Exhibit 1.1
4,427,500 Shares
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
_____ __, 2002
UNDERWRITING AGREEMENT
_____ __, 2002
UBS Warburg LLC
Banc of America Securities LLC
First Union Securities, Inc.
SunTrust Capital Markets, Inc.
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Right Management Consultants, Inc., a Pennsylvania corporation
(the "Company"), proposes to issue and sell to the underwriters named in
Schedule A hereto (the "Underwriters") an aggregate of 3,000,000 shares (the
"Company Firm Shares") of Common Stock, $ .01 par value (the "Common Stock"), of
the Company, and the shareholders listed on Schedule B hereto (the "Selling
Shareholders"), propose to sell to the Underwriters an aggregate of 850,000
shares of Common Stock in the amounts set forth opposite each Selling
Shareholder's name on Schedule B (the "Selling Shareholders' Firm Shares," and
together with the Company Firm Shares, the "Firm Shares"). In addition, solely
for the purpose of covering over-allotments, the Company proposes to grant to
the Underwriters the option to purchase from the Company up to an additional
532,500 shares of Common Stock (the "Company Additional Shares") and the Selling
Shareholders propose to grant to the Underwriters the option to purchase from
them up to an additional 45,000 shares of Common Stock in the amounts set forth
opposite each Selling Shareholder's name on Schedule B (the "Selling
Shareholders' Additional Shares," and together with the Company Additional
Shares, the "Additional Shares"). The Firm Shares and the Additional Shares are
hereinafter collectively sometimes referred to as the "Shares". The Shares are
described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-____) including
a prospectus, relating to the Shares, which incorporates by reference documents
which the Company has filed or will file in accordance with the provisions of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively the "Exchange Act"). The Company has furnished to you,
for use by the Underwriters and by dealers, copies of one or more preliminary
prospectuses and the documents incorporated by reference therein (each such
preliminary prospectus, including the documents incorporated therein by
reference, being herein called a "Preliminary Prospectus") relating to the
Shares. Except where the context otherwise requires, the registration statement,
as amended when it becomes effective, including all documents filed as a part
thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A under the Act and also including
any registration statement filed pursuant to Rule 462(b) under the Act, is
herein called the "Registration Statement", and the prospectus, including all
documents incorporated therein by reference, in the form filed by the Company
with the Commission pursuant to Rule 424(b) under the Act on or before the
second business day after the date hereof (or such earlier time as may be
required under the Act) or, if no such filing is required, the form of final
prospectus included in the Registration Statement at the time it became
effective, is herein called the "Prospectus".
The Company, the Selling Shareholders and the Underwriters
agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Company and each of the Selling Shareholders selling Firm Shares, severally and
not jointly, agree to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company and
the Selling Shareholders selling Firm Shares, at a purchase price of $ per
share, the aggregate number of Firm Shares (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying the aggregate number of
Shares to be sold by the Company and each of the Selling Shareholders selling
Firm Shares as set forth opposite their respective names on Schedule B hereto by
a fraction, the numerator of which is the aggregate number of Firm Shares to be
purchased by such Underwriter as set forth opposite the name of such Underwriter
on Schedule A hereto and the denominator of which is the aggregate number of
Firm Shares to be purchased by all of the Underwriters from the Company and the
Selling Shareholders selling Firm Shares. The Company and the Selling
Shareholders are each advised by you that the Underwriters intend (i) to make a
public offering of their respective portions of the Firm Shares as soon after
the effective date of the Registration Statement as in your judgment is
advisable and (ii) initially to offer the Firm Shares upon the terms set forth
in the Prospectus. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
In addition, the Company and each Selling Shareholder selling
Additional Shares, severally and not jointly, hereby grant to the several
Underwriters the option to purchase, and upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company and each Selling Shareholder selling Additional Shares, ratably in
accordance with the number of Firm Shares to be purchased by each of them, all
or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company and
the Selling Shareholders for the Firm Shares. The Additional Shares to be
purchased from the Company and each Selling Shareholder selling Additional
Shares shall be determined by multiplying the maximum number of Additional
Shares to be sold by the Company and each Selling Shareholder selling Additional
Shares as set forth opposite their respective names on Schedule B hereto by a
fraction, the numerator of which is the aggregate number of Additional Shares to
be purchased by the Underwriters and the denominator of which is the aggregate
maximum number of Additional Shares offered for purchase by the Company and each
Selling Shareholder selling Additional Shares (to be adjusted by you so as to
eliminate fractional shares). This option may be exercised by you on behalf of
the several Underwriters at any time and from time to time on or before the
thirtieth day following the date hereof by written notice to the Company. Such
notice shall set forth the aggregate number of Additional Shares as to which the
option is being exercised, and the date and time when the Additional Shares are
to be delivered (such date and time being herein referred to as the "additional
time of purchase"); provided, however, that the additional time of purchase
shall not be earlier than the time of purchase (as defined below) nor earlier
than the second business day(1) after the date on which the option shall have
been exercised nor later than the tenth business day after the date on which the
option shall have been exercised. The number of Additional Shares to be sold to
each Underwriter shall be the number which bears the same proportion to the
aggregate number of Additional Shares being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule A hereto
bears to the total number of Firm Shares (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the
Firm Shares shall be made to the Company and the Custodian on behalf of the
Selling Shareholders by Federal Funds wire transfer, against delivery of the
certificates for the Firm Shares to you through the facilities of the Depository
Trust Company ("DTC") for the respective accounts of the Underwriters. Such
payment and delivery shall be made at or around 10:00 A.M., New York City time,
on _____ __, 2002 (unless another time shall be agreed to by you and the Company
or unless postponed in accordance with the provisions of Section 10 hereof). The
time at which such payment and delivery are actually made is hereinafter
sometimes called the "time of purchase". Electronic transfer of the Firm Shares
shall be made to you at the time of purchase in such names and in such
denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase in the same manner as the payment to
the Company and the Selling Shareholders for the Firm Shares. Electronic
transfer of the Additional Shares shall be made to you at the additional time of
purchase in such names and in such denominations as you shall specify.
Deliveries of the documents described in Section 8 below with
respect to the purchase of the Shares shall be made at the offices of Fox,
Rothschild, O'Brien & Xxxxxxx, LLP, 0000 Xxxxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, at 3:00 p.m. New York City time, on the day
before the time of purchase or the additional time of purchase, as the case may
be.
3. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) the Company has not received, and has no notice of, any
order of the Commission preventing or suspending the use of any
Preliminary Prospectus, or instituting proceedings for that purpose;
each Preliminary Prospectus, at the time of filing thereof, complied in
all material respects with the requirements of the Act and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; the Registration Statement complied, when it
became effective, complies and will comply, and the Prospectus will
comply, in all material respects with the provisions of the Act; any
statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement have been and will
be so described or filed; the Registration Statement did not, when it
became effective, does not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
the Prospectus will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no warranty or representation with respect to any
statement contained in the Preliminary Prospectus, the Registration
Statement or the Prospectus in reliance upon and in conformity with
information concerning an Underwriter furnished in writing by such
Underwriter through UBS Warburg LLC to the Company expressly for use in
the Preliminary Prospectus, Registration Statement or the Prospectus;
the documents incorporated by reference in the Preliminary Prospectus,
Registration Statement and the Prospectus, at the time they were filed
with the Commission or became effective, as the case may be, complied
in all material respects with the requirements of the Exchange Act, and
did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and the Company has not distributed any offering
material in connection with the offering or sale of the Shares other
than the Registration Statement, the Preliminary Prospectus or the
Prospectus;
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1 As used herein "business day" shall mean a day on which the Nasdaq National
Market is open for trading.
(b) as of the date of this Agreement, the Company has an
authorized and outstanding capitalization as set forth under the
heading entitled "Actual" in the section of the Registration Statement
and the Prospectus entitled "Capitalization" and, as of the time of
purchase the Company shall have an authorized and outstanding
capitalization as set forth under the heading entitled "As adjusted" in
the section of the Registration Statement and the Prospectus entitled
"Capitalization"; all of the issued and outstanding shares of capital
stock including Common Stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable, have been
issued in compliance with all federal and state securities laws and
were not issued in violation of any preemptive right, resale right,
right of first refusal or similar right; no further approval or
authority of the shareholders or the Board of Directors of the Company
will be required for the issuance and sale of the Shares to be sold by
the Company or for the sale of the Shares to be sold by the Selling
Shareholders as contemplated herein;
(c) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, with full corporate power and authority
to own, lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
where the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to so
qualify would not have a material adverse effect on the business,
properties, financial condition, results of operation or prospects of
the Company and the Subsidiaries (as hereinafter defined) taken as a
whole (a "Material Adverse Effect"), and the Company is in compliance
in all material respects with the laws, orders, rules, regulations and
directives issued or administered by such jurisdictions. The Company
has no significant subsidiaries other than those set forth on Schedule
C hereto (the "Significant Subsidiaries" and together with all of the
Company's other subsidiaries, the "Subsidiaries"); as of March 31,
2002, on a pro forma basis, the Significant Subsidiaries comprised
83.6% of the Company's consolidated net revenue after deferred revenue,
97.9% of the Company's consolidated net income from operations after
taxes and 82.9% of the Company's consolidated total assets; complete
and correct copies of the charter documents, bylaws and other
organizational documents of the Company and the Significant
Subsidiaries, including all amendments thereto, have been delivered to
you and except as set forth in the exhibits to the Registration
Statement no changes therein will be made subsequent to the date hereof
and prior to the time of purchase or, if later, the additional time of
purchase; each Subsidiary has been duly incorporated and is validly
existing as a corporation and is in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus;
each Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of the properties or the conduct of its business
requires such qualification, except where the failure to so qualify
would not have a Material Adverse Effect, and each of the Subsidiaries
is in compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by such
jurisdictions; all of the outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable and (except for pledges of the
Subsidiaries' capital stock under the Company's existing credit
facility) are owned by the Company subject to no security interest,
other encumbrance or adverse claims; no options, warrants or other
rights to purchase, agreements or other obligations to issue or other
rights to convert any obligation into shares of capital stock or
ownership interests in the Subsidiaries are outstanding;
(e) neither the Company nor any of the Subsidiaries is in
conflict with, in breach of, or in default under (nor has any event
occurred which with notice, lapse of time, or both would result in any
breach of, or constitute a default under), (i) its respective charter
or by-laws or other organizational documents or (ii) in the performance
or observance of any obligation, agreement, covenant or condition
contained in any license, indenture, mortgage, deed of trust, bank loan
or credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or any of their
properties is bound or affected except, in the case of clause (ii),
where such conflict, breach or default would not, individually or in
the aggregate, have a Material Adverse Effect, and the execution,
delivery and performance of this Agreement, the issuance and sale of
the Shares and the consummation of the transactions contemplated hereby
will not conflict with, or result in any breach of or constitute a
default under (nor constitute any event which with notice, lapse of
time, or both would result in any breach of, or constitute a default
under), any provisions of the charter, by-laws or other organizational
documents of the Company or any of the Subsidiaries or under any
provision of any license, indenture, mortgage, deed of trust, bank loan
or credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or their
respective properties may be bound or affected, or under any federal,
state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company or any of the Subsidiaries;
(f) this Agreement has been duly authorized, executed and
delivered by the Company;
(g) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and Prospectus and the certificates for
the Shares are in due and proper form and the holders of the Shares
will not be subject to personal liability by reason of being such
holders;
(h) the Shares have been duly and validly authorized by the
Company and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued and fully paid and
non-assessable;
(i) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Shares or the consummation by the
Company of the transactions as contemplated hereby other than
registration of the Shares under the Act, which has been or will be
effected, and any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters and under the rules and regulations of the
National Association of Securities Dealers ("NASD");
(j) except as set forth in the Registration Statement and the
Prospectus, whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated hereby
or otherwise, (i) no person has the right, contractual or otherwise, to
cause the Company to issue or sell to it any shares of Common Stock or
shares of any other capital stock or other equity interests of the
Company, (ii) no person has any preemptive rights, resale rights,
rights of first refusal or other rights to purchase any shares of
Common stock or shares of any other capital stock or other equity
interests of the Company, (iii) no person has the right to act as an
underwriter, or as a financial advisor to the Company, in connection
with the offer and sale of the Shares, and (iv) no person has the
right, contractual or otherwise, to cause the Company to register under
the Act any shares of Common Stock or shares of any other capital stock
or other equity interests of the Company, or to include any such shares
or interests in the Registration Statement or the offering contemplated
hereby, except for such rights as have been complied with or waived;
(k) Xxxxxx Xxxxxxxx LLP and Deloitte & Touche LLP, whose
reports on the consolidated financial statements of the Company and the
Subsidiaries and Xxxxxx Consulting Group Limited ("Coutts") and its
subsidiaries, respectively, are filed with the Commission as part of
the Registration Statement and Prospectus, and Ernst & Young LLP, the
Company's current independent auditors, are each independent public
accountants as required by the Act;
(l) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign
law, regulation or rule, and has obtained all necessary authorizations,
consents and approvals from other persons, in order to conduct its
respective business as described in the Registration Statement and the
Prospectus; neither the Company nor any of the Subsidiaries is in
violation of, or in default under, any such license, authorization,
consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, the effect of which could have a
Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate
transactions, contracts, licenses, agreements, leases or documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required;
(n) there are no actions, suits, claims, investigations or
proceedings pending or threatened to which the Company or any of the
Subsidiaries or any of their respective officers is a party or of which
any of their respective properties is subject at law or in equity, or
before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which could
result in a judgment, decree or order having a Material Adverse Effect
or prevent consummation of the transactions contemplated hereby;
(o) the consolidated financial statements and schedules of the
Company, and the related notes thereto, and the consolidated financial
statements and schedules of Coutts and its subsidiaries, and the
related notes thereto, incorporated by reference in the Registration
Statement and the Prospectus present fairly the consolidated financial
position of the Company and the Subsidiaries and the consolidated
financial position of Coutts and its subsidiaries, respectively, as of
the dates indicated and the consolidated results of operations and cash
flows of the Company and the Subsidiaries and the consolidated results
of operations and cash flows of Coutts and its subsidiaries,
respectively, for the periods specified, and have been prepared in
compliance with the requirements of the Act and in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved; any pro forma financial statements or data
included or incorporated by reference in the Registration Statement and
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X of the Act, and
the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements; the other financial and
statistical data set forth in the Registration Statement and the
Prospectus are accurately presented and prepared on a basis consistent
with the financial statements and books and records of the Company; and
there are no financial statements (historical or pro forma) that are
required to be included in the Registration Statement and the
Prospectus that are not included as required;
(p) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been (i) any material adverse change, or any development involving
a prospective material adverse change in the business, properties,
management, financial condition, shareholders' equity or results of
operation of the Company and the Subsidiaries taken as a whole, (ii)
any transaction which is material to the Company or the Subsidiaries,
(iii) any obligation, direct or contingent, which is material to the
Company and the Subsidiaries taken as a whole, incurred by the Company
or the Subsidiaries, (iv) any change in the capital stock or
outstanding indebtedness of the Company or the Subsidiaries or (v) any
dividend or distribution of any kind declared, paid or made on the
capital stock of the Company; neither the Company nor the Subsidiaries
has any material contingent obligation which is not disclosed in the
Registration Statement;
(q) the Company has obtained for the benefit of the
Underwriters the agreement (a "Lock-Up Agreement"), in the form set
forth as Exhibit A hereto, of each of its directors and executive
officers (including the Selling Shareholders); the Company will not
release or purport to release any person from any Lock-Up Agreement
without the prior written consent of UBS Warburg LLC;
(r) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(s) all tax returns required to be filed by the Company and
each of the Subsidiaries have been filed, and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due have been paid, other than
those being contested in good faith and for which adequate reserves
have been provided;
(t) the Company and each of the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses
as the Company deems adequate and as previously disclosed to you; such
insurance insures against such losses and risks to an extent which is
adequate in accordance with customary industry practice to protect the
Company and the Subsidiaries and their businesses; all such insurance
is outstanding and fully in force on the date hereof and will be
outstanding and fully in force at the time of purchase and additional
time of purchase, as the case may be;
(u) none of the Company, any of the Subsidiaries, Coutts or
any of its subsidiaries has sustained since the date of the last
financial statements incorporated by reference in the Prospectus any
loss or interference with their respective business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree;
(v) the Company has not sent or received any communication
regarding termination of, or intent not to renew, any of the contracts
or agreements referred to or described in, or filed as an exhibit to,
the Registration Statement, the Prospectus or any document incorporated
by reference therein, and no such termination or non-renewal has been
threatened by the Company or, to the knowledge of the Company after due
inquiry, any other party to any such contract or agreement;
(w) the Company and each of the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(x) neither the Company nor any of the Subsidiaries nor any of
their respective directors, officers, affiliates or controlling persons
has taken, directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to cause or result, under
the Exchange Act or otherwise, in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Shares
(y) neither the Company, nor any of the Subsidiaries, nor to
the Company's knowledge after due inquiry, any employee or agent of the
Company or the Subsidiaries, has made any payment of funds of the
Company or the Subsidiaries or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Registration Statement or the Prospectus
(z) the Company or the Subsidiaries own, or have obtained
valid and enforceable licenses for, or other rights to use, the
inventions, patent applications, patents, trademarks (both registered
and unregistered), tradenames, copyrights and trade secrets described
in the Registration Statement and the Prospectus as being owned or
licensed by them, which the Company believes are necessary for the
conduct of its business and which the failure to own, license or have
such rights could have a Material Adverse Effect (collectively,
"Intellectual Property"); (i) other than as described in the
Registration Statement, there are no third parties who have or, to the
knowledge of the Company, will be able to establish their rights to any
Intellectual Property, except for the ownership rights of the owners of
the Intellectual Property which is licensed to the Company; (ii) there
is no infringement by third parties of any Intellectual Property; (iii)
there is no pending or threatened action, suit, proceeding or claim by
others challenging the Company's rights in or to any Intellectual
Property, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (iv) there is no pending or
threatened action, suit, proceeding or claim by others challenging the
validity or scope of any Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such
claim; (v) there is no pending or threatened action, suit, proceeding
or claim by others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other intellectual
property rights of others, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (vi) there is
no patent or patent application which contains claims that interfere
with the issued or pending claims of any of the Intellectual Property;
and (vii) there is no prior art that may render any patent application
owned by the Company of the Intellectual Property unpatentable which
has not been disclosed to the U.S. Patent and Trademark Office;
(aa) neither the Company nor any of the Subsidiaries is
engaged in any unfair labor practice; except for matters which would
not have a Material Adverse Effect individually or in the aggregate on
the Company and the Subsidiaries, (i) there is (A) no unfair labor
practice complaint pending or, to the knowledge of the Company,
threatened against the Company or any of the Subsidiaries before the
National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements is
pending or threatened, (B) no strike, labor dispute, slowdown or
stoppage pending or, to the knowledge of the Company, threatened
against the Company or any of the Subsidiaries and (C) no union
representation dispute currently existing concerning the employees of
the Company or any of the Subsidiaries, and (ii) to the best knowledge
of the respective managements of the Company or any of the
Subsidiaries, (A) no union organizing activities are currently taking
place concerning the employees of the Company or any of the
Subsidiaries and (B) there has been no violation of any federal, state,
local or foreign law relating to discrimination in the hiring,
promotion or pay of employees, of any applicable wage or hour laws, nor
any provisions of the Employee Retirement Income Security Act of 1974
("ERISA") or the rules and regulations promulgated thereunder
concerning the employees of the Company or any of the Subsidiaries;
(bb) (i) each of the Company and the Subsidiaries is in
compliance with and has no liability under any and all applicable laws,
statutes, ordinances, regulations, rules, decrees, orders, judgments,
consent orders, consent decrees or other binding requirements and the
common law relating to the protection of public health or the
environment, the release or threatened release of hazardous material
(including, without limitation, any material, substance, waste,
constituent, compound, pollutant or contaminant, including, without
limitation, petroleum (including, without limitation, crude oil or any
fraction thereof or any petroleum product), subject to regulation or
which can give rise to liability under the Environmental Laws (as
hereinafter defined)), natural resources damages, or occupational
safety and health (collectively, "Environmental Laws") and (ii) each of
the Company and the Subsidiaries is in compliance with all terms and
conditions of any required permits, licenses and authorizations, and is
also in compliance with all other applicable limitations, restrictions,
conditions, standards, prohibitions, requirements and obligations,
contained in the Environmental Laws; and
(cc) the Company and each of the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by each of them, free and clear of all liens,
claims, security interests or other encumbrances other than as
described in the Registration Statement; all the property described in
the Registration Statement and the Prospectus as being held under lease
by the Company or a Subsidiary is held thereby under valid, subsisting
and enforceable leases.
In addition, any certificate signed by any officer of the
Company and delivered to you or your counsel in connection with the
offering of the Shares shall be deemed to be a representation and
warranty by the Company, as to matters covered thereby, to each
Underwriter.
4. Representations and Warranties of the Selling Shareholders.
Each of the Selling Shareholders severally and not jointly represents and
warrants to, and agrees with, each of the Underwriters and the Company that:
(a) all consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Shareholder of
this Agreement and the Power-of-Attorney and the Custody Agreement
hereinafter referred to, and for the consummation by such Selling
Shareholder of the transactions contemplated by this Agreement, the
Power-of-Attorney and the Custody Agreement have been obtained; and
such Selling Shareholder has full right, power and authority to enter
into this Agreement, the Power-of-Attorney and the Custody Agreement
and to sell, assign, transfer and deliver the Shares to be sold by such
Selling Shareholder hereunder;
(b) this Agreement, the Power-of-Attorney and the Custody
Agreement have each been duly executed and delivered by or on behalf of
such Selling Shareholder and the Power-of-Attorney and the Custody
Agreement each constitute legal, valid and binding agreements of such
Selling Shareholder enforceable in accordance with their terms;
(c) the sale of the Shares to be sold by such Selling
Shareholder hereunder and the compliance by such Selling Shareholder
with all of the provisions of this Agreement, the Power-of-Attorney and
the Custody Agreement and the consummation by such Selling Shareholder
of the transactions contemplated hereby and thereby will not conflict
with or result in any breach of or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would
result in any breach of, or constitute a default under), any provision
of any license, indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any lease, contract or
other agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder or such Selling
Shareholder's properties may be bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to such Selling Shareholder; and such sale
can not be matched with a corresponding purchase prior to the time of
delivery for purposes of Section 16(b) of the Exchange Act;
(d) such Selling Shareholder has, and immediately prior to the
time of purchase or the additional time of purchase, as the case may
be, will have, good and valid title to the Shares to be sold by such
Selling Shareholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and upon payment therefor and the
delivery to DTC or its agent of the Shares registered in the name of
Cede & Co. or such other nominee designated by the DTC, both as
provided for herein, and the crediting of the Shares to the
Underwriters' respective accounts with DTC, Cede & Co. or such other
nominee designated by DTC will be a "protected purchaser" of the Shares
(as defined in Section 8-303 of the Uniform Commercial Code as adopted
in the State of New York (the "Code')), the Underwriters will acquire a
valid "security entitlement" (within the meaning of Section 8-501 of
the Code) to the Shares and no action based on an "adverse claim" (as
defined in Section 8-102 of the Code ) may be asserted against the
Underwriters with respect to such security entitlement (assuming that
the Underwriters are without notice of any such adverse claim);
(e) such Selling Shareholder has the authority to and has
executed and delivered a lock-up agreement in the form attached hereto
as Exhibit A;
(f) such Selling Shareholder has not taken and will not at any
time take, directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to cause or result, under
the Exchange Act or otherwise, in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Shares;
(g) to the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Shareholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, comply in all material respect to the
requirements of the Act and will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(h) if such Selling Shareholder is an executive officer of the
Company, such Selling Shareholder is not aware of and has no reason to
believe that the Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto contains an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(i) in order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Shareholder agrees to deliver to you prior
to or at the time of purchase a properly completed and executed United
States Treasury Department Substitute Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu
thereof);
(j) certificates in negotiable form, duly endorsed in blank or
accompanied by stock powers duly endorsed in blank, representing all of
the Shares to be sold by such Selling Shareholder hereunder have been
placed in custody under a Custody Agreement, in the form heretofore
furnished to you (the "Custody Agreement"), duly executed and delivered
by such Selling Shareholder to __________, as custodian (the
"Custodian"), and such Selling Shareholder has duly executed and
delivered a power-of-attorney, in the form heretofore furnished to you
(the "Power-of-Attorney"), appointing _________ and _________ as such
Selling Shareholder's attorneys-in-fact (the "Attorneys-in-Fact") with
authority, either acting alone or jointly, to execute and deliver this
Agreement on behalf of such Selling Shareholder, to determine the
purchase price to be paid by the Underwriters to such Selling
Shareholder as provided in Section 1 hereof, to authorize the delivery
of the Shares to be sold by such Selling Shareholder hereunder and
otherwise to act on behalf of such Selling Shareholder in connection
with the transactions contemplated by this Agreement and the Custody
Agreement; and
(k) the Shares represented by the certificates held in custody
for such Selling Shareholder under the Custody Agreement are subject to
the interests of the Underwriters hereunder; the arrangements made by
such Selling Shareholder for such custody, and the appointment by such
Selling Shareholder of the Attorneys-in-Fact by the Power-of-Attorney,
are to that extent irrevocable; the obligations of the Selling
Shareholders hereunder shall not be terminated by operation of law,
whether by the death or incapacity of such Selling Shareholder or, in
the case of an estate or trust, by the death or incapacity of any
executor or trustee or the termination of such estate or trust, or in
the case of a partnership or corporation, by the dissolution or
liquidation of such partnership or corporation, or by the occurrence of
any other event; if any individual Selling Shareholder or any such
executor or trustee should die or become incapacitated, or if any such
estate or trust should be terminated, or if any such partnership or
corporation should be dissolved or liquidated, or if any other such
event should occur, before the delivery of the Shares hereunder,
certificates representing the Shares to be sold by such Selling
Shareholder shall be delivered by or on behalf of such Selling
Shareholder in accordance with the terms and conditions of this
Agreement and the Custody Agreement, and actions taken by the Custodian
pursuant to the Custody Agreement or the Attorneys-in-Fact, either
acting alone or jointly, pursuant to the Power-of-Attorney shall be as
valid as if such death, incapacity, termination, dissolution,
liquidation or other event had not occurred, regardless of whether or
not the Custodian or the Attorneys-in-Fact, or either of them acting
alone, shall have received notice of such death, incapacity,
termination, dissolution, liquidation or other event.
5. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect so long as
required for the distribution of the Shares; provided -------- that the
Company shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of any such state
(except service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and, in the event of
any such suspension, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible;
(b) to make available to the Underwriters prior to 10:00 A.M.,
New York City time, on the business day next succeeding the date of
this Agreement and from time to time to furnish to the Underwriters in
New York City with as many written or (at the election of the
Underwriters) electronic copies of the Prospectus (or of the Prospectus
as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriters may request for the
purposes contemplated by the Act; in case any Underwriter is required
to deliver a prospectus after the nine-month period referred to in
Section 10(a)(3) of the Act in connection with the sale of the Shares,
the Company will prepare promptly upon request such amendment or
amendments to the Registration Statement and such prospectuses as may
be necessary to permit compliance with the requirements of Section
10(a)(3) of the Act;
(c) to (i) advise you promptly, confirming such advice in
writing, when the Registration Statement has become effective and when
any post-effective amendment thereto becomes effective, (ii) prepare
the Prospectus in a form approved by you and, if Rule 430A under the
Act is used, to file such Prospectus pursuant to Rule 424(b) under the
Act no later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Act and to make no further amendment or any
supplement to the Registration Statement or Prospectus to which you
shall object in writing promptly after reasonable notice thereof, and
(iii) advise you promptly, confirming such advice in writing, when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act;
(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or Prospectus or for additional information with
respect thereto, or of notice of institution of proceedings for, or the
entry of a stop order suspending the effectiveness of the Registration
Statement and, if the Commission should enter a stop order suspending
the effectiveness of the Registration Statement, to make every
reasonable effort to obtain the lifting or removal of such order as
soon as possible; to advise you promptly of any proposal to amend or
supplement the Registration Statement or Prospectus including by filing
any documents that would be incorporated therein by reference and to
file no such amendment or supplement to which you shall object in
writing after reasonable notice thereof;
(e) subject to Section 4(o) hereof, to file promptly all
reports and any definitive proxy or information statement required to
be filed by the Company with the Commission in order to comply with
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Shares, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and the Company
shall at the time of filing either pay to the Commission the filing fee
for the Rule 462(b) registration statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under
the Act;
(g) to furnish to you promptly and, upon request, to each of
the other Underwriters for a period of five years from the date of this
Agreement (i) copies of any reports or other communications which the
Company shall send to its shareholders or shall from time to time
publish or publicly disseminate, (ii) copies of all annual, quarterly
and current reports filed with the Commission on Forms 10-K, 10-Q and
8-K, or such other similar forms as may be designated by the
Commission, (iii) copies of documents or reports filed with any
national securities exchange or automated quotation system on which any
class of securities of the Company is listed or quoted, and (iv) such
other information as you may reasonably request regarding the Company
or the Subsidiaries;
(h) to advise the Underwriters promptly of the happening of
any event within the time during which a Prospectus relating to the
Shares is required to be delivered under the Act which could require
the making of any change in the Prospectus then being used , or in the
information incorporated therein by reference, so that the Prospectus
would not include an untrue statement of material fact or omit to state
a material fact necessary to make the statements therein, in the light
of the circumstances under which they are made, not misleading, and,
during such time, to prepare, file and furnish, at the Company's
expense, to the Underwriters promptly such amendments or supplements to
such Prospectus as may be necessary to reflect any such change and to
file no such amendment or supplement to which you shall object in
writing after reasonable notice thereof;
(i) to make generally available to its security holders, and
to deliver to you, an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period
of twelve months beginning after the effective date of the Registration
Statement (as defined in Rule 158(c) of the Act) as soon as is
reasonably practicable after the termination of such twelve-month
period but not later than August 1, 2003;
(j) to furnish to its shareholders as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, shareholders' equity and of cash flow
of the Company and the Subsidiaries for such fiscal year, accompanied
by a copy of the certificate or report thereon of nationally recognized
independent certified public accountants) and, as soon as practicable
after the end of each of the first three fiscal quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), to make available to is shareholders
consolidated summary financial information of the Company and the
Subsidiaries for such quarter in reasonable detail;
(k) to furnish to you two copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents
incorporated by reference therein), and sufficient conformed copies of
the foregoing (other than exhibits) for distribution of a copy to each
of the other Underwriters;
(l) to furnish to you as early as practicable prior to the
time of purchase and the additional time of purchase, as the case may
be, but no later than two business days prior thereto, a copy of the
latest available unaudited interim consolidated financial statements,
if any, of the Company and the Subsidiaries which have been read by the
Company's independent certified public accountants, as stated in their
letter to be furnished pursuant to Section 8(b) hereof;
(m) to apply the net proceeds from the sale of the Shares by
the Company in the manner set forth under the caption "Use of Proceeds"
in the Prospectus and such that the Company will not become an
"investment company" as that term is defined in the Investment Company
Act;
(n) to pay all costs, expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the
Underwriters except as set forth under Section 7 hereof and (iii), (iv)
and (vi) below) in connection with (i) the preparation and filing of
the Registration Statement, each Preliminary Prospectus, the
Prospectus, and any amendments or supplements thereto, and the printing
and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares, (iii) the
producing, word processing and/or printing of this Agreement, any
Agreement Among Underwriters, any dealer agreements, any powers of
attorney, any closing documents (including compilations thereof) and
any other documents in connection with the offering, purchase, sale and
delivery of the Shares and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except
closing documents) to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares for offering and sale
under state laws and the determination of their eligibility for
investment under state law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel for the Underwriters)
and the printing and furnishing of copies of any blue sky or legal
investment surveys or memorandum to the Underwriters and to dealers,
(v) any listing of the Shares on any securities exchange or
qualification of the Shares for quotation on the Nasdaq National Market
and any registration thereof under the Exchange Act, (vi) any filing
for review of the public offering of the Shares by the NASD, including
the legal fees and filing fees and other disbursements of counsel to
the Underwriters, (vii) the cost of preparing stock certificates,
(viii) the cost and charges of any transfer agent or registrar, (ix)
the costs and expenses of the Company relating to presentations or
meetings undertaken in connection with the marketing of the offer and
sale of the Shares to prospective investors and your sales forces,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations, travel, lodging
and other expenses incurred by the officers of the Company and any such
consultants and the cost of any aircraft chartered in connection with
the road show, and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise
specifically provided for in this paragraph;
(o) to furnish to you, before filing with the Commission
subsequent to the effective date of the Registration Statement and
during the period referred to in paragraph (e) above, a copy of any
document proposed to be filed pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act;
(p) not to sell, offer or agree to sell, contract to sell,
hypothecate, pledge, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common
Stock, or file or cause to be declared effective a registration
statement under the Act relating to the offer and sale of any shares of
Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or other rights to purchase Common Stock
or any other securities of the Company that are substantially similar
to Common Stock for a period of 90 days after the date hereof (the
"Lock-Up Period"), without the prior written consent of UBS Warburg
LLC, except for (i) the registration of the Shares and the sales to the
Underwriters pursuant to this Agreement, (ii) issuances of Common Stock
upon the exercise of options or warrants disclosed as outstanding in
the Registration Statement and the Prospectus, and (iii) the issuance
of employee stock options not exercisable during the Lock-Up Period
pursuant to stock option plans described in the Registration Statement
and the Prospectus; and
(q) to use its best efforts to cause the Shares to be listed
for quotation on the Nasdaq National Market.
6. Covenants of the Selling Shareholders. Each of the Selling
Shareholders agree to pay or cause to be paid all taxes, if any, on the transfer
and sale of the Shares to be sold by such Selling Shareholder hereunder. The
Company agrees with the Selling Shareholders to pay all costs and expenses
incident to the performance of the obligations of the Selling Shareholders under
this Agreement (except as set forth above), including, but not limited to, all
expenses incident to the registration, sale and delivery of the Shares to be
sold by the Selling Shareholders, the costs and expenses incident to the
preparation, printing, filing and furnishing the Registration Statement
(including all exhibits thereto), each Preliminary Prospectus and the Prospectus
and any amendments or supplements thereto, the expenses of qualifying the Shares
to be sold by the Selling Shareholders under the state securities or blue sky
laws, the expenses of any filing for review with the NASD, the fees and expenses
of counsel for such Selling Shareholders and the fees and expenses of the
Attorneys-in-Fact and the Custodian; provided that each Selling Shareholder
agrees to pay or cause to be paid its pro rata share (based on the percentage
which the number of Shares sold by such Selling Shareholder bears to the total
number of Shares sold) of all underwriting discounts and commissions.
7. Reimbursement of Underwriters' Expenses. If the Shares are
not delivered for any reason other than the termination of this Agreement
pursuant to the last paragraph of Section 10, the Company shall, in addition to
paying the amounts described in Section 5(n) and Section 6 hereof, reimburse the
Underwriters for all of their out-of-pocket expenses, including the fees and
disbursements of their counsel.
8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Shareholders on the date hereof and at the time of purchase (and the several
obligations of the Underwriters at the additional time of purchase are subject
to the accuracy of the representations and warranties on the part of the Company
and the Selling Shareholders on the date hereof, at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company and the Selling Shareholders of their obligations
hereunder and to the following additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase
and at the additional time of purchase, as the case may be, an opinion
of Fox, Rothschild, O'Brien & Xxxxxxx, LLP, counsel for the Company and
the Selling Shareholders, addressed to the Underwriters, and dated the
time of purchase or the additional time of purchase, as the case may
be, with reproduced copies for each of the other Underwriters and in
form reasonably satisfactory to Xxxxxxxx & Xxxxxxxx, counsel for the
Underwriters, stating that:
(i) the Company has been duly incorporated and is
validly existing and presently subsisting as a corporation
under the laws of the Commonwealth of Pennsylvania, with full
corporate power to own, lease and operate its properties and
conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein
contemplated;
(ii) each of the Significant Subsidiaries has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation with full corporate power to own, lease and
operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus
(such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect
of matters of fact upon certificates of officers of the
Company, provided that such counsel shall state that they
believe that both you and they are justified in relying upon
such opinions and certificates);
(iii) the Company is duly qualified to do business as
a foreign corporation and is in good standing under the laws
of each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such
qualification, except where the failure to so qualify would
not have a Material Adverse Effect (such counsel being
entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and
they are justified in relying upon such opinions and
certificates);
(iv) each of the Significant Subsidiaries is duly
qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction where the
ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure
to so qualify would not have a Material Adverse Effect (such
counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company,
provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions
and certificates);
(v) this Agreement has been duly authorized, executed
and delivered by the Company;
(vi) this Agreement, the Power-of-Attorney and the
Custody Agreement have each been duly executed and delivered
by each Selling Shareholder and the Power-of-Attorney and
Custody Agreement each constitute legal, valid and binding
agreements of each Selling Shareholder enforceable in
accordance with their terms subject (A) to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or
affecting creditors' rights, (B) to general equity principles
(whether considered in a preceding in equity or at law), (C)
to an implied covenant of good faith and (D) as to rights of
indemnity and contribution under this Agreement, to
limitations that may be imposed by federal or state securities
laws or principles of public policy;
(vii) the Shares have been duly authorized and, when
issued and delivered to and paid for by the Underwriters in
accordance with this Agreement, will be validly issued and
will be fully paid and non-assessable;
(viii) the Company has an authorized and outstanding
capitalization as set forth in the section of the Registration
Statement and the Prospectus entitled "Capitalization"; the
outstanding shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid,
nonassessable and free of preemptive rights under the
Pennsylvania Business Corporation Law and contractual
preemptive rights, resale rights, rights of first refusal and
similar rights; the Shares when issued will be free of
preemptive rights under the Pennsylvania Business Corporation
Law, the Articles of Incorporation and By-Laws of the Company,
any agreement or instrument filed as an exhibit to the
Registration Statement and, as to such counsel's knowledge,
any other agreement; the certificates for the Shares are in
due and proper form under Pennsylvania law and the holders of
the Shares will not be subject to personal liability solely by
reason of being such holders;
(ix) all of the outstanding shares of capital stock
of each of the Significant Subsidiaries have been duly
authorized and validly issued, are fully paid and
non-assessable and, except for pledges under the Company's
existing credit facility, are owned by the Company, in each
case subject to no security interest, other encumbrance or
adverse claim; to such counsel's knowledge, no options,
warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation
into shares of capital stock or ownership interests in the
Significant Subsidiaries are outstanding;
(x) the capital stock of the Company, including the
Shares, conforms in all material respects to the description
thereof contained in the section of the Registration Statement
and Prospectus entitled "Description of Capital Stock";
(xi) the Registration Statement and the Prospectus
(except as to the financial statements and schedules and other
financial and accounting data contained or incorporated by
reference therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act;
(xii) the Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened
under the Act and any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424 under the Act has
been made in the manner and within the time period required by
such Rule 424;
(xiii) no approval, authorization, consent or order
of or filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the issuance and sale of the
Company Firm Shares or the Company Additional Shares and
consummation by the Company of the transactions as
contemplated hereby other than registration of the Shares
under the Act and the approval of the NASD (except such
counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of
the various jurisdictions in which the Shares are being
offered by the Underwriters);
(xiv) no approval, authorization, consent or order of
or filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the issuance and sale of the
Selling Shareholders' Firm Shares or the Selling Shareholders'
Additional Shares and consummation by the Selling Shareholders
of the transactions as contemplated hereby other than
registration of the Shares under the Act, the approval of the
NASD and beneficial ownership filings under the Exchange Act
(except such counsel need express no opinion as to any
necessary qualification under the state securities or blue sky
laws of the various jurisdictions in which the Shares are
being offered by the Underwriters);
(xv) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby do not and will not
conflict with, or result in any breach of, or constitute a
default under (nor constitute any event which with notice,
lapse of time, or both, would result in any breach of, or
constitute a default under), any provisions of the articles of
incorporation or other formation document or by-laws of the
Company or any of the Significant Subsidiaries or under any
provision of any contract, agreement or instrument filed as an
exhibit to the Registration Statement to which the Company or
any of the Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected, under
any federal or Pennsylvania law, regulation or rule or any
decree, judgment or order applicable to the Company or any of
the Subsidiaries, or, to the knowledge of such counsel, under
any state (other than Pennsylvania), local or foreign law,
regulation or rule applicable to the Company or any of the
Subsidiaries;
(xvi) to such counsel's knowledge, neither the
Company nor any of the Significant Subsidiaries is in
violation of its articles of incorporation or other formation
document or by-laws or is in breach of, or in default under
(nor has any event occurred which with notice, lapse of time,
or both would result in any breach of, or constitute a default
under), any contract, agreement or instrument filed as an
exhibit to the Registration Statement to which the Company or
any of the Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected or under
any federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to the Company or
any of the Subsidiaries, other than any such breach or default
that could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect;
(xvii) to such counsel's knowledge, there are no
governmental proceedings, affiliate transactions, contracts,
licenses, agreements, leases or documents of a character which
are required to be filed as exhibits to the Registration
Statement or to be summarized or described in the Prospectus
which have not been so filed, summarized or described;
(xviii) to such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending
or threatened to which the Company or any of the Subsidiaries
is a party or of which any of their respective properties is
subject at law or in equity or before or by any federal,
state, local or foreign governmental or regulatory commission,
board, body, authority or agency which are required to be
described in the Prospectus but are not so described;
(xix) the sale of the Shares to be sold by each
Selling Shareholder hereunder and the compliance by each
Selling Shareholder with all of the provisions of this
Agreement, the Power-of-Attorney and the Custody Agreement and
the consummation of the transactions hereby and thereby do not
and will not conflict with or result in any breach of or
constitute a default under (nor constitute any event which
with notice, lapse of time, or both would result in any breach
of, or constitute a default under), any provision of any
license, indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which such
Selling Shareholder is a party or by which such Selling
Shareholder or such Selling Shareholder's properties may be
bound or affected, under any federal or Pennsylvania law,
regulation or rule or any decree, judgment or order applicable
to such Selling Shareholder, or, to the knowledge of such
counsel, under any state (other than Pennsylvania), local or
foreign law, regulation or rule applicable to such Selling
Shareholder; and such sale can not be matched with a
corresponding purchase prior to the time of delivery for
purposes of Section 16(b) of the Exchange Act;
(xx) the documents incorporated by reference in the
Registration Statement and Prospectus, when they became
effective or were filed, as the case may be, (or, if an
amendment with respect to any such document was filed, when
such amendment was filed or became effective, as the case may
be) with the Commission, complied as to form in all material
respects with the Act or Exchange Act (except as to the
financial statements and schedules and other financial and
accounting data contained or incorporated by reference therein
as to which such counsel need express no opinion);
(xxi) such Selling Shareholder has, and immediately
prior to the time of purchase or the additional time of
purchase, as the case may be, will have, good and valid title
to the Shares to be sold by such Selling Shareholder
hereunder, free and clear of all liens, encumbrances, equities
or claims; and upon payment therefor and the delivery to DTC
or its agent of the Shares registered in the name of Cede &
Co. or such other nominee designated by the DTC, both as
provided for herein, and the crediting of the Shares to the
Underwriters' accounts with DTC, Cede & Co. or such other
nominee designated by DTC will be a "protected purchaser" of
the Shares (as defined in Section 8-303 of the Code), the
Underwriters will acquire a valid "security entitlement"
(within the meaning of Section 8-501 of the Code) to the
Shares (pursuant to Section 8-502 of the Code) and no action
based on an "adverse claim" (as defined in Section 8-102 of
the Code ) may be asserted against the Underwriters with
respect to such security entitlement (assuming that the
Underwriters are without notice of any such adverse claim)
(such counsel being entitled to assume in respect of the
opinion in this clause that the Uniform Commercial Code as
adopted in New York s the same as and will be interpreted in
the same manner as the Uniform Commercial Code as adopted in
Pennsylvania);
(xxii) the Company will not, upon consummation of the
transactions contemplated by this Agreement, be an "investment
company," or a "promoter" or "principal underwriter" for, a
"registered investment company," as such terms are defined in
the Investment Company Act;
(xxiii) those statements in the sections of the
Registration Statement and the Prospectus entitled "Risk
Factors", "Business", "Management", "Description of Capital
Stock", "Validity of the Securities", "Certain U.S. Federal
Income Tax Considerations for Non-U.S. Holders" and
"Underwriting" insofar as such statements constitute summaries
of legal matters, contracts, agreements or legal proceedings,
or that refer to statements of law or legal conclusions, are
accurate in all material respects and present fairly the
information required to be shown; and
(xxiv) no person has the right, pursuant to the terms
of any agreement or instrument described in or filed as an
exhibit to the Registration Statement or otherwise known to
such counsel to have any securities issued by the Company and
owned by them registered pursuant to the Act, included in the
Registration Statement or sold in the offering contemplated
hereby, whether as a result of the filing or effectiveness of
the Registration Statement or the transactions contemplated
hereby or otherwise, except for such rights as have been
complied with or waived.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company
and representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus were discussed and, although such counsel
is not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectus (except as and to the extent stated in the first clause
of subparagraph (viii) and in subparagraphs (vii), (x) and (xxiii) above), on
the basis of the foregoing nothing has come to the attention of such counsel
that causes them to believe that the Registration Statement or any amendment
thereto at the time such Registration Statement or amendment became effective
and at the time of purchase or the additional time of purchase, as the case may
be, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus or any supplement thereto at the
date of such Prospectus or such supplement, and at all times up to and including
the time of purchase or additional time of purchase, as the case may be,
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,
in light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no belief with respect to the
financial statements and schedules and other financial or accounting data
included in the Registration Statement or the Prospectus).
In rendering the opinion in paragraph (xix), such counsel may
rely upon a certificate of such Selling Shareholders in respect of matters of
fact as to ownership of, and liens, encumbrances, equities or claims on, the
Shares sold by such Selling Shareholders and the existence of agreements as to
which such Selling Shareholders are parties, provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such certificate.
(b) You shall have received from Deloitte & Touche LLP and
Ernst & Young LLP letters each dated, respectively, the date of this
Agreement and the time of purchase and additional time of purchase, as
the case may be, and addressed to the Underwriters (with reproduced
copies for each of the Underwriters) in the form heretofore approved by
Xxxxxxxx & Xxxxxxxx;
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion
of Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, as to
such matters as you reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(d) No amendment or supplement to the Registration Statement
or Prospectus, including documents deemed to be incorporated by
reference therein, shall be filed to which you object in writing after
reasonable notice thereof;
(e) The Registration Statement shall become effective not
later than 5:30 P.M. New York City time on the date of this Agreement
and, if Rule 430A under the Act is used, the Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) under the Act, at or
before 5:30 P.M., New York City time, on the second full business day
after the date of this Agreement; and if the Company has elected to
rely upon Rule 462(b), the Rule 462(b) registration statement shall
have become effective by 10:00 P.M., New York City time, of the date of
this Agreement;
(f) Prior to the time of purchase or the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement or any part thereof shall
have been issued under the Act and no proceeding for that purpose shall
have been initiated or threatened by the Commission and all requests
for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction; (ii) the
Registration Statement and all amendments thereto, or modifications
thereof, if any, shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) the
Prospectus and all amendments or supplements thereto, or modifications
thereof, if any, shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading;
(g) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may
be, (i) no material and unfavorable change or any development involving
a material adverse change, financial or otherwise (other than as
specifically identified in the Registration Statement and Prospectus),
in the business, properties, management, financial condition,
shareholders' equity or results of operation or prospects of the
Company and the Subsidiaries taken as a whole shall occur or become
known and (ii) no transaction which is material and unfavorable to the
Company shall have been entered into by the Company or any of the
Subsidiaries;
(h) The Company and the Selling Shareholders shall have
furnished or caused to be furnished to you, at the time of purchase or
additional time of purchase, as the case may be, certificates of two
executive officers of the Company and of the Selling Shareholders,
respectively, to the effect that the representations and warranties of
the Company, in the case of the Company's certificate, and the Selling
Shareholders, in the case of such Selling Shareholders' certificate, as
set forth in this Agreement are true and correct as of each such date,
that the Company and the Selling Shareholders, respectively, have
performed all of its obligations under this Agreement as such
obligations are to be performed at or before the time of purchase and
at or before the additional time of purchase, as the case may be, and,
in the case of the Company, the conditions set forth in paragraphs (f)
and (g) of this Section 8 have been met;
(i) You shall have received the signed Lock-Up Agreements
referred to in Section 3(q);
(j) The Company and the Selling Shareholders shall have
furnished to you such other documents and certificates as to the
accuracy and completeness of any statement in the Registration
Statement and the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you may reasonably
request;
(k) The Shares shall have been approved for quotation on the
Nasdaq National Market at or prior to the time of purchase or the
additional time of purchase, as the case may be; and
(l) Between the time of execution of this Agreement and the
time of purchase or additional time of purchase, as the case may be,
there shall not have occurred any downgrading, nor shall any notice or
announcement have been given or made of (i) any intended or potential
downgrading or (ii) any review, watch or possible change that does not
indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company by any "nationally recognized statistical
rating organization," as that term is defined in Rule 436(g)(2) under
the Act.
9. Effective Date of Agreement; Termination. This Agreement
shall become effective (i) if Rule 430A under the Act is not used, when you
shall have received notification of the effectiveness of the Registration
Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto
have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of UBS Warburg LLC or the
absolute discretion of any group of Underwriters (which may include UBS Warburg
LLC) that has agreed to purchase in the aggregate at least 50% of the Firm
Shares, if, (x) since the time of execution of this Agreement or the earlier
respective dates as of which information is given in the Registration Statement
and Prospectus, there has been any material adverse change or any development
involving a prospective material adverse change in the business, properties,
management, financial condition, shareholders' equity, results of operation or
prospects of the Company and the Subsidiaries taken as a whole, which would, in
your judgment or in the judgment of such group of Underwriters, makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares on the terms and in the manner contemplated in the Registration
Statement and Prospectus, or (y) there shall have occurred: (i) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the Nasdaq National Market; (ii) a
suspension or material limitation in trading in the Company's securities on the
Nasdaq National Market; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of hostilities or
acts of terrorism involving the United States or the declaration by the United
States of a national emergency or war; or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic conditions
in the United States or elsewhere, if the effect of any such event specified in
clause (iv) or (v) in your judgment or in the judgment of such group of
Underwriters makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and Prospectus, or (z) there shall
have occurred any downgrading, or any notice shall have been given of (i) any
intended or potential downgrading or (ii) any review, watch or possible change
that does not indicate an improvement, in the rating accorded any securities of
or guaranteed by the Company by any "nationally recognized statistical rating
organization", as that term is defined in Rule 436(g)(2) under the Act.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 9, the Company and each other Underwriter
shall be notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 5(n), 7 and 11 hereof), and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 11 hereof) or to one another
hereunder.
10. Increase in Underwriters' Commitments. Subject to Sections
8 and 9, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a reason
sufficient to justify the termination of this Agreement under the provisions of
Section 9 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares to be sold hereunder, the non-defaulting
Underwriters shall take up and pay for (in addition to the aggregate number of
Firm Shares they are obligated to purchase pursuant to Section 1 hereof) the
number of Firm Shares agreed to be purchased by all such defaulting
Underwriters, as hereinafter provided. Such Shares shall be taken up and paid
for by such non-defaulting Underwriters in such amount or amounts as you may
designate with the consent of each Underwriter so designated or, in the event no
such designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company and each Selling Shareholder agrees with the
non-defaulting Underwriters that it will not sell any Firm Shares hereunder
unless all of the Firm Shares are purchased by the Underwriters (or by
substituted Underwriters selected by you with the approval of the Company or
selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 10 with like effect
as if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Shares which all Underwriters agreed to purchase hereunder, and if neither
the non-defaulting Underwriters nor the Company shall make arrangements within
the five business day period stated above for the purchase of all the Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall terminate without further act or deed and without any
liability on the part of the Company or the Selling Shareholders to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company or any Selling Shareholders, except
for the expenses to be borne by the Company, the Selling Shareholders and the
Underwriters as provided in Sections 5(n), 6, 7 and 11. Nothing in this
paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
11. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any person
who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons, from and against any loss, damage,
expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any
such person may incur under the Act, the Exchange Act, the common law
or otherwise, insofar as such loss, damage, expense, liability or claim
(or actions in respect thereof) arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of
this Section 11 being deemed to include any Preliminary Prospectus, the
Prospectus and the Prospectus as amended or supplemented by the
Company), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the
statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material
fact contained in and in conformity with information concerning an
Underwriter furnished in writing by or on behalf of such Underwriter
through UBS Warburg LLC to the Company expressly for use in such
Registration Statement or such Prospectus or arises out of or is based
upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information not misleading, (ii) any untrue statement or alleged untrue
statement made by the Company in Section 3 of this Agreement or the
failure by the Company to perform, when and as required, any agreement
or covenant contained herein, or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any audio or visual
materials provided by the Company or based upon written information
furnished by or on behalf of the Company including, without limitation,
slides, videos, films or tape recordings used in connection with the
marketing of the Shares.
(b) Each Selling Shareholder, severally and not jointly,
agrees to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, and any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation)
which, jointly or severally, any such Underwriter or any such person
may incur under the Act, the Exchange Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim (or actions
in respect thereof) arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or in the Registration Statement as amended
by any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the
statements made therein not misleading, 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 reliance upon and
in conformity with written information furnished to the Company by such
Selling Shareholder expressly for use therein and (ii) any untrue
statement or alleged untrue statement made by such Selling Shareholder
in Section 4 of this Agreement or the failure by such Selling
Shareholder to perform when and as required any agreement or covenant
contained herein. Notwithstanding the foregoing, the aggregate
liability of any Selling Shareholder pursuant to the provisions of this
Section 11 shall be limited to an amount equal to the aggregate
purchase price received by such Selling Shareholder less Underwriters'
discounts pursuant to this Agreement from the sale of Shares by such
Selling Shareholder hereunder.
(c) If any action, suit or proceeding (together, a
"Proceeding") is brought against an Underwriter or any such person in
respect of which indemnity may be sought against the Company or a
Selling Shareholder pursuant to subsections (a) or (b) of this Section
11, such Underwriter or such person shall promptly notify the
indemnifying party in writing of the institution of such Proceeding and
the indemnifying party shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such
indemnified party; provided, however, that the omission to so notify
the indemnifying party shall not relieve the indemnifying party from
any liability which the such party may have to any Underwriter or any
such person or otherwise to the extent the indemnifying party is not
materially prejudiced thereby. Such Underwriter or such person shall
have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or of such person unless the employment of such counsel
shall have been authorized in writing by the indemnifying party in
connection with the defense of such Proceeding or the indemnifying
party shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to take charge of the defense of
such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them
which are different from, additional to or in conflict with those
available to the indemnifying party (in which case the indemnifying
party shall not have the right to direct the defense of such Proceeding
on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying party and
paid as incurred (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The
indemnifying party shall not be liable for any settlement of any
Proceeding effected without such party's written consent but if settled
with the written consent of such party, the indemnifying party agrees
to indemnify and hold harmless any Underwriter and any such person from
and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
the second sentence of this paragraph, then the indemnifying party
agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered
into more than sixty business days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least thirty days' prior
notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which
any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(d) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers, any Selling
Shareholder and any person who controls the Company or any Selling
Shareholder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and the successors and assigns of all of the
foregoing persons from and against any loss, damage, expense, liability
or claim (including the reasonable cost of investigation) which,
jointly or severally, any such person may incur under the Act, the
Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim (or actions in respect of ) arises
out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through UBS Warburg LLC to the Company
expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection
with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading.
(e) If any Proceeding is brought against the Company, a
Selling Shareholder or any such other person in respect of which
indemnity may be sought against any Underwriter pursuant to subsection
(d) of this Section 11, such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified
party; provided, however, that the omission to so notify such
Underwriter shall not relieve such Underwriter from any liability which
such Underwriter may have to such person or otherwise to the extent
such Underwriter is not materially prejudiced thereby. The indemnified
party shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless the employment of such counsel shall have
been authorized in writing by such Underwriter in connection with the
defense of such Proceeding or such Underwriter shall not have, within a
reasonable period of time in light of the circumstances, employed
counsel to defend such Proceeding or such indemnified party or parties
shall have reasonably concluded that there may be defenses available to
it or them which are different from, or additional to or in conflict
with those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties, but such
Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of
such Underwriter), in any of which events such fees and expenses shall
be borne by such Underwriter and paid as incurred (it being understood,
however, that such Underwriter shall not be liable for the expenses of
more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same
jurisdiction representing the indemnified parties who are parties to
such Proceeding). No Underwriter shall be liable for any settlement of
any such Proceeding effected without the written consent of such
Underwriter but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless the
indemnified party from and against any loss or liability by reason of
such settlement. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of
any Proceeding effected without its written consent if (i) such
settlement is entered into more than sixty business days after receipt
by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at
least thirty days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such Proceeding.
(f) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party in respect of any losses, damages,
expenses, liabilities or claims referred to herein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand
from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and of the Underwriters on the
other in connection with the statements or omissions which resulted in
such losses, damages, expenses, liabilities or claims, as well as any
other relevant equitable considerations. The relative benefits received
by the Company and the Selling Shareholders on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company and the Selling Shareholders and the total
underwriting discounts and commissions received by the Underwriters,
bear to the aggregate public offering price of the Shares. The relative
fault of the Company and the Selling Shareholders on the one hand and
of the Underwriters on the other shall be determined by reference to,
among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Company or a Selling Shareholder or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to herein
shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating,
preparing to defend or defending any Proceeding.
(g) The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this Section 11 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in subsection (f) above. Notwithstanding the
provisions of this Section 11, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by such Underwriter and distributed to
the public were offered to the public exceeds the amount of any damage
which such Underwriter has otherwise been required to pay by reason of
such untrue statement or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant
to this Section 11 are several in proportion to their respective
underwriting commitments and not joint.
(h) The indemnity and contribution agreements contained in
this Section 11 and the covenants, warranties and representations of
the Company and the Selling Shareholders contained in this Agreement
shall remain in full force and effect regardless of any investigation
made by or on behalf of any Underwriter, its partners, directors or
officers or any person (including each partner, officer or director of
such person) who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, or by or on behalf of
the Company, its directors or officers, a Selling Shareholder or any
person who controls the Company or a Selling Shareholder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
shall survive any termination of this Agreement or the issuance and
delivery of the Shares. The Company, each Selling Shareholder and each
Underwriter agree promptly to notify each other of the commencement of
any Proceeding against it and, in the case of the Company, against any
of the Company's officers or directors in connection with the issuance
and sale of the Shares, or in connection with the Registration
Statement or the Prospectus.
12. Information Furnished by the Underwriters. The statements
set forth in the sixth paragraph, the eighth paragraph and the ninth paragraph
under the caption "Underwriting" in the Prospectus constitute the only
information furnished by or on behalf of the Underwriters as such information is
referred to in Sections 3 and 11 hereof.
13. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 0000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Executive Vice President
and Chief Financial Officer.
14. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
15. Submission to Jurisdiction. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company and each of the Selling Shareholders consents to the jurisdiction of
such courts and personal service with respect thereto. The Company and each of
the Selling Shareholders hereby consents to personal jurisdiction, service and
venue in any court in which any Claim arising out of or in any way relating to
this Agreement is brought by any third party against UBS Warburg LLC or any
other indemnified party. Each of UBS Warburg LLC, the Company and the Selling
Shareholders (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) waives all right to trial by jury in
any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company
and each of the Selling Shareholders agrees that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive
and binding upon the Company or such Selling Shareholder, as the case may be,
and may be enforced in any other courts in the jurisdiction of which the Company
or such Selling Shareholder, as the case may be, is or may be subject, by suit
upon such judgment.
16. Parties at Interest. The Agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the Company and the
Selling Shareholders and to the extent provided in Section 11 hereof the
controlling persons, directors and officers referred to in such section, and
their respective successors, assigns, heirs, personal representatives, executors
and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
17. Counterparts. This Agreement may be signed by the parties
in one or more counterparts which together shall constitute one and the same
agreement among the parties.
18. Successors and Assigns. This Agreement shall be binding
upon the Underwriters, the Company and each of the Selling Shareholders and
their successors and assigns and any successor or assign of any substantial
portion of the Company's and any of the Underwriters' respective businesses
and/or assets.
19. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned
subsidiary of UBS AG, is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of UBS Warburg AG. Because UBS Warburg LLC
is a separately incorporated entity, it is solely responsible for its own
contractual obligations and commitments, including obligations with respect to
sales and purchases of securities. Securities sold, offered or recommended by
UBS Warburg LLC are not deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending
relationships with issuers of securities underwritten or privately placed by UBS
Warburg LLC. To the extent required under the securities laws, prospectuses and
other disclosure documents for securities underwritten or privately placed, UBS
Warburg LLC will disclose the existence of any such lending relationships and
whether the proceeds of the issue will be used to repay debts owed to affiliates
of UBS Warburg LLC.
If the foregoing correctly sets forth the understanding among
the Company, the Selling Shareholders and the Underwriters, please so indicate
in the space provided below for the purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Company, the Selling
Shareholders and the Underwriters, severally. Any person executing and
delivering this Agreement as Attorney-in-Fact for the Selling Shareholders
represents that by so doing that he has been duly appointed as Attorney-in-Fact
the Selling Shareholders pursuant to a validly existing and binding
Power-of-Attorney which authorizes such Attorney-in-Fact to take such action.
Very truly yours,
RIGHT MANAGEMENT CONSULTANTS, INC.
By:
---------------------------------------------
Title:
By:
---------------------------------------------
Title: __________, on behalf of the Selling
Shareholders as Attorney-in-Fact
Accepted and agreed to as of the date first above written, on behalf of
themselves and the other several Underwriters named in Schedule A
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
FIRST UNION SECURITIES, INC.
SUNTRUST CAPITAL MARKETS, INC.
By: UBS WARBURG LLC
By: __________________________
Title:
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
FIRST UNION SECURITIES, INC.
SUNTRUST CAPITAL MARKETS, INC.
Total............... 3,850,000
================================================================================
SCHEDULE B
Number of
Additional Shares
Number of to be Sold if Maximum Option
Firm Shares Exercised
The Company................ 3,000,000 532,500
Selling Shareholders:
--------------------
Xxxxxxx X. Xxxxxx 640,000
Xxxxxx X. Xxxxx 210,000
Xxxx X. Xxxxx 45,000
Total 3,850,000 577,500
================================================
------------------------------------------------------------------------------
SCHEDULE C
Significant Subsidiaries
1. Coutts Career Consultants Japan, Inc.
2. Xxxxxx Consulting Group Limited
3. Right Associates, Inc.
4. Right Associates Limited
5. Right Human Resources, Inc.
6. Right Management Consultants of Illinois, Inc.
7. Right WayStation, Inc.
Exhibit A
Right Management Consultant, Inc.
Common Stock
($.01 Par Value)
_____ __, 2002
UBS Warburg LLC
Banc of America Securities LLC
First Union Securities, Inc.
SunTrust Capital Markets, Inc.
As Representative of the several Underwriters
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by Right Management Consultants, Inc. (the
"Company") and you, as representatives of the several Underwriters named in
Schedule A thereto, with respect to the public offering (the "Offering") of
common stock, par value $.01 per share, of the Company (the "Common Stock").
In order to induce you to enter into the Underwriting
Agreement, the undersigned agrees that for a period of 90 days after the date of
the final prospectus relating to the Offering the undersigned will not, without
the prior written consent of UBS Warburg LLC (i) sell, offer to sell, contract
to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose
of, directly or indirectly, contract to dispose of, or file (or participate in
the filing of) a registration statement with the Securities and Exchange
Commission (the "Commission") in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder with
respect to, any Common Stock of the Company or any securities convertible into
or exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock, (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, whether any such transaction is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise, or (iii) publicly announce an
intention to effect any transaction specified in clause (i) or (ii). The
foregoing sentence shall not apply to (a) the registration of or sale to the
Underwriters of any Common Stock pursuant to the Offering and the Underwriting
Agreement, (b) bona fide gifts, provided the recipient or recipients thereof
agree in writing to be bound by the terms of this Lock-Up Letter Agreement and
confirm that he, she or it has been in compliance with the terms of this Lock-Up
Letter Agreement since the date hereof or (c) dispositions to any trust for the
direct or indirect benefit of the undersigned and/or the immediate family of the
undersigned, provided that such trust agrees in writing to be bound by the terms
of this Lock-Up Letter Agreement and confirms that it has been in compliance
with the terms of this Lock-Up Letter Agreement since the date hereof. For
purposes of this Lock-Up Letter Agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering. The undersigned
further agrees that, for a period of 90 days after the date of the final
prospectus relating to the Offering, the undersigned will not, without the prior
written consent of UBS Warburg LLC, make any demand for, or exercise any right
with respect to, the registration of Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock.
If (i) the Company notifies you in writing that it does not
intend to proceed with the Offering, (ii) the registration statement filed with
the Securities and Exchange Commission with respect to the Offering is withdrawn
or (iii) for any reason the Underwriting Agreement shall be terminated prior to
the time of purchase (as defined in the Underwriting Agreement), this Lock-Up
Letter Agreement shall be terminated and the undersigned shall be released from
its obligations hereunder.
Yours very truly,
Name:
