Exhibit 1.1
_______________ SHARES
PEOPLESUPPORT, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
__________, 2004
XX XXXXX & CO., LLC
XXXXX XXXXXXX & CO.
X.X. XXXXXXX & SONS, INC.
JMP SECURITIES LLC
As Representatives of the several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. PeopleSupport, Inc., a Delaware corporation (the "Company"),
and the selling stockholders named in Schedule B hereto (the "Selling
Stockholders") propose to sell, pursuant to the terms of this Agreement, to the
several underwriters named in Schedule A hereto (the "Underwriters," or, each,
an "Underwriter"), an aggregate of __________ shares of Common Stock, $.001 par
value (the "Common Stock"), of the Company. The aggregate of __________ shares
so proposed to be sold is hereinafter referred to as the "Firm Stock." The
Company and the Selling Stockholders also propose to sell to the Underwriters,
upon the terms and conditions set forth in Section 3 hereof, up to an additional
___________ shares of Common Stock (the "Optional Stock"). The Firm Stock and
the Optional Stock are hereinafter collectively referred to as the "Stock." XX
Xxxxx & Co., LLC ("XX Xxxxx"), Xxxxx Xxxxxxx & Co., X.X. Xxxxxxx & Sons, Inc.,
and JMP Securities LLC are acting as representatives of the several Underwriters
and in such capacity are hereinafter referred to as the "Representatives." As
part of the offering contemplated by this Agreement, Xxxxx Xxxxxxx & Co. (the
"Designated Underwriter") has agreed to reserve out of the Firm Stock purchased
by it under this Agreement, up to __________ shares, for sale to the Company's
directors, business associates and employees, and friends and family members of
the Company's employees (collectively, "Participants"), as set forth in the
Prospectus (as defined herein) under the heading "Underwriting" (the "Directed
Share Program"). The Firm Stock to be sold by the Designated Underwriter
pursuant to the Directed Share Program (the "Directed Shares") will be sold by
the Designated Underwriter pursuant to this Agreement at the public offering
price. Any Directed Shares not subscribed for by the end of the business day on
which this Agreement is executed will be offered to the public by the
Underwriters as set forth in the Prospectus.
2. (I) Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters
that:
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(a) A registration statement on Form S-1 (File No. 333-115328) (the
"Initial Registration Statement") in respect of the Stock has been filed
with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Securities Act") and the rules
and regulations (the "Rules and Regulations") of the Commission
thereunder, which became effective upon filing, no other document with
respect to the Initial Registration Statement has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the Rules and Regulations, is hereinafter called a "Preliminary
Prospectus"); the various parts of the Initial Registration Statement and
the Rule 462(b) Registration Statement, if any, including all exhibits
thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act and deemed by virtue of Rule 430A under the Securities Act
to be part of the Initial Registration Statement at the time it was
declared effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statements;" and such
final prospectus, in the form first filed pursuant to Rule 424(b) under
the Securities Act, is hereinafter called the "Prospectus." No document
has been or will be prepared or distributed in reliance on Rule 434 under
the Securities Act. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission.
(b) The Registration Statement conforms (and the Rule 462(b) Registration
Statement, if any, the Prospectus and any amendments or supplements to
either of the Registration Statements or the Prospectus, when they become
effective or are filed with the Commission, as the case may be, will
conform) in all material respects to the requirements of the Securities
Act and the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statements and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the foregoing representations and
warranties shall not apply to information contained in or omitted from the
Registration Statements or the Prospectus or any such amendment or
supplement thereto in reliance upon, and in conformity with, written
information
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furnished to the Company through the Representatives by or on behalf of
any Underwriter specifically for inclusion therein, which information the
parties hereto agree is limited to the Underwriters' Information (as
defined in Section 16).
(c) The Company and each of its subsidiaries (as defined in Section 14)
have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good standing
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not have, singularly or in
the aggregate, a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect"). The
Company owns or controls, directly or indirectly, only the following
corporations, partnerships, limited liability partnerships, limited
liability companies, associations or other entities: STC Solutions, Inc.,
a Delaware corporation and PeopleSupport (Philippines), Inc., a Philippine
corporation.
(d) This Agreement has been duly authorized executed and
delivered by the Company.
(e) The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and free of any preemptive or
similar rights and will conform to the description thereof contained in
the Prospectus.
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable, have been issued in compliance with federal and state
securities laws, and conform to the description thereof contained in the
Prospectus. None of the outstanding shares of Common Stock was issued in
violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity or
debt securities convertible into or exchangeable or exercisable for, any
capital stock of the Company or any of its subsidiaries other than those
accurately described in the Prospectus. The description of the Company's
stock option, stock bonus and other stock plans or arrangements, and the
options or other rights granted thereunder, as described in the
Prospectus, accurately and fairly present
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the information required to be shown with respect to such plans,
arrangements, options and rights.
(g) All the outstanding shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and, except to the extent set forth in the Prospectus and
except as set forth below in the case of PeopleSupport (Philippines),
Inc., are owned by the Company directly or indirectly through one or more
wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other claim
of any third party. A de minimis number of shares of PeopleSupport
(Philippines), Inc. is owned by persons who are Philippine nationals as
required under Philippine law.
(h) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the charter or
by-laws of the Company or any of its subsidiaries or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets.
(i) Except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or qualifications
as may be required under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and applicable state securities laws, the National
Association of Securities Dealers, Inc. and the NASDAQ National Market in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing
or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby.
(j) BDO Xxxxxxx, LLP and PricewaterhouseCoopers, LLP who each have
expressed their opinions on certain audited financial statements and
related schedules included in the Registration Statements and the
Prospectus are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(k) The financial statements, together with the related notes and
schedules, included in the Prospectus and in each Registration Statement
fairly present the financial position and the results of operations and
changes in financial position of the Company and its consolidated
subsidiaries at the respective dates or for the respective periods therein
specified. Such statements and related notes and schedules have been
prepared in
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accordance with generally accepted accounting principles applied on a
consistent basis except as may be set forth in the Prospectus. The
financial statements, together with the related notes and schedules,
included in the Prospectus comply in all material respects with the
Securities Act and the Rules and Regulations thereunder. No other
financial statements or supporting schedules or exhibits are required by
the Securities Act or the Rules and Regulations thereunder to be included
in the Prospectus.
(l) Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus;
and, since such date, there has not been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, except as
set forth or contemplated in the Prospectus.
(m) Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company
or any of its subsidiaries is the subject which is required to be
described in the Registration Statement or the Prospectus and is not
described therein, or which, singularly or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, might have a Material
Adverse Effect or would prevent or adversely affect the ability of the
Company to perform its obligations under this Agreement; and to the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(n) Neither the Company nor any of its subsidiaries (i) is in violation of
its charter or by-laws, (ii) is in default in any respect, and no event
has occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its property or assets is subject or
(iii) is in violation in any respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets may
be subject, except in each case any violations or defaults which,
singularly or in the aggregate, would not have a Material Adverse Effect.
(o) The Company and each of its subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate state, federal or foreign
regulatory agencies or bodies which are
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necessary for the ownership of their respective properties or the conduct
of their respective businesses as described in the Prospectus except where
any failures to possess or make the same, singularly or in the aggregate,
would not have a Material Adverse Effect, and the Company has not received
notification of any revocation or modification of any such license,
authorization or permit and has no reason to believe that any such
license, certificate, authorization or permit will not be renewed.
(p) Neither the Company nor any of its subsidiaries is, or after giving
effect to the offering of the Stock and the application of the proceeds
thereof as described in the Prospectus, will become an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended and the rules and regulations of the Commission thereunder.
(q) Neither the Company nor (to the best of its knowledge) any of its
officers, directors or affiliates has taken or will take, directly or
indirectly, any action designed or intended to stabilize or manipulate the
price of any security of the Company, or which caused or resulted in, or
which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company.
(r) The Company and its subsidiaries own or possess the right to use all
trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned or used by
them for the conduct of their respective businesses, and the Company is
not aware of any claim to the contrary or any challenge by any other
person to the rights of the Company and its subsidiaries with respect to
the foregoing. To the best of the Company's knowledge, the Company's
business as now conducted and as proposed to be conducted does not and
will not infringe or conflict with any patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses or other intellectual
property or franchise right of any person. To the best of the Company's
knowledge, no claim has been made against the Company alleging the
infringement by the Company of any patent, trademark, service xxxx, trade
name, copyright, trade secret, license in or other intellectual property
right or franchise right of any person, which would have a Material
Adverse Effect.
(s) The Company and its subsidiaries do not own any real property. The
Company and its subsidiaries have valid rights to lease or otherwise use
all items of real or personal property which are material to the business
of the Company and its subsidiaries taken as a whole, in each case free
and clear of all liens, encumbrances, claims and defects that may result
in a Material Adverse Effect.
(t) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is
imminent which might reasonably be expected to have a Material Adverse
Effect. The Company is not aware that any key
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employee or significant group of employees of the Company or any
subsidiary plans to terminate employment with the Company or any such
subsidiary.
(u) No "prohibited transaction" (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to
any employee benefit plan which could reasonably be expected to have a
Material Adverse Effect; each employee benefit plan is in compliance in
all material respects with applicable law, including ERISA and the Code;
the Company has not incurred and does not expect to incur liability under
Title IV of ERISA with respect to the termination of, or withdrawal from,
any "pension plan"; and each "pension plan" (as defined in ERISA) for
which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which could reasonably be expected to cause the loss of such
qualification.
(v) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of
toxic or other wastes or other hazardous substances by, due to, or caused
by the Company or any of its subsidiaries (or, to the best of the
Company's knowledge, any other entity for whose acts or omissions the
Company or any of its subsidiaries is or may be liable) upon any of the
property now or previously owned or leased by the Company or any of its
subsidiaries, or upon any other property, in violation of any statute or
any ordinance, rule, regulation, order, judgment, decree or permit or
which would, under any statute or any ordinance, rule (including rule of
common law), regulation, order, judgment, decree or permit, give rise to
any liability, except for any violation or liability which would not have,
singularly or in the aggregate with all such violations and liabilities, a
Material Adverse Effect; there has been no disposal, discharge, emission
or other release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other hazardous
substances with respect to which the Company or any of its subsidiaries
have knowledge, except for any such disposal, discharge, emission, or
other release of any kind which would not have, singularly or in the
aggregate with all such discharges and other releases, a Material Adverse
Effect.
(w) The Company and its subsidiaries each (i) have filed with all
necessary federal, state and foreign income and franchise tax returns,
(ii) have paid all federal state, local and foreign taxes due and payable
for which it is liable, and (iii) do not have any tax deficiency or claims
outstanding or assessed or, to the best of the Company's
8
knowledge, proposed against it which could reasonably be expected to have
a Material Adverse Effect.
(x) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses
in similar industries.
(y) The Company and each of its subsidiaries 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 authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(z) The minute books of the Company and each of its subsidiaries have been
made available to the Underwriters and counsel for the Underwriters, and
such books (i) contain a complete summary of all meetings and actions of
the board of directors (including each board committee) and shareholders
of the Company and each of its subsidiaries since the time of its
respective incorporation through the date of the latest meeting and
action, and (ii) accurately in all material respects reflect all
transactions referred to in such minutes.
(aa) There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or to be filed as an exhibit to the
Registration Statements which is not described or filed therein as
required; and all descriptions of any such franchises, leases, contracts,
agreements or documents contained in the Registration Statements are
accurate and complete descriptions of such documents in all material
respects. Other than as described in the Prospectus, no such franchise,
lease, contract or agreement has been suspended or terminated for
convenience or default by the Company or any of the other parties thereto,
and the Company has not received notice or any other knowledge of any such
pending or threatened suspension or termination, except for such pending
or threatened suspensions or terminations that would not reasonably be
expected to, singularly or in the aggregate, have a Material Adverse
Effect.
(bb) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, that is required
to be described in the Prospectus and that is not so described.
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(cc) No person or entity (other than the Selling Stockholders in respect
of the Common Stock being sold by such Selling Stockholders in the
offering) has the right to require registration of shares of Common Stock
or other securities of the Company because of the filing or effectiveness
of the Registration Statements or otherwise in connection with the
offering, except for persons and entities who have expressly waived such
right or who have been given timely and proper notice and have failed to
exercise such right within the time or times required under the terms and
conditions of such right.
(dd) Except for this Agreement, neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding with
any person that would give rise to a valid claim against the Company or
the Underwriters for a brokerage commission, finder's fee or like payment
in connection with the offering and sale of the Stock.
(ee) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in the
Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(ff) The Stock has been approved for quotation subject to notice of
issuance on the NASDAQ Stock Market's National Market.
(gg) The Company has taken all necessary actions to ensure that, upon and
at all times after the effectiveness of the Registration Statement, it
will be in compliance with all applicable provisions of the Xxxxxxxx-Xxxxx
Act of 2002 and all rules and regulations promulgated thereunder or
implementing the provisions thereof (the "Xxxxxxxx-Xxxxx Act") that are
then applicable to the Company and is actively taking steps to ensure that
it will be in compliance with other applicable provisions of the
Xxxxxxxx-Xxxxx Act not currently in effect upon and at all times after
such provisions become applicable to the Company.
(hh) The Company has taken all necessary actions to ensure that, upon and
at all times after the NASDAQ National Market System ("NASDAQ") shall have
approved the Stock for inclusion, it will be in compliance with all
applicable corporate governance requirements set forth in the NASDAQ
Marketplace Rules that are then applicable to the Company and is actively
taking steps to ensure that it will be in compliance with other applicable
corporate governance requirements set forth in the NASDAQ Marketplace
Rules not currently applicable to the Company upon and all times after
such requirements become applicable to the Company.
(ii) Neither the Company nor any of its subsidiaries nor, to the best of
the Company's knowledge, any employee or agent of the Company or any
subsidiary, has made any contribution or other payment to any official of,
or candidate for, any federal, state or foreign office or government in
violation of any law or of the character required
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to be disclosed in the Prospectus, including without limitation the United
States Foreign Corrupt Practices Act.
(jj) There are no transactions, arrangements or other relationships
between and/or among the Company, any of its affiliates (as such term is
defined in Rule 405 of the Securities Act) and any unconsolidated entity,
including, but not limited to, any structured finance, special purpose or
limited purpose entity that could reasonably be expected to materially
affect the Company's liquidity or the availability of or requirements for
its capital resources required to be described in the Prospectus which
have not been described as required.
(kk) There are no outstanding loans, advances (except normal advances for
business expense in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the officers
or directors of the Company, except as disclosed in the Prospectus.
(ll) The Registration Statements, the Prospectus and the Preliminary
Prospectus comply, and any further amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign jurisdictions
in which they are distributed in connection with the Directed Share
Program. No authorization, approval, consent, license, order, registration
or qualification of or with any government, governmental instrumentality
or court, other than such as have been obtained, is necessary under the
securities laws or regulations of any foreign jurisdiction in which the
Directed Shares are offered outside the United States.
(mm) The Company has not offered, or caused the Underwriters to offer, any
Firm Stock to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or business partner
of the Company to alter the customer's or business partner's level or type
of business with the Company or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its products.
(nn) All issuances of securities, including without limitation grants of
options, by the Company have been in compliance with all applicable laws,
including without limitation federal and state securities laws, except as
set forth in the Prospectus and except where failure to comply with such
laws would not have a Material Adverse Effect.
(II) Representations and Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally represents and warrants to, and
agrees with, the several Underwriters that such Selling Stockholder:
(a) Has, and immediately prior to each Closing Date (as defined in Section
3 hereof) the Selling Stockholder will have good and valid title to the
shares of Stock to be sold by the Selling Stockholder hereunder on such
date, free and clear of all liens,
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encumbrances or claims; and upon delivery of such shares and payment
therefor pursuant hereto, good and valid title to such shares, free and
clear of all liens, encumbrances or claims, will pass to the several
Underwriters.
(b) Has duly and irrevocably executed and delivered a power of attorney,
in substantially the form heretofore delivered by the Representatives (the
"Power of Attorney"), appointing _______________ and _______________ and
each of them, as attorney-in-fact (the "Attorneys-in-fact") with authority
to execute and deliver this Agreement on behalf of such Selling
Stockholder, to authorize the delivery of the shares of Stock to be sold
by such Selling Stockholder hereunder and otherwise to act on behalf of
such Selling Stockholder in connection with the transactions contemplated
by this Agreement.
(c) Has duly and irrevocably executed and delivered a custody agreement,
in substantially the form heretofore delivered by the Representatives (the
"Custody Agreement"), with _______________ as custodian (the "Custodian"),
pursuant to which certificates in negotiable form for the shares of Stock
to be sold by such Selling Stockholder hereunder have been placed in
custody for delivery under this Agreement.
(d) Has full right, power and authority to enter into this Agreement, the
Power of Attorney and the Custody Agreement; the execution, delivery and
performance of this Agreement, the Power of Attorney and the Custody
Agreement by such Selling Stockholder and the consummation by such Selling
Stockholder of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
such Selling Stockholder is a party or by which the Selling Stockholder is
bound or to which any of the property or assets of the Selling Stockholder
is subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Selling Stockholder, the
articles of partnership of the Selling Stockholder, the deed of trust of
the Selling Stockholder or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Selling Stockholder or the property or assets of the Selling Stockholder;
and, except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or qualifications
as may be required under the Exchange Act and applicable state securities
laws in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing
or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement,
the Power of Attorney or the Custody Agreement by such Selling Stockholder
and the consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby.
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(e) The Registration Statements do not, and the Prospectus and any further
amendments or supplements to the Registration Statements or the Prospectus
will not, as of the applicable effective date (as to the Registration
Statements and any amendment thereto) and as of the applicable filing date
(as to the Prospectus and any amendment or supplement thereto) contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading. The preceding sentence applies only to the extent that any
information contained in or omitted from the Registration Statements or
Prospectus was in reliance upon and in conformity with written information
furnished to the Company by such Selling Stockholder specifically for
inclusion therein.
(f) Such Selling Stockholder has not taken, directly or indirectly, any
action designed or intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted in, or which might
reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company.
3. Purchase Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and each Selling Stockholder
agrees, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Stockholder, that number of shares of Firm Stock (rounded up or
down, as determined by XX Xxxxx in its discretion, in order to avoid fractions)
obtained by multiplying _____ shares of Firm Stock in the case of the Company
and the number of shares of Firm Stock set forth opposite the name of such
Selling Stockholder in Schedule B hereto, in the case of a Selling Stockholder,
in each case by a fraction the numerator of which is the number of shares of
Firm Stock set forth opposite the name of such Underwriter in Schedule A hereto
and the denominator of which is the total number of shares of Firm Stock.
The purchase price per share to be paid by the Underwriters to the Company
and the Selling Stockholders for the Stock will be $_____ per share (the
"Purchase Price").
The Company and the Selling Stockholders will deliver the Firm Stock to
the Representatives for the respective accounts of the several Underwriters (in
the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York time, on the second full
business day preceding the First Closing Date (as defined below) against payment
of the aggregate Purchase Price therefor by wire transfer to an account at a
bank acceptable to XX Xxxxx payable to the order of the Company and
_______________ as Custodian for the Selling Stockholders, all at the offices of
Xxxxxx & Xxxxxxx LLP, 000 X. Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX 00000.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligations of each
Underwriter hereunder. The time and date of the delivery and closing shall be at
10:00 A.M., New York time, on __________, 2004, in accordance with Rule 15c6-1
of the Exchange Act. The time and
13
date of such payment and delivery are herein referred to as the "First Closing
Date." The First Closing Date and the location of delivery of, and the form of
payment for, the Firm Stock may be varied by agreement among the Company, the
Selling Stockholders and XX Xxxxx.
The Company and the Selling Stockholders shall make the certificates for
the Stock available to the Representatives for examination on behalf of the
Underwriters in New York, New York at least twenty-four hours prior to the First
Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company and the Selling Stockholders agree, severally and not jointly, to sell
to the Underwriters the respective numbers of shares of Optional Stock obtained
by multiplying the number of shares of Optional Stock specified in such notice
by a fraction the numerator of which is _______________ in the case of the
Company and the number of shares set forth opposite the names of such Selling
Stockholders in Schedule B hereto under the caption "Number of Optional Shares
to be Sold" in the case of the Selling Stockholders and the denominator of which
is the total number of shares of Optional Stock (subject to adjustment by XX
Xxxxx to eliminate fractions). Such shares of Optional Stock shall be purchased
from the Company and each Selling Stockholder for the account of each
Underwriter in the same proportion as the number of shares of Firm Stock set
forth opposite such Underwriter's name bears to the total number of shares of
Firm Stock (subject to adjustment by XX Xxxxx to eliminate fractions). The
option granted hereby may be exercised as to all or any part of the Optional
Stock at any time, and from time to time (but no more than three times), not
more than thirty (30) days subsequent to the date of this Agreement. No Optional
Stock shall be sold and delivered unless the Firm Stock previously has been, or
simultaneously is, sold and delivered. The right to purchase the Optional Stock
or any portion thereof may be surrendered and terminated at any time upon notice
by XX Xxxxx to the Company and the Selling Stockholders.
The option granted hereby may be exercised by written notice being given
to the Company and the Selling Stockholders by XX Xxxxx setting forth the number
of shares of the Optional Stock to be purchased by the Underwriters and the date
and time for delivery of and payment for the Optional Stock. Each date and time
for delivery of and payment for the Optional Stock (which may be the First
Closing Date, but not earlier) is herein called the "Option Closing Date" and
shall in no event be earlier than two (2) business days nor later than five (5)
business days after written notice is given. (The Option Closing Date and the
First Closing Date are herein called the "Closing Dates.")
The Company and the Selling Stockholders will deliver the Optional Stock
to the Underwriters (in the form of definitive certificates, issued in such
names and in such denominations as the Representatives may direct by notice in
writing to the Company given at or prior to 12:00 Noon, New York time, on the
second full business day preceding the Option
14
Closing Date against payment of the aggregate Purchase Price therefor in federal
(same day) funds by certified or official bank check or checks or wire transfer
to an account at a bank acceptable to XX Xxxxx payable to the order of the
Company and _______________ as Custodian for the Selling Stockholders all at the
offices of Xxxxxx & Xxxxxxx LLP, 000 X. Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligations
of each Underwriter hereunder. The Company and the Selling Stockholders shall
make the certificates for the Optional Stock available to the Representatives
for examination on behalf of the Underwriters in New York, New York not later
than 10:00 A.M., New York Time, on the business day preceding the Option Closing
Date. The Option Closing Date and the location of delivery of, and the form of
payment for, the Optional Stock may be varied by agreement among the Company,
the Selling Stockholders and XX Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the
terms and conditions set forth in the Prospectus.
4. (I) Further Agreements of the Company. The Company agrees with
the several Underwriters that:
(a) The Company will prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and file such Rule
462(b) Registration Statement with the Commission on the date hereof;
prepare the Prospectus in a form approved by the Representatives and file
such Prospectus pursuant to Rule 424(b) under the Securities Act not later
than the second business day following the execution and delivery of this
Agreement; make no further amendment or any supplement to the Registration
Statements or to the Prospectus to which the Representatives shall
reasonably object by notice to the Company after a reasonable period to
review; advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to either Registration Statement
has been filed or becomes effective or any supplement to the Prospectus or
any amended Prospectus has been filed and to furnish the Representatives
with copies thereof; advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of
the Stock for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statements or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, use promptly its best efforts to obtain
its withdrawal.
(b) If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus
relating to the Stock is required to
15
be delivered any event occurs as a result of which (in the judgment of the
Company or in the opinion of counsel to the Underwriters) the Prospectus
as then amended or supplemented would include any untrue statement of a
material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Securities Act, the Company will promptly
notify the Representatives thereof and upon their reasonable request will
prepare an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance. The Company will furnish
without charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request of
such amended or supplemented Prospectus; and in case any Underwriter is
required to deliver a prospectus relating to the Stock nine months or more
after the effective date of the Initial Registration Statement, the
Company, upon the reasonable request of any of the Representatives and at
the expense of such Underwriter, will prepare promptly an amended or
supplemented Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act.
(c) To furnish promptly to each of the Representatives and to counsel for
the Underwriters a signed copy of each of the Registration Statements as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith
(and not including any exhibits incorporated by reference).
(d) To deliver promptly to the Representatives in New York City such
number of the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statements as originally
filed with the Commission and each amendment thereto (in each case
excluding exhibits), (ii) each Preliminary Prospectus, and (iii) the
Prospectus (not later than 10:00 A.M., New York time, of the business day
following the execution and delivery of this Agreement) and any amended or
supplemented Prospectus (not later than 10:00 A.M., New York City time, on
the business day following the date of such amendment or supplement).
(e) To make generally available to its shareholders as soon as
practicable, but in any event not later than twelve months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the option
of the Company, Rule 158).
(f) The Company will promptly take from time to time such actions as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities or Blue Sky laws of such jurisdictions as
the Representatives may
16
designate and to continue such qualifications in effect for so long as
required for the distribution of the Stock; provided that the Company and
its subsidiaries shall not be obligated to qualify as foreign corporations
in any jurisdiction in which they are not so qualified or to file a
general consent to service of process in any jurisdiction.
(g) During the period of five years from the date hereof, the Company will
deliver to the Representatives and, upon request, to each of the other
Underwriters, (i) as soon as they are available, copies of all reports or
other communications furnished to shareholders and (i) as soon as they are
available, copies of any reports and financial statements furnished or
filed with the Commission pursuant to the Exchange Act or any national
securities exchange or automatic quotation system on which the Stock is
listed or quoted.
(h) The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of, or file with
the Commission a registration statement under the Securities Act relating
to, any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock for a period of 180 days from
the date of the Prospectus without the prior written consent of XX Xxxxx
other than the Company's sale of the Stock hereunder and the issuance of
shares pursuant to employee benefit plans, qualified stock option plans or
other employee compensation plans existing on the date hereof or to be in
existence after the Effective Date as described in the Prospectus, or
pursuant to currently outstanding options, warrants or rights. The Company
will cause each officer, director and shareholder listed in Schedule C to
furnish to the Representatives, prior to the First Closing Date, a letter,
substantially in the form of Exhibit I hereto, pursuant to which each such
person shall agree not to directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares of
Common Stock or securities convertible into or exercisable or exchangeable
for Common Stock for a period of 180 days from the date of the Prospectus,
without the prior written consent of XX Xxxxx.
(i) The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(j) Prior to each of the Closing Dates the Company will furnish to the
Representatives, as soon as they have been prepared, copies of any
unaudited interim consolidated financial statements of the Company for any
periods subsequent to the periods covered by the financial statements
appearing in the Registration Statement and the Prospectus.
(k) Prior to each of the Closing Dates, neither the Company nor its
subsidiaries will issue any press release or other communication directly
or indirectly or hold any press conference with respect to the Company,
its condition, financial or otherwise, or earnings, business affairs or
business prospects (except for routine oral marketing
17
communications in the ordinary course of business and consistent with the
past practices of the Company and of which the Representatives are
notified), without the prior written consent of the Representatives,
unless in the judgment of the Company and its counsel, and after
notification to the Representatives, such press release or communication
is required by law.
(l) In connection with the offering of the Stock, until XX Xxxxx shall
have notified the Company of the completion of the resale of the Stock,
the Company will not, and will cause its affiliated purchasers (as defined
in Regulation M under the Exchange Act) not to, either alone or with one
or more other persons, bid for or purchase, for any account in which it or
any of its affiliated purchasers has a beneficial interest, any Stock, or
attempt to induce any person to purchase any Stock; and not to, and to
cause its affiliated purchasers not to, make bids or purchase for the
purpose of creating actual, or apparent, active trading in or of raising
the price of the Stock.
(m) The Company will not take any action prior to the Option Closing Date
which would require the Prospectus to be amended or supplemented pursuant
to Section 4(I)(b).
(n) The Company shall at all times during the period commencing on the
First Closing Date and ending nine months thereafter comply with all
applicable provisions of the Xxxxxxxx-Xxxxx Act in effect from time to
time.
(o) The Company will apply the net proceeds from the sale of the Stock as
set forth in the Prospectus under the heading "Use of Proceeds".
(p) In connection with the Directed Share Program, the Company will ensure
that the Directed Shares will be restricted to the extent required by the
NASD or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three (3) months following the date of the
effectiveness of the Registration Statement. The Designated Underwriter
will notify the Company as to which Participants will need to be so
restricted. The Company will direct the transfer agent to place stop
transfer restrictions upon such securities for such period of time.
(q) The Company will, or will cause the Selling Stockholders to, pay all
fees and disbursements of counsel (including local counsel) incurred by
the Underwriters in connection with the Directed Share Program and stamp
duties, similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program.
(r) The Company will comply with all applicable securities and other
applicable securities and other laws, rules and regulations in each
foreign jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
18
(s) The Company shall manage its affairs and investments in such a manner
as not to be or become an "investment company" within the meaning of the
Investment Company Act and the rules and regulations thereunder.
(II) Further Agreements of the Selling Stockholders. Each Selling
Stockholder, severally and not jointly, agrees with the several Underwriters
that:
(a) They will not directly or indirectly offer, sell, assign, transfer,
pledge, contract to sell, or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for
Common Stock other than the sale of the Stock hereunder for a period of
180 days from the date of the Prospectus, without the prior written
consent of XX Xxxxx.
(b) The shares of Stock represented by the certificates held in custody
under the Custody Agreement are for the benefit of and coupled with and
subject to the interests of the Underwriters and the other Selling
Stockholders, and that the arrangement for such custody and the
appointment of the Attorneys-in-fact are irrevocable; that the obligations
of such Selling Stockholder hereunder shall not be terminated by operation
of law, whether by the death or incapacity, liquidation or distribution of
such Selling Stockholder, or any other event, that if such Selling
Stockholder should die or become incapacitated or is liquidated or
dissolved or any other event occurs, before the delivery of the Stock
hereunder, certificates for the Stock to be sold by such Selling
Stockholder shall be delivered on behalf of such Selling Stockholder in
accordance with the terms and conditions of this Agreement and the Custody
Agreement, and action taken by the Attorneys-in-fact or any of them under
the Power of Attorney shall be as valid as if such death, incapacity,
liquidation or dissolution or other event had not occurred, whether or not
the Custodian, the Attorneys-in-fact or any of them shall have notice of
such death, incapacity, liquidation or dissolution or other event.
(c) Such Selling Stockholder will not take, directly or indirectly, any
action designed or intended to stabilize or manipulate the price of any
security of the Company, or that might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security
of the Company.
(d) Such Selling Stockholder will deliver to XX Xxxxx on or prior to the
First Closing Date a properly completed and executed United States
Treasury Department Form W-8 (if the Selling Stockholder is a non-United
States person) or Form W-9 (if the Selling Stockholder is a United States
person) or such other applicable form or statement specified by Treasury
Department regulations in lieu thereof.
5. Payment of Expenses. The Company agrees with the Underwriter to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Stock and any taxes payable in that connection; (b) the costs incident to
the Registration of the Stock under the Securities Act; (c) the costs incident
to the preparation, printing and distribution of the
19
Registration Statement, Preliminary Prospectus, Prospectus, any amendments and
exhibits thereto, the costs of printing, reproducing and distributing the Power
of Attorney, the Custody Agreement, the "Agreement Among Underwriters" between
the Representatives and the Underwriters, the Master Selected Dealers'
Agreement, the Underwriters' Questionnaire and this Agreement by mail, telex or
other means of communications; (d) the reasonable fees and expenses (including
related fees and expenses of counsel for the Underwriters) incurred in
connection with filings made with the National Association of Securities
Dealers; (e) any applicable listing or other fees; (f) the reasonable fees and
expenses of qualifying the Stock under the securities laws of the several
jurisdictions as provided in Section 4(I)(f) and of preparing, printing and
distributing Blue Sky Memoranda and Legal Investment Surveys (including related
fees and expenses of counsel to the Underwriters); (g) all fees and expenses of
the registrar and transfer agent of the Stock; and (h) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement (including, without limitation, the fees and expenses of the
Company's counsel and the Company's independent accountants); provided that,
except as otherwise provided in this Section 5 and in Section 9, the
Underwriters shall pay their own costs and expenses, including the fees and
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters.
Other than up to $15,000 the fees and expenses of a single counsel to the
Selling Stockholders to be paid by the Company, each Selling Stockholder will
pay all fees and expenses incident to the performance of such Selling
Stockholder's obligations under this Agreement which are not otherwise
specifically provided for herein, including but not limited to any fees and
expenses of counsel for such Selling Stockholder, such Selling Stockholder's pro
rata share of fees and expenses of the Attorneys-in-fact and the Custodian and
all expenses and taxes incident to the sale and delivery of the Stock to be sold
by such Selling Stockholder to the Underwriters hereunder (as and to the extent
provided for in that certain Amended and Restated Investors' Rights Agreement,
dated April 12, 2000 among the Company and the investors party thereto).
6. Conditions of Underwriters' Obligations. The respective obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the accuracy of the statements
of the Company and the Selling Stockholders made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder, and to each of the following
additional terms and conditions:
(a) No stop order suspending the effectiveness of either of the
Registration Statements shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the Commission, and any
request for additional information on the part of the Commission (to be
included in the Registration Statements or the Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of
20
the Representatives. The Rule 462(b) Registration Statement, if any, and
the Prospectus shall have been timely filed with the Commission in
accordance with Section 4(I)(a).
(b) None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement or
the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Underwriters,
is material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Custody
Agreements, the Powers of Attorney, the Stock, the Registration Statement
and the Prospectus and all other legal matters relating to this Agreement
and the transactions contemplated hereby shall be reasonably satisfactory
in all material respects to counsel for the Underwriters, and the Company
and the Selling Stockholders shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) Pillsbury Winthrop LLP shall have furnished to the Representatives
such counsel's written opinion, as counsel to the Company, addressed to
the Underwriters and dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company and each of its U.S. subsidiaries have been duly
incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation, and are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all
power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged,
except where the failure to so qualify or have such power or
authority would not have, singularly or in the aggregate, a Material
Adverse Effect.
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the shares of capital stock of the Company
set forth in the Prospectus as issued and outstanding (not including
the Stock being delivered on the Closing Date) have been duly and
validly authorized and issued, are non-assessable and, to such
counsel's knowledge, fully paid, and conform to the description
thereof contained in the Prospectus in all material respects. The
Firm Stock and Optional Stock being delivered by the Company on the
Closing Date and the
21
Option Closing Date have been duly authorized, and when issued and
delivered to and paid for by the Underwriters in accordance with the
Underwriting Agreement, will be validly issued, fully paid and
nonassessable.
(iii) All the outstanding shares of capital stock of each U.S. subsidiary
of the Company have been duly authorized and validly issued, and are
fully-paid and nonassessable and, except to the extent set forth in
the Prospectus and are owned by the Company directly or indirectly
through one or more wholly-owned subsidiaries, free and clear of any
claim, lien, encumbrance, security interest, restriction upon voting
or transfer or any other claim of any third party.
(iv) There are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's charter or by-laws or
any agreement or other instrument that is filed as an exhibit to (or
incorporated by reference in) the Registration Statement ("Material
Documents") except for such rights that have been waived.
(v) This Agreement has been duly authorized, executed and delivered by
the Company.
(vi) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under any of the Material
Documents, nor will such actions result in any violation of the
Charter or by-laws of the Company or of any of its U.S. subsidiaries
or any statute or any order, rule or regulation of any court or
governmental agency or body or court having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets. Except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with
the purchase and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby.
(vii) The statements in the Prospectus under the headings
"Business-Regulation," "Business-Legal Proceedings," "Description of
Capital Stock," "Shares Eligible for Future Sale" and "U.S. Federal
Income
22
Tax Consequences to Non-U.S. Holders," to the extent that they
constitute summaries of matters of U.S. law or regulation or legal
conclusions, have been reviewed by such counsel and fairly summarize
the matters described therein in all material respects.
(viii) The description in the Registration Statement and Prospectus of
U.S. statutes, legal or governmental proceedings and contracts and
other documents are accurate in all material respects; and to such
counsel's knowledge, there are no contracts or other documents of a
character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement
which are not described or filed as required.
(ix) To such counsel's knowledge, neither the Company nor any of its U.S.
subsidiaries (i) is in violation of its charter or by-laws, or (ii)
is in violation of any law, ordinance, governmental rule, regulation
or court decree to which it or its property or assets may be
subject, in the case of clause (ii), for those defaults, violations
or failures which, either individually or in the aggregate, would
not have a Material Adverse Effect. The foregoing opinion set forth
in clause (ii) of this subsection (ix) is limited to laws, rules and
regulations normally applicable to transactions of the type
contemplated in the Underwriting Agreement and do not extend to
licenses, permits and approvals necessary for the conduct of the
Company's business.
(x) To such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of
which any property or asset of the Company or any of its
subsidiaries is the subject which, singularly or in the aggregate,
if determined adversely to the Company or any of its subsidiaries,
might have a Material Adverse Effect or would prevent or adversely
affect the ability of the Company to perform its obligations under
this Agreement; and, to such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others (provided that such counsel
shall not be required to do any litigation or court docket
searches).
(xi) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion,
the Rule 462(b) Registration Statement, if any, was filed with the
Commission on the date specified therein, the Prospectus was filed
with the Commission pursuant to the subparagraph of Rule 424(b) of
the Rules and Regulations specified
23
in such opinion on the date specified therein and, to the knowledge
of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose is pending or threatened by the Commission.
(xii) The Registration Statements, as of the respective effective dates
and the Prospectus, as of its date, and any further amendments or
supplements thereto, as of their respective dates, made by the
Company prior to the Closing Date (other than the financial
statements and other financial data contained therein, as to which
such counsel need express no opinion) complied as to form in all
material respects with the requirements of the Securities Act and
the Rules and Regulations of the Commission thereunder.
(xiii) To such counsel's knowledge no person or entity (other than the
Selling Stockholders in respect of the Common Stock being sold by
such Selling Stockholders in the offering) has the right under the
Material Documents to require registration of shares of Common Stock
or other securities of the Company because of the filing or
effectiveness of the Registration Statements or otherwise in
connection with the offering, except for persons and entities who
have expressly waived such right or who have been given proper
notice and have failed to exercise such right within the time or
times required under the terms and conditions of such right.
(xiv) Neither the Company nor any of its subsidiaries is or, following
application of the proceeds of the offering as set forth in
resolutions adopted by the Board of Directors of the Company will
be, an "investment company" within the meaning of the Investment
Company Act and the rules and regulations of the Commission
thereunder.
Such counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Representatives, to the effect that (x) such
counsel has acted as counsel to the Company in connection with the preparation
of the Registration Statements (y) based on such counsel's examination of the
Registration Statements and such counsel's investigations made in connection
with the preparation of the Registration Statements and "conferences with
certain officers and employees of and with auditors for and counsel to the
Company," such counsel has no reason to believe that the Registration
Statements, as of the respective effective dates, 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, or
that the Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in order to
make the
24
statements therein, in light of the circumstances under which they were made,
not misleading; it being understood that such counsel need express no opinion as
to the financial statements or other financial data contained in the
Registration Statement or the Prospectus.
The foregoing opinion and statement may be qualified by a statement to the
effect that such counsel has not independently verified the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and takes no responsibility therefor except to the
extent set forth in the opinion described in clauses (vii) and (viii) above.
Such opinion shall be shall be subject to customary qualifications, assumptions
and limitations.
(e) __________ shall have furnished to the Representatives such counsel's
written opinion, as Philippine counsel to the Company, addressed to the
Underwriters and dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) Each of the Company's Philippine subsidiaries have been duly
incorporated and are validly existing as corporations in good
standing under Philippine law, are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the conduct
of their respective businesses requires such qualification, and have
all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged,
except where the failure to so qualify or have such power or
authority would not have, singularly or in the aggregate, a Material
Adverse Effect.
(ii) All the outstanding shares of capital stock of each of the Company's
Philippine subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable and, except to the extent
set forth in the Prospectus, are owned by the Company directly or
indirectly through one or more wholly-owned subsidiaries, free and
clear of any claim, lien, encumbrance, security interest,
restriction upon voting or transfer or any other claim of any third
party.
(iii) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel after reasonable investigation to
which any of the Company's Philippine subsidiaries is a party or by
which any of the Company's Philippine subsidiaries is bound or to
which any of the properties or assets of any of
25
the Company's Philippine subsidiaries is subject, nor will such
actions result in any violation of the Charter or by-laws of any of
the Company's Philippine subsidiaries or any Philippine statute or
any order, rule or regulation of any court or governmental agency or
body or court having jurisdiction over any of the Company's
Philippine subsidiaries or any of their properties or assets. No
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby.
(iv) The statements in the Prospectus under the headings
"Business-Regulation," "Business-Legal Proceedings," "Description of
Capital Stock," "Shares Eligible for Future Sale" and "U.S. Federal
Income Tax Consequences to Non-U.S. Holders," to the extent that
they constitute summaries of matters of Philippine law or regulation
or legal conclusions, have been reviewed by such counsel and fairly
summarize the matters described therein in all material respects.
(v) The description in the Registration Statement and Prospectus of
Philippine statutes, legal or governmental proceedings and contracts
and other documents are accurate in all material respects; and to
the best of such counsel's knowledge, there are no Philippine
statutes, legal or governmental proceedings, contracts or other
documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to
the Registration Statement which are not described or filed as
required.
(vi) To the best of such counsel's knowledge, none of the Company's
Philippine subsidiaries (i) is in violation of its charter or
by-laws, (ii) is in default, and no event has occurred, which, with
notice or lapse of time or both, would constitute a default, in the
due performance or observance of any term, covenant or condition
contained in any agreement or instrument to which it is a party or
by which it is bound or to which any of its properties or assets is
subject or (iii) is in violation of any Philippine law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any
license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property
or to the conduct of its business except, in the case of clauses
(ii) and (iii), for those defaults, violations or failures which,
either individually or in the aggregate, would not have a Material
Adverse Effect.
26
(f) _______________ shall have furnished to the Representatives such
counsel's written opinion, as counsel to the Selling Stockholders,
addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Representatives, to the effect
that:
(i) Each Selling Stockholder has full right, power and authority to
enter into this Agreement, the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by each
Selling Stockholder and the consummation by each Selling Stockholder
of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which any Selling
Stockholder is a party or by which any Selling Stockholder is bound
or to which any of the property or assets of any Selling Stockholder
is subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of any Selling Stockholder, the
articles of partnership of any Selling Stockholder, the deed of
trust of any Selling Stockholder or any statute or any order, rule
or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over any Selling Stockholder or
the property or assets of any Selling Stockholder; and, except for
the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications
as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of
the Stock by the Underwriters, no consent, approval, authorization
or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement, the Power of Attorney or the
Custody Agreement by any Selling Stockholder and the consummation by
any Selling Stockholder of the transactions contemplated hereby and
thereby.
(ii) This Agreement has been duly authorized, executed and delivered by
or on behalf of each Selling Stockholder.
(iii) A Power-of-Attorney and a Custody Agreement have been duly
authorized, executed and delivered by each Selling Stockholder and
constitute valid and binding agreements of each Selling Stockholder.
(iv) Upon payment for, and delivery of, the shares of Stock to be sold by
each Selling Stockholder under this Agreement in accordance with the
terms
27
hereof, the Underwriters will acquire good and valid title to such
shares, free and clear of all liens, encumbrances, equities or
claims.
(g) The Representatives shall have received from Xxxxxx & Xxxxxxx LLP,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to such matters as the Underwriters may reasonably
require, and the Company and the Selling Stockholders shall have furnished
to such counsel such documents as they request for enabling them to pass
upon such matters.
(h) At the time of the execution of this Agreement, the Representatives
shall have received from BDO Xxxxxxx, LLP and PricewaterhouseCoopers LLP
letters, addressed to the Underwriters and dated such date, in form and
substance satisfactory to the Representatives (i) confirming that they are
independent certified public accountants with respect to the Company and
its subsidiaries within the meaning of the Securities Act and the Rules
and Regulations and (ii) stating the conclusions and findings of such firm
with respect to the financial statements and certain financial information
contained in the Prospectus.
(i) On the Closing Date, the Representatives shall have received letters
(the "bring-down letter") from BDO Xxxxxxx, LLP and PricewaterhouseCoopers
LLP addressed to the Underwriters and dated the Closing Date confirming,
as of the date of the bring-down letter (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus as of a date
not more than three business days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by its letter delivered to
the Representatives concurrently with the execution of this Agreement
pursuant to Section 6(g).
(j) The Company shall have furnished to the Representatives a certificate,
dated the Closing Date, of its Chairman of the Board, its President or a
Vice President and its chief financial officer stating that (i) such
officers have carefully examined the Registration Statements and the
Prospectus and, in their opinion, the Registration Statements as of their
respective effective dates and the Prospectus, as of each such effective
date, did not include any untrue statement of a material fact and did not
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) since the effective
date of the Initial Registration Statement no event has occurred which
should have been set forth in a supplement or amendment to the
Registration Statements or the Prospectus, (iii) to the best of their
knowledge after reasonable investigation, as of the Closing Date, the
representations and warranties of the Company in this Agreement are true
and correct and the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, and (iv) subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse
28
change in the financial position or results of operation of the Company
and its subsidiaries, or any change, or any development including a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company
and its subsidiaries taken as a whole, except as set forth in the
Prospectus.
(k) Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholders) shall have
furnished to the Representatives on the Closing Date a certificate, dated
the such date, signed by, or on behalf of, the Selling Stockholder stating
that the representations, warranties and agreements of the Selling
Stockholder contained herein are true and correct as of the Closing Date
and that the Selling Stockholder has complied with all agreements
contained herein to be performed by the Selling Stockholder at or prior to
the Closing Date.
(l) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus and (ii) since such date there shall not have been any change
in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the business, general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is, in the judgment of the Representatives, so
material and adverse as to make it impracticable or inadvisable to proceed
with the sale or delivery of the Stock on the terms and in the manner
contemplated in the Prospectus.
(m) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance
or sale of the Stock or materially and adversely affect or potentially
materially and adversely affect the business or operations of the Company;
and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued as
of the Closing Date which would prevent the issuance or sale of the Stock
or materially and adversely affect or potentially materially and adversely
affect the business or operations of the Company.
(n) Subsequent to the execution and delivery of this Agreement there shall
not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market,
29
shall have been suspended or minimum or maximum prices or maximum range
for prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, (iii) the United States shall
have become engaged in hostilities, or the subject of an act of terrorism,
or there shall have been an escalation in hostilities involving the United
States, or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or
the effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the sale or
delivery of the Stock on the terms and in the manner contemplated in the
Prospectus.
(o) The NASDAQ National Market System shall have approved the Stock for
quotation, subject only to official notice of issuance and evidence of
satisfactory distribution.
(p) XX Xxxxx shall have received the written agreements, substantially in
the form of Exhibit I hereto, of the officers, directors and shareholders
of the Company listed in Schedule C to this Agreement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers, employees, representatives and agents and each person, if any,
who controls any Underwriter within the meaning of the Securities Act
(collectively the "Underwriter Indemnified Parties" and, each an
"Underwriter Indemnified Party") against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Underwriter Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus, either of the Registration Statements or the
Prospectus or in any amendment or supplement thereto, (ii) the omission or
alleged omission to state in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus or in any amendment or
supplement thereto, a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act
or failure to act, or any alleged act or failure to act, by any
Underwriter in connection with, or relating in any manner to , the Stock
or the offering contemplated
30
hereby, and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above, (provided that the Company shall not
be liable in the case of any matter covered by this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such act or failure to act undertaken or omitted to be
taken by such Underwriter through its gross negligence or willful
misconduct) and shall reimburse each Underwriter Indemnified Party
promptly upon demand for any legal or other expenses reasonably incurred
by that Underwriter Indemnified Party in connection with investigating or
preparing to defend or defending against or appearing as a third party
witness in connection with any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged
omission from the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for use therein, which information the parties hereto agree
is limited to the Underwriter's Information (as defined in Section 16).
The Company shall indemnify and hold harmless the Designated
Underwriter and its officers, employees, representatives and agents and
each person, if any, who controls the Designated Underwriter within the
meaning of the Securities Act (collectively the "Designated Underwriter
Indemnified Parties," and each a "Designated Underwriter Indemnified
Party") each Underwriter Indemnified Party against any loss, claim, damage
or liability, joint or several, or any action in respect thereof, to which
that Designated Underwriter Indemnified Party may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
material prepared by or with the consent of the Company for distribution
to Participants in connection with the Directed Share Program, (ii) the
omission or alleged omission to state in any material prepared by or with
the consent of the Company for distribution to Participants in connection
with the Directed Share Program of a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (iii) the
failure of any Participant to pay for and accept delivery of Directed
Shares that the Participant agreed to purchase; or (iv) any other loss,
claim, damage or liability, or any action in respect of, related to,
arising out of, or in connection with the Directed Share Program, other
than such losses, claims, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the
willful misconduct or gross negligence of the Designated Underwriter;
provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action
arises out of or is based upon an untrue
31
statement or alleged untrue statement in or omission or alleged omission
from the Preliminary Prospectus, either of the Registration Statements or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for use
therein, which information the parties hereto agree is limited to the
Underwriter's Information (as defined in Section 16).
This indemnity agreement is not exclusive and will be in addition to
any liability which the Company might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in
equity to each Underwriter Indemnified Party.
(b) The Selling Stockholders, severally and not jointly, shall indemnify
and hold harmless each Underwriter Indemnified Party, against any loss,
claim, damage or liability, joint or several, or any action in respect
thereof, to which that Underwriter Indemnified may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus, either of the Registration Statements or the
Prospectus or in any amendment or supplement thereto or (ii) the omission
or alleged omission to state in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus or in any amendment or
supplement thereto, a material fact required to be stated therein or
necessary to make the statements therein not misleading but in each case
only to the extent that the untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of the Selling Stockholder specifically
for inclusion therein, and shall reimburse each Underwriter Indemnified
Party promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter Indemnified Party in connection with
investigating or preparing to defend or defending against or appearing as
a third party witness in connection with any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, the
liability of each Selling Stockholder under this Section 7(b) shall be
limited to the proceeds received by such Selling Stockholder in connection
with the sale of such Selling Stockholders' shares of Stock less
applicable underwriting discounts and commissions. This indemnity
agreement is not exclusive and will be in addition to any liability which
the Selling Shareholders might otherwise have and shall not limit any
rights or remedies which may otherwise be available at law or in equity to
each Underwriter Indemnified Party.
(c) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company its officers, employees, representatives and agents,
each of its directors and each person, if any, who controls the Company
within the meaning of the Securities Act (collectively the "Company
Indemnified Parties" and each a "Company Indemnified
32
Party") and the Selling Stockholders, their respective officers,
employees, representatives and agents and each person, if any, who
controls the Selling Stockholders within the meaning of the Securities Act
(collectively, the "Shareholder Indemnified Parties" and each a
"Shareholder Indemnified Party"), against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
the Company Indemnified Parties or the Selling Stockholder Indemnified
Parties may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or in any amendment or supplement thereto or
(ii) 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, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company through the Representatives by or on behalf of that
Underwriter specifically for use therein, and shall reimburse the Company
Indemnified Parties and the Selling Stockholder Indemnified Parties for
any legal or other expenses reasonably incurred by such parties in
connection with investigating or preparing to defend or defending against
or appearing as third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided
that the parties hereto hereby agree that such written information
provided by the Underwriters consists solely of the Underwriter's
Information. This indemnity agreement is not exclusive and will be in
addition to any liability which the Underwriters might otherwise have and
shall not limit any rights or remedies which may otherwise be available at
law or in equity to the Company Indemnified Parties and Selling
Stockholder Indemnified Parties.
(d) Promptly after receipt by an indemnified party under this Section 7 of
notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 7
except to the extent it has been materially prejudiced by such failure;
and, provided, further, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 7. If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 7 for any legal or other expenses subsequently
33
incurred by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however, that any
indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available
to the indemnifying party and in the reasonable judgment of such counsel
it is advisable for such indemnified party to employ separate counsel or
(iii) the indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the indemnified
party, in which case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense
of the indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time for
all such indemnified parties, which firm shall be designated in writing by
XX Xxxxx, if the indemnified parties under this Section 7 consist of any
Underwriter Indemnified Party, or by the Company if the indemnified
parties under this Section 7 consist of any Company Indemnified Parties.
Each indemnified party, as a condition of the indemnity agreements
contained in Sections 7(a), 7(b) and 7(c), shall use all reasonable
efforts to cooperate with the indemnifying party in the defense of any
such action or claim. Subject to the provisions of Section 7(e) below, no
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if
there be a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement
or judgment.
Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to the penultimate paragraph in Section
7(a) hereof in respect of such action or proceeding, then in addition to
such separate firm for the indemnified parties, the indemnifying party
shall be liable for the reasonable fees and expenses of not more than one
separate firm (in addition to any local counsel) for the Designated
Underwriter for the defense of any losses, claims, damages and liabilities
arising out of the Directed Share Program, and all persons, if any, who
control the Designated Underwriter within the meaning of either Section 15
of the Act of Section 20 of the Exchange Act.
(e) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and expenses
of counsel, such
34
indemnifying party agrees that it shall be liable for any settlement of
the nature contemplated by this Section 7 effected without its written
consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the request for reimbursement, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of
such settlement.
(f) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section 7(a),
7(b) or 7(c), then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other from the
offering of the Stock, or, if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company
and the Selling Stockholders on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by the
Company and the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the
Stock purchased under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The 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 the
Company or the Selling Stockholders on the one hand or the Underwriters on
the other, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such untrue statement
or omission; provided that the parties hereto agree that the written
information furnished to the Company through the Representatives by or on
behalf of the Underwriters for use in any Preliminary Prospectus, either
of the Registration Statements or the Prospectus consists solely of the
Underwriters' Information. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 7(f) 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 herein. The amount
paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to
35
above in this Section 7(f) shall be deemed to include, for purposes of
this Section 7(f), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(f), (i)
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Stock underwritten by it and
distributed to the public were offered to the public less the amount of
any damages which such Underwriter has otherwise paid or become liable to
pay by reason of any untrue or alleged untrue statement or omission or
alleged omission and (ii) no Selling Stockholder shall be required to
contribute any amount in excess of the proceeds received by such Selling
Stockholder in connection with the sale of such Selling Stockholders'
shares of Stock less applicable underwriting discounts and commissions. 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 to contribute as provided in this
Section 7(f) are several in proportion to their respective underwriting
obligations and not joint.
8. Termination. The obligations of the Underwriters hereunder may be terminated
by XX Xxxxx, in its absolute discretion by notice given to and received by the
Company and the Selling Stockholders prior to delivery of and payment for the
Firm Stock if, prior to that time, (A) any of the events described in Sections
6(l) or 6(n) have occurred, or (B) if the Underwriters shall decline to purchase
the Stock for any reason permitted under this Agreement.
9. Reimbursement of Underwriters' Expenses. If (a) this Agreement shall have
been terminated pursuant to Section 8 or 10, (b) the Company or any Selling
Stockholder shall fail to tender the Stock for delivery to the Underwriters for
any reason not permitted under this Agreement, or (c) the Underwriters shall
decline to purchase the Stock for any reason permitted under this Agreement, the
Company and the Selling Stockholders shall reimburse the Underwriters for the
fees and expenses of their counsel and for such other out-of-pocket expenses as
shall have been reasonably incurred by them in connection with this Agreement
and the proposed purchase of the Stock, and upon demand the Company and the
Selling Stockholders shall pay the full amount thereof to XX Xxxxx. If this
Agreement is terminated pursuant to Section 10 by reason of the default of one
or more Underwriters, neither the Company nor any Selling Stockholder shall be
obligated to reimburse any defaulting Underwriter on account of those expenses.
10. Substitution of Underwriters. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the shares which such defaulting Underwriter or Underwriters agreed but failed
36
to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 10, (i) the Company and
the Selling Stockholders shall have the right to postpone the Closing Dates for
a period of not more than five (5) full business days in order that the Company
and the Selling Stockholders may effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective numbers of shares to be
purchased by the remaining Underwriters or substituted Underwriters shall be
taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to the Company, the Selling Stockholders or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 10 shall be without liability on the part of
any non-defaulting Underwriter, the Selling Stockholders or the Company, except
expenses to be paid or reimbursed pursuant to Sections 5 and 9 and except the
provisions of Section 7 shall not terminate and shall remain in effect.
11. Successors; Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the several Underwriters, the
Company and the Selling Stockholders and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the persons mentioned in the preceding sentence any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Company and the Selling Stockholders contained in this Agreement shall also be
for the benefit of the Underwriter Indemnified Parties, and the indemnities of
the several Underwriters shall also be for the benefit of the Company
Indemnified Parties and the Selling Stockholder Indemnified Parties. It is
understood that the Underwriter's responsibility to the Company and the Selling
Stockholders is solely contractual in nature and the Underwriters do not owe the
Company, or any other party, any fiduciary duty as a result of this Agreement.
12. Survival of Indemnities, Representations, Warranties, etc. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company , the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
37
of any investigation made by or on behalf of any Underwriter, the Selling
Stockholders, the Company or any person controlling any of them and shall
survive delivery of and payment for the Stock.
13. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to XX Xxxxx & Co., LLC
Attention: Xxxxxxxx X. Xxxx (Fax: 000-000-0000);
(b) if to the Company shall be delivered or sent by mail, telex
or facsimile transmission to PeopleSupport, Inc., 0000 Xxxxxxx
Xxx., Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Corporate Counsel (Fax: 000-000-0000);
(c) if to any Selling Stockholders, shall be delivered or sent by mail,
telex or facsimile transmission to such Selling Stockholder at the address
set forth on Schedule B hereto;
provided, however, that any notice to an Underwriter pursuant to Section 7 shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof.
14. Definition of Certain Terms. For purposes of this Agreement,
(a) "business day" means any day on which the New York Stock Exchange,
Inc. is open for trading and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. Underwriters' Information. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the Underwriters' Information consists
solely of the following information in the Prospectus: (i) the last paragraph on
the front cover page concerning the terms of the offering by the Underwriters;
and (ii) the statements concerning the Underwriters contained in the third and
tenth paragraphs under the heading "Underwriting."
17. Authority of the Representatives and Attorneys-in-fact. In connection with
this Agreement, you will act for and on behalf of the several Underwriters, and
any action taken under this Agreement by the Representatives, will be binding on
all the Underwriters; and any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all the Selling Stockholders. Any person
executing and delivering this Agreement as Attorney-in-fact for the Selling
Stockholders represents by so doing that he or she has been duly appointed as
Attorney-in-fact by such Selling Stockholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-fact to take such
action.
38
18. Partial Unenforceability. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
19. General. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Stockholders and the
Representatives.
20. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
39
If the foregoing is in accordance with your understanding of the agreement
between the Company, the Selling Stockholders and the several Underwriters,
kindly indicate your acceptance in the space provided for that purpose below.
Very truly yours, PEOPLESUPPORT, INC.
By:____________________________
Name:
Title:
SELLING STOCKHOLDERS LISTED
IN SCHEDULE B
By: Attorney-in-fact
By:______________________________
Attorney-in-fact
Acting on behalf of the Selling
Stockholders listed in Schedule B
Accepted as of
the date first above written:
XX XXXXX & CO., LLC
XXXXX XXXXXXX & CO.
X.X. XXXXXXX & SONS, INC.
JMP SECURITIES LLC
Acting on their own behalf
and as Representatives of the several
Underwriters referred to in the
foregoing Agreement.
By: XX XXXXX & CO., LLC
By:______________________________
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Head of Equity Capital Markets
40
SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
---- --------- ---------
XX Xxxxx & Co., LLC
Xxxxx Xxxxxxx & Co.
X.X. Xxxxxxx & Sons, Inc.
JMP Securities LLC
---------- ----------
Total
========== ==========
41
SCHEDULE B
Number of Number of
Firm Optional
Shares to Shares to
Selling Stockholders be Sold be Sold
-------------------- ------- -------
[Name and address]
---------- ----------
Total
========== ==========
42
SCHEDULE C
List of parties subject to Section 6(q)
43
EXHIBIT I
Form of Lock-Up Agreement
[Date]
XX Xxxxx & Co., LLC
Xxxxx Xxxxxxx & Co.
X.X. Xxxxxxx & Sons, Inc.
JMP Securities LLC
As representatives of the
several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: PeopleSupport, Inc.
Dear Sirs:
In order to induce XX Xxxxx & Co., LLC ("XX Xxxxx"), Xxxxx Xxxxxxx & Co.,
X.X. Xxxxxxx & Sons, Inc. and JMP Securities LLC (collectively, the
"Representatives"), to enter in to a certain underwriting agreement (the
"Underwriting Agreement") with PeopleSupport, Inc., a Delaware corporation (the
"Company"), with respect to the public offering (the "Offering") of shares of
the Company's Common Stock, par value $.001 per share ("Common Stock"), the
undersigned hereby agrees that for a period of 180 days following the date of
the final prospectus filed by the Company with the Securities and Exchange
Commission in connection with such public offering, the undersigned will not,
without the prior written consent of XX Xxxxx, directly or indirectly, (i)
offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose
of, any shares of Common Stock (including, without limitation, Common Stock
which may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations promulgated under the Securities Act of 1933, as
the same may be amended or supplemented from time to time (such shares, the
"Beneficially Owned Shares")) or securities convertible into or exercisable or
exchangeable in Common Stock, (ii) enter into any swap, hedge or similar
agreement or arrangement that transfers in whole or in part, the economic risk
of ownership of the Beneficially Owned Shares or securities convertible into or
exercisable or exchangeable in Common Stock or (iii) engage in any short selling
of the Common Stock. The foregoing sentence shall not apply to (a) the
registration of or sale to the Underwriters of any Common Stock pursuant to the
Offering and the Underwriting Agreement;(b) bona fide gifts; (c) dispositions to
any trust for the direct or indirect benefit of the undersigned and/or the
immediate family of the undersigned; (d) dispositions by will or intestate
succession to his or her immediate family; or (e) if the undersigned is a
partnership or corporation, as a distribution to partners or stockholders of the
undersigned; provided, however, in each case of items (b), (c), (d) and (e), the
respective recipient, trust, transferee, partner or stockholder thereof agrees
44
in writing to be bound by the terms of this Agreement and confirms that he, she
or it has been in compliance with the terms of this Agreement since the date
hereof.
Anything contained herein to the contrary notwithstanding, any person to
whom shares of Common Stock or Beneficially Owned Shares are transferred from
the undersigned shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until the
expiration of the 180 day period following the date of the Company's final
Prospectus, any and all rights, if any, to request or demand registration
pursuant to the Securities Act of any shares of Common Stock that are registered
in the name of the undersigned or that are Beneficially Owned Shares (other
than, if consented to by XX Xxxxx, the registration of Common Stock pursuant to
the Offering and the Underwriting Agreement). In order to enable the aforesaid
covenants to be enforced, the undersigned hereby consents to the placing of
legends and/or stop-transfer orders with the transfer agent of the Common Stock
with respect to any shares of Common Stock or Beneficially Owned Shares.
By:____________________________
Name:
Title:
