1
Exhibit 1
Draft of 11/1/99
UNDERWRITING AGREEMENT
_____________, 1999
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
XXXX XXXXXXXX XXXXXXX
A DIVISION OF XXXX XXXXXXXX INCORPORATED
XXXXXX XXXXXX PARTNERS LLC
As Representatives of the several Underwriters
c/o BancBoston Xxxxxxxxx Xxxxxxxx Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. Netegrity, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several underwriters named in SCHEDULE A (the
"Underwriters") an aggregate of 2,450,000 shares of its common stock, $.01 par
value per share ("Common Shares"); and the stockholders of the Company named in
SCHEDULE B (collectively, the "Selling Stockholders") severally propose to sell
to the Underwriters an aggregate of 550,000 Common Shares. The 2,450,000 Common
Shares to be sold by the Company and the 550,000 Common Shares to be sold by the
Selling Stockholders are collectively called the "Firm Shares." In addition, the
Company has granted to the Underwriters an option to purchase up to an
additional 50,000 Common Shares and the Selling Stockholders have severally
granted to the Underwriters an option to purchase up to an additional 400,000
Common Shares, each Selling Stockholder selling up to the amount set forth
opposite such Selling Stockholder's name in SCHEDULE B, all as provided in
Section 2. The additional 50,000 Common Shares to be sold by the Company and the
additional 400,000 Common Shares to be sold by the Selling Stockholders pursuant
to such option are collectively called the "Option Shares". The Firm Shares and,
if and to the extent such option is exercised, the Option Shares are
collectively called the "Shares." BancBoston Xxxxxxxxx Xxxxxxxx Inc., Xxxx
Xxxxxxxx Xxxxxxx, a division of Xxxx Xxxxxxxx Incorporated, and Xxxxxx Xxxxxx
Partners LLC have agreed to act as representatives of the several Underwriters
(in such capacity, the "Representatives") in connection with the offering and
sale of the Common Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-87171), which contains a form of prospectus to be used in connection with
the public offering and sale of the Shares. Such registration statement, as
amended, in the form in which it was declared effective by the Commission under
the Securities Act of 1933 and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), including (a) the financial statements,
financial schedules and exhibits thereto, (b) any information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430A under the
Securities Act, and (c) all documents filed under the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder (collectively, the
"Exchange Act") and incorporated or deemed to be incorporated by reference in
such registration statement, as amended, is called the "Registration Statement."
Any registration statement filed by the Company pursuant to Rule 462(b) under
the Securities Act is called the "Rule 462(b) Registration Statement," and from
and after the date and time of filing of the Rule 462(b) Registration Statement
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. Such prospectus, in the form first used by the Underwriters to
confirm sales of the Shares, is called the "Prospectus." All references in this
Agreement to the Registration Statement, the Rule 462(b) Registration Statement,
any prospectus subject to completion (each a "preliminary prospectus") or the
Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed pursuant to the Commission's Electronic Data
Gathering, Analysis and Retrieval system. All references in this Agreement to
financial statements, financial schedules and other information that is
2
"contained," "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements, financial schedules and other information
that is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement or the
Prospectus shall be deemed to mean and include the filing of any document under
the Exchange Act that is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be.
The Company and the Selling Stockholders hereby confirm their respective
agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has
complied to the Commission's satisfaction with all requests of the
Commission for additional or supplemental information. No stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement is in effect, and no proceedings for such
purpose have been instituted, are pending or, to the knowledge of the
Company, are contemplated or threatened by the Commission. Each
preliminary prospectus and the Prospectus when filed complied in all
material respects with the Securities Act and, if filed by electronic
transmission pursuant to the Commission's Electronic Data Gathering,
Analysis and Retrieval system, was identical to the copy thereof delivered
to the Underwriters for use in connection with the offer and sale of the
Shares. Each of the Registration Statement, any Rule 462(b) Registration
Statement, and any post-effective amendment to the Registration Statement
or any Rule 462(b) Registration Statement, at the time it became effective
and at all subsequent times, complied and will comply in all material
respects with the Securities Act and did not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. The Prospectus, as amended or supplemented, as of its date
and at all subsequent times, did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representations and
warranties set forth in the two immediately preceding sentences do not
apply to statements in or omissions from the Registration Statement, any
Rule 462(b) Registration Statement, any post-effective amendment to the
Registration Statement or any Rule 462(b) Registration Statement, the
Prospectus, or any amendment or supplement to the Prospectus made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by the Representatives
expressly for use therein. There are no contracts or other documents
required to be described in the Prospectus or to be filed as exhibits to
the Registration Statement that have not been described or filed as
required.
(b) Exchange Act Compliance. The documents incorporated or deemed to
be incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act.
(c) Exchange Act Reports Filed. The Company has filed all reports
required to be filed by it pursuant to the Exchange Act.
(d) Conditions for Use of Form S-3. The Company has satisfied the
conditions for the use of Form S-3, as set forth in the general
instructions thereto, with respect to the Registration Statement.
2
3
(e) Offering Materials Furnished to Underwriters. The Company has
delivered to the Representatives (i) three complete conformed copies of
the Registration Statement, including each consent of experts filed as a
part thereof, and (ii) conformed copies of the Registration Statement
(without exhibits), each preliminary prospectus and the Prospectus, as
amended or supplemented, in such quantities and at such places as the
Representatives have reasonably requested for each of the Underwriters.
(f) Distribution of Offering Material by the Company. The Company
has not distributed and will not distribute, prior to the later of the
Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any
preliminary prospectus, the Prospectus or the Registration Statement.
(g) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable
law and except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(h) Authorization of the Shares to be Sold by the Company. The
Shares to be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement, will be
validly issued, fully paid and nonassessable.
(i) Authorization of the Firm Shares to be Sold by the Selling
Stockholders. The Firm Shares to be purchased by the Underwriters from the
Selling Stockholders were duly authorized when issued and are validly
issued, fully paid and nonassessable.
(j) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement, except for (i)
such rights of the Selling Stockholders with respect to Shares included in
the Registration Statement and (ii) such rights as have been duly waived.
(k) No Material Adverse Change. Subsequent to the respective dates
as of which information is given in the Prospectus:
(i) there has been no material adverse change, or any
development that reasonably could be expected to result in
a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and the
Subsidiaries (as defined below), considered as one entity
(any such change or effect is called a "Material Adverse
Change" or "Material Adverse Effect");
(ii) neither the Company nor any of the Subsidiaries has
incurred any liability or obligation, indirect, direct or
contingent, not in the ordinary course of business or has
entered into any transaction or agreement not in the
ordinary course of business, other than any such
liabilities, obligations, transactions and agreements that
are not, in the aggregate, material to the Company and the
Subsidiaries, considered as one entity; and
(iii) there has not been any dividend or distribution of any kind
declared, paid or made by the Company or any of the
Subsidiaries on any class of capital stock or any
repurchase or redemption by the Company or any of the
Subsidiaries of any class of capital stock.
3
4
(l) Independent Certified Public Accountants. PricewaterhouseCoopers
LLP, who have expressed their opinion with respect to the consolidated
financial statements (which term as used in this Agreement includes the
related notes thereto) and any supporting schedules filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, are independent certified public accountants with respect to
the Company and the Subsidiaries within the meaning of the Securities Act.
(m) Preparation of the Financial Statements. The consolidated
financial statements filed with the Commission as a part of the
Registration Statement and included in the Prospectus present fairly in
all material respects the consolidated financial position of the Company
and the Subsidiaries as of and at the dates indicated and the results of
operations and cash flows of the Company and the Subsidiaries for the
periods specified. Any supporting schedules included in the Registration
Statement present fairly in all material respects the information required
to be stated therein. Such consolidated financial statements and
supporting schedules have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved, except as may be expressly stated in the related
notes thereto. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The financial data
set forth in the Prospectus under the captions "Summary--Summary
Consolidated Financial Data," "Selected Consolidated Financial Data" and
"Capitalization" fairly present in all material respects the information
set forth therein on a basis consistent with that of the audited
consolidated financial statements contained in the Registration Statement.
(n) Accounting Systems. Each of the Company and the Subsidiaries
maintains a system of accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of consolidated 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.
(o) Subsidiaries of the Company. The Company does not own or
control, directly or indirectly, any corporation, association or other
entity other than Software Developers Company GmbH, Personal Computing
Tools and Netegrity Europe SRL (collectively, the "Subsidiaries"). The
Company is in the process of incorporating subsidiaries in Singapore and
the United Kingdom.
(p) Incorporation and Good Standing of the Company and the
Subsidiaries. Each of the Company and the Subsidiaries (i) has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction in which it is organized, with full corporate
power and authority to own its properties and conduct its business as
described in the Prospectus, and (ii) except where the failure to do so
would not have a Material Adverse Effect, is duly qualified to do business
as a foreign corporation and is in good standing under the laws of each
jurisdiction that requires such qualification.
(q) Capitalization of the Subsidiaries. All the outstanding shares
of capital stock of each of the Subsidiaries (i) have been duly authorized
and are validly issued, fully paid and nonassessable and (ii) except as
otherwise stated in the Registration Statement, are owned by the Company,
free and clear of any security interests, claims, liens or encumbrances.
(r) No Prohibition on Subsidiaries Paying Dividends or Making Other
Distributions. None of the Subsidiaries (except as limited by statutory
obligations) is prohibited, directly or indirectly, from (i) paying any
dividends to the Company, (ii) making any other distribution on its
capital stock, (iii) repaying to the Company or the other Subsidiary any
loans or advances from the Company or such other Subsidiary or (iv)
transferring any of its properties or assets to the Company,
4
5
(s) Capitalization and Other Capital Stock Matters. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus or upon exercise of outstanding options or warrants described
in the Prospectus). The Common Shares, including the Shares, conform in
all material respects to the description thereof contained in the
Prospectus. All of the issued and outstanding Common Shares (i) have been
duly authorized and are validly issued, fully paid and nonassessable and
(ii) have been issued in compliance with federal and state securities
laws. None of the outstanding Common Shares were issued in violation of
any preemptive rights, rights of first refusal, or other similar rights to
subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of
the Company or any of the Subsidiaries other than those identified in the
Prospectus. The description of the Company's stock option and other stock
plans or arrangements, and the options or other rights granted thereunder,
set forth in the Prospectus accurately and fairly presents in all material
respects the information required to be shown with respect to such plans,
arrangements, options and rights.
(t) Listing. The Shares have been approved for inclusion on the
Nasdaq National Market, subject only to official notice of issuance.
(u) No Consents, Approvals or Authorizations Required. No consent,
approval, authorization or order of, or filing with, any court or
governmental agency or regulatory body is required in connection with the
transactions contemplated herein, except such as have been obtained or
made under the Securities Act and such as may be required by the blue sky
laws of any state or other jurisdiction of the United States, the by-laws,
rules and regulations of the National Association of Securities Dealers,
Inc. (the "NASD"), or federal or provincial securities laws of Canada.
(v) Non-Contravention of Existing Instruments and Agreements.
Neither the issue and sale of the Shares, the consummation of any of the
other transactions contemplated herein nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of, or result
in the imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries pursuant to (i) the
charter or by-laws of the Company or any of the Subsidiaries, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of the Subsidiaries is
a party or bound or to which its properties are subject or (iii) any
statute, law, rule, regulation, judgment, order or decree applicable to
the Company or any of the Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, any of the Subsidiaries or any of
their properties.
(w) No Defaults or Violations. Neither the Company nor any of the
Subsidiaries is in violation or default of (i) any provision of its
charter or by-laws, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is a
party or bound or to which its properties are subject or (iii) any
statute, law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or such Subsidiary or
any of its properties, as applicable, except for any such violations or
defaults that do not and will not, in the aggregate, have a Material
Adverse Effect.
(x) No Actions, Suits or Proceedings. Except as disclosed in the
Registration Statement, no action, suit or proceeding by or before any
court, any governmental agency, authority or body, or any arbitrator
involving the Company, any of the Subsidiaries, or its or their properties
is pending or, to the knowledge of the Company, threatened that reasonably
could be expected (i) to have a material adverse effect on the performance
of this Agreement or the consummation of any of the transactions
contemplated hereby or (ii) to result in a Material Adverse Effect.
5
6
(y) All Necessary Permits, etc. Except where failure to do so would
not have a Material Adverse Effect, each of the Company and the
Subsidiaries possesses all valid and current certificates, authorizations
and permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct its business. Neither the Company
nor any of the Subsidiaries has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with,
any such certificate, authorization or permit that, in the aggregate, if
the subject of unfavorable decisions, rulings or findings, reasonably
could be expected to result in a Material Adverse Change.
(z) Title to Properties. The Company and the Subsidiaries have good
and marketable title to all the properties and assets reflected as owned
in the consolidated financial statements referred to in Section 1(A)(l) or
elsewhere in the Prospectus, in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as, in the aggregate, do not materially and adversely
affect the value of such properties and do not materially interfere with
the use made or proposed to be made of such properties by the Company and
the Subsidiaries. The real property, improvements, equipment and personal
property held under lease by the Company or any of the Subsidiaries are
held under valid and enforceable leases, with such exceptions as, in the
aggregate, are not material and do not materially interfere with the use
made or proposed to be made of such real property, improvements, equipment
or personal property by the Company or such Subsidiary.
(aa) Tax Law Compliance. The Company and the Subsidiaries have (i)
filed all necessary federal, state and foreign income and franchise tax
returns or have properly requested extensions thereof and (ii) paid all
taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them
except as is being contested in good faith and by appropriate proceedings.
The Company has made adequate charges, accruals and reserves in the
applicable consolidated financial statements referred to in Section
1(A)(l) in respect of all federal, state and foreign income and franchise
taxes for all periods as to which the tax liability of the Company or any
of the Subsidiaries has not been finally determined. Other than in
connection with a sales tax audit presenting being conducted by the
Commonwealth of Massachusetts, the Company is not aware of any tax
deficiency that has been or might be asserted or threatened against the
Company or any of the Subsidiaries and that reasonably could be expected
to result in a Material Adverse Change.
(bb) Intellectual Property Rights. Each of the Company and the
Subsidiaries owns or possesses adequate rights to use all patents, patent
rights or licenses, inventions, collaborative research agreements, trade
secrets, know-how, trademarks, service marks, trade names and copyrights
that are necessary to conduct its businesses as described in the
Registration Statement and the Prospectus. The expiration of any patents,
patent rights, trade secrets, trademarks, service marks, trade names or
copyrights of the Company and the Subsidiaries would not result in a
Material Adverse Effect that is not otherwise disclosed in the Prospectus.
Neither the Company nor any of the Subsidiaries has received any notice
of, or has any knowledge of, any infringement of or conflict with asserted
rights of the Company by others with respect to any patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade
names or copyrights. Neither the Company nor any of the Subsidiaries has
received any notice of, or otherwise has any knowledge of, any
infringement of or conflict with asserted rights of others with respect to
any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights that, in the
aggregate, if the subject of an unfavorable decisions, rulings or
findings, reasonably could be expected to have a Material Adverse Effect.
There is no claim being made against the Company or any of the
Subsidiaries regarding patents, patent rights or licenses, inventions,
collaborative research, trade secrets, know-how, trademarks, service
marks, trade names or copyrights. The Company and the Subsidiaries do not
in the conduct of their business as now or proposed to be conducted (as
described in the Prospectus) infringe or conflict with any right or patent
of any third party, or any discovery, invention, product or process that
is the subject of a patent application filed by any third party, known to
the Company or any of the Subsidiaries, which infringement or conflict
reasonably could be expected to result in a Material Adverse Change.
6
7
(cc) Year 2000 Preparedness. There are no issues related to the
preparedness of the Company or any of the Subsidiaries for the Year 2000
that (i) are of a character required to be described or referred to in the
Registration Statement or Prospectus by the Securities Act that have not
been accurately described in the Registration Statement and the Prospectus
or (ii) reasonably could be expected to result in a Material Adverse
Change or to materially affect their properties, assets or rights.
(dd) No Transfer Taxes or Other Fees. There are no transfer taxes or
other similar fees or charges under federal law or the laws of any state,
or any political subdivision thereof, required to be paid in connection
with the execution and delivery of this Agreement or the issuance and sale
of Shares by the Company.
(ee) Company Not an "Investment Company." The Company has been
advised of the rules and requirements under the Investment Company Act of
1940, as amended. The Company is not, and after receipt of payment for the
Shares will not be, an "investment company" or an entity "controlled" by
an "investment company" within the meaning of such Act. The Company will
conduct its business in a manner so that it will not become subject to
such Act.
(ff) Insurance. The Company and the Subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in
such amounts, with such deductibles and covering such risks as are
adequate and customary for their businesses, including policies covering
(i) real and personal property owned or leased by the Company and the
Subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes, (ii) general liability, and (iii) directors' and officers'
liability. The Company has no reason to believe that it or any of the
Subsidiaries will not be able (i) to renew its existing insurance coverage
as and when such policies expire or (ii) to obtain comparable coverage
from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a
Material Adverse Change. Neither the Company nor any of the Subsidiaries
has been denied any insurance coverage that it has sought or for which it
has applied.
(gg) Labor Matters. To the Company's knowledge, no labor disturbance
by employees of the Company or any of the Subsidiaries exists or is
imminent. The Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, resellers,
dealers, international distributors or licensors or its significant
customers that reasonably could be expected to result in a Material
Adverse Change.
(hh) No Price Stabilization or Manipulation. The Company has not
taken and will not take, directly or indirectly, any action designed to,
or that reasonably could be expected to, cause or result in stabilization
or manipulation of the price of the Common Shares to facilitate the sale
or resale of the Shares.
(ii) Lock-Up Agreements. The persons listed on EXHIBIT A-1 have
signed an agreement substantially in the form attached hereto as EXHIBIT
A-2 (the "Lock-up Agreements"). The Company has provided to Underwriters'
Counsel executed copies of all of the Lock-up Agreements.
(jj) Related Party Transactions. There are no business relationships
or related-party transactions involving the Company, any of the
Subsidiaries or any other person that are required to be described in the
Prospectus and have not been described as required.
(kk) No Unlawful Contributions or Other Payments. Neither the
Company, any of the Subsidiaries nor, to the knowledge of the Company, any
employee or agent of the Company or any of the Subsidiaries has made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of a character
required to be disclosed in the Prospectus.
7
8
(ll) Environmental Laws. The Company and the Subsidiaries are in
compliance with all existing rules, laws and regulations relating to the
use, treatment, storage and disposal of toxic substances and protection of
health or the environment ("Environmental Laws") that are applicable to
their businesses, except where the failure to comply would not result in a
Material Adverse Change. Neither the Company nor any of the Subsidiaries
has received any notice from any governmental authority or third party of
an asserted claim under Environmental Laws, which claim is required to be
disclosed in the Registration Statement and the Prospectus. Neither the
Company nor any of the Subsidiaries will be required to make future
material capital expenditures of which it is aware to comply with
Environmental Laws. No property owned, leased or occupied by the Company
or any of the Subsidiaries has been designated as a Superfund site
pursuant to the Comprehensive Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. ss. 9601, et seq.), or otherwise designated as
a contaminated site under applicable state or local law.
(mm) ERISA Compliance. The Company, the Subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or
maintained by the Company, any of the Subsidiaries or their "ERISA
Affiliates" (as defined below) are in compliance in all material respects
with ERISA. "ERISA Affiliate" means any member of any group of
organizations described in Section 414(b),(c),(m) or (o) of the Internal
Revenue Code of 1986, as amended (the "Code"), of which the Company or
such Subsidiary is a member. No "reportable event" (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, the
Subsidiaries or any ERISA Affiliate. No "employee benefit plan"
established or maintained by the Company, any of the Subsidiaries or any
ERISA Affiliate, if such "employee benefit plan" were terminated, would
have any "amount of unfunded benefit liabilities" (as defined under
ERISA). Neither the Company, any of the Subsidiaries nor any ERISA
Affiliate has incurred or reasonably expects to incur any liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from,
any "employee benefit plan" or (ii) Section 412, 4971, 4975 or 4980B of
the Code. Each "employee benefit plan" established or maintained by the
Company, any of the Subsidiaries or any ERISA Affiliate that is intended
to be qualified under Section 401(a) of the Code is so qualified, and
nothing has occurred, whether by action or failure to act, that would
cause the loss of such qualification.
(nn) Certificates. Any certificate signed by an officer of the
Company and delivered to the Representatives or Underwriters' Counsel in
connection with this Agreement shall be deemed to be a representation and
warranty hereunder by the Company to each Underwriter as to the matters
set forth therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder represents, warrants and covenants to each Underwriter as
follows:
(a) The Underwriting Agreement. This Agreement (i) has been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder and (ii) is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as
the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(b) The Custody Agreement and Power of Attorney. Each of (i) the
Custody Agreement signed by or on behalf of such Selling Stockholder and
the Company, as custodian (the "Custodian"), relating to the deposit of
the Shares to be sold by such Selling Stockholder (the "Custody
Agreement") and (ii) the Irrevocable Power of Attorney of such Selling
Stockholder appointing Xxxxx X. Xxxxxx and Xxxxx X. Xxxxxx as such Selling
Stockholder's attorneys-in-fact (each an "Attorney-in-Fact") to the extent
set forth therein relating to the transactions contemplated hereby and by
the Prospectus (with respect to such Selling Stockholder, the "Power of
Attorney") has been duly authorized, executed and delivered by or on
behalf of such Selling Stockholder and is a valid and binding agreement of
such Selling
8
9
Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting the
rights and remedies of creditors or by general equitable principles. Such
Selling Stockholder agrees that the Shares to be sold by such Selling
Stockholder on deposit with the Custodian are subject to the interests of
the Underwriters, that the arrangements made for such custody are to that
extent irrevocable, and that the obligations of such Selling Stockholder
hereunder shall not be terminated, except as provided in this Agreement or
in the Custody Agreement, by any act of such Selling Stockholder, by
operation of law, by death or incapacity of such Selling Stockholder, or
by the occurrence of any other event. If such Selling Stockholder should
die or become incapacitated, or if any other event should occur, before
the delivery of the Shares to be sold by such Selling Stockholder
hereunder, the documents evidencing the Shares to be sold by such Selling
Stockholder then on deposit with the Custodian shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as
if such death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice thereof.
(c) Title to Shares to be Sold. On the First Closing Date and the
Second Closing Date, such Selling Stockholder will have good and valid
title to the shares of Common Stock to be sold by such Selling Stockholder
hereunder. Upon sale and delivery of, and payment for, such Firm Shares as
provided herein, such Selling Stockholder will convey good and marketable
title to such Firm Shares, free and clear of all security interests,
claims, liens or encumbrances.
(d) All Authorizations Obtained. Such Selling Stockholder has, and
on the First Closing Date will have, (i) good and marketable title to all
of the Firm Shares being sold by such Selling Stockholder pursuant to this
Agreement and (ii) the legal right and power, and all authorizations and
approvals required by law and its organizational documents (if any) to
enter into this Agreement, the Custody Agreement and the Power of
Attorney, to sell, transfer and deliver all of the Firm Shares being sold
by such Selling Stockholder pursuant to this Agreement, and to comply with
its other obligations hereunder and thereunder.
(e) No Further Consents, Authorization or Approvals. No consent,
approval, authorization or order of any court or governmental agency or
body is required for the consummation by such Selling Stockholder of the
transactions contemplated herein, except such as may have been obtained
under the Securities Act or otherwise and such as may be required by the
blue sky laws of any state or other jurisdiction of the United States, the
by-laws, rules and regulations of the NASD, or federal or provincial
securities laws of Canada.
(f) Non-Contravention. Neither the sale of the Firm Shares being
sold by such Selling Stockholder, the consummation of any of the other
transactions herein contemplated by such Selling Stockholder, nor the
fulfillment of the terms hereof by such Selling Stockholder will conflict
with, result in a breach or violation of, or constitute a default under
any law, any indenture or other agreement or instrument to which such
Selling Stockholder is party or bound or any judgment, order or decree
applicable to such Selling Stockholder of any court or regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over such Selling Stockholder.
(g) No Registration or Other Similar Rights. Such Selling
Stockholder does not have, or has waived prior to the date hereof, any
registration or other similar rights to have any equity or debt
securities, other than the Firm Shares to be sold hereunder by such
Selling Stockholder, registered for sale by the Company under the
Registration Statement or included in the offering contemplated by this
Agreement.
(h) No Preemptive, Co-sale or Other Similar Rights. Such Selling
Stockholder does not have, or has waived prior to the date hereof, any
preemptive right, co-sale right, right of first refusal or other similar
right to purchase any of the Shares that are to be sold by the Company or
any of the other Selling Stockholders to the Underwriters pursuant to this
Agreement. Such Selling Stockholder does not own
9
10
any warrants, options or similar rights to acquire, and does not have any
right or arrangement to acquire, any capital stock, right, warrants,
options or other securities from the Company, other than those identified
in the Registration Statement and the Prospectus.
(i) Disclosure Made by Such Selling Stockholder in the Prospectus.
All information furnished by or on behalf of such Selling Stockholder in
writing expressly for use in the Registration Statement and the Prospectus
(i) is, and on the First Closing Date and the Second Closing Date will be,
accurate and complete in all material respects and (ii) does not, and on
the First Closing Date and the Second Closing Date will not, contain any
untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading. Such Selling
Stockholder confirms as accurate the numbers of shares of Common Shares
set forth opposite such Selling Stockholder's name in the Prospectus under
the caption "Principal and Selling Stockholders" (both prior to and after
giving effect to the sale of the Shares).
(j) No Price Stabilization or Manipulation. Such Selling Stockholder
has not taken and will not take, directly or indirectly, any action
designed to or that reasonably could be expected to cause or result in
stabilization or manipulation of the price of the Common Shares to
facilitate the sale or resale of the Shares.
(k) No Transfer Taxes or Other Fees. There are no transfer taxes or
other similar fees or charges under federal law or the laws of any state,
or any political subdivision thereof, required to be paid in connection
with the execution and delivery of this Agreement or the sale of Firm
Shares by such Selling Stockholder.
(l) Distribution of Offering Materials by Such Selling Stockholder.
Such Selling Stockholder has not distributed and will not distribute,
prior to the later of the Second Closing Date and the completion of the
Underwriters' distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any
preliminary prospectus, the Prospectus or the Registration Statement.
(m) Confirmation of Company Representations and Warranties. Such
Selling Stockholder (i) has no reason to believe that the representations
and warranties of the Company contained in Section 1(A) are not true and
correct, (ii) is familiar with the Registration Statement and the
Prospectus and has no knowledge of any material fact, condition or
information not disclosed in the Registration Statement or the Prospectus
that has had or may result in a Material Adverse Effect and (iii) is not
prompted to sell the Firm Shares to be sold by such Selling Stockholder by
any information concerning the Company that is not set forth in the
Registration Statement and the Prospectus.
(n) Certificates. Any certificate signed by or on behalf of any
Selling Stockholder and delivered to the Representatives or Underwriters'
Counsel in connection with this Agreement shall be deemed to be a
representation and warranty hereunder by such Selling Stockholder to each
Underwriter as to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) The Firm Shares. Upon the terms herein set forth, (i) the Company
agrees to issue and sell to the several Underwriters an aggregate of 2,450,000
Firm Shares and (ii) the Selling Stockholders agree to sell to the several
Underwriters an aggregate of 550,000 Firm Shares, each Selling Stockholder
selling the number of Firm Shares set forth opposite such Selling Stockholder's
name on SCHEDULE B. The agreements by the Company and each of the Selling
Stockholders to make the sales described in the preceding sentence are several
and not joint. On the basis of the representations, warranties and agreements
herein contained, and upon the terms but subject to the conditions herein set
forth, the Underwriters agree, severally and not jointly, to purchase from the
Company and the Selling Stockholders the respective numbers of Firm Shares set
forth
10
11
opposite their names on SCHEDULE A. The purchase price per Firm Share to be paid
by the several Underwriters to the Company and the Selling Stockholders shall
be $___.
(b) The First Closing Date. Delivery of the Firm Shares to be purchased by
the Underwriters and payment therefor (in the manner described in Section 2(f)
hereof) shall be made by the Company and the Representatives at 9 A.M., Boston
time, at the offices of Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional Corporation
(or at such other place as may be agreed upon between the Representatives and
the Company), (i) on the third full business day following the first day that
Shares are traded, (ii) if this Agreement is executed and delivered after 4:30
P.M., Boston time, the fourth full business day following the day that this
Agreement is executed and delivered or (iii) at such other time and date not
later that seven full business days following the first day that Shares are
traded as the Representatives and the Company may determine (or at such time and
date to which payment and delivery shall have been postponed pursuant to Section
8), such time and date of payment and delivery being herein called the "Closing
Date." Notwithstanding the foregoing, if the Company has not made available to
the Representatives copies of the Prospectus within the time provided in Section
4(d), the Representatives may, in their sole discretion, postpone the Closing
Date until no later that two full business days following delivery of copies of
the Prospectus to the Representatives.
(c) The Option Shares; the Second Closing Date. In addition, on the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Company and the
Selling Stockholders indicated on SCHEDULE B hereby severally but not jointly
grant an option to the several Underwriters to purchase, severally and not
jointly, up to an aggregate of 450,000 Option Shares from the Company and such
Selling Stockholders at the purchase price per share to be paid by the
Underwriters for the Firm Shares. The option granted hereunder is for use by the
Underwriters solely in covering any over-allotments in connection with the sale
and distribution of the Firm Shares. The option granted hereunder may be
exercised at any time upon notice by the Representative to the Company and such
Selling Stockholders, which notice may be given at any time within 30 days from
the date of this Agreement. The time and date of delivery of the Option Shares,
if subsequent to the First Closing Date, is called the "Second Closing Date" and
shall be determined by the Representatives and shall not be earlier than three
nor later than five full business days after delivery of such notice of
exercise. If any Option Shares are to be purchased, (i) each Underwriter agrees,
severally and not jointly, to purchase the number of Option Shares (subject to
such adjustments to eliminate fractional shares as the Representatives may
determine) that bears the same proportion to the total number of Option Shares
to be purchased as the number of Firm Shares set forth on SCHEDULE A opposite
the name of such Underwriter bears to the total number of Firm Shares and (ii)
the Company and each such Selling Stockholder agree, severally and not jointly,
to sell the number of Option Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Option Shares to be sold as the number of
Option Shares set forth in SCHEDULE B opposite the name of such Selling
Stockholder (or, in the case of the Company, as 50,000 bears to the total number
of Option Shares to be sold. The Representative may cancel the option at any
time prior to its expiration by giving written notice of such cancellation to
the Company and such Selling Stockholders.
(d) Public Offering of the Shares. The Representatives hereby advise the
Company and the Selling Stockholders that the Underwriters intend to offer for
sale to the public, as described in the Prospectus, their respective portions of
the Shares as soon after this Agreement has been executed and the Registration
Statement has been declared effective as the Representatives, in their sole
judgment, have determined is advisable and practicable.
(e) Payment for the Shares. Payment for the Shares to be sold by the
Company shall be made at the First Closing Date (and, if applicable, at the
Second Closing Date) by wire transfer of immediately available funds to the
order of the Company. Payment for the Shares to be sold by the Selling
Stockholders shall be made at the First Closing Date by wire transfer of
immediately available funds to the order of the Custodian.
It is understood that the Representatives have been authorized, for
their own accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase
11
12
price for, the Firm Shares and any Option Shares the Underwriters have agreed to
purchase. BancBoston Xxxxxxxxx Xxxxxxxx Inc., individually and not as one of the
Representatives, may (but shall not be obligated to) make payment for any Shares
to be purchased by any Underwriter whose funds shall not have been received by
the Representatives by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall not
relieve such Underwriter from any of its obligations under this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Firm Shares to be sold by such Selling Stockholder to
the several Underwriters or otherwise in connection with the performance of such
Selling Stockholder's obligations hereunder and (ii) the Custodian is authorized
to deduct for such payment any such amounts from the proceeds to such Selling
Stockholder hereunder and to hold such amounts for the account of such Selling
Stockholder with the Custodian under the Custody Agreement.
(f) Delivery of the Shares. The Company and the Selling Stockholders shall
deliver, or cause to be delivered, a credit representing the Firm Shares to an
account or accounts at The Depository Trust Company as designated by the
Representatives for the accounts of the Representatives and the several
Underwriters at the First Closing Date, against the irrevocable release of a
wire transfer of immediately available funds for the amount of the purchase
price therefor. The Company and the Selling Stockholders that granted the option
provided in Section 2 shall also deliver, or cause to be delivered, a credit
representing the Option Shares to an account or accounts at The Depository Trust
Company as designated by the Representatives for the accounts of the
Representatives and the several Underwriters at the Second Closing Date, against
the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. Time shall be of the essence, and
delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 3 P.M.,
Boston time, on the second business day following the date the Shares are
released by the Underwriters for sale to the public, the Company shall deliver
or cause to be delivered copies of the Prospectus in such quantities and at such
places as the Representatives shall request.
SECTION 3. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.
A. COVENANTS OF THE COMPANY. The Company further covenants and agrees with
each Underwriter as follows:
(a) Registration Statement Matters. The Company will use its best
efforts to cause the Registration Statement to become effective or, if the
procedure in Rule 430A of the Securities Act is followed, will prepare and
timely file with the Commission pursuant to Rule 424(b) under the
Securities Act a prospectus in a form approved by the Representatives
containing information previously omitted at the time of effectiveness of
the Registration Statement in reliance on Rule 430A of the Securities Act.
The Company will not file any amendment to the Registration Statement or
any amendment or supplement to the Prospectus of which the Representatives
have not previously been advised and furnished with a copy, to which the
Representatives have reasonably objected in writing or which is not in
compliance with the Securities Act. If the Company elects to rely on Rule
462(b) under the Securities Act, the Company will file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b)
under the Securities Act prior to the time confirmations are sent or
given, as specified by Rule 462(b)(2) under the Securities Act, and will
pay the applicable fees in accordance with Rule 111 under the Securities
Act.
(b) Securities Act Compliance. The Company will advise the
Representatives promptly when (i) the Registration Statement or any
post-effective amendment thereto becomes effective, (ii) the Company
receives any comments from the Commission, (iii) the Commission requests
any amendment of the Registration Statement, any amendment or supplement
to the Prospectus, or any additional
12
13
information and (iv) the Commission institutes any stop order suspending
the effectiveness of the Registration Statement or the use of the
Prospectus or institutes proceedings for that purpose. The Company will
use its best efforts to prevent the Commission from issuing any such stop
order and, if such a stop order is issued, to cause the Commission to lift
such stop order as soon as possible.
(c) Blue Sky Compliance. The Company will cooperate with the
Representatives and Underwriters' Counsel in endeavoring to qualify the
Shares for sale under the securities laws of such jurisdictions (both
national and foreign) as the Representatives may reasonably have
designated in writing and will make such applications, file such documents
and furnish such information as may be reasonably required for that
purpose, provided the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction where it is not now so qualified or required to file such
a consent. The Company will, from time to time, prepare and file such
statements, reports and other documents as are or may be required to
continue such qualifications in effect for so long a period as the
Representatives may reasonably request for distribution of the Shares.
(d) Amendments and Supplements to the Prospectus and Other
Securities Act Matters. The Company will comply with the Securities Act,
the Exchange Act and the rules and regulations of the Commission under the
Exchange Act so as to permit the completion of the distribution of the
Shares as contemplated by this Agreement and the Prospectus. If during the
period in which a prospectus is required by law to be delivered by an
underwriter or dealer, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the
Representatives or Underwriters' Counsel, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or, if it is necessary at any
time to amend or supplement the Prospectus to comply with any law, the
Company promptly will prepare and file with the Commission, and furnish at
its own expense to the Underwriters and to dealers, an appropriate
amendment to the Registration Statement or supplement to the Prospectus so
that the Prospectus as so amended or supplemented will not, in the light
of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with the law.
(e) Copies of any Amendments and Supplements to the Prospectus. The
Company will furnish to the Representatives, without charge, during the
period beginning on the date hereof and ending on the later of the Second
Closing Date or such date as in the opinion of Underwriters' Counsel the
Prospectus is no longer required by law to be delivered in connection with
sales by an underwriter or dealer (the "Prospectus Delivery Period"), as
many copies of the Prospectus and any amendments and supplements thereto
as the Representatives may request.
(f) Insurance. The Company will (i) obtain directors' and officers'
liability insurance in the minimum amount of $10,000,000 that shall apply
to the offering contemplated hereby and (ii) cause BancBoston Xxxxxxxxx
Xxxxxxxx Inc. to be added as an additional insured to such policy in
respect of the offering contemplated hereby.
(g) Notice of Subsequent Events. If at any time during the
ninety-day period after the Registration Statement becomes effective, any
rumor, publication or event relating to or affecting the Company shall
occur as a result of which in opinion of the Representatives the market
price of the Common Shares has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after
written notice from the Representatives advising the Company to the effect
set forth above, forthwith prepare, consult with the Representatives
concerning the substance of, and disseminate a press release or other
public statement, reasonably satisfactory to Representatives, responding
to or commenting on such rumor, publication or event.
(h) Use of Proceeds. The Company will apply the net proceeds from
the sale of the Shares sold by it in the manner described under the
caption "Use of Proceeds" in the Prospectus.
13
14
(i) Transfer Agent. The Company will engage and maintain, at its
expense, a registrar and transfer agent for the Common Shares.
(j) Earnings Statement. As soon as practicable, the Company will
make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited) covering
the twelve-month period ending December 31, 2000 that satisfies the
provisions of Section 11(a) of the Securities Act.
(k) Periodic Reporting Obligations. During the Prospectus Delivery
Period, the Company will file with the Commission, on a timely basis, all
reports and documents required to be filed under the Exchange Act.
(l) Agreement Not to Offer or Sell Additional Securities. The
Company will not, for a period of 90 days after the date of the
Prospectus, offer to sell, contract to sell, or otherwise sell, dispose
of, loan, pledge or grant any rights with respect to any Common Shares,
any options or warrants to purchase any Common Shares, or any securities
convertible into or exchangeable for Common Shares without the prior
written consent of BancBoston Xxxxxxxxx Xxxxxxxx Inc., other than (i) the
sale of the Shares to be sold by the Company hereunder, and (ii) the
Company's issuance of options or Common Shares under the Company's stock
option plan, as presently authorized.
(m) Future Reports to the Representatives. During the five-year
period commencing on the date hereof, the Company will furnish to the
Representatives (i) as soon as practicable after the end of each fiscal
year, copies of its annual report containing the consolidated balance
sheet of the Company and its subsidiaries as of the close of such fiscal
year, consolidated statements of income, stockholders' equity and cash
flows for the year then ended, and the opinion thereon of the Company's
independent certified public accountants; (ii) as soon as practicable
after the filing thereof, copies of each proxy statement, Annual Report on
Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or
other report filed by the Company with the Commission, the Nasdaq Stock
Market, Inc. or any securities exchange; and (iii) as soon as practicable
after mailing, copies of any report or communication of the Company mailed
generally to holders of its capital stock.
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder further
covenants and agrees with each Underwriter as follows:
(a) Delivery of Form W-8 or W-9. Such Selling Stockholder will
deliver to the Representatives prior to the First Closing Date a properly
completed and executed United States Treasury Department Form W-8 (if such
Selling Stockholder is a non-United States person) or Form W-9 (if such
Selling Stockholder is a United States person).
(b) Notification of Untrue Statements, etc. If, at any time prior to
the date on which the distribution of the Shares as contemplated by this
Agreement and the Prospectus has been completed, as determined by the
Representatives, such Selling Stockholder has knowledge of the occurrence
of any event as a result of which the Prospectus or the Registration
Statement, in each case as then amended or supplemented, would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, such Selling Stockholder will
promptly notify the Company and the Representatives.
14
15
SECTION 4. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters to purchase and pay for the
Shares as provided herein on the First Closing Date and, with respect to the
Option Shares, the Second Closing Date shall be subject to the accuracy of the
respective representations and warranties on the part of the Company and the
Selling Stockholders set forth in Section 1 as of the date hereof and as of the
First Closing Date as though then made and, with respect to the Option Shares,
as of the Second Closing Date as though then made, to the timely performance by
the Company and the Selling Stockholders of their respective covenants and other
obligations hereunder, and to each of the following additional conditions:
(a) Compliance with Registration Requirements; No Stop Order; No
Objection from the NASD. The Registration Statement shall have become
effective prior to the execution of this Agreement, or at such later date
as shall be consented to in writing by the Representatives. No stop order
suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the
knowledge of the Company, any Selling Shareholder or any Underwriter,
threatened by the Commission. Any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the reasonable
satisfaction of Underwriters' Counsel. The NASD shall have raised no
objection to the fairness and reasonableness of the underwriting terms and
arrangements.
(b) Corporate Proceedings. All corporate proceedings and other legal
matters in connection with this Agreement, the form of the Registration
Statement and the Prospectus, and the registration, authorization, issue,
sale and delivery of the Shares shall have been reasonably satisfactory to
Underwriters' Counsel. Such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable
them to pass upon the matters referred to in this Section 4.
(c) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement and prior to the First Closing Date or the
Second Closing Date, as the case may be, there shall not have been any
Material Adverse Change from that set forth in the Registration Statement
or Prospectus that in the sole judgment of the Representatives, is
material and adverse and that makes it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Prospectus.
(d) Opinion of Counsel for the Company. You shall have received on
the First Closing Date or the Second Closing Date, as the case may be, an
opinion of Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional Corporation,
counsel for the Company, substantially in the form of EXHIBIT B attached
hereto, dated the First Closing Date or the Second Closing Date, as the
case may be, addressed to the Underwriters and with reproduced copies or
signed counterparts thereof for each of the Underwriters. Counsel
rendering the opinion contained in EXHIBIT B may rely as to questions of
law not involving the law of the United States or Massachusetts or the
General Corporation Law of the State of Delaware upon opinions of local
counsel, and as to questions of fact upon representations or certificates
of officers of the Company and of government officials, in which case
their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to the Representatives and
to Underwriters' Counsel.
(e) Opinion of Counsel for the Underwriters. You shall have received
on the First Closing Date or the Second Closing Date, as the case may be,
an opinion of Underwriters' Counsel, substantially in the form of EXHIBIT
C hereto. The Company shall have furnished to such counsel such documents
as they may have reasonably requested for the purpose of enabling them to
pass upon such matters.
(f) Accountants' Comfort Letter. You shall have received on the
First Closing Date and on the Second Closing Date, as the case may be, a
letter from PricewaterhouseCoopers LLP addressed to the
15
16
Underwriters, dated the First Closing Date or the Second Closing Date, as
the case may be, confirming that they are independent certified public
accountants with respect to the Company and the Subsidiaries within the
meaning of the Securities Act and based upon the procedures described in
such letter delivered to you concurrently with the execution of this
Agreement (herein called the "Original Letter"), but carried out to a date
not more than four business days prior to the First Closing Date or the
Second Closing Date, as the case may be, (i) confirming, to the extent
true, that the statements and conclusions set forth in the Original Letter
are accurate as of the First Closing Date or the Second Closing Date, as
the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter that are
necessary to reflect any changes in the facts described in the Original
Letter since the date of such letter or to reflect the availability of
more recent financial statements, data or information. The letter shall
not disclose any change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and
the Subsidiaries considered as one enterprise from that set forth in the
Registration Statement or the Prospectus that, in the sole judgment of the
Representatives, is material and adverse and that makes it, in the sole
judgment of the Representatives, impracticable or inadvisable to proceed
with the public offering of the Shares as contemplated by the Prospectus.
The Original Letter from PricewaterhouseCoopers LLP (i) shall be addressed
to the Underwriters, (ii) shall be satisfactory in form and substance to
the Representatives, (iii) shall represent that they are independent
accountants with respect to the Company within the meaning of the
Securities Act, (iv) shall set forth their opinion with respect to their
examination of the consolidated balance sheets of the Company as of
December 31, 1997 and 1998 and related consolidated statements of
operations, shareholders' equity, and cash flows for the nine months ended
December 31, 1996 and the fiscal years ended December 31, 1997 and 1998
and (v) shall address other matters agreed upon by PricewaterhouseCoopers
LLP and the Representatives.
(g) Officers' Certificate. You shall have received on the First
Closing Date or the Second Closing Date, as the case may be, a certificate
of the Company, dated the First Closing Date or the Second Closing Date,
as the case may be, signed by the President and Chief Executive Officer
and the Vice President of Finance, Chief Financial Officer and Treasurer
of the Company, to the effect that, and you shall be satisfied that:
(i) the representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the
First Closing Date or the Second Closing Date, as the case
may be, and the Company has complied with all the
agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the First Closing
Date or the Second Closing Date, as the case may be;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or
threatened under the Securities Act;
(iii) when the Registration Statement became effective and at all
times subsequent thereto up to the time of delivery of such
certificate, (A) the Registration Statement and the
Prospectus, and any amendments or supplements thereto,
contained all material information required to be included
therein by the Securities Act and conformed in all material
respects to the requirements of the Securities Act and (B)
the Registration Statement and the Prospectus, and any
amendments or supplements thereto, did not and do not
include any 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;
(iv) since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an
amendment or supplement to the Prospectus that has not been
so set forth; and
16
17
(v) subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus,
there has not been (A) any Material Adverse Change, (B) any
transaction that is material to the Company and the
Subsidiaries considered as one enterprise, except
transactions entered into in the ordinary course of
business, (C) any obligation, direct or contingent, that is
material to the Company and the Subsidiaries considered as
one enterprise, incurred by the Company or the
Subsidiaries, except obligations incurred in the ordinary
course of business, (D) any change in the capital stock or
outstanding indebtedness of the Company or any of the
Subsidiaries that is material to the Company and the
Subsidiaries considered as one enterprise, (E) any dividend
or distribution of any kind declared, paid or made on the
capital stock of the Company or any of the Subsidiaries, or
(F) any loss or damage (whether or not insured) to the
properties of the Company or any of the Subsidiaries that
has been sustained or will have been sustained that has or
will have a Material Adverse Effect.
(h) Opinion of Counsel for the Selling Stockholders. You shall have
received, with respect to each of the Selling Stockholders, on the First
Closing Date and the Second Closing Date, if applicable, an opinion of
counsel for such Selling Stockholder (which counsel shall be Xxxxxxxx,
Xxxxxxx & Xxxxxxx, A Professional Corporation, or another firm reasonably
acceptable to the Representatives and Underwriters' Counsel),
substantially in the form of EXHIBIT D hereto, dated as of such Closing
Date, addressed to the Underwriters and with reproduced copies or signed
counterparts thereof for each of the Underwriters. In rendering such
opinion, such counsel may rely as to questions of law not involving the
law of the United States or Massachusetts or the General Corporation Law
of the State of Delaware upon opinions of local counsel and as to
questions of fact, upon representations or certificates of such Selling
Stockholder, officers of such Selling Stockholder (when the Selling
Stockholder is not a natural person) and governmental officials, in which
case their opinion is to state that they are so relying and that they have
no knowledge of any material misstatement or inaccuracy of any material
misstatement or inaccuracy in any such opinion, representation or
certificate so relied upon shall be delivered to the Representatives and
Underwriters' Counsel.
(i) Selling Stockholders' Certificate. You shall have received on
the First Closing Date and the Second Closing Date, as the case may be, a
written certificate executed by the Attorneys-in-Fact, dated as of such
Closing Date, to the effect that:
(i) the representations, warranties and covenants of each of
the Selling Stockholders set forth in Section 1(B) are true
and correct with the same force and effect as though
expressly made by the Selling Stockholders on and as of
such Closing Date; and
(ii) each of the Selling Stockholders has complied with all the
agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such Closing Date.
(j) Stock Listing. The Shares shall have been approved for inclusion
on the Nasdaq National Market, subject only to official notice of
issuance.
(k) Compliance with Prospectus Delivery Requirements. The Company
shall have complied with the provisions of Sections 2(g) and 3(e) with
respect to the furnishing of Prospectuses.
(l) Additional Documents. On or before the First Closing Date or the
Second Closing Date, as the case may be, the Representatives and
Underwriters' Counsel shall have received such information, documents and
opinions as they may reasonably require (i) for the purpose of enabling
them to pass upon the issuance and sale of the Shares as contemplated
herein or (ii) in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the
conditions or agreements, of the Company or the Selling Stockholders
herein contained.
17
18
If any condition specified in this Section 4 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Stockholders at any
time on or prior to the First Closing Date and, with respect to the Option
Shares, at any time prior to the Second Closing Date, which termination shall be
without liability on the part of any party to any other party, except that
Sections 5, 6, 7 and 10 shall at all times be effective and shall survive such
termination.
SECTION 5. PAYMENT OF EXPENSES.
The Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of the obligations of the Company and the
Selling Stockholders hereunder and in connection with the transactions
contemplated hereby, including (i) all expenses incident to the issuance and
delivery of the Shares (including all printing and engraving costs), (ii) all
fees and expenses of the registrar and transfer agent of the Common Shares,
(iii) all issue, transfer and other stamp taxes in connection with the issuance
and sale of the Shares to the Underwriters, (iv) all fees and expenses of the
Company's counsel, independent accountants and other advisors, (v) all costs and
expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Registration Statement (including financial statements,
exhibits, consents and certificates of experts), each preliminary prospectus and
the Prospectus, and all amendments and supplements thereto, and this Agreement,
(vi) all filing fees, attorneys' fees and expenses incurred by the Company or
the Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Shares for offer and sale under the state securities or blue sky laws or the
provincial securities laws of Canada or any other country, and, if requested by
the Representatives, preparing and printing a "Blue Sky Memorandum," an
"International Blue Sky Memorandum" or any other memoranda, and any supplements
thereto, advising the Underwriters of such qualifications, registrations and
exemptions, (vii) the filing fees incident to, and the reasonable fees and
expenses of Underwriters' Counsel in connection with, the NASD review and
approval of the Underwriters' participation in the offering and distribution of
the Shares, (viii) the fees and expenses associated with listing the Common
Shares on the Nasdaq National Market, and (ix) all other fees, costs and
expenses referred to in Item 13 of Part II of the Registration Statement. Except
as provided in this Section 5 or in Section 6 or 7, the Underwriters shall pay
their own expenses, including the fees and disbursements of their counsel.
This Section 5 shall not affect or modify any separate, valid agreement
relating to the allocation of payment of expenses between the Company, on the
one hand, and the Selling Stockholders, on the other hand.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.
If this Agreement is terminated by the Representatives pursuant to Section
4, 9 or 15, or if the sale to the Underwriters of the Firm Shares on the First
Closing Date is not consummated because of any refusal, inability or failure on
the part of the Company or the Selling Stockholders to perform any agreement
herein or to comply with any provision hereof, the Company agrees to reimburse
the Representatives and the other Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally upon demand for
all out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the other Underwriters in connection with the proposed
purchase and the offering and sale of the Shares, including fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification of the Underwriters. The Company and each of the
Selling Stockholders agree severally, but not jointly, to indemnify and hold
harmless each Underwriter, its officers and employees, and each person, if any,
who controls any Underwriter within the meaning of the Securities Act and the
Exchange Act against any loss, claim, damage, liability or expense, as incurred,
to which such Underwriter or such controlling person may become subject, under
the Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such
18
19
settlement is effected with the written consent of the Company and the Selling
Stockholders, which consent shall not be unreasonably withheld), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based:
(i) upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any
amendment thereto, including any information deemed to be a part
thereof pursuant to Rule 430A under the Securities Act, or the
omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(ii) upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(iii) in whole or in part upon any inaccuracy in the representations
and warranties of the Company or such Selling Stockholder
contained herein;
(iv) in whole or in part upon any failure of the Company or such
Selling Stockholder to perform its or his obligations hereunder
or under law; or
(v) any act or failure to act or any alleged act or failure to act by
any Underwriter in connection with, or relating in any manner to,
the Shares or the offering contemplated hereby, which is included
as part of or referred to in any loss, claim, damage, liability
or action arising out of or based upon any matter covered by
clause (i), (ii), (iii) or (iv) above, provided that the Company
and the Selling Stockholders shall not be liable under this
clause (v) to the extent that a court of competent jurisdiction
shall have determined by a final judgment that such loss, claim,
damage, liability or action resulted directly from any such acts
or failures to act undertaken or omitted to be taken by such
Underwriter through its bad faith or willful misconduct;
and to reimburse each Underwriter and each such controlling person for any and
all expenses (including the fees and disbursements of counsel chosen by
BancBoston Xxxxxxxxx Xxxxxxxx Inc.) as such expenses are reasonably incurred by
such Underwriter or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by the Representatives expressly for use in the Registration Statement,
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided, further, that with respect to any preliminary prospectus,
the foregoing indemnity agreement shall not inure to the benefit of any
Underwriter from whom the person asserting any loss, claim, damage, liability or
expense purchased Shares, or any person controlling such Underwriter, if copies
of the Prospectus were timely delivered to the Underwriter pursuant to Section 2
and a copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required by law so
to have been delivered, 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, claim, damage, liability
or expense; and provided, further, that the liability of each Selling
Stockholder under the foregoing indemnity agreement shall be limited to an
amount equal to the initial public offering price of the Shares sold by such
Selling Stockholder, less the underwriting discount, as set forth on the front
cover page of the Prospectus. The indemnity agreement
19
20
set forth in this Section 7(a) shall be in addition to any liabilities that
the Company and the Selling Stockholders may otherwise have.
(b) Indemnification of the Company, Its Directors and Officers, and the
Selling Stockholders. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, the Selling Stockholders and
each person, if any, who controls the Company or any Selling Stockholder within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer, Selling Stockholder or controlling person may become subject
under the Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus (or any amendment or
supplement thereto), in reliance upon and in conformity with written information
furnished to the Company and the Selling Stockholders by the Representatives
expressly for use therein; and to reimburse the Company, or any such director,
officer, Selling Stockholder or controlling person for any legal and other
expense reasonably incurred by the Company, or any such director, officer,
Selling Stockholder or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The indemnity agreement set forth in this Section
7(b) shall be in addition to any liabilities that the Underwriters may otherwise
have.
(c) Information Provided by the Underwriters. The Company and each of the
Selling Stockholders hereby acknowledge that the only information that the
Underwriters have furnished to the Company and the Selling Stockholders
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) are the information set
forth in the table in the first paragraph and the statements in the second
paragraph under the caption "Underwriting" in the Prospectus and the statements
in the paragraphs entitled "Stabilization," "Passive Market Making" and "New
Underwriters" under the caption "Underwriting" in the Prospectus. The
Underwriters confirm that such statements are correct.
(d) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 7, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability that
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 7 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense
20
21
of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying
party (BancBoston Xxxxxxxxx Xxxxxxxx Inc. in the case of Sections 7(b) and 8),
representing the indemnified parties who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party.
(e) Settlements. The indemnifying party under this Section 7 shall not be
liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. 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 Section 7(d), 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 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes (i) an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(f) Contribution. If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof), then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party 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 from the offering of the Shares. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriter on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Selling Stockholders on
the one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 7(f) were determined by pro rata allocation (even if the
21
22
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 above in this Section 7(f). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to above in this Section
7(f) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (f), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 7(f) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(g) Timing of Any Payments of Indemnification. Any losses, claims,
damages, liabilities or expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred, but in all cases, no later than thirty
days of invoice to the indemnifying party.
(h) Survival. The indemnity and contribution agreements contained in this
Section 7 and the representation and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers or any
persons controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor to
any Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 7.
(i) Acknowledgments of Parties. The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof, including the
provisions of this Section 7, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 7 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and the Prospectus as required by the Securities Act.
SECTION 8. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.
If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the several Underwriters shall fail or refuse to purchase
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares that such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on SCHEDULE A
bears to the aggregate number of Firm Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Shares that such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Shares and the
aggregate number of Shares with respect to which such default occurs exceeds 10%
of the aggregate number of Shares to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Shares are not made within 48 hours after such default, this Agreement shall
terminate without liability of any party to any other party except that the
provisions of Sections 4 and 7 shall at all times be effective and shall survive
such termination. In any such case either the Representatives or the Company
shall have the right to postpone the First Closing Date or the Second Closing
Date, as the case may be, but in no event for longer than seven days in order
that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
22
23
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
8. Any action taken under this Section 8 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 9. TERMINATION OF THIS AGREEMENT.
Prior to the First Closing Date, this Agreement may be terminated by the
Representatives by notice given to the Company and the Selling Stockholders if
at any time (a) trading or quotation in any of the Company's securities shall
have been suspended or limited by the Commission or by the Nasdaq Stock Market,
or trading in securities generally on either the Nasdaq Stock Market or the New
York Stock Exchange shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or the NASD; (b) a general banking moratorium shall have been
declared by any of federal, New York, Delaware or California authorities; (c)
there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective change in United States' or international
political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable or
inadvisable to market the Common Shares in the manner and on the terms described
in the Prospectus or to enforce contracts for the sale of securities; (d) in the
judgment of the Representatives there shall have occurred any Material Adverse
Change; or (e) the Company shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as in the judgment of
the Representatives may interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have
been insured. Any termination pursuant to this Section 9 shall be without
liability on the part of (i) the Company or the Selling Stockholders to any
Underwriter, except that the Company and the Selling Stockholders shall be
obligated to reimburse the expenses of the Representatives and the Underwriters
pursuant to Sections 5 and 6, (ii) any Underwriter to the Company or the Selling
Stockholders, or (iii) any party hereto to any other party except that the
provisions of Section 7 shall at all times be effective and shall survive such
termination.
SECTION 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and
other statements of the Company, of its officers, of the Selling Stockholders
and of the several Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholders, as
the case may be, and will survive delivery of and payment for the Shares sold
hereunder and any termination of this Agreement.
SECTION 11. NOTICES.
All communications hereunder shall be in writing and shall be mailed, hand
delivered or telecopied and confirmed to the parties hereto as follows:
If to the Representatives: BANCBOSTON XXXXXXXXX XXXXXXXX INC.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
If to the Company: NETEGRITY, INC.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: President and Chief Executive Officer
23
24
If to the Selling Stockholders: XXXXX X. XXXXXX AND XXXXX X. XXXXXX
As Attorneys-in-Fact
c/o Netegrity, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Any party hereto may change its address for receipt of communications by giving
written notice to the others.
SECTION 12. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Underwriters pursuant to Section 9, and
to the benefit of the employees, officers and directors and controlling persons
referred to in Section 7, and to their respective successors, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares as such from any of the Underwriters
merely by reason of such purchase.
SECTION 13. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or provision
of this Agreement shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
SECTION 14. GOVERNING LAW PROVISIONS.
(a) Governing Law. This agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in such state.
(b) Consent to Jurisdiction. Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby
("Related Proceedings") may be instituted in the federal courts of the United
States of America located in the City and County of San Francisco or the courts
of the State of California in each case located in the City and County of San
Francisco (collectively, the "Specified Courts"), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum. Each party not located in the
United States irrevocably appoints CT Corporation System, which currently
maintains a San Francisco office at 00 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America, as its agent to receive service of
process or other legal summons for purposes of any such suit, action or
proceeding that may be instituted in any state or federal court in the City and
County of San Francisco.
SECTION 15. FAILURE OF ONE OR MORE SELLING STOCKHOLDERS TO SELL AND DELIVER
SHARES.
If one or more of the Selling Stockholders shall fail to sell and deliver
to the Underwriters the Shares to be sold and delivered by such Selling
Stockholders at the First Closing Date pursuant to this Agreement, then the
Underwriters may at their option, by written notice from the Representatives to
the Company and the Selling Stockholders, either (i) terminate this Agreement
without any liability on the part of any Underwriter
24
25
or, except as provided in Sections 5, 6, and 7 hereof, the Company or the
Selling Stockholders, or (ii) purchase the shares that the Company and other
Selling Stockholders have agreed to sell and deliver in accordance with the
terms hereof. If one or more of the Selling Stockholders shall fail to sell and
deliver to the Underwriters the Shares to be sold and delivered by such Selling
Stockholders pursuant to this Agreement at the First Closing Date or the Second
Closing Date, then the Underwriters shall have the right, by written notice from
the Representative to the Company and the Selling Stockholders, to postpone the
First Closing Date or the Second Closing Date, as the case may be, but in no
event for longer than seven days in order that the required changes, if any, to
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
SECTION 16. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement between the Company and
the Selling Stockholders on the one hand and the Underwriters on the other hand
to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in
writing by each party whom the condition is meant to benefit. All references to
Sections, Schedules and Exhibits shall be deemed references to such parts of
this Agreement, except as otherwise provided. The Table of Contents and the
Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement. The word
"including" as used herein shall not be construed so as to exclude any other
thing not referred to or described.
* * *
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorneys-in-Fact the
enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.
Very truly yours,
NETEGRITY, INC.
By ________________________________________
President and Chief Executive Officer
SELLING STOCKHOLDERS
By _________________________________________
As Attorney-in-Fact for the Selling
Stockholders named in SCHEDULE B hereto
The foregoing Underwriting Agreement is
hereby confirmed and accepted by the
Representatives as of the date first above written:
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
XXXX XXXXXXXX XXXXXXX
A DIVISION OF XXXX XXXXXXXX INCORPORATED
XXXXXX XXXXXX PARTNERS LLC
25
26
On their behalf and on behalf of each of the
several Underwriters named in SCHEDULE A hereto
By BancBoston Xxxxxxxxx Xxxxxxxx Inc.
By ______________________________
Authorized Signatory
26
27
SCHEDULE A
NUMBER OF
FIRM SHARES
TO BE
UNDERWRITERS PURCHASED
-------------- -------------
BancBoston Xxxxxxxxx Xxxxxxxx Inc. ...................................................................
Xxxx Xxxxxxxx Xxxxxxx, a division of Xxxx Xxxxxxxx Incorporated.......................................
Xxxxxx Xxxxxx Partners LLC ...........................................................................
-------------
Total ........................................................................................... 3,000,000
=============
28
SCHEDULE B
NUMBER OF NUMBER OF
FIRM SHARES OPTION SHARES
SELLING STOCKHOLDER TO BE SOLD TO BE SOLD
---------------------- -------------- ---------------
Pequot Private Equity Fund L.P./Pequot Offshore Private
Equity Fund Inc........................................................... 410,000
Xxxxx X. Xxxxxx................................................................. 70,000
Xxxxxxx X. Xxxxxx............................................................... 40,000
Xxxxxxx X. Xxxx................................................................. 10,000
Xxxxx Xxxxx..................................................................... 5,000
Xxxxx X. Xxxxxx................................................................. 5,000
Xxxxxx Xxxxxx................................................................... 5,000
Xxxxxx X. Xxxxx................................................................. 5,000
-------------------------------
Total...................................................................... 550,000 400,000
===============================
29
EXHIBIT A
LOCK-UP AGREEMENT
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
As Lead Representative of the several Underwriters
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned understands that you, as lead representative of the
several underwriters (the "Underwriters"), propose to enter into an Underwriting
Agreement (the "Underwriting Agreement") with Netegrity, Inc. (the "Company")
and certain selling stockholders providing for the public offering (the "Public
Offering") by the Underwriters, including yourselves, of the Company's common
stock, $.01 par value (the "Common Stock"), pursuant to a registration statement
on Form S-3 to be filed with the Securities and Exchange Commission. This letter
agreement shall terminate and be of no further force and effect upon a decision
by BancBoston Xxxxxxxxx Xxxxxxxx Inc. or the Company not to proceed with the
Public Offering.
In consideration of the Underwriters' agreement to purchase and make the
Public Offering of the Common Stock, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the undersigned
hereby agrees that the undersigned will not, for a period commencing on the date
hereof and continuing thereafter until 90 days after the date of the final
prospectus for the Public Offering (the "Lock-Up Period"), offer to sell,
contract to sell, or otherwise sell, dispose of, loan, pledge or grant any
rights with respect to (each a "Disposition") any shares of Common Stock, any
options or warrants to purchase any shares of Common Stock, or any securities
convertible into or exchangeable for shares of Common Stock (collectively,
"Securities") now owned or hereafter acquired directly by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, otherwise than (a) as a distribution to limited partners, members
or shareholders of the undersigned, (b) by gift, will or intestacy, (c) in the
event the undersigned is an individual, to his or her immediate family or to a
trust the beneficiaries of which are exclusively the undersigned, his or her
parent or parents and/or a member or members of his or her immediate family, (d)
to the undersigned's affiliates, as such term is defined in Rule 405 under the
Securities Act of 1933, provided that the transferees, donees or distributees
thereof under clauses (a), (b), (c) and (d) (as the case may be) agree in
writing to be bound by the terms of this Lock-Up Agreement, or (e) with the
prior written consent of BancBoston Xxxxxxxxx Xxxxxxxx Inc. The foregoing
restriction is expressly agreed to preclude the holder of the Securities from
engaging in any hedging or other transaction that is designed to or reasonably
expected to lead to or result in a Disposition of Securities during the Lock-Up
Period, even if such Securities would be disposed of by someone other than the
undersigned. Such prohibited hedging or other transactions include, without
limitation, any short sale (whether or not against the box) or any purchase,
sale or grant of any right (including, without limitation, any put or call
option) with respect to any Securities or with respect to any security (other
than a broad-based market basket or index) that includes, relates to or derives
any significant part of its value from the Securities. Notwithstanding the
foregoing, this Lock-Up Agreement does not prohibit the sale of shares of Common
Stock by the undersigned to the Underwriters in the Public Offering. The
undersigned hereby agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of the
Securities held by the undersigned except in compliance with this Lock-Up
Agreement.
Date:________________, 1999 Very truly yours,
____________________________________
A-1
30
Name (please print or type)
______________________________________
Signature
A-2
31
EXHIBIT B
MATTERS TO BE COVERED IN THE OPINION OF COUNSEL FOR THE COMPANY
(i) The Company is validly existing as a corporation in good standing
under the General Corporation Law of the State of Delaware.
(ii) The Company has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus.
(iii) The Company is duly qualified to do business as a foreign
corporation and is in good corporate standing in [list states]. To such
counsel's knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
Subsidiaries.
(iv) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus under the caption "Capitalization" as of the
dates stated therein, the issued and outstanding shares of capital stock of the
Company (including the Selling Stockholder Shares) have been duly and validly
issued and are fully paid and nonassessable, and, to such counsel's knowledge,
will not have been issued in violation of or subject to any preemptive right,
co-sale right, registration right, right of first refusal or other similar
right.
(v) The Firm Shares or the Option Shares, as the case may be, to be issued
by the Company pursuant to the terms of this Agreement have been duly authorized
and, upon issuance and delivery against payment therefor in accordance with the
terms hereof, will be duly and validly issued and fully paid and nonassessable,
and to such counsel's knowledge will not have been issued in violation of or
subject to any preemptive right, co-sale right, registration right, right of
first refusal or other similar right.
(vi) The Company has the corporate power and authority to enter into this
Agreement and to issue, sell and deliver to the Underwriters the Shares to be
issued and sold by it hereunder.
(vii) This Agreement has been duly authorized by all necessary corporate
action on the part of the Company and has been duly executed and delivered by
the Company.
(viii) To such counsel's knowledge, the Registration Statement has become
effective under the Act, no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that purpose have
been instituted or are pending or threatened under the Securities Act.
(ix) The Firm Shares or the Option Shares have been validly registered
under the Securities Act and the Rules and Regulations of the Exchange Act and
the applicable rules and regulations of the Commission thereunder.
(x) The Registration Statement and the Prospectus, and each amendment or
supplement thereto (other than the financial statements (including supporting
schedules) and financial data derived therefrom as to which such counsel need
express no opinion), as of the effective date of the Registration Statement,
complied as to form in all material respects with the requirements of the Act
and the applicable Rules and Regulations; and each of the Incorporated
Documents, as amended (other than the financial statements (including supporting
schedules) and the financial data derived therefrom as to which such counsel
need express no opinion) complied when originally filed or when finally amended
pursuant to the Exchange Act as to form in all material respects with the
requirements of the Act and the Rules and Regulations of the Exchange Act and
the applicable rules and regulations of the Commission thereunder.
(xi) The information in the Prospectus under the caption "Description of
Capital Stock," to the extent that it constitutes matters of law or legal
conclusions, has been reviewed by such counsel and is a fair summary of such
matters and conclusions; and the forms of certificates evidencing the Common
Stock and filed as exhibits to the Registration Statement comply with Delaware
law.
B-1
32
(xii) The description in the Registration Statement and the Prospectus of
the charter and bylaws of the Company and of statutes are accurate and fairly
present the information required to be presented by the Securities Act.
(xiii) To such counsel's knowledge, there are no agreements, contracts,
leases or documents to which the Company is a party of a character required to
be described or referred to in the Registration Statement or Prospectus or any
Incorporated Document or to be filed as an exhibit to the Registration Statement
or any Incorporated Document which are not described or referred to therein or
filed as required.
(xiv) The performance of this Agreement and the consummation of the
transactions herein contemplated (other than performance of the Company's
indemnification obligations hereunder, concerning which no opinion need be
expressed) will not (a) result in any violation of the Company's charter or
bylaws or (b) to such counsel's knowledge, result in a material breach or
violation of any of the terms and provisions of, or constitute a default under,
any bond, debenture, note or other evidence of indebtedness, or any lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument known to such counsel to which the Company is a
party or by which its properties are bound, or any applicable statute, rule or
regulation known to such counsel or, to such counsel's knowledge, any order,
writ or decree of any court, government or governmental agency or body having
jurisdiction over the Company or any of its properties or operations.
(xv) No consent, approval, authorization or order of or qualification with
any court, government or governmental agency or body having jurisdiction over
the Company or any of its properties or operations is necessary in connection
with the consummation by the Company of the transactions herein contemplated,
except (i) such as have been obtained under the Securities Act, (ii) such as may
be required under state or other securities or Blue Sky laws in connection with
the purchase and the distribution of the Shares by the Underwriters, (iii) such
as may be required by the National Association of Securities Dealers, LLC and
(iv) such as may be required under the federal or provincial laws of Canada or
the law of any other foreign jurisdiction.
(xvi) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Company or any of the Subsidiaries
of a character required to be disclosed in the Registration Statement or the
Prospectus or any Incorporated Document by the Securities Act or by the Exchange
Act or the applicable rules and regulations of the Commission thereunder, other
than those described therein.
(xvii) To such counsel's knowledge, the Company is not presently (a) in
material violation of its respective charter or bylaws or (b) in material
breach, to such counsel's knowledge, of any order, writ or decree of any court
or governmental agency or body having jurisdiction over the Company or any of
its properties or operations.
(xviii) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus and any Incorporated Document, no holders
of Company Shares or other securities of the Company have registration rights
with respect to securities of the Company and, except as set forth in the
Registration Statement and Prospectus, all holders of securities of the Company
having rights known to such counsel to registration of such shares of Company
Shares or other securities, because of the filing of the Registration Statement
by the Company have, with respect to the offering contemplated thereby, waived
such rights or such rights have expired by reason of lapse of time following
notification of the Company's intent to file the Registration Statement or have
included securities in the Registration Statement pursuant to the exercise of
and in full satisfaction of such rights.
B-2
33
(xix) The Company is not and, after giving effect to the offering and the
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(xx) Each document filed pursuant to the Exchange Act (other than the
financial statements and supporting schedules included therein, as to which no
opinion need be rendered) and incorporated or deemed to be incorporated by
reference in the Prospectus complied when originally filed or when finally
amended as to form in all material respects with the Exchange Act.
In addition, such counsel shall state that such counsel has participated
in conferences with officials and other representatives of the Company, the
Representatives, Underwriters' Counsel and the independent certified public
accountants of the Company, at which conferences the contents of the
Registration Statement and Prospectus and related matters were discussed, and
although they have not verified the accuracy or completeness of the statements
contained in the Registration Statement or the Prospectus, nothing has come to
the attention of such counsel which leads them to believe that, at the time the
Registration Statement became effective and at all times subsequent thereto up
to and on the First Closing Date or Second Closing Date, as the case may be, the
Registration Statement and any amendment or supplement thereto and any
Incorporated Document, when such documents became effective or when originally
filed or as finally amended with the Commission (other than the financial
statements including supporting schedules and other financial and statistical
information derived therefrom, as to which such counsel need express no comment)
contained any 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 at the First Closing Date or the Second Closing Date, as the
case may be, the Registration Statement, the Prospectus and any amendment or
supplement thereto and any Incorporated Document (except as aforesaid) contained
any untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel shall also state that
the conditions for the use of Form S-3 set forth in the General Instructions
thereto have been satisfied.
B-3
34
EXHIBIT C
MATTERS TO BE COVERED IN THE OPINION OF UNDERWRITERS' COUNSEL
(i) The Company is validly existing as a corporation in good standing
under the General Corporation Law of the State of Delaware.
(ii) The execution and delivery of the Underwriting Agreement have been
duly authorized by all necessary corporate action of the Company, and the
Underwriting Agreement has been duly executed and delivered by the Company.
(iii) The Shares to be issued by the Company have been duly authorized by
all necessary corporate action of the Company. When those Shares are issued and
delivered in accordance with the terms of the Underwriting Agreement, they will
be validly issued, fully paid and non-assessable.
(iv) To such counsel's knowledge, the Registration Statement has become
effective under the Securities Act, no order suspending the effectiveness of the
Registration Statement has been issued by the Commission and no proceeding for
that purpose has been instituted or threatened by the Commission.
Such counsel shall state that such counsel has reviewed the opinions
addressed to the Representatives from Xxxxxxxx, Xxxxxxx & Xxxxxxx, A
Professional Corporation and any other firm serving as counsel to the Selling
Stockholders, each dated the date hereof, and furnished to you in accordance
with the provisions of the Underwriting Agreement. Such opinions appear on their
face to be appropriately responsive to the requirements of the Underwriting
Agreement.
In addition, such counsel shall state that such counsel has participated
in conferences with officials and other representatives of the Company, the
Company's counsel, the Representatives and the independent certified public
accountants of the Company, at which such conferences the contents of the
Registration Statement and Prospectus and related matters were discussed, and
although they have not verified the accuracy or completeness of the statements
contained in the Registration Statement or the Prospectus:
(a) The Registration Statement (except the financial statements
and other financial and statistical data included therein, as to which
such counsel need express no view), at the time it became effective, and
the Prospectus (except as aforesaid), as of its date, appeared on their
face to be appropriately responsive in all material respects to the
requirements of the Securities Act.
(b) No information has come to the attention of such counsel that
causes such counsel to believe that the Registration Statement (except the
financial statements and other financial and statistical data included
therein, as to which such counsel need express no view), at the time it
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.
(c) No information has come to the attention of such counsel that
causes such counsel to believe that the Prospectus (except the financial
statements and other financial and statistical data included therein, as
to which such counsel need express no view), as of its date or the date of
such opinion, contained or contains 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 the light of the circumstances under which they
were made, not misleading.
C-1
