writing to the Company by or on behalf of the
Underwriters for use in the Registration Statement or the Prospectus.
(iii) The Stock is duly and validly authorized, and when issued and
sold to the
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Underwriters as provided herein will be duly and validly issued, fully paid
and nonassessable and conforms to the description thereof in the Prospectus
and will be sold free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest; and no preemptive right, co-sale
right, registration right, right of first refusal or other similar right of
stockholders exists with respect to any of the Company Shares or the
issuance and sale thereof, except for certain agreements between Summit
Partners and the Company, the provisions of which have been effectively
waived. No further approval or authority of the stockholders or the Board of
Directors of the Company will be required for the issuance and sale of the
Stock by the Company as contemplated herein.
(iv) The Company has all requisite corporate, power and authority
to enter into this Agreement and perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement on the part of the Company,
enforceable in accordance with its terms, except as rights to
indemnification and contribution hereunder may be limited by applicable law
and except as enforcement hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles
whether considered in a proceeding at law or in equity. The performance of
this Agreement and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, (i) any bond, debenture, note or other
evidence of indebtedness, or under any lease, contract, indenture, mortgage,
deed of trust, loan agreement, joint venture or other agreement or
instrument to which the Company is a party or by which the Company, or any
of its properties may be bound, (ii) the charter or bylaws of the Company,
each as amended to date, or (iii) any law, order, rule, regulation, writ,
injunction, judgment or decree of any court, government or governmental
agency or body, domestic or foreign, having jurisdiction over the Company,
or any of its properties; except for any such breaches, violations or
defaults which, individually or in the aggregate, would not have a Material
Adverse Effect. No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company, or any of its
properties is required for the execution and delivery of this Agreement and
the consummation by the Company of the transactions herein contemplated,
except such as may be required under the Securities Act or under state or
other securities or Blue Sky laws, all of which requirements under the
Securities Act have been satisfied.
(v) There is not pending or, to the Company's knowledge,
threatened, any action, suit, claim or proceeding against the Company or its
directors, officers or properties, before any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over
the Company or over its directors, officers or properties, which (i) if
adversely decided would have a Material Adverse Effect, (ii) if adversely
decided
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would prevent consummation of the transactions contemplated hereby or (iii)
is required to be disclosed in the Registration Statement or Prospectus and
is not so disclosed; and there are no agreements, contracts, leases or
documents of the Company required to be described or referred to in the
Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement by the Securities Act or the Rules and Regulations
which have not been fully and accurately described or filed.
(vi) All issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities,
and the authorized and outstanding capital stock of the Company is as set
forth in the Prospectus under the caption "Capitalization" and conforms in
all material respects to the statements relating thereto contained in the
Registration Statement and the Prospectus (and such statements correctly
state the substance of the instruments defining the capitalization of the
Company). Except as disclosed in the Prospectus or in the financial
statements of the Company and the related notes thereto included in the
Prospectus, the Company has no outstanding options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments
to issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's
stock option, stock bonus and other stock plans or arrangements, and the
options or other rights granted or to be granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(vii) Deloitte & Touche LLP, which has examined the consolidated
financial statements of the Company, together with the related schedules and
notes thereto, as of and for each of the years ended December 31, 1995,
1996, 1997 and 1998 (collectively, the "Financial Statements"), filed with
the Commission as a part of the Registration Statement, which are included
in the Prospectus, are independent accountants within the meaning of the
Securities Act and the Rules and Regulations; the audited consolidated
financial statements of the Company, together with the related schedules and
notes, and the unaudited consolidated financial information, forming part of
the Registration Statement and Prospectus, fairly present the consolidated
financial position and the results of operations of the Company at the
respective dates and for the respective periods to which they apply; and all
audited consolidated financial statements of the Company, together with the
related schedules and notes thereto, and the unaudited consolidated
financial information, filed with the Commission as part of the Registration
Statement, have been prepared in accordance with U.S. generally accepted
accounting principles ("GAAP") consistently applied throughout the periods
involved except as may be otherwise stated therein. Except as and to the
extent (a) reflected and reserved against at
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September 30, 1998 in the Financial Statements or (b) incurred in the
ordinary course of business after September 30, 1998 and not material in
amount, the Company has no liability or obligation, secured or unsecured,
whether accrued, absolute, contingent, unasserted or otherwise, which is
material to the Company. The selected and summary financial and statistical
data included in the Registration Statement accurately and fairly present
the information shown therein and have been compiled on a basis consistent
with the audited financial statements presented therein. No other financial
statements or schedules are required to be included in the Registration
Statement.
(viii) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus and except as
otherwise disclosed therein, there has not been (i) any material adverse
change in the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company, (ii) any transaction that is
material to the Company, or (iii) any loss or damage (whether or not
insured) to the property of the Company which has been sustained or will
have been sustained which has had, or could result in, a Material Adverse
Effect.
(ix) Except as set forth in the Registration Statement and
Prospectus, (i) the Company has valid title to all properties and assets
described in the Registration Statement and Prospectus as owned by the
Company, free and clear of any material pledge, lien, security interest,
encumbrance, claim or equitable interest, other than such as would not have
a Material Adverse Effect and as reflected in the Financial Statements, (ii)
the agreements to which the Company is a party described in the Registration
Statement and Prospectus are valid agreements, enforceable against the
Company and to the Company's knowledge, by the Company against the other
parties thereto, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles, and, to the Company's knowledge, the other contracting party or
parties thereto are not in breach or default in any material respect under
any of such agreements, and (iii) the Company has valid and enforceable
leases for all properties described in the Registration Statement and
Prospectus as leased by it, except as enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles. Except as set forth in the Registration
Statement and Prospectus, the Company owns or leases all such properties as
are necessary to its operations as now conducted. The description of the
Company's properties contained in the Prospectus is true and complete in all
material respects. Except as otherwise disclosed in the Prospectus, no
officer, director, stockholder or employee of the Company, nor any spouse,
child or other relative or affiliate thereof, owns directly or indirectly,
in whole or in part, any of the properties or assets of the Company.
(x) The general ledgers and books of account of the Company have
been
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maintained in accordance with good business practice and in accordance with
all applicable procedures required by laws and regulations.
(xi) The Company has timely filed all Tax Returns (as defined
below) that it was required to file, and all such Tax Returns were complete
and accurate in all material respects. The Company has paid on a timely
basis all Taxes (as defined below) that were due and payable. All accrued
but unpaid tax liabilities have been adequately provided for in the
financial statements of the Company. The unpaid Taxes of the Company for tax
periods through the date of the most recent balance sheet of the Financial
Statements do not exceed the accruals and reserves for Taxes (other than
reserves for deferred Taxes) set forth on such balance sheet. The Company
does not have any actual or potential liability for any Tax obligation of
any taxpayer (including without limitation any affiliated group of
corporations or other entities that included the Company during a prior
period) other than the Company. For purposes of this Agreement, "Taxes"
means all taxes, charges, fees, levies or other similar assessments or
liabilities, including without limitation income, gross receipts, ad
valorem, premium, value-added, excise, real property, personal property,
sales, use, transfer, withholding, employment, payroll, profits, license,
lease, service, service use, severance, stamp, occupation, windfall profits,
customs, franchise and other taxes imposed by the United States of America
or any state, local or foreign government, or any agency thereof, or other
political subdivision of the United States or any such government, and any
interest, fines, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any tax or any contest or
dispute thereof. For purposes of this Agreement, "Tax Returns" means all
reports, returns, declarations, statements or other information required to
be supplied to a taxing authority in connection with Taxes.
(xii) At all times since October 7, 1994 through June 4, 1998, for
federal income tax purposes, the Company has validly been treated as an "S
corporation" within the meaning of Section 1361(a) of the Code and has
validly been treated in a similar manner for purposes of the income tax laws
of all states in which it has been subject to taxation.
(xiii) The Company maintains insurance with recognized insurers in
such amounts and of the types as are customary in the business in which it
is engaged, including, but not limited to, insurance covering real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured
against; there are no claims by the Company under any such policy or
instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause.
(xiv) No labor disturbance by the employees of the Company exists
or, to the Company's knowledge, is threatened or imminent. No collective
bargaining agreement exists with any employees of the Company and, to the
Company's knowledge, no such
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agreement is threatened or imminent.
(xv) The Company owns, licenses or otherwise possesses legally
enforceable rights to use all patents, patent rights, inventions, trade
secrets, know-how, trademarks, service marks, trade names and copyrights
("Intellectual Property") which are necessary to conduct its business as
described in the Registration Statement and Prospectus; the expiration of
any such patents, patent rights, trade secrets, trademarks, service marks,
trade names or copyrights would not result in a Material Adverse Effect; the
Company has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of others with respect to
any such Intellectual Property which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could result in a
Material Adverse Effect.
(xvi)The Company has conducted "year 2000" audits with respect to
all of the Company's internal systems used in and that are material to the
business or operations of the Company, including, without limitation,
computer hardware systems, software applications, firmware, equipment
containing embedded microchips and other embedded systems. The Company has
obtained "year 2000" certification with respect to all third party systems
used in connection with and that are material to the business or operations
of the Company, including and without limitation systems belonging to the
Company's suppliers and service providers. All of the Company's internal
systems used in and that are material to the business or operations of the
Company, including, without limitation, computer hardware systems, software
applications, firmware, equipment containing embedded microchips and other
embedded systems are "Year 2000 Compliant" (as defined below) and will not
be materially adversely affected with respect to functionality,
interoperability, performance or volume capacity (including without
limitation the processing and reporting of data) by virtue of the arrival of
the year 2000. The Company is not aware of any failure to be "Year 2000
Compliant" of any third-party system used in connection with and that is
material to the business or operations of the Company, including without
limitation any system belonging to one of the Company's suppliers or service
providers. For purposes of the Agreement, "Year 2000 Compliant" means that
the applicable system or item: (i) will accurately receive, record, store,
provide, recognize and process all date and time data from, during, into and
between the twentieth and twenty-first centuries; (ii) will accurately
perform all date-dependent calculations and operations (including, without
limitation mathematical operations, sorting, comparing and reporting) from,
during, into and between the twentieth and twenty-first centuries; and (iii)
will not malfunction, cease to function or provide invalid or incorrect
results as a result of (x) the change of century, (y) date data, including
date data which represents or references different centuries or more than
one century or (z) the occurrence of any particular date; in each case
without human intervention, other than original data entry; provided, in
each case, that all applications, hardware and other systems used in
conjunction with such system or item which are not owned or licensed by the
Company
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correctly exchange date data with or provide data to such system or item.
(xvii) The Company has filed an application to list the Stock on
The Nasdaq National Market and has received notification that such listing
has been approved subject to official notice of issuance.
(xviii) The Company has filed a registration statement pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to register the Common Stock under the Exchange Act.
(xix) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(xx) The Company has not distributed and will not distribute prior
to the later of (i) the Closing Date, or any date on which Option Stock is
to be purchased, as the case may be, and (ii) completion of the distribution
of the Stock, any offering material in connection with the offering and sale
of the Stock other than any Preliminary Prospectuses, the Prospectus, the
Registration Statement and other materials, if any, permitted by the
Securities Act.
(xxi) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Stock
to facilitate the sale or resale of the Stock.
(xxii) The Company has provided to counsel for the Underwriters a
complete and accurate list of all security holders of the Company and the
number and type of securities held by each security holder. The Company has
provided to counsel for the Underwriters true, accurate and complete copies
of all Lock-up Agreements (as defined in Section 9(i)) presently in effect
or effected hereby.
(xxiii) Except as set forth in the Registration Statement and
Prospectus, (i) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental
Laws"), (ii) the Company has not received any notice from any foreign,
federal, state or local governmental authority or third party of an asserted
claim under Environmental Laws, (iii) the Company will not be required to
make future capital expenditures to comply with Environmental Laws and (iv)
no property which is, or was previously, owned, leased or occupied by the
Company has been designated as a Superfund site pursuant to the
Comprehensive Response, Compensation, and Liability Act of 1980, as amended
(42 U.S.C. ss. 9601, ET SEQ.), or otherwise designated as a contaminated
site under applicable foreign, federal, state or local law.
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(xxiv) The Company is in compliance in all material respects with
all presently applicable provisions of the U.S. Employee Retirement Income
Security Act of 1974 ("ERISA") with respect to each "plan" as defined in
Section 3(3) of ERISA in which its employees are eligible to participate and
each such plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations. The Company has not incurred any unpaid liability to the
Pension Benefit Guaranty Corporation (other than for the payment of premiums
in the ordinary course) or to any such plan under Title IV of ERISA.
(xxv) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorizations, and (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets.
(xxvi) There are no transactions to which the Company or any of its
subsidiaries is a party which are required to be disclosed in the Prospectus
pursuant to Item 404 of Regulation S-K which are not so disclosed.
(b) Each of Summit Partners and the Founders hereby jointly and
severally represents and warrants as follows:
(i) it, he or she has reviewed the Registration Statement and
Prospectus and, although it, he or she has not independently verified
the accuracy or completeness of all the information contained therein,
nothing has come to its, his or her attention that would lead it, him
or her to believe that, on the Effective Date, the Registration
Statement contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading; and, on the
Effective Date, the Prospectus contained and, on the Closing Date and
any later date on which Option Stock is to be purchased, contains any
untrue statement of a material fact or omitted or omits to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(ii) The representations and warranties of the Company set
forth in subparagraphs (xi), (xii) and (xxvi) of Section 2(a) above are
true, accurate and complete in all respects and are hereby incorporated
by reference in the representations and warranties of Summit Partners
and the Founders in this Section 2(b).
3. Purchase of the Stock by the Underwriters.
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(a) On the basis of the representations and warranties and subject
to the terms and conditions herein set forth, the Company agrees to issue and
sell 4,350,000 shares of the Underwritten Stock to the several Underwriters
and each of the Underwriters agrees to purchase from the Company the
aggregate number of shares of Underwritten Stock set forth opposite its name
in SCHEDULE I. The price at which such shares of Underwritten Stock shall be
sold by the Company and purchased by the several Underwriters shall be $XX.XX
per share. The obligation of each Underwriter to the Company shall be to
purchase from the Company that number of shares of the Underwritten Stock
which represents the same proportion of the total number of shares of the
Underwritten Stock to be sold by the Company pursuant to this Agreement as
the number of shares of the Underwritten Stock set forth opposite the name of
such Underwriter in SCHEDULE I hereto represents of the total number of
shares of the Underwritten Stock to be purchased by all Underwriters pursuant
to this Agreement, as adjusted by you in such manner as you deem advisable to
avoid fractional shares. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraphs (b)
and (c) of this Section 3, the agreement of each Underwriter is to purchase
only the respective number of shares of the Underwritten Stock specified in
SCHEDULE I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company shall immediately give notice thereof
to you, and the non-defaulting Underwriters shall have the right within 24 hours
after the receipt by you of such notice to purchase, or procure one or more
other Underwriters to purchase, in such proportions as may be agreed upon
between you and such purchasing Underwriter or Underwriters and upon the terms
herein set forth, all or any part of the shares of the Stock which such
defaulting Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares
and portion, the number of shares of the Stock which each non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
PROVIDED, HOWEVER, that the non-defaulting Underwriters shall not be obligated
to purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of the
Stock exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of the
Stock which the defaulting Underwriter or Underwriters agreed to purchase shall
not be purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms herein
set forth. In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus
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or any other documents or arrangements may be made. If neither the
non-defaulting Underwriters nor the Company shall make arrangements within the
24-hour periods stated above for the purchase of all the shares of the Stock
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall be terminated 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 (b), and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally
and not jointly, up to 652,500 shares in the aggregate of the Option Stock
from the Company at the same price per share as the Underwriters shall pay
for the Underwritten Stock. Said option may be exercised only to cover
over-allotments in the sale of he Underwritten Stock by the Underwriters and
may be exercised in whole or in part at any time (but not more than once), on
or before the thirtieth day after the date of this Agreement upon written or
telegraphic notice by you to the Company setting forth the aggregate number
of shares of the Option Stock as to which the several Underwriters are
exercising the option. Delivery of certificates for the hsares of Option
Stock, and payment therefor, shall be made as provided in Section 5 hereof.
The number of shares of the Option Stock to be purchased by each Underwriter
shall be the same percentage of the total number of shares of the Option
Stock to be purchased by the several Underwriters as such Underwriter is
purchasing of the Underwritten Stock, as adjusted by you in such manner as
you deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of
the Stock to be purchased by them shall be as set forth in the Prospectus.
The Underwriters may from time to time change the public offering price after
the closing of the initial public offering and increase or decrease the
concessions and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the outside
front cover page of the Prospectus and under the third, fifth, eighth and
ninth paragraphs of the "Underwriting" section contained in the Registration
Statement, any Preliminary Prospectus and the Prospectus relating to the
Stock filed by the Company (insofar as such information relates to the
Underwriters) constitutes the only inforamtion furnished in writing by the
Underwriters to the Company for inclusion in the Registration Statement, any
Preliminary Prospectus, and the Prospectus, and you, on behalf of the
respective Underwriters, represent and warrant to the Company that the
statements made therein are correct.
5. DELIVERY OF AND PAYENT FOR THE STOCK.
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(a) Delivery of certificates for the shares of the Underwritten Stock
and the Option Stock (if the option granted by Section 3(c) hereof shall have
been exercised not later than 7:00 a.m., San Francisco time, on the date two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, at 7:00
a.m., San Francisco time, on the fourth business day after the date of this
Agreement, or at such time on such other day, not later than seven full business
days after such fourth business day, as shall be agreed upon in writing by the
Company and you. The date and hour of such delivery and payment (which may be
postponed as provided in Section 3(b) hereof) are herein called the "Closing
Date."
(b) If the option granted by Section 3(c) hereof shall be exercised
after 7:00 a.m., San Francisco time, on the date two business days preceding the
Closing Date, delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made at the office of Xxxx and Xxxx LLP, 00 Xxxxx
Xxxxxx, Xxxxxx, XX 00000, at 7:00 a.m., San Francisco time, on the third
business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made to
the Company or its order by one or more certified or official bank check or
checks in same day funds. Such payment shall be made upon delivery of
certificates for the Stock or by electronic delivery through the facilities of
the Depository Trust Company to you for the respective accounts of the several
Underwriters against receipt therefor signed by you. If certificates for the
Stock are to be delivered, such certificates shall be registered in such name or
names and shall be in such denominations as you may request at least one
business day before the Closing Date, in the case of Underwritten Stock, and at
least one business day prior to the purchase thereof, in the case of the Option
Stock. Such certificates will be made available to the Underwriters for
inspection, checking and packaging at the offices of Lewco Securities
Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the business day prior to
the Closing Date or, in the case of the Option Stock, by 3:00 p.m., New York
time, on the business day preceding the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares of Stock to be purchased by any Underwriter whose check shall not
have been received by you on the Closing Date or any later date on which Option
Stock is purchased for the account of such Underwriter. Any such payment by you
shall not relieve such Underwriter from any of its obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees
as follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) not file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have
-13-
been advised and furnished with a copy or to which you shall have reasonably
objected in writing or which is not in compliance with the Securities Act or the
rules and regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the event of
(i) the request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceeding for that purpose, (iv) the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (v) the receipt by it of notice of the
initiation or threatening of any proceeding for such purpose. The Company will
make every reasonable effort to prevent the issuance of such a stop order and,
if such an order shall at any time be issued, to obtain the withdrawal thereof
at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you
a signed copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement becomes
effective and, promptly upon the filing thereof, a signed copy of each
post-effective amendment, if any, to the Registration Statement (together with,
in each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office or offices as you may designate, as many copies of the Prospectus as
you may reasonably request, and (iii) thereafter from time to time during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, likewise send to the Underwriters as many additional
copies of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which it is necessary, in the opinion of counsel
for the Company or of counsel for the Underwriters, to supplement or amend the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser of the Stock,
the Company will forthwith prepare and file with the Commission a supplement to
the Prospectus or an amended prospectus so that the Prospectus as so
supplemented or amended will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time such Prospectus
is delivered to such purchaser, not misleading. If, after the initial public
offering of the Stock by the Underwriters and during such period referred to
above, the Underwriters shall propose to
-14-
vary the terms of the offering thereof by reason of changes in general market
conditions or otherwise, you will advise the Company in writing of the proposed
variation, and, if in the opinion either of counsel for the Company or of
counsel for the Underwriters such proposed variation requires that the
Prospectus be supplemented or amended, the Company will forthwith prepare and
file with the Commission a supplement to the Prospectus or an amended prospectus
setting forth such variation. The Company authorizes the Underwriters and all
dealers to whom any of the Stock may be sold by the several Underwriters to use
the Prospectus, as from time to time amended or supplemented, in connection with
the sale of the Stock in accordance with the applicable provisions of the
Securities Act and the applicable Rules and Regulations for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or Blue Sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; PROVIDED, HOWEVER, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. The Company will, from time to
time, prepare and file such statements, reports, and other documents as are or
may be required to continue such qualifications in effect for so long a period
as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to stockholders of
the Company and of all information, documents and reports filed with the
Commission.
(h) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the Effective Date, the Company
will make generally available to its security holders an earnings statement in
accordance with Section 11(a) of the Securities Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs and
expenses incident to (i) the preparation, printing and filing with the
Commission and the National Association of Securities Dealers, Inc. ("NASD") of
the Registration Statement, any Preliminary Prospectus and the Prospectus, (ii)
the filing fee of the NASD, (iii) the furnishing to the Underwriters of copies
of any Preliminary Prospectus and of the several documents required by paragraph
(c) of this Section 6 to be so furnished, (iv) the printing of this Agreement
and related documents delivered
-15-
to the Underwriters, (v) the Company preparation, printing and filing of all
supplements and amendments to the Prospectus referred to in paragraph (d) of
this Section 6, (vi) the furnishing to you and the Underwriters of the reports
and information referred to in paragraph (g) of this Section 6 and (vii) the
printing and issuance of stock certificates, including the transfer agent's
fees.
(j) The Company agrees to reimburse you, for the account of the
several Underwriters, for blue sky fees and related disbursements (including
reasonable counsel fees and disbursements and cost of printing memoranda for the
Underwriters) paid by or for the account of the Underwriters or their counsel in
qualifying the Stock under state securities or blue sky laws and in the review
of the offering by the NASD.
(k) The provisions of paragraphs (i) and (j) of this Section are
intended to relieve the Underwriters from the payment of the expenses and costs
which the Company hereby agrees to pay and shall not affect any agreement which
the Company may make, or may have made, for the sharing of any such expenses and
costs. Except as provided in paragraphs (i) and (j) of this Section 6, the
Underwriters shall pay all of their own expenses, including the fees and
disbursements of their counsel (excluding those related to qualification,
registration or exemption under the Blue Sky laws, the Blue Sky memorandum and
the NASD review referred to above).
(l) The Company hereby agrees that, without the prior written consent
of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, the Company will not,
for a period of 180 days following the commencement of the public offering of
the Stock by the Underwriters, directly or indirectly, (i) sell, offer, contract
to sell, make any short sale, pledge, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for or any rights to
purchase or acquire Common Stock or (ii) enter into any swap or other agreement
that transfers, in whole or in part, any of the economic consequences or
ownership of Common Stock, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Stock to be sold to the Underwriters pursuant to this Agreement, (B) shares
of Common Stock issued by the Company upon the exercise of options granted under
the stock option plans of the Company (the "Option Plans") or upon the exercise
of warrants outstanding as of the date hereof, all as described under the
caption "Capitalization" in the Preliminary Prospectus, and (C) options to
purchase Common Stock granted under the Option Plans.
(m) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the Stock has been or is likely to be materially adversely
affected (regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from
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you advising the Company to the effect set forth above and subject to the
reasonable advice of its counsel, forthwith prepare, consult with you concerning
the substance of, and disseminate a press release or other public statement,
reasonably satisfactory to you, responding to or commenting on such rumor,
publication or event.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company, the Founders and Summit Partners jointly and severally
agree to indemnify and hold harmless each Underwriter and each person (including
each partner or officer thereof) who controls any Underwriter within the meaning
of Section 15 of the Securities Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Securities Act, the Exchange Act, or
the common law or otherwise, and the Company, the Founders and Summit Partners
jointly and severally agree to reimburse each such Underwriter and controlling
person for any legal or other expenses (including, except as otherwise
hereinafter provided, reasonable fees and disbursements of counsel) incurred by
the respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case to the extent the same arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as a part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER , that (1) the indemnity agreements of the Company, the
Founders and Summit Partners contained in this paragraph (a) shall not apply to
any such losses, claims, damages, liabilities or expenses if such statement or
omission was made in reliance upon and in conformity with information furnished
as herein stated or otherwise furnished in writing to the Company by or on
behalf of any Underwriter for use in any Preliminary Prospectus or the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto, (2) the indemnity agreement contained in this paragraph (a)
with respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or
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supplemented) unless the failure is the result of noncompliance by the Company
with paragraph (c) of Section 6 hereof, (3) Summit Partners and the Founders
shall only be liable under this paragraph with respect to (A) information
pertaining to Summit Partners or the Founders, as the case may be, furnished by
or on behalf of Summit Partners or the Founders, as the case may be, expressly
for use in any Preliminary Prospectus or the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto or (B) facts that
would constitute a breach of any representation or warranty of Summit Partners
or the Founders, as the case may be, set forth in Section 2(b) hereof, and (4)
the liability of Summit Partners and the Founders shall be subject to the
limitations set forth in subparagraph (f) below. The indemnity agreements of the
Company, the Founders and Summit Partners contained in this paragraph (a) and
the representations and warranties of the Company, the Founders and Summit
Partners contained in Section 2 hereof shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement on his
own behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Securities Act, the Founders and Summit Partners from and against any
and all losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise and to reimburse each of them
for any expenses (including, except as otherwise hereinafter provided,
reasonable fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case to the extent the same arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as a part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement) or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment thereof or supplement thereto) or
the omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, if such statement or omission was made in
reliance upon and in conformity with information furnished as herein stated or
otherwise furnished in writing to the Company by or on behalf of such
indemnifying Underwriter for use in the Registration Statement or the Prospectus
or any such amendment thereof or supplement thereto. The indemnity agreement of
each Underwriter contained in this paragraph (b) shall remain operative and in
full force and effect regardless of any investigation
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made by or on behalf of any indemnified party and shall survive the delivery of
and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (the "Notice") of such service
or notification to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be available
to any party who shall fail to give the Notice if the party to whom such Notice
was not given was unaware of the action, suit, investigation, inquiry or
proceeding to which the Notice would have related, but only to the extent the
indemnifying party or parties were prejudiced by the failure to give the Notice,
and the failure to notify such indemnifying party or parties of any such service
or notification shall not relieve such indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of such indemnity agreement. Any indemnifying party
shall be entitled at its own expense to participate in the defense of any
action, suit or proceeding against, or investigation or inquiry of, an
indemnified party. Any indemnifying party shall be entitled, if it so elects
within a reasonable time after receipt of the Notice by giving written notice
(the "Notice of Defense") to the indemnified party, to assume (alone or in
conjunction with any other indemnifying party or parties) the entire defense of
such action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or parties,
by counsel chosen by such indemnifying party or parties and reasonably
satisfactory to the indemnified party or parties; PROVIDED, HOWEVER, that (i) if
the indemnified party or parties reasonably determine that there may be a
conflict between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled to have
counsel chosen by such indemnified party or parties participate in, but not
conduct, the defense. If, within a reasonable time after receipt of the Notice,
an indemnifying party gives a Notice of Defense and the counsel chosen by the
indemnifying party or parties is reasonably satisfactory to the indemnified
party or parties, the indemnifying party or parties will not be liable under
paragraphs (a) through (c) of this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding, except that
(A) the indemnifying party or parties shall bear the legal and other expenses
incurred in connection with the conduct of the defense as referred to in clause
(i) of the proviso to the preceding sentence and (B) the indemnifying party or
parties shall bear such other expenses as it
-19-
or they have authorized to be incurred by the indemnified party or parties. If,
within a reasonable time after receipt of the Notice, no Notice of Defense has
been given, the indemnifying party or parties shall be responsible for any legal
or other expenses incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock 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 each indemnifying party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company, the Founders and Summit Partners on the one hand and the Underwriters
on the other shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Stock received by the Company, the
Founders and Summit Partners and the total underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the Prospectus,
bear to the aggregate public offering price of the Stock. Relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by each indemnifying party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
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Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) No indemnifying party will, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not such
indemnified party or any person who controls such indemnified party within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of such indemnified
party and each such controlling person from all liability arising out of such
claim, action, suit or proceeding.
(f) The aggregate liability of the Founders and Summit Partners
together under their representations and warranties contained in Section 2(b)
hereof, and under the indemnity and reimbursement agreements contained in the
provisions of this Section 7 and Section 11 hereof, shall be limited to the
total net proceeds received by the Company in connection with the sale of the
Stock that are used to redeem the Company's outstanding shares of preferred
stock less the aggregate purchase price of any of the Company Shares purchased
by Summit Partners from the Company and less the aggregate exercise price of
warrants outstanding as of the date hereof exercised by Summit Partners or
repay, in an amount up to an aggregate of $7.0 million, the Company's
subordinated debentures. In addition, the individual liability of each of the
Founders and Summit Partners under Sections 2(b), 7 and 11 shall be limited, in
the case of each of the Founders, to the net after-tax proceeds received by such
Founder in the Company's 1998 recapitalization and, in the case of Summit
Partners, to the redemption proceeds received either in connection with the
redemption of the Company's preferred stock, less the aggregate purchase price
of any of the Company Shares purchased by Summit Partners from the Company and
less the aggregate exercise price of warrants outstanding as of the date hereof
exercised by Summit Partners or repayment, in an amount up to an aggregate of
$7.0 million, of the Company's subordinated debentures, in each case held by
Summit Partners; PROVIDED, HOWEVER, that in no event shall the Underwriters be
entitled to such recovery of amounts in excess of the aggregate limitation set
forth in the first sentence of this Section 7(f). In addition, none of the
Founders or Summit shall be subject to any liability, or be obligated to make
any payments, on account of the provisions in Section 2(b), 7 or 11 until the
Underwriters shall have first made a demand for payment on the Company with
respect to such matters and the Company shall have either rejected such demand
or failed to make such requested payment within 60 days after receipt of such
demand.
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8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company if after the
date of this Agreement trading in the Common Stock shall have been suspended, or
if there shall have occurred (i) the engagement in hostilities or an escalation
of major hostilities by the United States or the declaration of war or a
national emergency by the United States on or after the date hereof, (ii) any
outbreak of hostilities or other national or international calamity or crisis or
change in economic or political conditions if the effect of such outbreak,
calamity, crisis or change in economic or political conditions in the financial
markets of the United States would, in the Underwriters' reasonable judgment,
make the offering or delivery of the Stock impracticable, (iii) suspension of
trading in securities generally or a material adverse decline in value of
securities generally on the New York Stock Exchange, the American Stock
Exchange, or The Nasdaq National Market, or limitations on prices (other than
limitations on hours or numbers of days of trading) for securities on either
such exchange or system, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of, or
commencement of any proceeding or investigation by, any court, legislative body,
agency or other governmental authority which in the Underwriters' reasonable
opinion materially and adversely affects or will materially or adversely affect
the business or operations of the Company, (v) declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in the Underwriters' reasonable opinion has a
material adverse effect on the securities markets in the United States. If this
Agreement shall be terminated pursuant to this Section 8, there shall be no
liability of the Company to the Underwriters and no liability of the
Underwriters to the Company; PROVIDED, HOWEVER, that in the event of any such
termination the Company agrees to indemnify and hold harmless the Underwriters
from all costs or expenses incident to the performance of the obligations of the
Company under this Agreement, including all costs and expenses referred to in
paragraphs (i) and (j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company of all its obligations to be performed hereunder at
or prior to the Closing Date or any later date on which Option Stock is to be
purchased, as the case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective; and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder and
the validity and form of the certificates representing the Stock, all corporate
proceedings and other legal matters incident to the foregoing, and the form of
the Registration Statement and of the Prospectus
-22-
(except as to the financial statements contained therein), shall have been
approved at or prior to the Closing Date by Xxxx and Xxxx LLP, counsel for the
Underwriters.
(c) You shall have received from Xxxxxxx, Procter & Xxxx LLP, counsel
for the Company an opinion, addressed to the Underwriters and dated the Closing
Date, covering the matters set forth in ANNEX A hereto, and if Option Stock is
purchased at any date after the Closing Date, additional opinions from each such
counsel, addressed to the Underwriters and dated such later date, confirming
that the statements expressed as of the Closing Date in such opinions remain
valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct and neither the Registration Statement nor the Prospectus omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading, (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in such a
supplement or amendment, (iii) since the respective dates as of which
information is given in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the business, properties, financial
condition or results of operations of the Company, whether or not arising from
transactions in the ordinary course of business, and, since such dates, except
in the ordinary course of business, the Company has not entered into any
material transaction not referred to in the Registration Statement in the form
in which it originally became effective and the Prospectus contained therein,
(iv) the Company has no material contingent obligations which are not disclosed
in the Registration Statement and the Prospectus, (v) there are not any pending
or known threatened legal proceedings to which the Company is a party or of
which property of the Company is the subject which are material and which are
required to be disclosed in the Registration Statement and the Prospectus and
which are not disclosed, (vi) there are not any franchises, contracts, leases or
other documents which are required to be filed as exhibits to the Registration
Statement which have not been filed as required, (vii) the representations and
warranties of the Company and Summit Partners herein are true and correct in as
of the Closing Date or any later date on which Option Stock is to be purchased,
as the case may be, and (viii) there has not been any material change in the
market for securities in general or in political, financial or economic
conditions from those reasonably foreseeable as to render it impracticable in
your reasonable judgment to make a public offering of the Stock, or a material
adverse change in market levels for securities in general (or those of IT
professional placement companies in particular) or financial or economic
conditions which render it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later date
on which Option Stock is purchased a certificate, dated the Closing Date or such
later date, as the case may be, and signed by the President and the Chief
Financial Officer of the Company, stating that the
-23-
respective signers of said certificate have carefully examined the Registration
Statement in the form in which it originally became effective and the Prospectus
contained therein and any supplements or amendments thereto, and that the
statements included in clauses (i) through (vii) of paragraph (d) of this
Section 9 are true and correct.
(f) You shall have received from Deloitte & Touche LLP, a letter or
letters, addressed to the Underwriters and dated the Closing Date and any later
date on which Option Stock is purchased, confirming that they are independent
certified public accountants with respect to the Company within the meaning of
the Act and the applicable published Rules and Regulations and based upon the
procedures described in such letter delivered to you concurrently with the
execution of this Agreement (herein called the "Original Letter"), but carried
out to a date not more than three (3) business days prior to the Closing Date or
such later date on which Option Stock is to be purchased, as the case may be,
(i) confirming, to the extent true, that the statements and conclusions set
forth in the Original Letter are accurate as of the Closing Date or such later
date on which Option Stock is to be purchased, as the case may be, and (ii)
setting forth any revisions and additions to the statements and conclusions set
forth in the Original Letter which are necessary to reflect any changes in the
facts described in the Original Letter since the date of such letter, or to
reflect the availability of more recent financial statements, data or
information. The letter shall not disclose any change in the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company from that set forth in the Registration Statement or Prospectus,
which, in your sole judgment, is material and adverse and that makes it, in your
sole judgment, impracticable or inadvisable to proceed with the public offering
of the Stock as contemplated by the Prospectus. The Original Letter from
Deloitte & Touche LLP shall be addressed to or for the use of the Underwriters
in form and substance reasonably satisfactory to the Underwriters and shall (i)
represent, to the extent true, that they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
applicable published Rules and Regulations, (ii) set forth their opinion with
respect to their examination of the balance sheet of the Company as of December
31, 1995, 1996, 1997 and for the nine months ended September 30, 1998, and
related statements of operations, Stockholders' equity, and cash flows for the
twelve months ended December 31, 1995, 1996, 1997 and for the nine months ended
September 30, 1998, (iii) state that in the course of such review, nothing came
to their attention that leads them to believe that any material modifications
need to be made to any of the Quarterly Financial Statements in order for them
to be in compliance with GAAP consistently applied across the periods presented,
and (v) address other matters agreed upon by Deloitte & Touche LLP and you. In
addition, you shall have received from Deloitte & Touche LLP a letter addressed
to the Company and made available to you for the use of the Underwriters stating
that their review of the Company's system of internal accounting controls, to
the extent they deemed necessary in establishing the scope of their examination
of the Company's financial statements as of September 30, 1998, did not disclose
any weaknesses in internal controls that they considered to be material
weaknesses.
(g) You shall have been furnished evidence in usual written or
telegraphic form from
-24-
the appropriate authorities of the several jurisdictions, or other evidence
satisfactory to you, of the qualification referred to in paragraph (f) of
Section 6 hereof.
(h) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly authorized for listing by the Nasdaq National
Market upon official notice of issuance.
(i) On or prior to the Closing Date, you shall have received from all
directors, officers, and beneficial holders of more than 5% of the outstanding
Common Stock agreements, in form reasonably satisfactory to Xxxxxxxxx & Xxxxx
LLC (collectively, "Lock-Up Agreements"), stating that without the prior written
consent of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, such person or
entity will not, for a period of 180 days following the commencement of the
public offering of the Stock by the Underwriters, directly or indirectly, (i)
sell, offer, contract to sell, make any short sale, pledge, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase orotherwise transfer or dispose of any shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for or any rights to purchase or acquire Common Stock or (ii) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise.
(j) On or prior to the Closing Date, the Company shall have obtained a
director and officer insurance policy with a minimum coverage amount of at least
$10.0 million and provide evidence thereof reasonably acceptable to Xxxx and
Xxxx LLP, counsel for the Underwriters. Such policy shall name the Underwriters
as beneficiaries under such policy.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxx and Xxxx LLP, counsel for the Underwriters, shall
be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; PROVIDED,
HOWEVER, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein, to fulfill any of the conditions herein, or to comply with any
provision hereof other than by reason of a default by any of the Underwriters,
the Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses
-25-
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the transactions contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company by giving notice
to you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; PROVIDED,
HOWEVER, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to their other
obligations under Section 7 of this Agreement, the Company, the Founders and
Summit Partners hereby jointly and severally (subject to the limitations in
Section 7(f) hereof) agree to reimburse on a quarterly basis the Underwriters
for all reasonable legal and other expenses incurred in connection with
investigating or defending any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in paragraph (a) of Section 7 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 11 and the
possibility that such payments might later be held to be improper; PROVIDED,
HOWEVER, that (i) to the extent any such payment is ultimately held to be
improper, the persons receiving such payments shall promptly refund them, (ii)
such persons shall provide to the Company, upon request, reasonable assurances
of their ability to effect any refund, when and if due, and (iii) none of the
Founders or Summit Partners shall have any obligation under this Section 11 for
matters with respect to which they have no indemnification obligation under
Section 7 hereof.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 7 hereof, the several parties (in addition
to the Company, Summit Partners, the Founders and the several Underwriters)
indemnified under the provisions of said Section 7, and their respective
personal representatives, successors and assigns. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation
any legal or equitable remedy or claim under or in respect of this Agreement or
any provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the Stock from any
of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall
-26-
be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, with a copy to Xxxxxx X. Xxxxxxxx, Esq., Xxxx
and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000; and if to the Company, shall be
mailed, telegraphed or delivered to it at its office, 000 Xxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: President, with a copy to Xxxx X.
Xxxx, III, P.C., Xxxxxxx, Procter & Xxxx XXX, Xxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000. All notices given by telegraph shall be promptly confirmed
by letter delivered by U.S.
Mail.
14. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation made
by or on behalf of any Underwriter or controlling person thereof, or by or on
behalf of the Company or its respective directors or officers, and (c) delivery
and payment for the Stock under this Agreement; PROVIDED, HOWEVER, that if this
Agreement is terminated prior to the Closing Date, the provisions of paragraphs
(l) and (m) of Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
-27-
Please sign and return to the Company in care of the Company the enclosed
duplicates of this letter, whereupon this letter will become a binding agreement
among the Company, the Founders, Summit Partners and the several Underwriters in
accordance with its terms.
Very truly yours,
STRIDE & ASSOCIATES, INC.
By:
-------------------------------
[Name]
[Title]
FOUNDERS:
-------------------------------
Xxxx Xxxxxx
-------------------------------
Xxxxxx Xxxxxxx
-------------------------------
Xxxx Xxxxxxxx
-------------------------------
Xxxxxxx Xxxxxxxxx
SUMMIT PARTNERS:
Summit Ventures IV, L.P.
By: Summit Partners IV, L.P.
Its General Partner
By: Stamps, Xxxxxxx & Co., IV
Its General Partner
By:
-------------------------
General Partner
Summit Ventures V, L.P.
By: Summit Partners V, L.P.
Its General Partner
By: Summit Partners, LLC
Its General Partner
By:
-------------------------
Member
Summit V Advisors Fund, L.P.
By: Summit Partners, LLC
Its General Partner
By:
-------------------------
Member
Summit V Advisors Fund (QP), L.P.
By: Summit Partners, LLC
Its General Partner
By:
-------------------------
Member
Summit Subordinated Debt Fund II, L.P.
By: Summit Partners SD II, LLC
Its General Partner
By:
-------------------------
Summit Investors III, LP
By:
-------------------------
General Partner
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
BANCBOSTON XXXXXXXXX XXXXXXXX
By: Xxxxxxxxx & Xxxxx LLC
By:
--------------------------
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in SCHEDULE I hereto.
SCHEDULE I
UNDERWRITERS
NUMBER OF
SHARES TO BE
UNDERWRITERS PURCHASED
XXXXXXXXX & XXXXX..........................................................................
BANCBOSTON XXXXXXXXX XXXXXXXX..............................................................
---------------------
TOTAL....................................................................... 4,350,000
---------
---------
SCHEDULE II
SUMMIT PARTNERS
NAME OF AFFILIATED
INVESTMENT FUNDS
SUMMIT VENTURES IV, L.P.
SUMMIT VENTURES V, L.P.
SUMMIT V ADVISORS FUND, L.P.
SUMMIT V ADVISORS FUND (QP), L.P.
SUMMIT SUBORDINATED DEBT FUND, II, L.P.
SUMMIT INVESTORS III, L.P.
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF
COUNSEL FOR THE COMPANY
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified as a foreign corporation and in good
standing in [name jurisdictions], and has full corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement;
(ii) the authorized, issued and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the
Prospectus; all of the outstanding shares of such capital stock (including
the Underwritten Stock and the shares of Option Stock issued, if any) have
been duly authorized and validly issued and the Underwritten Stock and the
Option Stock when paid for by the Underwriters pursuant to the
Underwriting Agreement will be fully paid and nonassessable; any Option
Stock purchased after the Closing Date, when issued and delivered to and
paid for by the Underwriters as provided in the Underwriting Agreement,
will have been duly and validly issued and be fully paid and
nonassessable; and the Underwritten Stock and the Option Stock have not
and will not be issued in violation of any preemptive rights of, or rights
of refusal in favor of, stockholders exist with respect to the Stock, or
the issue and sale thereof, pursuant to the Certificate of Incorporation
or Bylaws of the Company, each as amended to date;
(iii) the Registration Statement has become effective under the
Securities Act and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or suspending
or preventing the use of the Prospectus is in effect and to the knowledge
of such counsel, no proceedings for that purpose have been instituted or
are pending or contemplated by the Commission;
(iv) the Registration Statement and the Prospectus (except as to the
financial statements or notes thereto and schedules and other financial,
statistical and accounting data contained therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Securities Act and with the rules
and regulations of the Commission thereunder;
(v) the statements under the captions "Management -- 1998 Stock Option
and Grant Plan," "Management--Employment Agreements and Severance
Arrangements," "Certain Transactions With Related Parties" and
"Description of Capital Stock" in the Registration Statement and the
Prospectus and in Item 15 of the Registration Statement, insofar as such
statements constitute
2
a summary of contracts, agreements or other legal documents referred to
therein, fairly present in all material the information called for with
respect to such contracts, agreements and documents, to the extent the
foregoing are required to be included in the Registration Statement or the
Prospectus under the Securities Act and the rules and regulations of the
Commission thereunder;
(vi) such counsel do not know of any franchises, contracts, leases or
documents which in the opinion of such counsel are of a character required
to be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement, which are not described
and filed as required;
(vii) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the issue and sale by the Company of the shares of Stock sold by
the Company as contemplated by the Underwriting Agreement will not
conflict with, or result in a breach of, the Certificate of Incorporation
or Bylaws of the Company or any agreement or instrument known to such
counsel to which the Company is a party or any applicable law or
regulation, or so far as is known to such counsel, any order, writ,
injunction or decree, of any jurisdiction, court or governmental
instrumentality;
(ix) to the knowledge of such counsel all holders of securities of the
Company having rights to the registration of shares of Common Stock, or
other securities, because of the filing of the Registration Statement by
the Company have waived such rights or such rights have expired by reason
of lapse of time following notification of the Company's intent to file
the Registration Statement;
-2-
In addition, such counsel shall state that they have participated in
conferences with directors, officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
representatives of the Underwriters and representatives of counsel for the
Underwriters, at which conferences the contents of the Registration Statement
and the Prospectuses and related matters were discussed and although such
counsel has not independently verified and are not passing upon and assume no
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectuses (other than with
respect to the opinions set forth in paragraph (iv) above), no facts have come
to such counsel's attention which lead such counsel to conclude that the
Registration Statement, on the Effective Date thereof, 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 contained therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to the financial
statements and related notes, the financial statement schedules and other
financial, statistical and accounting data included in the Registration
Statement or the Prospectus).
------------------------------------
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or of the State of Delaware, upon
opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
Representative[s] and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel.
-3-
