KANBAY INTERNATIONAL, INC.
[ ] Shares
Common Stock
$0.001 Par Value
UNDERWRITING AGREEMENT
_________ __, 2004
UNDERWRITING AGREEMENT
[ ], 2004
UBS Securities LLC
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxxxx X. Xxxxx & Co. Incorporated
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Kanbay International, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell, and the persons named in Schedule B annexed hereto
(the "SELLING STOCKHOLDERS") propose to sell, to the underwriters named in
Schedule A annexed hereto (the "UNDERWRITERS"), for whom you are acting as
representatives, an aggregate of [ ] shares (the "FIRM SHARES") of Common Stock,
$0.001 par value (the "COMMON STOCK"), of the Company, of which [ ] shares are
to be issued and sold by the Company and an aggregate of [ ] shares are to be
sold by the Selling Stockholders in the respective amounts set forth under the
caption "Firm Shares" in Schedule B hereto. In addition, solely for the purpose
of covering over-allotments, the Selling Stockholders propose to grant to the
Underwriters the option to purchase from the Company up to an additional [ ]
shares of Common Stock (the "ADDITIONAL SHARES") in the respective amounts set
forth under the caption "Additional Shares" in Schedule B hereto. The Firm
Shares and the Additional Shares are hereinafter collectively sometimes referred
to as the "SHARES." The Shares are described in the Prospectus which is referred
to below.
The Company hereby acknowledges that in connection with the proposed
offering of the Shares, it has requested UBS Financial Services Inc.
("UBS-FINSVC") to administer a directed share program (the "DIRECTED SHARE
PROGRAM") under which up to [ ] Firm Shares, or 5% of the Firm Shares to be
purchased by the Underwriters (the "RESERVED SHARES"), shall be reserved for
sale by UBS-FinSvc at the initial public offering price to the Company's
officers, directors, employees and consultants and other persons having a
relationship with the Company as designated by the Company (the "DIRECTED SHARE
PARTICIPANTS"), as part of the distribution of the Shares by the Underwriters,
subject to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. ("NASD")
and all other applicable laws, rules and regulations. The number of Shares
available for sale to the general public will be reduced to the extent that
Directed Share Participants purchase Reserved Shares. The Underwriters may offer
any Reserved Shares not purchased by Directed Share Participants to the general
public on the same basis as the other Shares being issued and sold hereunder.
The Company has supplied UBS-FinSvc with names, addresses and telephone numbers
of the individuals or other entities which the Company has
2
designated to be participants in the Directed Share Program. It is understood
that any number of those designated to participate in the Directed Share Program
may decline to do so.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "ACT"), with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-1 (File No. 333-113495)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each such preliminary prospectus, being herein called
a "PRELIMINARY PROSPECTUS") relating to the Shares. Except where the context
otherwise requires, the registration statement, as amended when it became or
becomes effective, including all documents filed as a part thereof, and
including any information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 424(b) under the Act and deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act and also including any registration statement filed pursuant to Rule
462(b) under the Act, is herein called the "REGISTRATION STATEMENT," and the
prospectus, in the form filed by the Company with the Commission pursuant to
Rule 424(b) under the Act on or before the second business day after the date
hereof (or such earlier time as may be required under the Act) or, if no such
filing is required, the form of final prospectus included in the Registration
Statement at the time it became effective, is herein called the "PROSPECTUS." As
used herein, "BUSINESS DAY" shall mean a day on which the New York Stock
Exchange is open for trading.
The Company, the Selling Stockholders and the Underwriters agree as
follows:
1. SALE AND PURCHASE. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell[ ] Firm Shares and each Selling Stockholder hereby
agrees to sell the number of Firm Shares set forth opposite its name in Schedule
B hereto, severally and not jointly, to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of Firm
Shares set forth opposite that Underwriter's name in Schedule A hereto, subject
to adjustment in accordance with Section 10 hereof, in each case at a purchase
price of $[ ] per Share. The Company and each Selling Stockholder is advised by
you that the Underwriters intend (i) to make a public offering of their
respective portions of the Firm Shares as soon after the effective date of the
Registration Statement as in your judgment is advisable and (ii) initially to
offer the Firm Shares upon the terms set forth in the Prospectus. You may from
time to time increase or decrease the public offering price after the initial
public offering to such extent as you may determine.
In addition, the Selling Stockholders listed on Schedule B hereto
hereby grant to the several Underwriters the option to purchase, and, upon the
basis of the representations and warranties and subject to the terms and
conditions herein set forth, the Underwriters shall have the right to purchase,
severally and not jointly, from the Selling Stockholders listed on Schedule B
hereto, ratably in accordance with the number of Firm Shares to be purchased by
each of them, all or a portion of the Additional Shares as may be necessary to
cover over-allotments made in connection with the offering of the Firm Shares,
at the same purchase price per share to be paid by the Underwriters to the
Selling Stockholders listed on Schedule B hereto for the Firm Shares. This
option may be exercised by UBS
3
Securities LLC ("UBS") on behalf of the several Underwriters at any time and
from time to time on or before the thirtieth day following the date of the
Prospectus, by written notice to the Company and the Selling Stockholders listed
on Schedule B hereto. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised, and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to as the "ADDITIONAL TIME OF PURCHASE"); PROVIDED, HOWEVER,
that the additional time of purchase shall not be earlier than the time of
purchase (as defined below) nor earlier than the second business day after the
date on which the option shall have been exercised nor later than the tenth
business day after the date on which the option shall have been exercised. The
number of Additional Shares to be sold to each Underwriter shall be the number
which bears the same proportion to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule A hereto bears to the total number of Firm Shares
(subject, in each case, to such adjustment as you may determine to eliminate
fractional shares), subject to adjustment in accordance with Section 10 hereof.
The number of Additional Shares to be sold by each Selling Shareholder shall be
a number equal to the number of Additional Shares as to which the option is
being exercised multiplied by a fraction, the numerator of which shall be the
number of Additional Shares to be sold by such Selling Shareholder and the
denominator of which shall be the aggregate number of Additional Shares listed
on Schedule B hereto (subject, in each case, to such adjustment as you may
determine to eliminate fractional Shares).
Pursuant to powers of attorney, which in each case shall be
satisfactory to counsel for the Underwriters, granted by (i) Household
Investment Funding, Inc. ("HIFI"), Xxxxx X. Xxxx and Xxxxxxx X. Xxxxx will act
as representatives of HIFI, and (ii) each other Selling Stockholder, Xxxxxxx X.
Xxxxxxxx and Xxxxxx X. Xxxxxxxx, each of whom will have full power and authority
to act as representative of the other Selling Stockholders. The foregoing
representatives (the "REPRESENTATIVES OF THE SELLING STOCKHOLDERS") are
authorized, on behalf of each Selling Stockholder, to execute any documents
necessary or desirable in connection with the sale of the Shares to be sold
hereunder by each Selling Stockholder, to make delivery of the certificates of
such Shares, to receive the proceeds of the sale of such Shares, to give
receipts for such proceeds, to pay therefrom the expenses to be borne by each
Selling Stockholder in connection with the sale and public offering of the
Shares, to distribute the balance of such proceeds to each Selling Stockholder
in proportion to the number of Shares sold by each Selling Stockholder, to
receive notices on behalf of each Selling Stockholder and to take such other
action as may be necessary or desirable in connection with the transactions
contemplated by this Agreement.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Shares shall be made to the Company and each of the Selling Stockholders by
Federal Funds wire transfer, against delivery of the certificates for the Firm
Shares to you through the facilities of The Depository Trust Company ("DTC") for
the respective accounts of the Underwriters. Such payment and delivery shall be
made at 10:00 A.M., New York City time, on [ ], 2004 (unless another time shall
be agreed to by you and the Company and the Representatives of the Selling
Stockholders or unless postponed in accordance with the provisions of Section 10
hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called "THE TIME OF PURCHASE." Electronic transfer of the
4
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the additional time of purchase in such names and in
such denominations as you shall specify.
Deliveries of the documents described in Section 8 hereof with respect
to the purchase of the Shares shall be made at the offices of Winston & Xxxxxx
LLP, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has been declared effective under the
Act; no stop order of the Commission preventing or suspending the use of
any Preliminary Prospectus or the effectiveness of the Registration
Statement has been issued and no proceedings for such purpose have been
instituted or, to the Company's knowledge, are contemplated by the
Commission; each Preliminary Prospectus, at the time of filing thereof,
complied in all material respects to the requirements of the Act and the
last Preliminary Prospectus distributed in connection with the offering of
the Shares did not, as of its date, and does not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; the
Registration Statement complied when it became effective, complies and will
comply, as amended or supplemented, if applicable, in all material respects
with the requirements of the Act and the Prospectus will comply, as of its
date and as amended or supplemented, if applicable, in all material
respects with the requirements of the Act and any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement have been and will be so described or filed; the
Registration Statement did not when it became effective, and will not, as
amended or supplemented, if applicable, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and the
Prospectus will not, as of its date and as amended or supplemented, if
applicable, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the Company makes no warranty
or representation with respect to any statement or omission in any
Preliminary Prospectus, the Registration Statement or the Prospectus in
reliance upon and in conformity with information concerning (i) an
Underwriter and furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in any Preliminary Prospectus,
the Registration Statement or the Prospectus or (ii) a Selling
5
Stockholder and furnished in writing by or on behalf of such Selling
Stockholder to the Company expressly for use in any Preliminary Prospectus,
the Registration Statement or the Prospectus; and the Company has not
distributed and will not distribute any offering material in connection
with the offering or sale of the Shares other than the Registration
Statement, the then most recent Preliminary Prospectus and the Prospectus;
(b) as of the date of this Agreement, the Company has an authorized
and outstanding capitalization as set forth under the heading "Pro Forma"
in the section of the Registration Statement and the Prospectus entitled
"Capitalization", as of the time of purchase, the Company shall have an
authorized and outstanding capitalization as set forth under the heading
"Pro Forma" in the section of the Registration Statement and the Prospectus
entitled "Capitalization" and, as of the additional time of purchase, if
later, the Company shall have an authorized and outstanding capitalization
as set forth under the heading "As Adjusted" in the section of the
Registration Statement and the Prospectus entitled "Capitalization"
(subject, in each case, to the issuance of shares of Common Stock upon
exercise of stock options and warrants disclosed as outstanding in the
Registration Statement and the Prospectus and grant of options under equity
compensation plans described in the Registration Statement and the
Prospectus); all of the issued and outstanding shares of capital stock,
including the Common Stock, of the Company have been duly authorized and
validly issued and are fully paid and non-assessable, have been issued in
compliance with all federal and state securities laws and were not issued
in violation of any preemptive right, resale right, right of first refusal
or similar right;
(c) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, have a
material adverse effect on the business, properties, management, financial
condition, results of operations or prospects of the Company and the
Subsidiaries (as hereinafter defined), taken as a whole (a "MATERIAL
ADVERSE EFFECT");
(e) the Company has no majority-owned subsidiaries (as defined in the
Act) other than the majority-owned subsidiaries listed on Schedule C-1
hereto (collectively, the "SUBSIDIARIES"); the Company owns, directly or
indirectly, the percentage of the issued and outstanding capital stock,
partnership interests or membership interests, as the case may be, of each
of the Subsidiaries as reflected on Schedule C-1; except as reflected on
Schedules C-1 and C-2, the Company does not own, directly or indirectly,
any shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm,
6
partnership, joint venture, association or other entity; complete and
correct copies of the charters and by-laws (or equivalent constitutive
documents) of the Company and the Subsidiaries and all amendments thereto
have been made available to you, and except as set forth in the exhibits to
the Registration Statement, no changes therein will be made subsequent to
the date hereof and prior to the time of purchase or, if later, the
additional time of purchase; each Subsidiary that is a corporation has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; each Subsidiary that
is a partnership has been duly organized and is validly existing as a
partnership in good standing under the laws of its jurisdiction of
formation; each Subsidiary that is a limited liability company has been
duly organized and is validly existing as a limited liability company in
good standing under the laws of its jurisdiction of formation; each
Subsidiary has the power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus; each Subsidiary is duly qualified to do
business as a foreign entity and is in good standing in each jurisdiction
where the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate,
have a Material Adverse Effect; all of the issued and outstanding shares of
capital stock of the Subsidiaries that are corporations have been duly
authorized and validly issued and are fully paid and non-assessable, and
the percentages of such shares as reflected on Schedule C-1 are owned,
directly or indirectly, by the Company subject to no security interest,
other encumbrance or adverse claims (other than all of the issued and
outstanding shares of capital stock of Kanbay Incorporated, which the
Company has pledged to Silicon Valley Bank pursuant to that certain Stock
Pledge Agreement dated as of April 19, 2000); all of the issued and
outstanding partnership interests of the Subsidiaries that are partnerships
have been duly and validly issued, and the percentages of such partnership
interests as reflected on Schedule C-1 are owned, directly or indirectly,
by the Company subject to no security interest, other encumbrance or
adverse claims; all of the issued and outstanding membership interests of
the Subsidiaries that are limited liability companies have been duly and
validly issued, and the percentages of such membership interests as
reflected on Schedule C-1 are owned, directly or indirectly, by the Company
subject to no security interest, other encumbrance or adverse claims; and
no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation into shares
of capital stock, partnership interests or membership interests, as the
case may be, in the Subsidiaries are outstanding;
(f) the Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and non-assessable and free of statutory and
contractual preemptive rights, resale rights, rights of first refusal and
similar rights;
(g) the capital stock of the Company, including the Shares, shall
conform in all material respects as of the time of purchase and as of the
additional time of purchase, if applicable, to the description thereof set
forth in the section of the Registration Statement and the Prospectus
entitled "Description of Capital Stock" and the form of specimen
certificate
7
for the Shares is in due and proper form and the holders of the Shares will
not be subject to personal liability for the obligations of the Company by
reason of ownership of such Shares;
(h) each of this Agreement and the Recapitalization Agreement (the
"RECAPITALIZATION AGREEMENT") dated as of June 10, 2004 by and among the
Company, MSH Holdings Inc., Household Investment Funding Inc. and the other
stockholders and warrant holders party thereto has been duly authorized,
executed and delivered by the Company;
(i) neither the Company nor any of the Subsidiaries is in breach or
violation of or in default under (nor has any event occurred which with
notice, lapse of time or both would result in any breach or violation of,
constitute a default under or give the holder of any indebtedness (or a
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness under) its
respective charter or by-laws, or, except for such breaches, violations or
defaults that would not, individually or in the aggregate, have a Material
Adverse Effect, any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their
properties may be bound or affected, and the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares and
the consummation of the transactions contemplated hereby will not conflict
with, result in any breach or violation of or constitute a default under
(nor constitute any event which with notice, lapse of time or both would
result in any breach or violation of or constitute a default under) the
charter or by-laws of the Company or any of the Subsidiaries, or, except
for such breaches, violations or defaults that would not, individually or
in the aggregate, have a Material Adverse Effect, any indenture, mortgage,
deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound or
affected, or any federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to the Company or any of the
Subsidiaries;
(j) no approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required in connection with the
issuance and sale of the Shares or the consummation by the Company of the
transactions contemplated hereby other than registration of the Shares
under the Act, which has been or will be effected, and any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters or
under the rules and regulations of the NASD;
(k) except as set forth in the Registration Statement and the
Prospectus or otherwise waived in writing or terminated prior to the date
hereof, (i) no person has the right, contractual or otherwise, to cause the
Company to issue or sell to it any shares of Common Stock or shares of any
other capital stock or other equity interests of the Company, (ii) no
person has any preemptive rights, resale rights, rights of first refusal or
other rights to
8
purchase any shares of Common Stock or shares of any other capital stock or
other equity interests of the Company, and (iii) no person has the right to
act as an underwriter or as a financial advisor to the Company in
connection with the offer and sale of the Shares, in the case of each of
the foregoing clauses (i), (ii) and (iii), whether as a result of the
filing or effectiveness of the Registration Statement or the sale of the
Shares as contemplated thereby or otherwise; except as set forth in the
Registration Statement and the Prospectus or otherwise waived in writing or
terminated prior to the date hereof, no person has the right, contractual
or otherwise, to cause the Company to register under the Act any shares of
Common Stock or shares of any other capital stock or other equity interests
of the Company, or to include any such shares or interests in the
Registration Statement or the offering contemplated thereby, whether as a
result of the filing or effectiveness of the Registration Statement or the
sale of the Shares as contemplated thereby or otherwise;
(l) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation
or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its respective business,
except where the absence of such license, authorization, consent, approval
or filing would not, individually or in the aggregate, have a Material
Adverse Effect; neither the Company nor any of the Subsidiaries is in
violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, except where such violation, default,
revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions, contracts, licenses, agreements, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(n) except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits, claims, investigations or
proceedings (i) pending, to which the Company or any of the Subsidiaries
or, to the Company's knowledge, any of their respective directors or
officers is a party (in such person's capacity as a director or officer) or
to which any of their respective properties is, or (ii) to the Company's
knowledge, threatened, to which the Company or any of the Subsidiaries or
any of their respective directors or officers would be a party (in such
person's capacity as a director or officer) or to which any of their
respective properties would be, subject at law or in equity, before or by
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, except any such action, suit, claim,
investigation or proceeding which would not result in a judgment, decree or
order having, individually or in the aggregate, a Material Adverse Effect
or preventing consummation of the transactions contemplated hereby;
9
(o) Ernst & Young LLP, whose report on the consolidated financial
statements of the Company and the Subsidiaries is filed with the Commission
as part of the Registration Statement and the Prospectus, are independent
public accountants as required by the Act;
(p) the audited financial statements of the Company included in the
Registration Statement and the Prospectus, together with the related notes
and schedules, present fairly in all material respects the consolidated
financial position of the Company as of the dates indicated and the
consolidated results of operations and cash flows of the Company for the
periods specified and, except as otherwise set forth in the Registration
Statement and the Prospectus, have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved; the other financial and statistical data set
forth in the Registration Statement and the Prospectus are fairly presented
and prepared on a basis consistent with the financial statements and books
and records of the Company; there are no financial statements (historical
or pro forma) that are required to be included in the Registration
Statement and the Prospectus that are not included as required; and the
Company and the Subsidiaries do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet
obligations), not disclosed in the Registration Statement and the
Prospectus;
(q) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth
in the Registration Statement and the Prospectus, there has not been (i)
any material adverse change, or any development involving a prospective
material adverse change, in the business, properties, management, financial
condition or results of operations of the Company and the Subsidiaries
taken as a whole (ii) any transaction which is material to the Company and
the Subsidiaries taken as a whole, (iii) any obligation, direct or
contingent (including any off-balance sheet obligations), incurred by the
Company or the Subsidiaries, which is material to the Company and the
Subsidiaries taken as a whole, (iv) any change in the capital stock or
outstanding indebtedness of the Company or the Subsidiaries or (v) any
dividend or distribution of any kind declared, paid or made on the capital
stock of the Company;
(r) the Company has obtained for the benefit of the Underwriters the
agreement (a "LOCK-UP AGREEMENT"), in substantially the form set forth as
EXHIBIT A hereto, of each of its directors and officers and each holder of
the Company's Common Stock or any security convertible into or exercisable
or exchangeable for Common Stock, or any warrant or other right to purchase
Common Stock or any such security except as set forth on Schedule D hereto;
(s) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT");
10
(t) the Company and the Subsidiaries have good and marketable title
to all property (real and personal) described in the Registration Statement
and in the Prospectus as being owned by them, free and clear of all liens,
claims, security interests or other encumbrances, except as set forth in
the Registration Statement and except as would not, individually or in the
aggregate, have a Material Adverse Effect; all the property described in
the Registration Statement and the Prospectus as being held under lease by
the Company or a Subsidiary is, assuming due and valid execution by the
lessor, held thereby under valid, subsisting and enforceable leases;
(u) (i) the Company and the Subsidiaries own, or have obtained valid
and enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and
unregistered), tradenames, copyrights, trade secrets and other proprietary
information described in the Registration Statement and the Prospectus as
being owned or licensed by them or which are necessary for the conduct of
their respective businesses, except where the failure to own, license or
have such rights would not, individually or in the aggregate, have a
Material Adverse Effect (collectively, "INTELLECTUAL PROPERTY"); (ii) to
the Company's knowledge, there are no third parties who have rights to any
Intellectual Property, except for the ownership rights of the owners of the
Intellectual Property which is licensed to the Company and except for the
rights of third parties that would not have a Material Adverse Effect;
(iii) to the Company's knowledge, there is no infringement by third parties
of any Intellectual Property; (iv) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any Intellectual Property; (v)
there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of
any Intellectual Property; (vi) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others that the
Company infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and, to the Company's
knowledge, it does not infringe or otherwise violate any patent, trademark,
copyright, trade secret or other proprietary rights of others; and (vii) to
the Company's knowledge, there is no patent or patent application that
contains claims that interfere with the issued or pending claims of any of
the Intellectual Property;
(v) neither the Company nor any of the Subsidiaries is engaged in any
unfair labor practice; except for matters which would not, individually or
in the aggregate, have a Material Adverse Effect, (i) there is (A) no
unfair labor practice complaint pending or, to the Company's knowledge,
threatened against the Company or any of the Subsidiaries before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements pending or, to the
Company's knowledge, threatened, (B) no strike, labor dispute, slowdown or
stoppage pending or, to the Company's knowledge, threatened against the
Company or any of the Subsidiaries and (C) to the Company's knowledge, no
union representation dispute currently existing concerning the employees of
the Company or any of the Subsidiaries, and (ii) to the Company's
knowledge, (A) no union organizing activities are currently taking place
concerning the employees of the Company or any of the Subsidiaries and (B)
there has been no violation of any federal, state, local or
11
foreign law relating to discrimination in the hiring, promotion or pay of
employees, any applicable wage or hour laws or any provision of the
Employee Retirement Income Security Act of 1974 or the rules and
regulations promulgated thereunder concerning the employees of the Company
or any of the Subsidiaries;
(w) the Company and the Subsidiaries and their properties, assets and
operations are in compliance with, and the Company and the Subsidiaries
hold all permits, authorizations and approvals required under,
Environmental Laws (as defined below), except to the extent that failure to
so comply or to hold such permits, authorizations or approvals would not,
individually or in the aggregate, have a Material Adverse Effect; neither
the Company nor any of the Subsidiaries (i) is, to the Company's knowledge,
the subject of any investigation, (ii) has received any notice or claim,
(iii) is a party to or affected by any pending or, to the Company's
knowledge, threatened action, suit or proceeding, (iv) is bound by any
judgment, decree or order or (v) has entered into any agreement, in each
case relating to any alleged violation of any Environmental Law or any
actual or alleged release or threatened release or cleanup at any location
of any Hazardous Materials (as defined below) (as used herein,
"ENVIRONMENTAL LAW" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, order, decree, judgment, injunction,
permit, license, authorization or other binding requirement, or common law,
relating to health, safety or the protection, cleanup or restoration of the
environment or natural resources, including those relating to the
distribution, processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of
Hazardous Materials, and "HAZARDOUS MATERIALS" means any material
(including, without limitation, pollutants, contaminants, hazardous or
toxic substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law);
(x) all tax returns required to be filed by the Company and each of
the Subsidiaries have been filed (other than tax returns required to be
filed by Kanbay (Japan) Incorporated, the failure to file of which has not
and will not have a Material Adverse Effect), and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have been
paid, other than those being contested in good faith or for which adequate
reserves have been provided on the books and records of the Company and its
Subsidiaries;
(y) the Company and each of the Subsidiaries maintains insurance
covering its properties, operations, personnel and businesses as the
Company deems adequate; such insurance insures against such losses and
risks to an extent which is adequate in accordance with customary industry
practice to protect the Company and the Subsidiaries and their businesses;
all such insurance is fully in force on the date hereof;
(z) neither the Company nor any of the Subsidiaries has sustained
since the date of the last audited financial statements included in the
Registration Statement and the Prospectus any materially adverse loss or
interference with its respective business from fire,
12
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
except as set forth in the Registration Statement and the Prospectus;
(aa) the Company has not sent or received any communication regarding
termination of, or intent not to renew, any of the contracts filed as an
exhibit to the Registration Statement, and no such termination or
non-renewal has been threatened by the Company or, to the Company's
knowledge, any other party to any such contract;
(bb) the Company and each of the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(cc) the Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 and 15d-15 under the
Securities Exchange Act of 1934 (the "EXCHANGE ACT")); such disclosure
controls and procedures are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made
known to the Company's Chief Executive Officer and its Chief Financial
Officer by others within those entities, and such disclosure controls and
procedures are effective to perform the functions for which they were
established; the Company's auditors and the Audit Committee of the Board of
Directors have been advised by the Company of: (i) any significant
deficiencies in the design or operation of internal controls which could
adversely affect the Company's ability to record, process, summarize, and
report financial data; and (ii) any fraud, whether or not material, that
involves management or other employees who have a role in the Company's
internal controls; any material weaknesses in internal controls have been
identified for the Company's auditors; and since the date of the most
recent evaluation of such disclosure controls and procedures, there have
been no significant changes in internal controls or in other factors that
could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses;
(dd) the Company has made available to you true, correct, and complete
copies of all documentation pertaining to any extension of credit in the
form of a personal loan made, directly or indirectly, by the Company to any
director or executive officer of the Company, or to any family member or
affiliate of any director or executive officer of the Company; and since
July 30, 2002, the Company has not, directly or indirectly, including
through any Subsidiary: (i) extended credit, arranged to extend credit, or
renewed any extension of credit, in the form of a personal loan, to or for
any director or executive officer of the Company, or to or for any family
member or affiliate of any director or executive officer of the Company;
13
or (ii) made any material modification, including any renewal thereof, to
any term of any personal loan to any director or executive officer of the
Company, or any family member or affiliate of any director or executive
officer, which loan was outstanding on July 30, 2002;
(ee) there is no failure on the part of the Company or any of the
Company's directors or officers, in their capacities as such, to comply
with any provision of the Xxxxxxxx-Xxxxx Act of 2002, as amended, and the
rules and regulations promulgated in connection therewith that would have a
Material Adverse Effect;
(ff) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from such
sources to the extent required;
(gg) neither the Company nor any of the Subsidiaries, has made any
payment of funds of the Company or the Subsidiaries or received or retained
any funds in violation of any law, rule or regulation, including, without
limitation, the Foreign Corrupt Practices Act, as amended; to the Company's
knowledge, no employee or agent of the Company or the Subsidiaries has made
any payment of funds of the Company or the Subsidiaries or received or
retained any funds in violation of any law, rule or regulation, including,
without limitation, the Foreign Corrupt Practices Act, as amended;
(hh) neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any of their respective directors, officers,
affiliates or controlling persons has taken, directly or indirectly, any
action designed to cause or result in, or which has constituted under the
Exchange Act or otherwise, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Shares;
(ii) to the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's
officers, directors or securityholders, except as set forth in the
Registration Statement and the Prospectus or as disclosed to you in writing
prior to the date hereof;
(kk) the Registration Statement, the Prospectus and any preliminary
prospectus comply in all material respects, and any further amendments or
supplements thereto will comply in all material respects, with any
applicable laws or regulations of any foreign jurisdiction in which the
Prospectus or any preliminary prospectus is distributed in connection with
the Directed Share Program; and no approval, authorization, consent or
order of or filing with any governmental or regulatory commission, board,
body, authority or agency, other than those obtained, is required in
connection with the offering of the Reserved Shares in any jurisdiction
where the Reserved Shares are being offered; and
(ll) the Company has not offered, or caused the Underwriters to offer,
Reserved Shares to any person pursuant to the Directed Share Program with
the specific intent to influence unlawfully (i) a customer or supplier of
the Company or any of the Subsidiaries to
14
alter the customer's or supplier's level or type of business with the
Company or any of the Subsidiaries, or (ii) a trade journalist or
publication to write or publish favorable information about the Company or
any of the Subsidiaries or any of their respective products or services.
In addition, any certificate signed by any officer of the Company or
any of the Subsidiaries and delivered to the Underwriters or counsel for the
Underwriters in connection with the offering of the Shares shall be deemed to be
a representation and warranty by the Company or Subsidiary, as the case may be,
as to matters covered thereby, to each Underwriter.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter that:
(a) such Selling Stockholder now is and at the time of delivery of
such Shares (whether the time of purchase or additional time of purchase,
as the case may be) will be, the lawful owner of the number of Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has and, at
the time of delivery thereof, will have valid and marketable title to, or a
valid "security entitlement" within the meaning of Section 8-501 of the New
York Uniform Commercial Code in respect of, such Shares, and upon delivery
of and payment for such Shares (whether at the time of purchase or the
additional time of purchase, as the case may be), the Underwriters will
acquire valid and marketable title to, or a valid "security entitlement"
within the meaning of Section 8-501 of the New York Uniform Commercial Code
in respect of, such Shares free and clear of any claim, lien, encumbrance,
security interest, community property right, restriction on transfer or
other defect in title;
(b) such Selling Stockholder has and at the time of delivery of such
Shares (whether the time of purchase or additional time of purchase, as the
case may be) will have, full legal right, power and capacity, and any
approval required by law (other than those imposed by the Act and the
securities or blue sky laws of certain jurisdictions), to sell, assign,
transfer and deliver such Shares in the manner provided in this Agreement;
(c) this Agreement and each Custody Agreement among American Stock
Transfer & Trust Company, as custodian, and the Selling Stockholders (each,
a "CUSTODY AGREEMENT") have been duly executed and delivered by such
Selling Stockholder and, with respect to the Custody Agreement assuming due
authorization, execution and delivery by the custodian, each is a legal,
valid and binding agreement of such Selling Stockholder enforceable in
accordance with its terms;
(d) when the Registration Statement becomes effective and at all
times subsequent thereto through the latest of the time of purchase,
additional time of purchase or the termination of the offering of the
Shares, the Registration Statement and Prospectus, and any supplements or
amendments thereto, as they relate to such Selling Stockholder, will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that the foregoing
representation and warranty, as it relates to such Selling Stockholder, is
limited to information included in the Registration Statement and
Prospectus, and any
15
supplements or amendments thereto, concerning such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder to the
Company expressly for use therein;
(e) such Selling Stockholder has duly and irrevocably authorized the
Representatives of the Selling Stockholders, on behalf of such Selling
Stockholder (except with respect to HIFI, which has duly and irrevocably
authorized Xxxxx X. Xxxx and Xxxxxxx X. Xxxxx, on behalf of HIFI), to
execute and deliver this Agreement and any other document necessary or
desirable in connection with the transactions contemplated hereby and to
deliver the Shares to be sold by such Selling Stockholder and receive
payment therefor pursuant hereto;
(f) the sale of such Selling Stockholder's Shares pursuant to this
Agreement is not prompted by any information concerning the Company which
is not set forth in the Prospectus;
(g) the execution, delivery and performance of this Agreement by or
on behalf of such Selling Stockholder, the compliance by the undersigned
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not (i) conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the organizational
documents of such Selling Stockholder, if such Selling Stockholder is not
an individual, or any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder or any property of such Selling Stockholder
is bound or (ii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body
or agency having jurisdiction over such Selling Stockholder or any property
of such Selling Stockholder; and
(h) such Selling Stockholder has not taken, directly or indirectly,
any action designed to cause or result in, or which has constituted under
the Exchange Act or otherwise, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares.
5. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states or other jurisdictions as you
may designate and to maintain such qualifications in effect so long as you
may request for the distribution of the Shares; PROVIDED that the Company
shall not be required to qualify as a foreign corporation or to consent to
the service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the Shares);
and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose;
16
(b) to make available to the Underwriters in New York City, as soon
as practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many copies
of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may
request for the purposes contemplated by the Act; in case any Underwriter
is required to deliver a prospectus after the nine-month period referred to
in Section 10(a)(3) of the Act in connection with the sale of the Shares,
the Company will prepare, at its expense, promptly upon request such
amendment or amendments to the Registration Statement and the Prospectus as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or any post-effective amendment
thereto to be declared effective before the Shares may be sold, the Company
will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and the Company will
advise you promptly and, if requested by you, will confirm such advice in
writing, (i) when the Registration Statement and any such post-effective
amendment thereto has become effective, and (ii) if Rule 430A under the Act
is used, when the Prospectus is filed with the Commission pursuant to Rule
424(b) under the Act (which the Company agrees to file in a timely manner
under such Rule);
(d) to advise you and HIFI promptly, confirming such advice in
writing, of any request by the Commission for amendments or supplements to
the Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for, or
the entry of a stop order, suspending the effectiveness of the Registration
Statement and, if the Commission should enter a stop order suspending the
effectiveness of the Registration Statement, to use its best efforts to
obtain the lifting or removal of such order as soon as possible; to advise
you and HIFI promptly of any proposal to amend or supplement the
Registration Statement or the Prospectus and to provide you, HIFI and
Underwriters' counsel copies of any such documents for review and comment a
reasonable amount of time prior to any proposed filing and to file no such
amendment or supplement to which you or HIFI shall reasonably object in
writing;
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the
Commission in order to comply with the Exchange Act subsequent to the date
of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares; and to
provide you with a copy of such reports and statements and other documents
to be filed by the Company pursuant to Section 13, 14 or 15(d) of the
Exchange Act during such period a reasonable amount of time prior to any
proposed filing, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
17
(g) to advise the Underwriters promptly of the happening of any event
within the time during which a prospectus relating to the Shares is
required to be delivered under the Act which could require the making of
any change in the Prospectus then being used so that the Prospectus would
not include an untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading, and, during such
time, subject to Section 5(d) hereof, to prepare and furnish, at the
Company's expense, to the Underwriters promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any such
change;
(h) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act) covering a period of twelve
months beginning after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act) as soon as is reasonably practicable
after the termination of such twelve-month period but not later than
___________, 2005;
(i) to furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a consolidated balance
sheet and statements of income, stockholders' equity and cash flow of the
Company and the Subsidiaries for such fiscal year, accompanied by a copy of
the certificate or report thereon of nationally recognized independent
certified public accountants);
(j) to furnish to you five conformed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto) and sufficient conformed copies of
the foregoing (other than exhibits) for distribution of a conformed copy to
each of the other Underwriters;
(k) to the extent not otherwise available on XXXXX and upon request,
to furnish promptly to you and to each of the other Underwriters for a
period of two years from the date of this Agreement (i) copies of any
reports, proxy statements, or other communications which the Company shall
send to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed
with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar
forms as may be designated by the Commission, (iii) copies of documents or
reports filed with any national securities exchange on which any class of
securities of the Company is listed, and (iv) such other information as you
may reasonably request regarding the Company or the Subsidiaries;
(l) to furnish to you as early as practicable prior to the time of
purchase and any additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim and monthly consolidated financial statements, if any, of
the Company and the Subsidiaries which have been read by the Company's
independent certified public accountants, as stated in their letter to be
furnished pursuant to Section 8(f) hereof;
18
(m) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus;
(n) to pay all costs, expenses, fees and taxes (other than any fees
and disbursements of counsel for the Underwriters, except as set forth in
Section 7 hereof and clauses (iv), (vi) and (ix) below) in connection with
(i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii)
the registration, issue, sale and delivery of the Shares including any
stock or transfer taxes and stamp or similar duties payable upon the sale,
issuance or delivery of the Shares to the Underwriters, (iii) the
producing, word processing and/or printing of this Agreement, any Agreement
Among Underwriters, any dealer agreements, any Powers of Attorney and any
closing documents (including compilations thereof) and the reproduction
and/or printing and furnishing of copies of each thereof to the
Underwriters and (except closing documents) to dealers (including costs of
mailing and shipment), (iv) the qualification of the Shares for offering
and sale under state or foreign laws and the determination of their
eligibility for investment under state or foreign law as aforesaid
(including the legal fees and filing fees and other disbursements of
counsel for the Underwriters incurred in connection with such qualification
and determination, which shall not exceed $[ ] (which limitation shall not
apply to fees of foreign legal counsel engaged in connection with the
Directed Share Program, it being understood that UBS and the Company will
mutually agree in which countries Shares will be offered pursuant thereto)
and the printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) any listing of
the Shares on any securities exchange or qualification of the Shares for
quotation on the National Association of Securities Dealers Automated
Quotation National Market System ("NASDAQ") and any registration thereof
under the Exchange Act, (vi) any filing for review of the public offering
of the Shares by the NASD, including the legal fees and filing fees and
other disbursements of counsel to the Underwriters incurred in connection
with such filing, which shall not exceed $[ ], (vii) the fees and
disbursements of any transfer agent or registrar for the Shares, (viii) the
costs and expenses of the Company relating to presentations or meetings
undertaken in connection with the marketing of the offering and sale of the
Shares to prospective investors and the Underwriters' sales forces,
including, without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations and travel, lodging and
other expenses incurred by the officers of the Company and any such
consultants; provided, however, that the Underwriters agree to pay the cost
of all food service (including, without limitation, all breakfasts, lunches
and dinners) provided at presentations or meetings undertaken in connection
with the marketing of the offering and sale of the Shares to prospective
investors and the Underwriters' sales forces; and provided further,
however, that the Underwriters agree to pay their pro rata share of the
cost of any aircraft chartered in connection with the road show (it being
understood that, for purposes of this clause (viii), the Underwriters' pro
rata share shall be determined by dividing the number of representatives of
the Underwriters on the aircraft by the sum of (1) the number of
representatives of the Underwriters and (2) the
19
number of representatives of the Company on the aircraft; for example, if
there are two representatives of the Underwriters and three representatives
of the Company on the aircraft, the Underwriters agree to pay 40% of the
cost of the aircraft, (ix) the offer and sale of the Reserved Shares,
including all costs and expenses of UBS-FinSvc and the Underwriters,
including the fees and disbursements of counsel for the Underwriters, and
(x) the performance of the Company's other obligations hereunder;
(o) not to (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of
or agree to dispose of, directly or indirectly, any Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock
or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock,
or (ii) file or cause to be declared effective a registration statement
under the Act relating to the offer and sale of any shares of Common Stock
or securities convertible into or exercisable or exchangeable for Common
Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock,
or (iii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or any other securities of the Company that
are substantially similar to Common Stock, whether such transaction is to
be settled by delivery of Common Stock or such other securities or
otherwise or (iv) publicly announce in which to effect any transaction
specified in clause (i), (ii) or (iii) of this Section 5(o), for a period
of 180 days after the date hereof (the "LOCK-UP PERIOD"), without the prior
written consent of UBS, except for (i) the registration of the Shares and
the sales to the Underwriters pursuant to this Agreement, (ii) issuances of
Common Stock upon the exercise of options or warrants disclosed as
outstanding in the Registration Statement and the Prospectus, (iii) grants
of stock options not exercisable during the Lock-Up Period pursuant to
equity compensation plans described in the Registration Statement and the
Prospectus, (iv) the registration of the offer and sale of shares of Common
Stock upon exercise of options, and (v) issuances of Common Stock pursuant
to the employee stock purchase plan; PROVIDED, HOWEVER, if (i) during the
period that begins on the date that is 15 calendar days plus 3 business
days before the last day of the 180-day restricted period and ends on the
last day of the 180-day restricted period, the Company issues an earnings
release or material news or a material event relating to the Company
occurs; or (ii) prior to the expiration of the 180-day restricted period,
the Company announces that it will release earnings results during the
16-day period beginning on the last day of the 180-day period, the
restrictions imposed by this subsection shall continue to apply until the
expiration of the date that is 15 calendar days plus 3 business days after
the date on which the issuance of the earnings release or the material news
or material event occurs; PROVIDED FURTHER, however, this paragraph shall
be of no force or effect if the Company's shares of Common Stock are
"actively traded securities," as defined in Regulation M, 17 CFR
242.101(c)(1).
(p) to use its best efforts to cause the Common Stock to be listed
for quotation on NASDAQ;
20
(q) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common
Stock; and
(r) to ensure that the Reserved Shares will be restricted from sale,
transfer, assignment, pledge or hypothecation for such period and to such
extent as may be required by the NASD and its rules; and to comply in all
material respects with all applicable securities and other applicable laws,
rules and regulations in each jurisdiction in which the Reserved Shares are
offered in connection with the Directed Share Program.
6. CERTAIN COVENANT OF THE SELLING STOCKHOLDERS. Each of the Selling
Stockholders agree with each Underwriter to execute a Lock-Up Agreement or
Extended Lock-Up Agreement.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to (a) the fifth paragraph of Section 10 hereof, (b) clauses (y) (i), (iii),
(iv) or (v) of the second paragraph of Section 9 or (c) the default by one or
more of the Underwriters in its or their respective obligations hereunder, the
Company shall, in addition to paying the amounts described in Section 5(n)
hereof, reimburse the Underwriters for all of their out-of-pocket expenses,
including the fees and disbursements of their counsel.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholders on the
date hereof, at the time of purchase and, if applicable, at the additional time
of purchase, the performance by the Company and each of the Selling Stockholders
of its obligations hereunder and to the following additional conditions
precedent:
(a) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxxx &
Xxxxxxxx LLC, counsel for the Company, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in
form and substance reasonably satisfactory to Xxxxx Xxxx & Xxxxxxxx,
counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as contemplated
herein;
(ii) each of the Subsidiaries organized under the laws of a
jurisdiction in the United States (the "U.S. SUBSIDIARIES") has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus;
21
(iii) each of the Company and the U.S. Subsidiaries is duly
qualified to do business as a foreign corporation and is in good
standing in the jurisdictions in the United States set forth in
Schedule E hereto;
(iv) all of the issued and outstanding shares of capital stock
of the Company, except for the Shares to be sold by the Company for
which such counsel need not give an opinion, have been duly authorized
and validly issued, are fully paid and non-assessable and are free of
statutory preemptive rights and, to such counsel's knowledge,
contractual preemptive rights, resale rights, rights of first refusal
and similar rights; the Shares are free of statutory preemptive rights
and, to such counsel's knowledge, contractual preemptive rights,
resale rights, rights of first refusal and similar rights; the form of
specimen certificate for the Shares filed as an exhibit to the
Registration Statement is in due and proper form and the holders of
the Shares will not be subject to personal liability for the
obligations of the Company by reason of ownership of such Shares;
(v) all of the outstanding shares of capital stock of each of
the U.S. Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and, except as otherwise stated in
the Registration Statement and the Prospectus, are owned by the
Company, in each case, to such counsel's knowledge, subject to no
security interest, other encumbrance or adverse claim; and to such
counsel's knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert
any obligation into shares of capital stock or ownership interests in
the U.S. Subsidiaries are outstanding, except as reflected on Schedule
F hereto;
(vi) the execution, delivery and performance of this Agreement
by the Company, the issuance and sale of the Shares by the Company and
the consummation by the Company of the transactions contemplated
hereby do not and will not conflict with, result in any breach or
violation of or constitute a default under (nor constitute any event
which with notice, lapse of time or both would result in any breach or
violation of or constitute a default under) the charter or by-laws of
the Company or any of the U.S. Subsidiaries, or any indenture,
mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other
agreement or instrument filed as an exhibit to the Registration
Statement, or any U.S. federal or state law, regulation or rule (not
including any federal or state securities law) or, to such counsel's
knowledge, any decree, judgment or order applicable to the Company or
any of the Subsidiaries;
(vii) to such counsel's knowledge, there are no actions, suits,
claims, investigations or proceedings pending, threatened or
contemplated to which the Company or any of the Subsidiaries or any of
their respective directors or officers is or would be a party (in such
person's capacity as a director or officer) or to which any of their
respective properties is or would be subject at law or in equity,
before or by
22
any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, which have not been
disclosed to the Underwriters; and
(viii) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company"
or an entity "controlled" by an "investment company," as such terms
are defined in the Investment Company Act;
In addition, such counsel shall state that, in connection with the
preparation by the Company of the Registration Statement and Prospectus,
such counsel participated in conferences with certain officers and other
representatives of the Company, representatives of the independent public
accountants of the Company, representatives of the Underwriters and counsel
for the Underwriters at which the contents of the Registration Statement
and Prospectus and related matters were discussed and, although such
counsel did not independently verify such information and are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, on the basis of the foregoing (relying as to the factual
matters upon statements of officers and other representatives of the
Company and public officials), no facts have come to such counsel's
attention that caused such counsel to believe that the Registration
Statement (other than the financial statements and related notes thereto
and the other financial, statistical and accounting data included therein
or omitted therefrom, as to which such counsel need express no belief) or
any amendment thereto, as of the date the Registration Statement or
amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (other than the financial statements and related notes thereto
and the other financial, statistical and accounting data included therein
or omitted therefrom, as to which such counsel need express no belief), at
the time of purchase or the additional time of purchase, as the case may
be, as amended or supplemented, if applicable, included or includes an
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxxxx &
Xxxxxx LLP, special counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the
case may be, with reproduced copies for each of the other Underwriters and
in form and substance reasonably satisfactory to Xxxxx Xxxx & Xxxxxxxx,
counsel for the Underwriters, stating that:
(i) this Agreement has been duly authorized, executed and
delivered by the Company;
(ii) the Shares to be sold by the Company have been duly
authorized and, when issued, paid for and delivered in accordance with
this Agreement, will be validly issued, fully paid and non-assessable;
23
(iii) the statements made in the Prospectus under the heading
"Description of Capital Stock", insofar as they purport to constitute
a summary of the terms of the Company's capital stock, including the
Shares, constitute an accurate summary of the terms of such capital
stock in all material respects;
(iv) the Registration Statement, as of the date it became
effective, and the Prospectus, as of its date, complied as to form in
all material respects to the applicable requirements of the Act and
the applicable rules and regulations of the Commission thereunder,
except that such counsel need not express (A) any opinion as to the
financial statements and related notes thereto and the other
financial, statistical and accounting data included in the
Registration Statement or omitted therefrom or as to the exhibits to
the Registration Statement or (B) any opinion or assurance as to the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus;
(v) no consent, approval, authorization, order or other action
by, or notice to or filing with, any federal or New York governmental
or regulatory body or authority or any Delaware governmental agency or
body acting pursuant to the Delaware General Corporation Law, as
amended (the "DGCL"), is required for the execution and delivery of
this Agreement by the Company, the issue, sale and delivery of the
Shares by the Company in accordance with this Agreement or the
compliance by the Company with all of the provisions of this
Agreement, except (A) those which have been obtained, taken or made or
(B) such as may be required by the state securities or blue sky laws
of the various jurisdictions in which the Shares are being offered by
the Underwriters;
(vi) the statements made in the Prospectus under the heading
"Certain Material U.S. Income Tax Consequences to Non-U.S. Holders",
insofar as they purport to constitute a summary of the matters of
United States federal tax law and regulations or legal conclusions
with respect thereto, constitute accurate summaries of the matters
described therein in all material respects; and
(vii) to such counsel's knowledge, the execution and delivery of
this Agreement by the Company, the issue, sale and delivery of the
Shares by the Company in accordance with this Agreement and the
compliance by the Company with all of the provisions of this Agreement
do not violate any federal or New York securities statute or any rule
or regulation that has been issued pursuant to any federal or New York
securities statute.
In addition, such counsel shall state that, in connection with the
preparation by the Company of the Registration Statement and Prospectus,
such counsel participated in conferences with certain officers and other
representatives of the Company, representatives of the independent public
accountants of the Company, representatives of the Underwriters and counsel
for the Underwriters at which the contents of the Registration Statement
and
24
Prospectus and related matters were discussed and, although such counsel
did not independently verify such information and are not passing upon and
do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the Prospectus
(except to the extent specified in subparagraphs (iii) and (vi) above), on
the basis of the foregoing (relying as to the factual matters upon
statements of officers and other representatives of the Company and public
officials), no facts have come to such counsel's attention that caused such
counsel to believe that the Registration Statement (other than the
financial statements and related notes thereto and the other financial,
statistical and accounting data included therein or omitted therefrom, as
to which such counsel need express no belief) or any amendment thereto, as
of the date the Registration Statement or amendment became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (other than the
financial statements and related notes thereto and the other financial,
statistical and accounting data included therein or omitted therefrom, as
to which such counsel need express no belief), at the time of purchase or
the additional time of purchase, as the case may be, as amended or
supplemented, if applicable, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(c) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Pathak and
Associates, special India counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form and substance reasonably satisfactory to Xxxxx
Xxxx & Xxxxxxxx, counsel for the Underwriters, stating that:
(i) Kanbay Software (India) Private Ltd. ("KANBAY INDIA") has
been duly incorporated and is validly existing as a limited liability
company under the laws of the Republic of India, with full corporate
power and authority to own and lease its properties and conduct its
business as described in the Registration Statement and the
Prospectus;
(ii) all of the outstanding equity shares of Kanbay India have
been duly authorized and validly issued and are fully paid up and are
not subject to any preemptive or similar rights under, to such
counsel's knowledge, any written agreement entered into by Kanbay
India (such opinion being limited to those written agreements
identified in the list attached to such opinion as an exhibit).
Except as otherwise stated in the Registration Statement and the
Prospectus, to such counsel's knowledge, there are no outstanding
securities issued by Kanbay India that are convertible into, or
exchangeable for, or warrants, rights or options to purchase from
Kanbay India, the equity shares of Kanbay India;
25
(iii) the execution, delivery and performance of this Agreement
by the Company, the issuance and sale of the Shares by the Company and
the consummation by the Company of the transactions contemplated
thereby will not conflict with, result in any breach or violation of
or constitute a default under (nor constitute any event which with
notice, lapse of time or both would result in any breach or violation
of or constitute default under): (A) the certificate of incorporation,
the memorandum of association and the articles of association of
Kanbay India, (B) any provision of applicable laws of the Republic of
India, (C) to such counsel's knowledge, any judgment, order or decree
of any governmental body, agency or court in India that is binding on
Kanbay India or its property or (D) to such counsel's knowledge, any
obligation or covenant under any indenture, contract or agreement to
which Kanbay India is a party (such opinion being limited (1) to those
orders, decrees, written agreements or instruments (which orders,
decrees, written agreements and instruments have been certified by an
officer of Kanbay India to be all of the orders, decrees, agreements
and instruments material to Kanbay India) identified in the list
attached to such opinion as an exhibit and (2) in that such counsel
expresses no opinion with respect to any violation not readily
ascertainable from the face of any such order, decree, agreement or
instrument, or arising under or based upon any cross default provision
in so far as it relates to a default under any agreement or instrument
not so identified on such exhibit to such opinion, or arising as a
result of any violation of any agreement or covenant based on a
failure to comply with any financial or numerical requirement
requiring computation); and
(iv) such counsel is not representing Kanbay India in any legal
proceedings other than the proceedings identified in the list attached
to such opinion as an exhibit, to which Kanbay India is a party or to
which any property of Kanbay India is subject (which legal proceedings
have been certified by an officer of Kanbay India to be all of the
legal proceedings to which Kanbay India is a party or to which any
property of Kanbay India is subject).
(d) HIFI shall furnish to you at the time of purchase, addressed to
the Underwriters, and dated the time of purchase, an opinion of [Household
internal counsel], counsel for HIFI, with reproduced copies for each of the
other Underwriters, and in form and substance reasonably satisfactory to
Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, stating that:
(i) this Agreement and the Custody Agreement have been duly
executed and delivered by or on behalf of XXXX;
(ii) HIFI has valid title to, or a valid security entitlement
in respect of, the Shares to be sold by HIFI free and clear of all
security interests, claims, liens, equities and other encumbrances;
HIFI has full legal right and power, and has obtained any
authorization or approval required by New York law (other than those
imposed by the Act and the securities or blue sky laws of New York),
to sell, assign, transfer and
26
deliver the Shares to be sold by HIFI or a security entitlement in
respect of such Shares in the manner provided in this Agreement;
(iii) delivery of stock certificates representing the Shares to
be sold by XXXX, endorsed to the Underwriters, and payment therefor
pursuant to this Agreement will pass valid title to such Shares, free
and clear of any adverse claim within the meaning of Section 8-102 of
the Uniform Commercial Code of New York, to each Underwriter who has
purchased such Shares without notice of an adverse claim; and
(iv) each of the Representatives of the Selling Stockholders
has been duly authorized by each Selling Stockholder to execute and
deliver on behalf of such Selling Stockholder this Agreement and any
other document necessary or desirable in connection with the
transactions contemplated hereby and to deliver the Shares to be sold
by such Selling Stockholder.
(e) The Selling Shareholders (other than HIFI) shall furnish to you
at the additional time of purchase, an opinion of Xxxxx & XxxXxxxxx,
special counsel for the Selling Shareholders (other than HIFI) addressed to
the Underwriters, and dated the additional time of purchase, with
reproduced copies for each of the other Underwriters, and in form and
substance reasonably satisfactory to Xxxxx Xxxx & Xxxxxxxx, counsel for the
Underwriters, stating that:
(i) this Agreement and Custody Agreement have been duly
executed and delivered by or on behalf of each Selling Stockholder
that is a natural person;
(ii) no governmental authorization or approval (other than any
authorization or approval under the federal securities laws and the
securities or blue sky laws of any state, as to which no opinion need
be expressed) is required to permit such Selling Stockholders to sell,
assign, transfer and deliver the Shares to be sold by such Selling
Stockholders, or security entitlements in respect of such Shares, in
the manner provided by this Agreement;
(iii) upon the delivery of stock certificates representing the
Shares to be sold by such Selling Stockholders duly indorsed to the
Underwriters, and upon payment therefor in accordance with this
Agreement, each Underwriter who purchases such Shares without notice
of any adverse claim (within the meaning Section 8-102 of the Uniform
Commercial Code of the State of New York) will acquire such Shares
free and clear of any adverse claim; and
(iv) each Power of Attorney constitutes the valid and binding
agreement of the Selling Stockholder party thereto, enforceable
against such Selling Stockholder in accordance with its terms.
(f) You shall have received from Ernst & Young LLP letters dated,
respectively, the date of this Agreement, the time of purchase and, if
applicable, the additional time of
27
purchase, and addressed to the Underwriters (with reproduced copies for
each of the Underwriters) in the forms heretofore approved by UBS.
(g) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxx Xxxx &
Xxxxxxxx, counsel for the Underwriters, dated the time of purchase or the
additional time of purchase, as the case may be, with respect to such
matters as may be reasonably requested by the Underwriters.
(h) No Prospectus or amendment or supplement to the Registration
Statement or the Prospectus shall have been filed to which you object in
writing.
(i) The Registration Statement shall become effective not later than
5:30 P.M. New York City time, on the date of this Agreement and, if Rule
430A under the Act is used, the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act at or before 5:30 P.M.,
New York City time, on the second full business day after the date of this
Agreement and any registration statement pursuant to Rule 462(b) under the
Act required in connection with the offering and sale of the Shares shall
have been filed and become effective no later than 10:00 p.m., New York
City time, on the date of this Agreement.
(j) Prior to the time of purchase, and, if applicable, the additional
time of purchase, (i) no stop order with respect to the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto shall not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and (iii) the Prospectus and all amendments or supplements
thereto shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
are made, not misleading.
(k) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, no
material adverse change or any development involving a prospective material
adverse change in the business, properties, management, financial condition
or results of operations of the Company and the Subsidiaries taken as a
whole shall occur or become known.
(l) (i) The Company will, at the time of purchase and, if applicable,
at the additional time of purchase, deliver to you a certificate of its
Chief Executive Officer and its Chief Financial Officer in the form
attached as Exhibit C-1 hereto; and (ii) Kanbay India will, at the time of
purchase and, if applicable, at the additional time of purchase, deliver to
you a certificate of an officer of Kanbay India in the form attached as
Exhibit C-2 hereto.
(m) You shall have received (i) signed Lock-up Agreements referred to
in Section 3(r) hereof and (ii) signed lock-up letter agreements, in
substantially the form set forth as Exhibit B hereto, from each of HIFI,
The Co-Investment 2000 Fund, L.P., Cross Atlantic
28
Technology Fund II, L.P., Xxxxxx X. Xxxxxxxx, MSIT Holdings, Inc, Kanbay
Acquisition, L.L.C., Kanbay Investment, L.L.C., Wyndmoor Associates,
X. Xxxxxxx Xxxxxxx Irrevocable Trust, and Xxxxxxx X. Xxxxxxx.
(n) The Company and the Selling Stockholders shall have furnished to
you such other documents and certificates as of the time of purchase and,
if applicable, the additional time of purchase, as you may reasonably
request.
(o) The Shares shall have been approved for quotation on NASDAQ,
subject only to notice of issuance at or prior to the time of purchase or
the additional time of purchase, as the case may be.
(p) The Company shall furnish to you executed copies of any waiver or
consent required under any agreement which would otherwise give any person
(i) any preemptive rights, resale rights, rights of first refusal or other
rights to purchase any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company or (ii) the right,
contractual or otherwise, to cause the Company to register under the Act
any shares of Common Stock or shares of any other capital stock or other
equity interests of the Company, or to include any such shares or interests
in the Registration Statement or the offering contemplated thereby, whether
as a result of the filing or effectiveness of the Registration Statement or
the sale of the Shares as contemplated thereby or otherwise.
(q) The Selling Stockholders will at the time of purchase and the
additional time of purchase, as the case may be, deliver to you a
certificate of the Representatives of the Selling Stockholders to the
effect that the representations and warranties of the Selling Stockholders
as set forth in this Agreement are true and correct as of each such date.
9. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of UBS or any group of Underwriters
(which may include UBS) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if (x) since the time of execution of this Agreement or
the earlier respective dates as of which information is given in the
Registration Statement and the Prospectus, there has been any material adverse
change or any development involving a prospective material adverse change in the
business, properties, management, financial condition or results of operations
of the Company and the Subsidiaries taken as a whole, which would, in UBS'
judgment or in the judgment of such group of Underwriters, make it impracticable
or inadvisable to proceed with the public offering or the delivery of the Shares
on the terms and in the manner contemplated in the Registration Statement and
the Prospectus, or (y) since the time of execution of this Agreement, there
shall have occurred: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the NASDAQ; (ii) a suspension or material limitation in trading in the
Company's securities on
29
NASDAQ; (iii) a general moratorium on commercial banking activities declared by
either federal or New York State authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United
States; (iv) an outbreak or escalation of hostilities or acts of terrorism
involving the United States or a declaration by the United States of a national
emergency or war; or (v) any other calamity or crisis or any change in
financial, political or economic conditions in the United States or elsewhere,
if the effect of any such event specified in clause (iv) or (v) in UBS' judgment
or in the judgment of such group of Underwriters makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares on
the terms and in the manner contemplated in the Registration Statement and the
Prospectus.
If UBS or any group of Underwriters elects to terminate this Agreement
as provided in this Section 9, the Company, the Representatives of the Selling
Stockholders and each other Underwriter shall be notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company or the
Selling Stockholders, as the case may be, shall be unable to comply with any of
the terms of this Agreement, the Company or the Selling Stockholders, as the
case may be, shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 5(n), 7 and 11 hereof), and the
Underwriters shall be under no obligation or liability to the Company and the
Selling Stockholders under this Agreement (except to the extent provided in
Section 12 hereof) or to one another hereunder.
10. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections 8 and 9
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 8 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 9
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm Shares set forth opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company and each of the Selling Stockholders agrees with the
non-defaulting Underwriters that it will not sell any Firm Shares hereunder
unless all of the Firm Shares are purchased by the Underwriters (or by
substituted Underwriters selected by you with the approval of the Company or
selected by the Company with your approval).
30
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 10 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph, and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
11. INDEMNITY AND CONTRIBUTION.
(a) (1) The Company agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, any such Underwriter or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this
Section 11 being deemed to include any Preliminary Prospectus, the
Prospectus and the Prospectus as amended or supplemented by the Company),
or arises out of or is based upon any omission or alleged omission to state
a material fact required to be stated in either such Registration Statement
or such Prospectus or necessary to make the statements made therein not
misleading, except (A) insofar as any such loss, damage, expense, liability
or claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in and in conformity with
information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in
such Registration Statement or such Prospectus or arises out of or is based
upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
31
Statement or such Prospectus or necessary to make such information not
misleading, and (B) insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or
arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated in a Preliminary Prospectus or
necessary to make the statements made therein not misleading, the indemnity
in this Section 11(a)(1)(i) shall not inure to the benefit of any
Underwriter from whom the person asserting any such loss, damage, expense,
liability or claim purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented)
was timely furnished by the Company to such Underwriter and the Prospectus
(as so amended or supplemented) was not sent or given by or on behalf of
such Underwriter to such person at or prior to the written confirmation of
the sale of the Shares to such person and if the Prospectus (as so amended
or supplemented) would have cured the defect giving rise to such loss,
damage, expense, liability or claim, (ii) any material breach of any
representation and warranty made by the Company in Section 3 hereof or the
failure by the Company to perform in all material respects when and as
required any agreement or covenant of the Company contained herein, (iii)
any untrue statement or alleged untrue statement of a material fact
contained in any audio or visual materials provided by the Company or
approved by the Company, including, without limitation, slides, videos,
films or tape recordings, and used in connection with the marketing of the
Shares or (iv) the Directed Share Program, provided that the Company shall
not be responsible under this clause (iv) for any loss, damage, expense,
liability or claim that is finally judicially determined to have resulted
from the gross negligence or willful misconduct of the Underwriters in
conducting the Directed Share Program.
(2) HIFI severally agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, any such Underwriter or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement
as amended by any post effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the
statements made therein not misleading, except (A) insofar as any such
loss, damage, expense liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained
in and in conformity with information concerning such Underwriter furnished
in writing by or on behalf of such Underwriter through you to the Company
expressly for use in such Registration Statement or such Prospectus or
arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in
such Registration Statement or such Prospectus or necessary to make such
32
information not misleading, (B) insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in a Preliminary
Prospectus or necessary to make the statements made therein not misleading,
the indemnity in this Section 11(a)(2) shall not inure to the benefit of
any Underwriter from whom the person asserting any such loss, damage,
expense, liability or claim purchased Shares, or any person controlling
such Underwriter, if a copy of the Prospectus (as then amended or
supplemented) was timely furnished by the Company to such Underwriter and
the Prospectus (as so amended or supplemented) was not sent or given by or
on behalf of such Underwriter to such person at or prior to the written
confirmation of the sale of the Shares to such person and if the Prospectus
(as so amended or supplemented) would have cured the defect giving rise to
such loss, damage, expense, liability or claim, (C) HIFI shall be obligated
to indemnify the Underwriters and any person controlling each Underwriter
pursuant to this Section 11(a)(2) only if the indemnification of such
persons by the Company pursuant to Section 11(a)(1) is insufficient to
compensate such parties from and against such losses, damages, expenses,
liabilities and claims and (D) in any event, HIFI shall not be responsible,
either pursuant to this indemnity or other provisions of this Section 11 or
as a result of any breach of this Agreement, for losses, damages, expenses,
liability or claims for an amount in excess of the net proceeds received by
HIFI from the sale of Shares hereunder.
(3) Each Selling Stockholder severally agrees to indemnify, defend
and hold harmless each Underwriter, its partners, directors and officers,
and any person who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and the Company, its
directors and officers and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons, from and against
any loss, damage, expense, liability or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Underwriter,
the Company or any such person may incur under the Act, the Exchange Act,
the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in and in
conformity with information concerning such Selling Stockholder furnished
in writing by or on behalf of such Selling Stockholder to the Company
expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such
information required to be stated in either such Registration Statement or
such Prospectus or necessary to make such information not misleading,
except (A) insofar as any such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in
such Registration Statement or such Prospectus or arises out of or is based
upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
33
Statement or such Prospectus or necessary to make such information not
misleading, (B) insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or
arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated in a Preliminary Prospectus or
necessary to make the statements made therein not misleading, the indemnity
in this Section 11 (a)(3) shall not inure to the benefit of any Underwriter
from whom the person asserting any such loss, damage, expense, liability or
claim purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented) was timely
furnished by the Company to such Underwriter and the Prospectus (as so
amended or supplemented) was not sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of the
sale of the Shares to such person and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, damage,
expense, liability or claim, and (C) in any event, no Selling Stockholder
shall be responsible, either pursuant to this indemnity or other provisions
of this Section 11 or as a result of any breach of this Agreement
(including in connection with clause (ii) below), for losses, damages,
expenses, liability or claims for an amount in excess of the net proceeds
received by such Selling Stockholder from the sale of Shares hereunder or
(ii) any material breach of any representation and warranty made by such
Selling Stockholder in Section 4 hereof or the failure by such Selling
Stockholder to perform in all material respects when and as required any
agreement or covenant of such Selling Stockholder contained herein. For the
purposes of Section 11(a)(3)(i) and Section 4(d) above, the statements set
forth in paragraphs [ ] and [ ] under the caption "Principal and Selling
Stockholders" in the Prospectus constitute the only information furnished
by or on behalf of the Selling Stockholders as such information is referred
to in such sections.
(4) If any action, suit or proceeding (each, a "PROCEEDING") is
brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company or any Selling Stockholder
pursuant to one of the foregoing paragraphs, such Underwriter or such
person shall promptly notify the Company and the Representatives of the
Selling Stockholders in writing of the institution of such Proceeding and
the Company or such Selling Stockholder, as the case may be, shall assume
the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees
and expenses; PROVIDED, HOWEVER, that the omission to so notify the Company
or the Representatives of the Selling Stockholders shall not relieve the
Company or such Selling Stockholder from any liability which the Company or
such Selling Stockholder may have to any Underwriter or any such person or
otherwise, except to the extent the Company or such Selling Stockholder is
materially prejudiced by such omission. Such Underwriter or such person
shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of such
Underwriter or of such person unless the employment of such counsel shall
have been authorized in writing by the Company or such Selling Stockholder
in connection with the defense of such Proceeding or the Company or such
Selling Stockholder shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to defend such Proceeding or
34
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Company or such
Selling Stockholder (in which case the Company or such Selling Stockholder
shall not have the right to direct the defense of such Proceeding on behalf
of the indemnified party or parties, but the Company or such Selling
Stockholder may employ counsel and participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of the
Company or such Selling Stockholder), in any of which events such fees and
expenses shall be borne by the Company or such Selling Stockholder and paid
as incurred (it being understood, however, that the Company or such Selling
Stockholder shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series
of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company or
such Selling Stockholder shall not be liable for any settlement of any
Proceeding effected without its written consent but if settled with the
written consent of the Company or such Selling Stockholder, the Company or
such Selling Stockholder agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability by
reason of such settlement. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not have
fully reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party shall
have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such indemnified party.
The Company agrees to indemnify, defend and hold harmless UBS-FinSvc
and its partners, directors and officers, and any person who controls
UBS-FinSvc within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing
persons, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or
severally, UBS-FinSvc or any such person may incur under the Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim (i) arises out of or is based upon (a) any of
the matters referred to in clauses (i) through (iii) of the first paragraph
of this Section 11(a), or (b) 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 Directed Share Participants
in connection with the Directed Share Program or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to
35
make the statements therein not misleading; (ii) is caused by the failure
of any Directed Share Participant to pay for and accept delivery of
Reserved Shares that the Directed Share Participant has agreed to purchase;
or (iii) otherwise arises out of or is based upon the Directed Share
Program, provided that the Company shall not be responsible under this
clause (iii) for any loss, damage, expense, liability or claim that is
finally judicially determined to have resulted from the gross negligence or
willful misconduct of UBS-FinSvc in conducting the Directed Share Program.
Section 11(a)(4) shall apply equally to any Proceeding brought against
UBS-FinSvc or any such person in respect of which indemnity may be sought
against the Company pursuant to the foregoing sentence; except that the
Company shall be liable for the expenses of one separate counsel (in
addition to any local counsel) for UBS-FinSvc and any such person, separate
and in addition to counsel for the Underwriters, in any such Proceeding.
The Company agrees to indemnify, defend and hold harmless each Selling
Stockholder, its partners, directors and officers, and any person who
controls any Selling Stockholder within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns of
all of the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, any such Selling Stockholder or any such person may
incur under the Act, the Exchange Act, the common law or otherwise, insofar
as such loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement
as amended by any post effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the
statements made therein not misleading, except insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained
in and in conformity with information concerning such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder through
you to the Company expressly for use in such Registration Statement or such
Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and each Selling Stockholder, its partners,
directors and officers, and any person who controls any Selling Stockholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, and the successors and assigns of all of the foregoing persons, from
and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company,
any such Selling Stockholder or any such person may incur under the Act,
the Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged
36
untrue statement of a material fact contained in and in conformity with
information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in
the Registration Statement (or in the Registration Statement as amended by
any post-effective amendment thereof by the Company) or in a Prospectus, or
arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in
such Registration Statement or such Prospectus or necessary to make such
information not misleading.
If any Proceeding is brought against the Company, any Selling
Stockholder or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Company,
any Selling Stockholder or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; PROVIDED, HOWEVER, that the omission to
so notify such Underwriter shall not relieve such Underwriter from any
liability which such Underwriter may have to the Company, any Selling
Stockholder or any such person or otherwise, except to the extent such
Underwriter is materially prejudiced by such omission. The Company, any
Selling Stockholder or such person shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of the Company, any Selling Stockholder or such person
unless the employment of such counsel shall have been authorized in writing
by such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to defend such Proceeding or
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to or in conflict with those available to such Underwriter (in
which case such Underwriter shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties, but such
Underwriter may employ counsel and participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne
by such Underwriter and paid as incurred (it being understood, however,
that such Underwriter shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding
or series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No Underwriter
shall be liable for any settlement of any such Proceeding effected without
the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Company, any Selling Stockholder and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for
any settlement of any Proceeding effected without its written consent if
(i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such
37
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii)
such indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such Proceeding and does
not include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
(c) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 11 or insufficient to hold an indemnified party harmless in respect
of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the Selling
Stockholders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
shall be deemed to be in the same respective proportions as the total
proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and the Selling
Stockholders and the total underwriting discounts and commissions received
by the Underwriters, bear to the aggregate public offering price of the
Shares. The relative fault of the Company and the Selling Stockholders on
the one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission relates
to information supplied by the Company and/or the Selling Stockholders or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 11 were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in subsection (c) above. Notwithstanding the provisions of this
Section 11, no
38
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by such
Underwriter and distributed to the public were offered to the public
exceeds the amount of any damage which such Underwriter has otherwise been
required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 11 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 11 and the covenants, warranties and representations of the Company
and the Selling Stockholders contained in this Agreement shall remain in
full force and effect regardless of any investigation made by or on behalf
of any Underwriter, its partners, directors or officers, or any person
(including each partner, officer or director of such person) who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, or by or on behalf of the Company, its directors or
officers or any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf
of any Selling Stockholder, its partners, directors and officers, and any
person who controls any Selling Stockholder within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares.
The Company, each of the Selling Stockholders and each Underwriter agree
promptly to notify each other of the commencement of any Proceeding against
it and, in the case of the Company or the Selling Stockholders, against any
of the Company's or any of the Selling Stockholders' officers or directors,
as the case may be, in connection with the issuance and sale of the Shares,
or in connection with the Registration Statement or the Prospectus.
12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth in
the last paragraph on the cover page of the Prospectus and the statements set
forth in paragraphs [ ] and [ ] under the caption "Underwriting" in the
Prospectus constitute the only information furnished by or on behalf of the
Underwriters as such information is referred to in Sections 3 and 11 hereof.
13. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 10171-0026, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at Kanbay
International, Inc., 0000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxxx, Esq.; and if to the Selling Stockholders, shall
be sufficient in all respects if delivered or sent to the Representatives of the
Selling Stockholders at Kanbay International, Inc., 0000 Xxxxxx Xxxxx, Xxxxx
000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Esq. and Xxxxxxx
X. Xxxxxxxx, and to HIFI at [ ].
39
14. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("CLAIM"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
15. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company and each of the Selling Stockholders hereby consent to
personal jurisdiction, service and venue in any court in which any Claim arising
out of or in any way relating to this Agreement is brought by any third party
against UBS or any indemnified party. Each of UBS, the Selling Stockholders and
the Company (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) waives all right to trial by jury in
any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company
and each of the Selling Stockholders agree that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive
and binding upon such party and may be enforced in any other courts to the
jurisdiction of which such party is or may be subject, by suit upon such
judgment.
16. PARTIES AT INTEREST. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Selling Stockholders and
the Company and to the extent provided in Section 11 hereof the controlling
persons, partners, directors and officers referred to in such section, and their
respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
17. COUNTERPARTS. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters, each of the Selling Stockholders and the Company and their
successors and assigns and any successor or assign of any substantial portion of
the Company's, any of the Selling Stockholders', and any of the Underwriters'
respective businesses and/or assets.
19. MISCELLANEOUS. UBS, an indirect, wholly owned subsidiary of UBS AG, is
not a bank and is separate from any affiliated bank, including any U.S. branch
or agency of UBS AG. Because UBS is a separately incorporated entity, it is
solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance
40
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
41
If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholders and the several Underwriters, please so
indicate in the space provided below for that purpose, whereupon this agreement
and your acceptance shall constitute a binding agreement among the Company, the
Selling Stockholders and the Underwriters, severally.
Very truly yours,
KANBAY INTERNATIONAL, INC.
By:
------------------------------------------------
Title:
HOUSEHOLD INVESTMENT FUNDING, INC.
By:
------------------------------------------------
Attorney-in-Fact
THE SELLING STOCKHOLDERS NAMED IN SCHEDULE B ATTACHED
HERETO (OTHER THAN HOUSEHOLD INVESTMENT FUNDING, INC.)
By:
------------------------------------------------
Attorney-in-Fact
42
Accepted and agreed to as of the
date first above written, on
behalf of themselves and the
other several Underwriters
named in Schedule A
UBS SECURITIES LLC
XXXXXX XXXXXXXXXX XXXXX LLC
XXXXXX X. XXXXX & CO. INCORPORATED
By: UBS SECURITIES LLC
By: __________________________
Title:
By: __________________________
Title:
SCHEDULE A
UNDERWRITER FIRM SHARES
----------- -----------
UBS SECURITIES LLC
XXXXXX XXXXXXXXXX XXXXX LLC
XXXXXX X. XXXXX & CO. INCORPORATED
-----------
Total.......
===========
SCHEDULE B
FIRM SHARES ADDITIONAL SHARES
----------- -----------------
Household Investment Funding, Inc..................................... 0
Kausani Trust......................................................... 0
Global Perspectives Limited........................................... 0
Kismet Exports & Investments Private Limited 0
Xxxx Xxxxxx 0
Xxxxxxxxx X. Xxxxxx 0
X. Xxxx Xxxxxxxxx 0
------------ -----------
Total...............................
============ ===========
SCHEDULE C-1
PERCENTAGE
SUBSIDIARIES OWNED JURISDICTION
------------ ---------- ------------
Kanbay Incorporated 100% Illinois
Kanbay (Japan) Incorporated 100% Illinois
Kanbay (Singapore) Pte Ltd. 100% Singapore
Kanbay Limited 100% Bermuda
Kanbay (Asia) Limited 99.9% Mauritius
Kanbay Software (India) Private Ltd 99.9% India
Kanbay Europe Ltd. 100% UK
Kanbay (HK) Ltd. 99.9% Hong Kong
Kanbay Australia Pty Ltd 100% Australia
Kanbay Pty Ltd 100% Australia
Kanbay Managed Solutions, Inc. 80% Illinois
Kanbay Managed Solutions Canada, Inc. 80% Canada
Kanbay Global Services, Inc. 100% Illinois
Kanbay Canada Inc. 100% Canada
SCHEDULE C-2
PERCENTAGE OF
EQUITY INVESTMENTS EQUITY OWNED JURISDICTION
------------------ ------------ ------------
SSS Holding Corporation Ltd 48% UK
Strategic Systems Solutions Ltd 48% UK
Strategic Investments Solutions Ltd 24% UK
Strategic Training Solutions Ltd 48% UK
Strategic Systems Inc 48% South Carolina
Monocle 11.04% UK
Strategic Back-Office Solutions Ltd. 36% UK
Strategic Resourcing Solutions Ltd 50% UK
PRINCIPAL AMOUNT
DEBT INVESTMENTS SECURITY OWNED
---------------- -------- -----
General Datacon Industries, Inc. 10% Adjustable Senior $119,606.92
Subordinated Debentures Due
2008
SCHEDULE D
OPTION HOLDER NUMBER OF OPTIONS GRANTED
------------- -------------------------
Xxxx Xxxxxxxx.................. 4,657
Xxxx Xxxxx..................... 17,696
Xxxxxxx Xxxxx.................. 27,941
Quai Chiang.................... 2,980
Xxxx Xxxxxxxxx................. 5,076
Xxxxx Xxxxxx................... 4,284
Xxxxxx Xxxxxxxxxxxxx........... 11,176
Xxxxxx Xxxxxxxx................ 11,176
Xxxxx Xxxxx.................... 1,863
Xxxxxxx Xxxxx.................. 3,725
Xxxxx Xxxxxxxxx................ 5,961
Sukhit Xxxxxx.................. 3,912
Xxx Xxxxxxx.................... 9,314
Xxxxxxx
Xxxxxxxxxxxx................... 21,421
Xxxxxxx Xxxxx.................. 9,314
Xxxxx Xxxxxxx.................. 1,863
Xxxx Xxxxx Xxxxx............... 8,801
Xxxxx Trimbak.................. 2,980
Po Woon........................ 2,794
SCHEDULE E
U.S. FOREIGN JURISDICTION
COMPANY/U.S. SUBSIDIARIES QUALIFICATIONS
------------------------- -------------------------
Xxxxxx International, Inc. None
Kanbay Incorporated Oregon
Texas
Washington
California
New York
Missouri
Kanbay (Japan) Incorporated None
Kanbay Managed Solutions, Inc. None
Xxxxxx Global Services, Inc. None
SCHEDULE F
AGREEMENTS FOR CONVERSION OF OBLIGATIONS INTO SHARES OF COMPANY COMMON STOCK:
Amended and Restated Registration Rights Agreement, dated as of September 14,
2000
EXHIBIT A
Kanbay International, Inc.
Common Stock
($0.001 Par Value)
___________, 2004
UBS Securities LLC
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxxxx X. Xxxxx & Co. Incorporated
As Representatives of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed
Underwriting Agreement (the "
UNDERWRITING AGREEMENT") to be
entered into by Kanbay International, Inc. (the "COMPANY") and you, as
Representatives of the several Underwriters named therein, with respect to the
initial public offering (the "OFFERING") of common stock, par value $0.001 per
share, of the Company (the "COMMON STOCK").
In order to induce you to enter into the
Underwriting Agreement, the
undersigned agrees that for a period beginning the date of the final prospectus
relating to the Offering and ending 180 days after such date the undersigned
will not, without the prior written consent of UBS Securities LLC ("UBS"), (i)
sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any
option to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, or file (or participate in the filing of) a registration statement
with the Securities and Exchange Commission (the "COMMISSION") in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder with respect to, any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or warrants or
other rights to purchase Common Stock, (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock, whether any such transaction is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise, or (iii)
publicly announce an intention to effect any transaction specified in clause (i)
or (ii). The foregoing sentence shall not apply to (a) the registration of or
sale to the Underwriters of any Common Stock
2
pursuant to the Offering and the
Underwriting Agreement, (b) bona fide gifts,
provided the recipient thereof agrees in writing with the Underwriters to be
bound by the terms of this Lock-Up Letter Agreement, (c) dispositions to any
trust for the direct or indirect benefit of the undersigned and/or the immediate
family of the undersigned, provided that such trust agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Letter Agreement or (d)
the transfer or any shares of Common Stock by the undersigned to any affiliate
or, if the undersigned is a limited partnership or limited liability company,
the transfer of any shares of Common Stock by the undersigned to any limited or
general partner or member of the undersigned, provided that such transferee
agrees in writing with the Underwriters to be bound by the terms of this Lock-Up
Letter Agreement.
For the avoidance of doubt, it is understood that nothing in this
Lock-Up Letter Agreement shall be construed to restrict the undersigned's right
to exercise options or warrants disclosed as outstanding in the Registration
Statement and the Prospectus (each as defined in the
Underwriting Agreement)
exercisable for Common Stock, it being further understood that such Common Stock
shall be subject to the provisions of this Lock-Up Letter Agreement.
In addition, the undersigned hereby waives any rights the undersigned
may have to require registration of Common Stock in connection with the filing
of a registration statement relating to the Offering. The undersigned further
agrees that, for a period of 180 days after the date of the final prospectus
relating to the Offering, the undersigned will not, without the prior written
consent of UBS, make any demand for, or exercise any right with respect to, the
registration of Common Stock of the Company or any securities convertible into
or exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock.
If (i) during the period that begins on the date that is 15 calendar
days plus 3 business days before the last day of the 180-day restricted period
and ends on the last day of the 180-day restricted period, the Company issues an
earnings release or material news or a material event relating to the Company
occurs; or (ii) prior to the expiration of the 180-day restricted period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions imposed by
this letter shall continue to apply until the expiration of the date that is 15
calendar days plus 3 business days after the date on which the issuance of the
earnings release or the material news or material event occurs; provided,
however, this paragraph shall be of no force or effect if the Company's shares
of Common Stock are "actively traded securities," as defined in Regulation M, 17
CFR 242.101(c)(1).
3
If (i) the Company notifies you in writing that it does not intend to
proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) for any reason the
Underwriting Agreement shall be terminated prior to the
time of purchase (as defined in the
Underwriting Agreement), this Lock-Up Letter
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder.
Yours very truly,
-----------------------------
Name:
EXHIBIT B
[STOCKHOLDER LETTERHEAD]
___________, 2004
UBS Securities LLC
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxxxx X. Xxxxx & Co. Incorporated
As Representatives of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter agreement (the "LOCK-UP LETTER AGREEMENT") is being
delivered to you in connection with the proposed
Underwriting Agreement (the
"UNDERWRITING AGREEMENT") to be entered into by Kanbay International, Inc. (the
"COMPANY") and you, as Representatives of the several Underwriters named
therein, with respect to the initial public offering (the "OFFERING") of common
stock, par value $0.001 per share, of the Company (the "COMMON STOCK").
You have advised us that the shareholders of the Company listed on
Schedule I hereto (the "OTHER SHAREHOLDERS") have, in connection with the
Offering, agreed to enter into an agreement (each, an "OTHER LOCK-UP LETTER
AGREEMENT") with you on terms that are substantially similar to this Lock-Up
Letter Agreement. You acknowledge that the undersigned is entering into this
Lock-Up Letter Agreement on the basis of and in reliance upon you confirming the
undersigned that each Other Shareholder has entered into an Other Lock-Up Letter
Agreement. For the purposes of this Lock-Up Letter Agreement, "substantially
similar" shall mean that the terms contained in the third and fourth paragraphs
of this Lock-Up Letter Agreement shall be identical to the comparable provisions
in any Other Lock-Up Letter Agreement and no term contained in any Other Lock-Up
Letter Agreement shall be more favorable to the Other Shareholders than as
provided in this Lock-Up Letter Agreement[; provided that the undersigned
understands the Common Stock owned by Kanbay Acquisition, L.L.C. and Kanbay
Investment, L.L.C. shall be released from their Other Lock-Up Letter Agreements
on January 1, 2005.
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that for a period beginning the date of the final prospectus
relating to the Offering and ending 360 days after such date (the "LOCK-UP
PERIOD") the undersigned will not, without the prior written consent of UBS
Securities LLC ("UBS"), (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or file (or participate in the
filing of) a registration statement with the Securities and Exchange Commission
(the "COMMISSION") in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the
2
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission promulgated thereunder (the "SECTION 16 REGULATIONS") with
respect to, any Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or warrants or other rights to purchase Common Stock, whether any
such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii) of this paragraph.
In addition, the undersigned agrees that for a period beginning 360
days after the date of the final prospectus relating to the Offering and ending
720 days after such date (the "RESTRICTED PERIOD"), the undersigned will not in
any consecutive 90 day period during the Restricted Period without the prior
written consent of the Board of Directors of the Company, (i) sell, offer to
sell, contract or agree to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of or agree to dispose of, directly or indirectly,
or file (or participate in the filing of) a registration statement with the
Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of the
Section 16 Regulations, any Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock in excess of an amount of Common Stock, securities
convertible into or exercisable or exchangeable for Common Stock, or warrants or
other rights to purchase Common Stock equal to 25% of your aggregate holdings,
calculated immediately prior to the Offering, of such securities (the
"RESTRICTED AMOUNT"), (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, whether any such transaction is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise, in excess of the Restricted
Amount or (iii) publicly announce an intention to effect any transaction
specified in clause (i) or (ii) of this paragraph.
The foregoing restrictions 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, provided the recipient thereof
agrees in writing with the Underwriters to be bound by the terms of this Lock-Up
Letter Agreement, (c) dispositions to any trust for the direct or indirect
benefit of the undersigned and/or the immediate family of the undersigned,
provided that such trust agrees in writing with the Underwriters to be bound by
the terms of this Lock-Up Letter Agreement or (d) the transfer or any shares of
Common Stock by the undersigned to any affiliate or, if the undersigned is a
limited partnership or limited liability company, the transfer of any shares of
Common Stock by the undersigned to any limited or general partner or member of
the undersigned, provided that such transferee agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Letter Agreement.
For the avoidance of doubt, it is understood that nothing in this
Lock-Up Letter Agreement shall be construed to restrict the undersigned's right
to exercise options or warrants
3
disclosed as outstanding in the Registration Statement and the Prospectus (each
as defined in the Underwriting Agreement) exercisable for Common Stock, it being
further understood that such Common Stock shall be subject to the provisions of
this Lock-Up Letter Agreement.
In addition, the undersigned hereby waives any rights the undersigned
may have (other than any rights under the Underwriting Agreement) to require
registration of Common Stock in connection with the filing of a registration
statement relating to the Offering.
The undersigned further agrees that, for a period of 360 days after
the date of the final prospectus relating to the Offering, the undersigned will
not, without the prior written consent of UBS, make any demand for, or exercise
any right with respect to, the registration of Common Stock of the Company or
any securities convertible into or exercisable or exchangeable for Common Stock,
or warrants or other rights to purchase Common Stock.
If (i) during the period that begins on the date that is 15 calendar
days plus 3 business days before the last day of the Lock-Up Period and ends on
the last day of the Lock-Up Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs and the Company
notifies the undersigned of such release, news or event; or (ii) prior to the
expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions imposed by the third, seventh and eighth
paragraphs of this Lock-Up Letter Agreement shall continue to apply until the
expiration of the date that is 15 calendar days plus 3 business days after the
date on which the issuance of the earnings release or the material news or
material event occurs; provided, however, this paragraph shall be of no force or
effect if the Company's shares of Common Stock are "actively traded securities,"
as defined in Regulation M, 17 CFR 242.101(c)(1).
If (i) the Company notifies you in writing that it does not intend to
proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) for any reason the Underwriting Agreement shall be terminated prior to the
time of purchase (as defined in the Underwriting Agreement), this Lock-Up Letter
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder. In addition, if at any time any Other Lock-Up Letter
Agreement is terminated, this Lock-Up Letter Agreement shall immediately
terminate with no action required by any party. You agree to provide the
undersigned with 3 days prior notice of the effectiveness of a termination of
any Other Lock-Up Letter Agreement. Further, if any Other Lock-Up Letter
Agreement is modified, amended or otherwise altered in any respect or if any
term, provision or obligation of any Other Lock-Up Letter Agreement is waived by
you in whole or in part, then (i) this Lock-Up Letter Agreement shall also be
similarly modified, amended or altered or the corresponding term, provision or
obligation of this Lock-Up Letter Agreement shall be waived to the same extent
as such Other Lock-Up Letter Agreement and (ii) you shall provide the
undersigned with at least 3 days prior notice of the effectiveness of any such
modification, amendment, alteration or waiver of such Other Lock-Up Letter
Agreement. For the purposes of this paragraph, "you" refers to UBS during the
Lock-Up Period and the Company during the Restricted Period.
4
This agreement will only become effective on the date that you provide
the undersigned with satisfactory evidence that each Other Shareholder has
entered into an Other Lock-Up Letter Agreement.
5
Upon the effectiveness of this Lock-Up Letter Agreement the lock-up
letter agreement entered into between you and the undersigned dated
______________, 2004 shall be terminated and shall no longer be in effect.
[NAME OF STOCKHOLDER(S)]
--------------------------------
Name:
Title:
Accepted and agreed to on
behalf of themselves and the
other several Underwriters
named in Schedule A to the
Underwriting Agreement
UBS SECURITIES LLC
XXXXXX XXXXXXXXXX XXXXX LLC
XXXXXX X. XXXXX & CO. INCORPORATED
By: UBS SECURITIES LLC
By:
------------------------------
Authorized Signatory
Accepted and agreed to
By: KANBAY INTERNATIONAL, INC.
--------------------------
Name:
Title:
6
Schedule I
OTHER SHAREHOLDERS
EXHIBIT C-1
OFFICERS' CERTIFICATE
Each of Xxxxxxx X. Xxxxxxx, Chief Executive Officer, and Xxxxxxx X.
Xxxxxxxx, Vice President and Chief Financial Officer, of Kanbay International,
Inc., a Delaware corporation (the "COMPANY"), do hereby certify as follows:
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Company as set forth in this
Agreement are true and correct as of the time of purchase and, if
applicable, the additional time of purchase.
3. The Company has performed all of its obligations under this Agreement as
are to be performed at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (j) and (k) of Section 8 of this
Agreement have been met.
5. The financial statements and other financial information included in the
Registration Statement and the Prospectus fairly present in all material
respects the financial condition, results of operations, and cash flows of
the Company as of, and for, the periods presented in the Registration
Statement.
IN WITNESS WHEREOF, I have signed this certificate.
Dated: [Date]
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President and Chief
Financial Officer
EXHIBIT C-2
OFFICERS' CERTIFICATE
[Name], [Title], of Kanbay Software (India) Private Limited, a limited
liability company incorporated under the laws of the Republic of India ("KANBAY
INDIA"), do hereby certify as follows:
1. I have reviewed the Registration Statement, the Prospectus and the opinion
(the "OPINION") of Pathak and Associates provided pursuant to Section 8(c)
of this Agreement.
2. The orders, decrees, written agreements and instruments identified in the
relevant exhibit to the Opinion are all of the orders, decrees, agreements
and instruments that are material to Kanbay India.
3. The legal proceedings identified in the relevant exhibit to the Opinion are
all legal proceedings to which Kanbay India is a party or to which any
property of Kanbay India is subject.
IN WITNESS WHEREOF, I have signed this certificate.
Dated: [Date]
-----------------------------------------
Name:
Title:
