1
Exhibit 1
1,800,000 Shares
INTELLIGROUP, INC.
Common Stock
UNDERWRITING AGREEMENT
December __, 1996
XXXXX & COMPANY
XXXXXXXXXX SECURITIES
As Representatives of the several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. Intelligroup, Inc., a New Jersey corporation (the
"Company"), and the selling shareholders named in Schedule B hereto (the
"Selling Shareholders") propose to sell, pursuant to the terms of this
Agreement, to the several underwriters named in Schedule A hereto (the
"Underwriters," or, each, an "Underwriter"), an aggregate of 1,800,000 shares of
Common Stock, par value $.01 per share (the "Common Stock"), of the Company. The
aggregate of 1,800,000 shares so proposed to be sold is hereinafter referred to
as the "Firm Stock." The Company and the Selling Shareholders listed in Schedule
B hereto also propose to sell to the Underwriters, upon the terms and conditions
set forth in Section 3 hereof, up to an additional 270,000 shares of Common
Stock (the "Optional Stock"). The Firm Stock and the Optional Stock are
hereinafter collectively referred to as the "Stock." Xxxxx & Company ("Cowen")
and Xxxxxxxxxx Securities ("Xxxxxxxxxx") are acting as representatives of the
several Underwriters and in such capacity are hereinafter referred to as the
"Representatives." The Underwriters consent to the sale of Common Stock
hereunder by the Company and the Selling Stockholders for purposes of the
lock-up undertakings made by the Company and the Selling Stockholders in
connection with the initial public offering of Common Stock.
2. (a) Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with, the several Underwriters
that:
(i) The Company has complied with the conditions and meets the
requirements for use of Form SB-2, and a registration statement on Form
SB-2 (File No. 333-____) in the form in which it became or becomes
effective and also in such form as it may be when any post-effective
amendment thereto shall become effective with respect to the Stock,
including any preeffective
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prospectuses included as part of the registration statement as
originally filed or as part of any amendment or supplement thereto, or
filed pursuant to Rule 424 under the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, copies of which have heretofore been
delivered to you, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act and has been
filed with the Commission under the Securities Act; one or more
amendments to such registration statement, including in each case an
amended preeffective prospectus, copies of which amendments have
heretofore been delivered to you, have been so prepared and filed. If
it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed
and must be declared effective before the offering of the Stock may
commence, the term "Registration Statement" as used in this Agreement
means the registration statement as amended by said post-effective
amendment. The term "Registration Statement" as used in this Agreement
shall also include any registration statement relating to the Stock
that is filed and declared effective pursuant to Rule 462(b) under the
Securities Act. The term "Prospectus" as used in this Agreement means
the prospectus in the form included in the Registration Statement, or,
(A) if the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Securities Act and such
information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act, the term "Prospectus"
as used in this Agreement means the prospectus in the form included in
the Registration Statement as supplemented by the addition of the Rule
430A information contained in the prospectus filed with the Commission
pursuant to Rule 424(b) and (B) if prospectuses that meet the
requirements of Section 10(a) of the Securities Act are delivered
pursuant to Rule 434 under the Securities Act, then (i) the term
"Prospectus" as used in this Agreement means the "prospectus subject to
completion" (as such term is defined in Rule 434(g) under the
Securities Act) as supplemented by (a) the addition of Rule 430A
information or other information contained in the form of prospectus
delivered pursuant to Rule 434(b)(2) under the Securities Act or (b)
the information contained in the term sheets described in Rule
434(b)(3) under the Securities Act, and (ii) the date of such
prospectuses shall be deemed to be the date of the term sheets. The
term "Preeffective Prospectus" as used in this Agreement means the
prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of the
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Registration Statement with the Commission, and as such prospectus
shall have been amended from time to time prior to the date of the
Prospectus.
(ii) The Commission has not issued or threatened to issue any
order preventing or suspending the use of any Preeffective Prospectus,
and, at its date of issue, each Preeffective Prospectus conformed in
all material respects with the requirements of the Securities Act and
did not include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; and, when the Registration Statement
becomes effective and at all times subsequent thereto up to and
including each Closing Date, the Registration Statement and the
Prospectus and any amendments or supplements thereto contained and will
contain all material statements and information required to be included
therein by the Securities Act and conformed and will conform in all
material respects to the requirements of the Securities Act and neither
the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representations, warranties and agreements
shall not apply to information contained in or omitted from any
Preeffective Prospectus or the Registration Statement or the Prospectus
or any such amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company by or on
behalf of any Underwriter, directly or through you, or by any Selling
Shareholder, specifically for use in the preparation thereof; there is
no franchise, lease, contract, agreement or document required to be
described in the Registration Statement or Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or
filed therein as required; and all descriptions of any such franchises,
leases, contracts, agreements or documents contained in the
Registration Statement are accurate and complete descriptions of such
documents in all material respects.
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, and
except as set forth or contemplated in the Prospectus, neither the
Company nor any of its subsidiaries has incurred any liabilities or
obligations, direct or contingent, nor entered into any
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transactions not in the ordinary course of business, and there has not
been any material adverse change in the condition (financial or
otherwise), properties, business, management, prospects, net worth or
results of operations of the Company and its subsidiaries, considered
as a whole, or any change in the capital stock or short-term or
long-term debt of the Company and its subsidiaries considered as a
whole. The Company and its subsidiaries have no material contingent
obligations which are not disclosed in the Company's financial
statements which are included in the Registration Statement, as it may
be amended or supplemented.
(iv) The financial statements, together with the related notes
and schedules, set forth in the Prospectus and elsewhere in the
Registration Statement fairly present, on the basis stated in the
Registration Statement, the financial position and the results of
operations and changes in financial position of the Company and its
consolidated subsidiaries at the respective dates or for the respective
periods therein specified. Such statements and related notes and
schedules have been prepared in accordance with generally accepted
accounting principles in the United States applied on a consistent
basis except as may be set forth in the Prospectus. The selected
financial and statistical data set forth in the Prospectus under the
caption "Selected Consolidated Financial Data" fairly present, on the
basis stated in the Registration Statement, the information set forth
therein.
(v) Xxxxxx Xxxxxxxx LLP, who have expressed their opinions on
the audited financial statements included in the Registration Statement
and the Prospectus, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(vi) The Company and each of its subsidiaries have been duly
organized and are validly existing and in good standing as corporations
under the laws of their respective jurisdictions of organization, with
power and authority (corporate and other) to own or lease their
properties and to conduct their businesses as described in the
Registration Statement and the Prospectus; the Company and its
subsidiaries are in possession of and operating in compliance with all
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders required for the conduct of their
businesses, all of which are valid and in full force and effect; and
the Company and each of such subsidiaries are duly qualified to do
business and in good standing as foreign corporations in all other
jurisdictions where their ownership or leasing of
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properties or the conduct of their businesses requires such
qualification, except for those jurisdictions in which the failure to
so qualify has not had and will not have a material adverse effect on
the condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of the
Company and its subsidiaries considered as a whole. The Company and
each of its subsidiaries has all requisite power and authority, and all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public regulatory
or governmental agencies and bodies to own, lease and operate its
properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus, and no such
consent, approval, authorization, order, registration, qualification,
license or permit contains a materially burdensome restriction not
adequately disclosed in the Registration Statement and the Prospectus.
The Company owns all of the issued and outstanding capital stock of
Oxford Systems, Inc. and Intelligroup New Zealand Ltd. and neither the
Company nor any of its subsidiaries owns or controls, directly or
indirectly, any other corporations, associations or other entities.
(vii) The Company's authorized and outstanding capital stock
is on the date hereof, and will be on the Closing Dates as set forth
under the heading "Capitalization" in the Prospectus; the information
set forth under the caption "Capitalization" in the Prospectus (after
giving effect to the transactions therein described) is true and
correct; the outstanding shares of Common Stock (including the
outstanding shares of Stock) of the Company conform to the description
thereof in the Registration Statement and the Prospectus and have been
duly authorized and validly issued and are fully paid and nonassessable
and have been issued in compliance with all federal and state
securities laws and were not issued in violation of or subject to any
preemptive rights or similar rights to subscribe for or purchase
securities. Except as disclosed in and or contemplated by the
Registration Statement and the Prospectus and the financial statements
of the Company and related notes and schedules thereto included in the
Registration Statement and the Prospectus, the Company does not have
outstanding any options or warrants to purchase, or any preemptive
rights or other rights to subscribe for or to purchase any securities
or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's
stock option and other stock plans or
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arrangements, and the options or other rights granted or exercised
thereunder, as set forth in the Registration Statement and the
Prospectus, accurately and fairly presents the information required to
be shown with respect to such plans, arrangements, options and rights.
All outstanding shares of capital stock of each subsidiary have been
duly authorized and validly issued, and are fully paid and
nonassessable and are owned directly by the Company or by another
wholly owned subsidiary of the Company free and clear of any liens,
charges, encumbrances, equities or claims.
(viii) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and nonassessable and free of
any preemptive or similar rights and will conform to the description
thereof in the Registration Statement and the Prospectus.
(ix) Except as set forth in the Registration Statement and the
Prospectus, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries or affiliates is a party
or of which any property of the Company or any subsidiary or affiliate
is subject, which, if determined adversely to the Company or any such
subsidiary or affiliate, might individually or in the aggregate (A)
prevent or adversely affect the transactions contemplated by this
Agreement, (B) suspend the effectiveness of the Registration Statement,
(C) prevent or suspend the use of the Preeffective Prospectus in any
jurisdiction or (D) result in a material adverse change in the
condition (financial or otherwise), properties, business, management,
prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole; and to the best of the Company's
knowledge no such proceedings are threatened or contemplated against
the Company or any subsidiary or affiliate by governmental authorities
or others. The Company is not a party nor subject to the provisions of
any material injunction, judgment, decree or order of any court,
regulatory body or other governmental agency or body ("Governmental
Authority"). All of the Company's litigation required to be disclosed
pursuant to the Rules and Regulations has been disclosed and the
description of the Company's litigation under the heading "Business --
Legal Proceedings" in the Prospectus is true and correct and complies
with the Rules and Regulations.
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(x) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms or provisions of or
constitute a default (or an event which with notice or lapse of time,
or both, would constitute a default) under any indenture, mortgage,
deed of trust, note agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which it or any
of its properties is or may be bound, the Amended and Restated
Certificate of Incorporation, Amended and Restated By-laws or other
organizational documents of the Company or any of its subsidiaries, or
any law, order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries
or any of their properties or will result in the creation of a lien.
(xi) No consent, approval, authorization or order of any court
or governmental agency or body is required or necessary in connection
with the execution and delivery by the Company or for the consummation
by the Company of the transactions contemplated by this Agreement,
except such as may be required by the National Association of
Securities Dealers, Inc. (the "NASD") or under the Securities Act or
the securities or "Blue Sky" laws of any jurisdiction in connection
with the purchase and distribution of the Stock by the Underwriters.
(xii) The Company has the full corporate power and authority
to enter into this Agreement to perform its obligations hereunder
(including to issue, sell and deliver the Stock) and this Agreement has
been duly and validly authorized, executed and delivered by the Company
and is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent
that rights to indemnity and contribution hereunder may be limited by
federal or state securities laws or the public policy underlying such
laws.
(xiii) Except as disclosed in the Registration Statement and
the Prospectus with respect to unrecorded and unpaid federal and state
payroll-related taxes and with respect to possible past violations of
the Immigration Reform and Control Act of 1990, the Company and its
subsidiaries are in all material respects in compliance with, and
conduct their businesses in conformity with, all applicable federal,
state, local and foreign laws, rules and regulations or any court or
governmental agency or body; to the knowledge of the Company, otherwise
than as set forth in the Registration Statement and the Prospectus, no
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prospective change in any of such federal, state, local or foreign
laws, rules or regulations has been adopted which, when made effective,
would have a material adverse effect on the operations of the Company
and its subsidiaries. To the best knowledge of the Company, any
violations by the Company of the Immigration Reform and Control Act of
1990 or any similar laws, rules or regulations would not be found to be
a "pattern and practice" by the Immigration and Naturalization Service.
In the ordinary course of business, employees of the Company conduct
periodic reviews of the effect of Environmental Laws (as defined below)
on the business operations and properties of the Company and its
subsidiaries, in the ordinary course of which they seek to identify and
evaluate associated costs and liabilities. Except as disclosed in the
Registration Statement and the Prospectus, the Company and its
subsidiaries are in compliance with all applicable existing federal,
state, local and foreign laws, rules and regulations relating to the
protection of human health or the environment or imposing liability or
requiring standards of conduct concerning any Hazardous Materials
("Environmental Laws"), except for such instances of noncompliance
which, either singly or in the aggregate, would not have a material
adverse effect. The term "Hazardous Material" means (A) any "hazardous
substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (B) any "hazardous
waste" as defined by the Resource Conservation and Recovery Act, as
amended, (C) any petroleum or petroleum product, (D) any
polychlorinated biphenyl and (E) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law.
(xiv) Except as disclosed in the Registration Statement and
the Prospectus with respect to unrecorded and unpaid federal and state
payroll-related taxes, the Company and its subsidiaries have filed all
necessary federal, state, local and foreign income, payroll, franchise
and other tax returns and have paid all taxes shown as due thereon or
with respect to any of their properties; and there is no tax deficiency
that has been, or to the knowledge of the Company is likely to be,
asserted against the Company or any of its subsidiaries or any of their
respective properties or assets that would adversely affect the
financial position, business or results of operations of the Company
and its subsidiaries. All tax liabilities have been adequately provided
for in the consolidated financial statements of the Company.
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(xv) No person or entity has the right to require registration
of shares of Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statement or otherwise,
except for Summit Investors III, L.P. and Summit Ventures IV, L.P.
which have the right to require the registration of their shares of
Firm Stock and Optional Stock pursuant to the registration rights
agreement described in the Prospectus.
(xvi) Neither the Company nor any of its officers, directors
or affiliates has taken or will take, directly or indirectly, any
action designed or intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted in, or which might
in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company.
(xvii) The Company has provided you with all financial
statements of the Company and its subsidiaries since December 31, 1993
to the date hereof that are available to the officers of the Company,
including financial statements for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996.
(xviii) The Company and its subsidiaries own or possess all
patents, trademarks, trademark registrations, service marks, service
xxxx registrations, tradenames, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned by them
or any of them or necessary for the conduct of their respective
businesses, and the Company is not aware of any claim to the contrary
or any challenge by any other person to the rights of the Company and
its subsidiaries with respect to the foregoing. The Company's business
as now conducted and as proposed to be conducted does not and will not
infringe or conflict with in any material respect patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses or
other intellectual property or franchise right of any person. Except as
described in the Prospectus, no claim has been made against the Company
alleging the infringement by the Company of any patent, trademark,
service xxxx, tradename, copyright, trade secret, license in or other
intellectual property right or franchise right of any person.
(xix) The Company and its subsidiaries have performed all
material obligations required to be performed by them under all
contracts required by Item 601(b)(10) of Regulation S-B under the
Securities Act to be filed as exhibits to the Registration Statement,
and
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neither the Company nor any of its subsidiaries nor any other party to
such contract is in default under or in breach of any such obligations.
Neither the Company nor any of its subsidiaries has received any notice
of such default or breach.
(xx) The Company is not involved in any labor dispute nor is
any such dispute threatened. The Company is not aware that (A) any
executive, key employee or significant group of employees of the
Company or any subsidiary plans to terminate employment with the
Company or any such subsidiary or (B) any such executive or key
employee is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by
the present or proposed business activities of the Company and its
subsidiaries. Neither the Company nor any subsidiary has or expects to
have any liability for any prohibited transaction or funding deficiency
or any complete or partial withdrawal liability with respect to any
pension, profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to which
the Company or any subsidiary makes or ever has made a contribution and
in which any employee of the Company or any subsidiary is or has ever
been a participant. With respect to such plans, the Company and each
subsidiary are in compliance in all material respects with all
applicable provisions of ERISA.
(xxi) [Intentionally left blank]
(xxii) The Company and its subsidiaries have, and the Company
and its subsidiaries as of the Closing Dates will have, good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned or proposed to be owned
by them which is material to the business of the Company or of its
subsidiaries, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Prospectus or such as
would not have a material adverse effect on the Company and its
subsidiaries considered as a whole; and any real property and buildings
held under lease by the Company and its subsidiaries or proposed to be
held after giving effect to the transactions described in the
Registration Statement and the Prospectus are, or will be as of each
Closing Date, held by them under valid, subsisting and enforceable
leases with such exceptions as would not have a material adverse effect
on the Company and its subsidiaries considered as a whole, in each case
except as described in or contemplated by the Registration Statement
and the Prospectus.
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(xxiii) The Company and its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which
they are engaged or propose to engage after giving effect to the
transactions described in the Registration Statement and the Prospectus
(except as described in the Registration Statement and the Prospectus
with respect to errors and omissions insurance); and neither the
Company nor any of its subsidiaries has any reason to believe that it
will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition, financial or
otherwise, or the earnings, business or operations of the Company and
its subsidiaries considered as a whole, except as described in or
contemplated by the Prospectus.
(xxiv) Other than as contemplated by this Agreement, there is
no broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(xxv) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of doing Business with Cuba, and
the Company further agrees that if it commences engaging in business
with the government of Cuba or with any person or affiliate located in
Cuba after the date the Registration Statement becomes or has become
effective with the Commission or with the Florida Department of Banking
and Finance (the "Department"), whichever date is later, the Company
will provide the Department notice of such business in a form
acceptable to the Department.
(xxvi) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles in the United
States and to maintain accountability for assets; (C) access to assets
is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is
compared with existing assets at reasonable intervals and
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appropriate action is taken with respect to any differences.
(xxvii) Neither the Company nor any of its subsidiaries nor
any director, employee or agent of the Company or any of its
subsidiaries has made any payment of funds of the Company or any of its
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 and
the Prospectus.
(xxviii) Neither the Company nor any of its subsidiaries is,
or will become, as a result of the consummation of the transactions
contemplated by this Agreement, and application of the net proceeds
therefrom as described in the Prospectus, 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.
(xxix) Neither the Company nor any of its subsidiaries is or
intends to become (a) a controlled foreign corporation, as such term is
defined in the Internal Revenue Code of 1986, as amended (the "Code"),
(b) a passive foreign investment company within the meaning of Section
1296(a) of the Code or (c) a foreign personal holding corporation, as
such term is defined in the Code.
(xxx) Each certificate signed by any officer of the Company
and delivered to the Underwriters or counsel for the Underwriters shall
be deemed to be a representation and warranty by the Company as to the
matters covered thereby.
(xxxi) The Common Stock has been approved for quotation and
trading on the Nasdaq National Market.
(xxxii) The Company has paid $793,000 of the $814,000 Internal
Revenue Service assessment described in the Prospectus, has reserved an
additional $21,000 for the assessed but unbilled Internal Revenue
Service assessment and has reserved an additional $186,000 for any
additional state tax assessments.
For purposes of the foregoing representations and warranties which are
conditioned by reference to the knowledge of the Company, the Company shall be
charged with the knowledge of each Selling Shareholder.
(b) Representations, Warranties and Agreements of the Selling
Shareholders. Each Selling Shareholder severally and not
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jointly represents and warrants to, and agrees with, the several Underwriters
that such Selling Shareholder:
(i) Now has, and on each Closing Date will have, valid and
marketable title to the Stock to be sold by such Selling Shareholder,
free and clear of any lien, claim, security interest or other
encumbrance, including, without limitation, any restriction on
transfer, and has full right, power and authority to enter into this
Agreement, the Power of Attorney and the Custody Agreement (each as
hereinafter defined), and, to the extent such Selling Shareholder is a
corporation or a partnership, has been duly organized and is validly
existing and in good standing as a corporation or partnership, as
applicable, under the laws of its jurisdiction of organization.
(ii) Now has, and on each Closing Date will have, upon
delivery of and payment for each share of Stock hereunder, full right,
power, authority and any approval required by law to sell, transfer,
assign and deliver the Stock being sold by such Selling Shareholder
hereunder, and each of the several Underwriters will acquire valid and
marketable title to all of the Stock being sold to the Underwriters by
such Selling Shareholder, free and clear of any liens, encumbrances,
equities claims, restrictions on transfer or other defects whatsoever.
(iii) For a period of 180 days after the date of this
Agreement, without the consent of Xxxxx, such Selling Shareholder will
not offer to sell, sell, contract to sell or otherwise dispose of any
capital stock or securities convertible into or exchangeable for
capital stock, including, without limitation, capital stock which may
be deemed to be beneficially owned by such Selling Shareholder in
accordance with the Rules and Regulations, except for the Stock being
sold hereunder or as set forth in the agreement under Section 8(l)
herein.
(iv) Has duly executed and delivered a power of attorney, in
substantially the form heretofore delivered to the Representatives (the
"Power of Attorney"), appointing Xxxxx X. Xxxxx, or his duly appointed
substitute as attorney-in-fact (the "Attorneys-in-fact") with authority
to execute and deliver this Agreement on behalf of such Selling
Shareholder, to authorize the delivery of the shares of Stock 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.
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(v) Has duly executed and delivered a custody agreement, in
substantially the form heretofore delivered to the Representatives (the
"Custody Agreement"), with Xxxxxxxx Xxxxxxxxx as custodian (the
"Custodian"), pursuant to which certificates in negotiable form for the
shares of Stock to be sold by such Selling Shareholder hereunder have
been placed in custody for delivery under this Agreement.
(vi) Has, by execution and delivery of each of this Agreement,
the Power of Attorney and the Custody Agreement, created valid and
binding obligations of such Selling Shareholder, enforceable against
such Selling Shareholder in accordance with its terms, except to the
extent that rights to indemnity hereunder may be limited by federal or
state securities laws or the public policy underlying such laws.
(vii) The performance of this Agreement, the Custody Agreement
and the Power of Attorney, and the consummation of the transactions
contemplated hereby and thereby will not result in a breach or
violation by such Selling Shareholder of any of the terms or provisions
of, or constitute a default by such Selling Shareholder under, any
indenture, mortgage, deed of trust, trust (constructive or other), loan
agreement, lease, franchise, license or other agreement or instrument
to which such Selling Shareholder is a party or by which such Selling
Shareholder or any of its properties is bound, or any judgment of any
court or governmental agency or body applicable to such Selling
Shareholder or any of its properties, or to such Selling Shareholder's
knowledge, any statute, decree, order, rule or regulation of any court
or governmental agency or body applicable to such Selling Shareholder
or any of its properties.
(viii) Neither such Selling Shareholder nor any of its
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted in, or which might
in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company.
(ix) Has no reason to believe that the representations and
warranties of the Company contained in this Section 2 are not true and
correct, is familiar with the Registration Statement and has no
knowledge of any material fact, condition or information not disclosed
in the Registration Statement which has adversely affected or may
adversely affect the business of the Company or any of its
subsidiaries; and the sale
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of the Shares by such Selling Shareholder pursuant hereto is not
prompted by any materially adverse information concerning the Company
or any of its subsidiaries which is not set forth in the Registration
Statement. The information pertaining to the Selling Shareholder under
the caption "Selling Shareholder" in the Prospectus is complete and
accurate in all material respects.
Each Selling Shareholder agrees that the shares of Stock represented by
the certificates held in custody under the Custody Agreement are for the benefit
of and coupled with and subject to the interests of the Underwriters, the other
Selling Shareholders and the Company hereunder, and that the arrangement for
such custody and the appointment of the Attorneys-in-fact are irrevocable; that
the obligations of such Selling Shareholder hereunder shall not be terminated by
operation of law, whether by the death or incapacity, liquidation or
distribution of such Selling Shareholder, or any other event, that if such
Selling Shareholder should die or become incapacitated or is liquidated or
dissolved or any other event occurs, before the delivery of the Stock hereunder,
certificates for the Stock to be sold by such Selling Shareholder shall be
delivered on behalf of such Selling Shareholder in accordance with the terms and
conditions of this Agreement and the Custody Agreement, and action taken by the
Attorneys-in-fact or any of them under the Power of Attorney shall be as valid
as if such death, incapacity, liquidation or dissolution or other event had not
occurred, whether or not the Custodian, the Attorneys-in-fact or any of them
shall have notice of such death, incapacity, liquidation or dissolution or other
event.
(c) Additional Representations, Warranties and Agreements of the
Principal Shareholders. Each of Xxxxx Xxxxxx, Xxxxxxxx Xxxxxx and Xxxxxxxx
Xxxxxxxxxxxx (individually, a "Principal Shareholder") represents and warrants
to, and agrees with, the several Underwriters that:
(i) Such Principal Shareholder has duly executed and delivered
the Indemnification Agreement, dated July 16, 1996 (the
"Indemnification Agreement"), among the Company and the Selling
Shareholders; the Escrow Agreement, dated as of the date hereof (the
"Escrow Agreement") among each of the Principal Shareholders, as
indemnitors, the Company and Summit Bank, as escrow agent; and the
Pledge Agreement, dated as of the date hereof (the "Pledge Agreement"),
made by the Principal Shareholders, as pledgors, to the Company, as
pledgee. The Indemnification Agreement, the Escrow Agreement and the
Pledge Agreement are each in full force and effect and the parties
thereto are in full compliance with all their obligations under such
agreements.
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16
(ii) Such Principal Shareholder has, by execution and delivery
of the Indemnification Agreement, the Escrow Agreement and the Pledge
Agreement, created valid and binding obligations of such Principal
Shareholder, enforceable against such Principal Shareholder in
accordance with the respective terms of such agreements.
(iii) The execution, delivery and performance by such
Principal Shareholder of the Indemnification Agreement, the Escrow
Agreement and the Pledge Agreement, and the compliance by such
Principal Shareholder with his obligations thereunder, did not and will
not conflict with, or result in a breach or violation of any of the
terms or provisions of, or constitute a default (or an event with
notice or lapse of time, or both, would constitute a default) by such
Principal Shareholder under any indenture, mortgage, deed of trust,
trust (constructive or other), loan agreement, lease, franchise,
license or other agreement or instrument to which such Principal
Shareholder is a party or by which such Principal Shareholder or any of
his properties is bound, or any judgment of any court or governmental
agency or body applicable to such Principal Shareholder or any of his
properties, or to such Principal Shareholder's knowledge, any statute,
decree, order, rule or regulation of any court or governmental agency
or body applicable to such Principal Shareholder or any of his
properties.
(iv) On October 2, 1996, the first closing date of the
Company's initial public offering of Common Stock (the "IPO Closing
Date"), the Principal Shareholders pledged an aggregate of 191,667
shares of Common Stock to the Company (with Summit Bank serving as
escrow agent for the benefit of the Company). The security interest
created by the Pledge Agreement in the shares of Common Stock pledged
by each Principal Shareholder pursuant to the Pledge Agreement (the
"Pledged Shares") constitutes a valid, perfected first priority lien on
the Pledged Shares, enforceable by the Company as such against all
creditors of such Principal Shareholder and any persons purporting to
purchase any of the Pledged Shares from such Principal Shareholder.
(v) On the IPO Closing Date, the Principal Shareholders
delivered a total of $450,000 (the "Escrowed Cash") to Summit Bank, as
escrow agent under the Escrow Agreement (the "Escrow Agreement"). The
security interest created by the Escrow Agreement in the Escrowed Cash
constitutes a valid, perfected first priority lien on the Escrowed
Cash, enforceable by the Company as such against all creditors of such
Principal Shareholder.
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17
(c) Additional Representations, Warranties and Agreements of the
Company and the Principal Shareholders Regarding Intelligroup Asia Private Ltd.
Each of the Company and each Principal Shareholder represents and
warrants to, and agrees with, the several Underwriters that:
(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as
set forth or contemplated in the Prospectus, Intelligroup Asia Private
Ltd. ("Intelligroup Asia") has not incurred any liabilities or
obligations, direct or contingent, nor entered into any transactions
not in the ordinary course of business, and there has not been any
material adverse change in the condition (financial or otherwise),
properties, business, management, prospects, net worth or results of
operations of Intelligroup Asia, or any change in the capital stock or
short-term or long-term debt of Intelligroup Asia. Intelligroup Asia
has no material contingent obligations which are not disclosed in the
Registration Statement, as it may be amended or supplemented.
(ii) Intelligroup Asia has been duly organized and is validly
existing and in good standing as a corporation under the laws of India,
with power and authority (corporate and other) to own or lease its
properties and to conduct its business as described in the Registration
Statement and the Prospectus; Intelligroup Asia is in possession of and
operating in compliance with all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates and orders
required for the conduct of its businesses, all of which are valid and
in full force and effect; and Intelligroup Asia is duly qualified to do
business and in good standing as foreign corporations in all other
jurisdictions where its ownership or leasing of properties or the
conduct of its business requires such qualification, except for those
jurisdictions in which the failure to so qualify has not had and will
not have a material adverse effect on the condition (financial or
otherwise), properties, business, management, prospects, net worth or
results of operations of Intelligroup Asia. Intelligroup Asia has all
requisite power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses and
permits of and from all public regulatory or governmental agencies and
bodies to own, lease and operate its properties and conduct its
business as now being conducted and as described in the Registration
Statement and the Prospectus, and no such consent, approval,
authorization, order, registration,
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qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and
the Prospectus.
(iii) The 200 shares of capital stock of Intelligroup Asia
("Asia Shares") owned by Xxxxxxxx Xxxxxx, the 200 Asia Shares owned by
Xxxxxxxx Xxxxxxxxxxxx, the 100 Asia Shares owned by K. Xxxx Xxxxxx and
the 100 Asia Shares owned by X. Xxxxxx represent all of the issued and
outstanding capital stock of Intelligroup Asia and all such capital
stock has been duly authorized and validly issued, is fully paid and
non-assessable is owned, as described in the Registration Statement and
Prospectus, by Xx. Xxxxxx, Xx. Xxxxxxxxxxxx, Xx. Xxxxxx and Xx. Xxxxxx,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, charge or equity, and no options, warrants or other
rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into shares of capital or ownership
interest in Intelligroup Asia exist or are outstanding.
(iv) Except as set forth in the Registration Statement and the
Prospectus, there are no legal or governmental proceedings pending to
which Intelligroup Asia is a party or of which any property of
Intelligroup Asia is subject, which, if determined adversely to
Intelligroup Asia, might individually or in the aggregate (A) prevent
or adversely affect the transactions contemplated by this Agreement,
(B) prevent or adversely affect the transactions contemplated by the
Agreement, dated April 4, 1996, between Xxxxxxxx Xxxxxx, as Sole
Proprietor of Ms. Intelligroup Asia, as assignor, and Intelligroup
Asia, as assignee, (the "Take-over Agreement"); the Agreement, dated as
of June 15, 1996, by and between the Company and Intelligroup Asia (the
"Support Agreement,"); the Agreement, dated June 7, 1996, between
Xxxxxxxx Xxxxxx, as transferor, and the Company, as transferee (the
"First Transfer Agreement"); the Agreement, dated June 9, 1996, between
Xxxxxxxx Xxxxxxxxxxxx, as transferor, and the Company, as transferee
(the "Second Transfer Agreement"); the Agreement, dated June 9, 1996,
between Xxxxx Xxxxxx, as transferor, and the Company, as transferee
(the "Third Transfer Agreement"); the Agreement, dated June 10, 1996,
between X. Xxxxxx, as transferor, and Xxxxx Xxxxxx, as transferee (the
"Fourth Transfer Agreement"); and the Agreement, dated June 10, 1996,
between Shri Xxxx Xxxxxx, as transferor, and Xxxxx Xxxxxx, as
transferee (the "Fifth Transfer Agreement," and the above-referenced
Agreements, collectively, the "Transfer Agreements," and, together with
the Take-Over Agreement and the Support Agreement, the "Intelligroup
Asia Documents"), (C) suspend the effectiveness of the
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Registration Statement, (D) prevent or suspend the use of the
Preeffective Prospectus in any jurisdiction or (E) result in a material
adverse change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of operations of
Intelligroup Asia; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated against Intelligroup Asia by
governmental authorities or others. Intelligroup Asia is not a party
to, nor subject to the provisions of, any material injunction,
judgment, decree or order of any court, regulatory body or other
governmental agency or body. All of Intelligroup Asia's litigation
required to be disclosed pursuant to the Rules and Regulations has been
disclosed.
(v) The execution, delivery and performance of the
Intelligroup Asia Documents by each party thereto and the consummation
of the transactions therein contemplated did not and will not result in
a breach or violation of any of the terms or provisions of or
constitute a default (or an event which with notice or lapse of time,
or both, would constitute a default) under any indenture, mortgage,
deed of trust, note agreement or other agreement or instrument by which
such party or any of its properties is or may be bound, any
organizational documents of such party, or any law, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over such party or any of its properties or will result in
the creation of a lien. Each of the Intelligroup Asia Documents is in
full force and effect and the parties thereto are in full compliance
with all their obligations under such agreements
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required or necessary in connection
with the execution and delivery by each party to the Intelligroup Asia
Documents of, or for the consummation by each party to the Intelligroup
Asia Documents, of the transactions contemplated by, the Intelligroup
Asia Documents, except for the approval of the Reserve Bank for (A)
each transfer of Asia Shares contemplated by the Fourth and Fifth
Transfer Agreements, in respect of which the necessary application has
been made and (B) each transfer of Asia Shares contemplated by the
First, Second and Third Transfer Agreements, in respect of which
application is proposed to be made to the Reserve Bank upon receipt of
the approvals pursuant to sub clause (A) above. Intelligroup Asia and
the Principal Shareholders have no reason to believe that each of the
aforesaid approvals will not be granted.
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(vii) Each party to the Intelligroup Asia Documents has the
full corporate or other power and authority to enter into the
Intelligroup Asia Documents and to perform its obligations thereunder
and the Intelligroup Asia Documents have been duly and validly
authorized, executed and delivered by such party and are valid and
binding obligations of such party, enforceable against such party in
accordance with their terms.
(viii) Intelligroup Asia is in all material respects in
compliance with, and conducts its business in conformity with, all
applicable federal, state, local and foreign laws, rules and
regulations or any court or governmental agency or body; to the
knowledge of the Company, otherwise than as set forth in the
Registration Statement and the Prospectus, no prospective change in any
of such federal, state, local or foreign laws, rules or regulations has
been adopted which, when made effective, would have a material adverse
effect on the operations of Intelligroup Asia. In the ordinary course
of business, employees of Intelligroup Asia conduct periodic reviews of
the effect of Environmental Laws on the business operations and
properties of Intelligroup Asia, in the ordinary course of which they
seek to identify and evaluate associated costs and liabilities.
(ix) Intelligroup Asia has filed all necessary local and
foreign income, payroll, franchise and other tax returns and has paid
all taxes shown as due thereon or with respect to any of its
properties; and there is no tax deficiency that has been, or to the
knowledge of the Company or the Principal Shareholders is likely to be,
asserted against Intelligroup Asia or any of its properties or assets
that would adversely affect the financial position, business or results
of operations of Intelligroup Asia. All tax liabilities of Intelligroup
Asia have been adequately provided for in the consolidated financial
statements of the Company.
(x) Intelligroup Asia owns or possesses all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, tradenames, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned by it or
necessary for the conduct of its business, and Intelligroup Asia is not
aware of any claim to the contrary or any challenge by any other person
to the rights of Intelligroup Asia with respect to the foregoing.
Intelligroup Asia's business as now conducted and as proposed to be
conducted does not and will not infringe or conflict, in any material
respect, with patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses or other intellectual property or
franchise right of any person.
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No claim has been made against Intelligroup Asia alleging the
infringement by Intelligroup Asia of any patent, trademark, service
xxxx, tradename, copyright, trade secret, license in or other
intellectual property right or franchise right of any person.
(xi) Intelligroup Asia is not involved in any labor dispute
nor is any such dispute threatened. Intelligroup Asia is not aware that
(A) any executive, key employee or significant group of employees of
Intelligroup Asia plans to terminate employment with it or (B) any such
executive or key employee is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that would
be violated by the present or proposed business activities of
Intelligroup Asia. Intelligroup Asia neither has nor expects to have
any liability for any prohibited transaction or funding deficiency or
any complete or partial withdrawal liability with respect to any
pension, profit sharing or other plan, to which Intelligroup Asia makes
or ever has made a contribution and in which any employee of the
Intelligroup Asia is or has ever been a participant.
(xii) Intelligroup Asia has, and Intelligroup Asia as of each
Closing Date will have, good and marketable title in fee simple to all
real property and good and marketable title to all personal property
owned or proposed to be owned by it which is material to the business
of Intelligroup Asia, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus
or such as would not have a material adverse effect on Intelligroup
Asia; and any real property and buildings held under lease by
Intelligroup Asia or proposed to be held after giving effect to the
transactions described in the Registration Statement and the Prospectus
are, or will be as of each Closing Date, held by it under valid,
subsisting and enforceable leases with such exceptions as would not
have a material adverse effect on Intelligroup Asia, in each case
except as described in or contemplated by the Registration Statement
and the Prospectus.
(xiii) Intelligroup Asia is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are customary in the business in which it is engaged or
proposes to engage after giving effect to the transactions described in
the Registration Statement and the Prospectus (except with respect to
errors and omissions insurance); and Intelligroup Asia does not have
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from
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similar insurers as may be necessary to continue its business at a cost
that would not materially and adversely affect the condition, financial
or otherwise, or the earnings, business or operations of Intelligroup
Asia.
(xiv) Intelligroup Asia maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general
or specific authorization; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles in the United States and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xv) Neither Intelligroup Asia nor any of its directors,
employees or agents has made any payment of funds of Intelligroup Asia
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 and
the Prospectus.
3. Purchase by, and Sale and Delivery to, Underwriters--Closing Dates.
The Company and the Selling Shareholders agree, severally and not jointly, to
sell to the Underwriters the Firm Stock, with the number of shares to be sold by
the Company and each Selling Shareholder being the number of Shares set opposite
his, her or its name in Schedule B; and on the basis of the representations,
warranties, covenants and agreements herein contained, but subject to the terms
and conditions herein set forth, the Underwriters agree, severally and not
jointly, to purchase the Firm Stock from the Company and the Selling
Shareholders, the number of shares of Firm Stock to be purchased by each
Underwriter being set opposite its name in Schedule A, subject to adjustment in
accordance with Section 12 hereof. The number of shares of Stock to be purchased
by each Underwriter from each Selling Shareholder hereunder shall bear the same
proportion to the total number of shares of Stock to be purchased by such
Underwriter hereunder as the number of shares of stock being sold by each
Selling Shareholder bears to the total number of shares of Stock being sold by
all Selling Shareholders, subject to adjustment by the Representatives to
eliminate fractions.
The purchase price per share to be paid by the Underwriters to the
Company and the Selling Shareholders net of underwriting commissions will be
$_____ per share (the "Purchase Price").
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The Company and the Selling Shareholders will deliver the Firm Stock to
the Representatives for the respective accounts of the several Underwriters (in
the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company and the Selling Shareholders given at or prior to 12:00 Noon, New York
Time, on the second full business day preceding the First Closing Date (as
defined below) or, if no such direction is received, in the names of the
respective Underwriters or in such other names as Cowen may designate (solely
for the purpose of administrative convenience) and in such denominations as
Cowen may determine), against payment of the aggregate Purchase Price therefor
by wire transfer, certified or official bank check or checks in Clearing House
funds (next day funds), payable to the order of the Company and each Selling
Shareholder as more fully set forth in Schedule D, all at the offices of Xxxxxxx
Xxxx & Xxxxxxxxx, One Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (except with respect to the delivery by the Selling Shareholders of Firm
Stock, which will take place in Jersey City, New Jersey). The time and date of
the delivery and closing shall be at 10:00 a.m., New York Time, on December __,
1996, in accordance with Rule 15c6-1 of the Exchange Act. The time and date of
such payment and delivery are herein referred to as the "First Closing Date."
The First Closing Date and the location of delivery of, and the form of payment
for, the Firm Stock may be varied by agreement among the Company, the Selling
Shareholders and Cowen. The First Closing Date may be postponed pursuant to the
provisions of Section 12.
The Company and the Selling Shareholders shall make the certificates
for the Stock available to the Representatives for examination on behalf of the
Underwriters not later than 10:00 a.m., New York Time, on the business day
preceding the First Closing Date at the offices of Xxxxx & Company, Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
It is understood that Cowen or Xxxxxxxxxx, individually and not as
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment to the Company or to the Selling Shareholders on behalf of any
Underwriter or Underwriters, for the Stock to be purchased by such Underwriter
or Underwriters. Any such payment by Cowen or Xxxxxxxxxx shall not relieve such
Underwriter or Underwriters from any of its or their other obligations
hereunder.
The several Underwriters agree to make an initial public offering of
the Firm Stock at the initial public offering price as soon after the
effectiveness of the Registration Statement as in their judgment is advisable.
The Representatives shall promptly advise the Company and the Selling
Shareholders of the making of the initial public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, each
Selling Shareholder hereby
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grants to the Underwriters an option to purchase, severally and not jointly, up
to the aggregate number of shares of Optional Stock set forth opposite each such
Selling Shareholder's name on Schedule B hereto, for an aggregate of up to
270,000 shares. The price per share to be paid for the Optional Stock shall be
the Purchase Price. The option granted hereby may be exercised as to all or any
part of the Optional Stock at any time, and from time to time, not more than
thirty (30) days subsequent to the effective date of this Agreement. No Optional
Stock shall be sold and delivered unless the Firm Stock previously has been, or
simultaneously is, sold and delivered. The right to purchase the Optional Stock
or any portion thereof may be surrendered and terminated at any time upon notice
by the Underwriters to the Company and the Selling Shareholders.
The option granted hereby may be exercised by the Underwriters by
giving written notice from Cowen to the Selling Shareholders setting forth the
number of shares of the Optional Stock to be purchased by them and the date and
time for delivery of and payment for the Optional Stock. Each date and time for
delivery of and payment for the Optional Stock (which may be the First Closing
Date, but not earlier) is herein called the "Option Closing Date" and shall in
no event be earlier than two (2) business days nor later than ten (10) business
days after written notice is given. (The Option Closing Date and the First
Closing Date are herein called the "Closing Dates" and each a "Closing Date.")
All purchases of Optional Stock from the Selling Shareholders shall be made on a
pro rata basis. Optional Stock shall be purchased for the account of each
Underwriter in the same proportion as the number of shares of Firm Stock set
forth opposite such Underwriter's name in Schedule B hereto bears to the total
number of shares of Firm Stock (subject to adjustment by the Underwriters to
eliminate odd lots). Upon exercise of the option by the Underwriters, each
Selling Shareholder agrees to sell to the Underwriters the number of shares of
Optional Stock set forth in the written notice of exercise and the Underwriters
agree, severally and not jointly and subject to the terms and conditions herein
set forth, to purchase the number of such shares determined as aforesaid.
The Selling Shareholders will deliver the Optional Stock to the
Representatives in Jersey City, New Jersey (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Selling Shareholders
given at or prior to 12:00 Noon, New York Time, on the second full business day
preceding the Option Closing Date or, if no such direction is received, in the
names of the respective Underwriters or in such other names as Cowen may
designate (solely for the purpose of administrative convenience) and in such
denominations as Cowen may determine, against payment of the aggregate Purchase
Price therefor by wire transfer, or certified or official bank checks, in
Clearing House funds (next day funds), payable to the order of each Selling
Shareholder all at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, One Citicorp Center,
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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The Selling Shareholders shall make the certificates for the Optional Stock
available to the Underwriters for examination not later than 10:00 a.m., New
York Time, on the business day preceding the Option Closing Date at the offices
of Xxxxx & Company, Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Option
Closing Date and the location of delivery of, and the form of payment for, the
Option Stock may be varied by agreement between and among the Company, the
Selling Shareholders and Cowen. The Option Closing Date may be postponed
pursuant to the provisions of Section 12.
4. Covenants and Agreements of the Company and the Selling
Shareholders.
(a) The Company covenants and agrees with the several Underwriters
that:
(i) The Company will (A) if the Company and the
Representatives have determined not to proceed pursuant to Rule 430A,
use its best efforts to cause the Registration Statement to become
effective, (B) if the Company and the Representatives have determined
to proceed pursuant to Rule 430A, use its best efforts to comply with
the provisions of and make all requisite filings with the Commission
pursuant to Rule 430A and Rule 424 of the Rules and Regulations and (C)
if the Company and the Representatives have determined to deliver
Prospectuses pursuant to Rule 434 of the Rules and Regulations, to use
its best efforts to comply with all the applicable provisions thereof.
The Company will advise the Representatives promptly as to the time at
which the Registration Statement becomes effective, will advise the
Representatives promptly of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of
the institution of any proceedings for that purpose, and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible the lifting thereof, if issued. The Company
will advise the Representatives promptly of the receipt of any comments
of the Commission or any request by the Commission for any amendment of
or supplement to the Registration Statement or the Prospectus or for
additional information and will not at any time file any amendment to
the Registration Statement or supplement to the Prospectus which shall
not previously have been submitted to the Representatives a reasonable
time prior to the proposed filing thereof or to which the
Representatives shall reasonably object in writing or which is not in
compliance with the Securities Act and the Rules and Regulations.
(ii) The Company will prepare and file with the Commission,
promptly upon the request of the Representatives, any amendments or
supplements to the
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Registration Statement or the Prospectus which in the opinion of the
Representatives may be necessary to enable the several Underwriters to
continue the distribution of the Stock and will use its best efforts to
cause the same to become effective as promptly as possible.
(iii) If at any time after the effective date of the
Registration Statement when a prospectus relating to the Stock is
required to be delivered under the Securities Act any event relating to
or affecting the Company or any of its subsidiaries occurs as a result
of which the Prospectus or any other prospectus as then in effect would
include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the
Securities Act, the Company will promptly notify the Representatives
thereof and will prepare an amended or supplemented prospectus which
will correct such statement or omission; and in case any Underwriter is
required to deliver a prospectus relating to the Stock nine (9) months
or more after the effective date of the Registration Statement, the
Company upon the request of the Representatives and at the expense of
such Underwriter will prepare promptly such prospectus or prospectuses
as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Securities Act.
(iv) The Company will deliver to the Representatives, at or
before the Closing Date, signed copies of the Registration Statement,
as originally filed with the Commission, and all amendments thereto
including all financial statements and exhibits thereto, and will
deliver to the Representatives such number of copies of the
Registration Statement, including such financial statements but without
exhibits, and all amendments thereto, as the Representatives may
reasonably request. The Company will deliver or mail to or upon the
order of the Representatives, from time to time until the effective
date of the Registration Statement, as many copies of the Preeffective
Prospectus as the Representatives may reasonably request. The Company
will deliver or mail to or upon the order of the Representatives on the
date of the initial public offering, and thereafter from time to time
during the period when delivery of a prospectus relating to the Stock
is required under the Securities Act, as many copies of the Prospectus,
in final form or as thereafter amended or supplemented as the
Representatives may reasonably request; provided, however, that the
expense of the preparation and delivery of any prospectus
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required for use nine (9) months or more after the effective
date of the Registration Statement shall be borne by the
Underwriters required to deliver such prospectus.
(v) The Company will make generally
available to its shareholders as soon as practicable, but not
later than fifteen (15) months after the effective date of the
Registration Statement, an earnings statement which will be in
reasonable detail (but which need not be audited) and which
will comply with Section 11(a) of the Securities Act, covering
a period of at least twelve (12) months beginning after the
"effective date" (as defined in Rule 158 under the Securities
Act) of the Registration Statement.
(vi) The Company will cooperate with the
Representatives to enable the Stock to be registered or
qualified for offering and sale by the Underwriters and by
dealers under the securities laws of such jurisdictions as the
Representatives may designate and at the request of the
Representatives will make such applications and furnish such
consents to service of process or other documents as may be
required of it as the issuer of the Stock for that purpose;
provided, however, that the Company shall not be required to
qualify to do business or to file a general consent (other
than that arising out of the offering or sale of the Stock) to
service of process in any such jurisdiction where it is not
now so subject. The Company will, from time to time, prepare
and file such statements and reports as are or may be required
of it as the issuer of the Stock to continue such
qualifications in effect for so long a period as the
Representatives may reasonably request for the distribution of
the Stock. The Company will advise the Representatives
promptly after the Company becomes aware of the suspension of
the qualifications or registration of (or any such exception
relating to) the Common Stock of the Company for offering,
sale or trading in any jurisdiction or of any initiation or
threat of any proceeding for any such purpose, and in the
event of the issuance of any orders suspending such
qualifications, registration or exception, the Company will,
with the cooperation of the Representatives use its best
efforts to obtain the withdrawal thereof.
(vii) The Company will furnish to its
shareholders annual reports containing financial statements
certified by independent public accountants and with quarterly
summary financial information in reasonable detail which may
be unaudited. During the period of five (5) years from the
date hereof, the Company will deliver to the Representatives
and, upon
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request, to each of the other Underwriters, as soon as they
are available, copies of each annual report of the Company and
each other report furnished by the Company to its shareholders
and will deliver to the Representatives, (A) as soon as they
are available, copies of any other reports (financial or
other) which the Company shall publish or otherwise make
available to any of its shareholders as such, (B) as soon as
they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any
national securities exchange and (C) from time to time such
other information concerning the Company as you may reasonably
request. So long as the Company has active subsidiaries, such
financial statements will be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders
generally. Separate financial statements shall be furnished
for all subsidiaries whose accounts are not consolidated but
which at the time are significant subsidiaries as defined in
the Rules and Regulations.
(viii) The Company will file with the NASD
all documents and notices required by the NASD of companies
that have securities designated on the Nasdaq National Market
and will use its best efforts to list, subject to official
notice of effectiveness, on the Nasdaq National Market, the
Stock to be issued and sold by the Company.
(ix) The Company will maintain a transfer
agent and registrar for its Common Stock.
(x) Prior to filing its quarterly statements
on Form 10-Q or 10-QSB, as the case may be, the Company will
have its independent auditors perform a limited quarterly
review of its quarterly numbers, provided, however, that such
review for two full years commencing the quarter immediately
following consummation of the Offering shall be in accordance
with standards and procedures as set forth in the Statement on
Auditing Standards No. 71.
(xi) The Company will not offer, sell,
assign, transfer, encumber, contract to sell, grant an option
to purchase or otherwise dispose of, other than by operation
of law, gifts, pledges or dispositions by estate
representatives, any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common
Stock (including, without limitation, Common Stock of the
Company which may be deemed to be beneficially owned by the
undersigned in accordance with the Rules and Regulations)
before March 23, 1997, other than the Company's sale of Common
Stock
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hereunder and the Company's issuance of Common Stock upon the
exercise of warrants and stock options which are presently
outstanding and described in the Prospectus.
(xii) The Company will apply the net
proceeds from the sale of the Stock as set forth in the
description under "Use of Proceeds" in the Prospectus, which
description complies in all respects with the requirements of
Item 504 of Regulation S-B.
(xiii) The Company will supply you with
copies of all correspondence to and from, and all documents
issued to and by, the Commission in connection with the
registration of the Stock under the Securities Act.
(xiv) Prior to each Closing Date the Company
will furnish to you, as soon as they have been prepared,
copies of any unaudited interim consolidated financial
statements of the Company and its subsidiaries, as applicable,
for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement
and the Prospectus.
(xv) Prior to each Closing Date the Company
will issue no press release or other communications directly
or indirectly and hold no press conference with respect to the
Company or any of its subsidiaries, the financial condition,
results of operation, business, prospects, assets or
liabilities of any of them, or the offering of the Stock,
without your prior written consent. For a period of twelve
(12) months following the later Closing Date, the Company will
use its best efforts to provide to you copies of each press
release or other public communications with respect to the
financial condition, results of operations, business,
prospects, assets or liabilities of the Company concurrently
with, or as soon as may reasonably be practicable after the
issuance thereof.
(xvi) During the period of five (5) years
hereafter, the Company will furnish to the Representatives,
and upon request of the Representatives, to each of the
Underwriters: (A) as soon as practicable after the end of each
fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of
such fiscal year and statements of income, stockholder's
equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public accountants; (B)
as soon as practicable after the filing thereof, copies of
each proxy statement, Annual Report on Form 10-K or Form
10-KSB, as the case may be,
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Quarterly Report on Form 10-Q or Form 10-QSB, as the case
may be,Report on Form 8-K or other report filed by the
Company with the Commission, or the NASD or any securities
exchange; and (C) as soon as available, copies of any report
or communication of the Company mailed generally to holders of
its Common Stock. The Company will deliver to the
Representatives similar reports with respect to significant
subsidiaries, as that term is defined in the Rules and
Regulations, which are not consolidated in the Company's
financial statements.
(xvii) The Company will not take, directly
or indirectly, any action designed to cause or result in, or
that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of
any securities of the Company.
(b) Each Selling Shareholder, severally and not jointly,
covenants and agrees with the several Underwriters that:
(i) No offering, sale, short sale or other
disposition of any shares of Common Stock or other capital
stock of the Company or other securities convertible,
exchangeable or exercisable for shares of Common Stock or
derivative of shares of Common Stock owned by such Selling
Shareholder or request by such Selling Shareholder for the
registration for the offer or sale of any of the foregoing (or
as to which such Selling Shareholder has the right to direct
the disposition) will be made for a period of 180 days after
the date of this Agreement, directly or indirectly, by such
Selling Shareholder otherwise than hereunder, as set forth in
Section 8(l) herein or with the prior written consent of
Cowen.
(ii) In order to document the Underwriters'
compliance with the reporting and withholding provisions of
the Tax Equity and Fiscal Responsibility Act of 1982 and the
Interest and Dividend Tax Compliance Act of 1983 with respect
to the transactions herein contemplated, each Selling
Shareholder agrees to the extent required by applicable law or
regulation to deliver to you prior to or at the First Closing
Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
(iii) Such Selling Shareholder will not
take, directly or indirectly, any action designed to cause or
result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of
the price of any securities of the Company.
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5. Payment of Expenses. (a) The Company will pay (directly or
by reimbursement) all costs, fees and expenses incurred in connection with
expenses incident to the performance of the obligations of the Company and of
the Selling Shareholders under this Agreement and in connection with the
transactions contemplated hereby, including but not limited to (i) all expenses
and taxes incident to the issuance and delivery of the Stock to the
Representatives; (ii) all expenses incident to the registration of the Stock
under the Securities Act; (iii) the costs of preparing stock certificates
(including printing and engraving costs); (iv) all fees and expenses of the
registrar and transfer agent of the Stock; (v) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Stock to the
Underwriters; (vi) fees and expenses of the Company's counsel and the Company's
independent accountants; (vii) all costs and expenses incurred in connection
with the preparation, printing, filing, shipping and distribution of the
Registration Statement, each Preeffective Prospectus and the Prospectus
(including all exhibits and financial statements) and all amendments and
supplements provided for herein, the Selling Shareholders' Powers of Attorney
and Custody Agreement, the "Agreement Among Underwriters" between the
Representatives and the Underwriters, the Master Selected Dealers' Agreement,
the Underwriters' Questionnaire and the Blue Sky memoranda and this Agreement;
(viii) all filing fees, attorneys' fees and expenses incurred by the Company or
the Underwriters in connection with exemptions from the qualifying or
registering (or obtaining qualification or registration of) all or any part of
the Stock for offer and sale and determination of its eligibility for investment
under the Blue Sky or other securities laws of such jurisdictions as the
Representatives may designate; (ix) all fees and expenses paid or incurred in
connection with filings made with the NASD; and (x) all other costs and expenses
incident to the performance of their obligations hereunder which are not
otherwise specifically provided for in this Section.
(b) Except as otherwise agreed with the Company with respect
to the Summit Selling Shareholders (as defined herein), each Selling Shareholder
will pay (directly or by reimbursement) all fees and expenses incident to the
performance of such Selling Shareholder's obligations under this Agreement which
are not otherwise specifically provided for herein, including but not limited to
any fees and expenses of counsel for such Selling Shareholder, such Selling
Shareholder's pro rata share of fees and expenses of the Attorneys-in-fact and
the Custodian and all expenses and taxes incident to the sale and delivery of
the Stock to be sold by such Selling Shareholder to the Underwriters hereunder.
(c) In addition to their other obligations under Section 6(a)
hereof, the Company and each Principal Shareholder, jointly and severally, agree
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon (i) any
statement or omission or any alleged statement or omission or (ii) any breach or
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inaccuracy in their representations and warranties, that they will reimburse
each Underwriter on a quarterly basis for all reasonable legal or other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
and each Principal Shareholder's obligation to reimburse each Underwriter for
such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company and each Principal Shareholder, as the
case may be, together with interest, compounded daily, determined on the basis
of the prime rate (or other commercial lending rate for borrowers of the highest
credit standing) announced from time to time by Citibank, N.A., New York, New
York (the "Prime Rate"). Any such interim reimbursement payments which are not
made to an Underwriter in a timely manner as provided below shall bear interest
at the Prime Rate from the due date for such reimbursement. This expense
reimbursement agreement will be in addition to any other liability which the
Company or any Principal Shareholder may otherwise have. The request for
reimbursement will be sent to the Company with a copy to each Principal
Shareholder. In the event that the Company fails to make such reimbursement
payment within thirty (30) days of the reimbursement request, the
Representatives shall notify the Principal Shareholders of their obligation to
make such reimbursement payments within fifteen (15) days; provided, however,
that each Principal Shareholder shall be required to advance at such time only
its pro rata portion of the reimbursement payment. To the extent that any
Principal Shareholder fails to pay its pro rata portion in timely response to
the Underwriters' request, the other Principal Shareholders shall be jointly and
severally liable for such reimbursement payment and each shall render such
payment to the Representatives within fifteen (15) days of written demand
therefor by the Representatives.
(d) In addition to its other obligations under Section 6(b)
hereof, each Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in Section 6(b) hereof which relates to information
furnished to the Company pursuant to Section 6(c) hereof, it will reimburse the
Company (and, to the extent applicable, each officer, director or controlling
person of the Company or any Selling Shareholder) on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company (and, to
the extent applicable, each officer, director or controlling person of the
Company or any Selling Shareholder) for such expenses and the possibility that
such
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payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, the Company (and, to the extent applicable, each
officer, director or controlling person of the Company or any Selling
Shareholder) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company within thirty
(30) days of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request. This indemnity agreement will be in addition to
any liability which such Underwriter may otherwise have.
(e) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in paragraph (c)
and/or (d) of this Section 5, including the amounts of any requested
reimbursement payments and the method of determining such amounts, shall be
settled by arbitration conducted under the provisions of the Constitution and
Rules of the Board of Governors of the New York Stock Exchange, Inc. or pursuant
to the Code of Arbitration Procedure of the NASD. Any such arbitration must be
commenced by service of a written demand for arbitration or written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the event
the party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Such an arbitration would be limited to the
operation of the interim reimbursement provisions contained in paragraph (c)
and/or (d) of this Section 5 and would not resolve the ultimate propriety or
enforceability of the obligation to reimburse expenses which is created by the
provisions of Section 6.
6. Indemnification and Contribution. (a) Each of the Company
and each Principal Shareholder, who comprise three of the Selling Shareholders,
jointly and severally, agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls such Underwriter within the meaning of the
Securities Act and the respective officers, directors, partners, employees,
representatives and agents of each of such Underwriter (collectively, the
"Underwriter Indemnified Parties" and, each, an "Underwriter Indemnified
Party"), against any losses, claims, damages, liabilities or expenses (including
the reasonable cost of investigating and defending against any claims therefor
and counsel fees incurred in connection therewith), joint or several, which
arise out of or are based in whole or in part upon the Securities Act, the
Exchange Act or any other federal, state, local or foreign statute or
regulation, or at common law, on the ground or alleged ground that any
Preeffective Prospectus, the Registration Statement or the Prospectus (or any
Preeffective Prospectus, the Registration Statement or the Prospectus as from
time to time amended or supplemented) includes or allegedly includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements
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therein, in light of the circumstances under which they were made, not
misleading, unless such statement or omission was made in reliance upon, and in
conformity with, written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for use in the
preparation thereof. Each of the Company and each Principal Shareholder will be
entitled to participate at its own expense in the defense or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but if
the Company or any such Principal Shareholder elects to assume the defense, such
defense shall be conducted by counsel chosen by it. In the event the Company or
any such Principal Shareholder elects to assume the defense of any such suit and
retain such counsel, any Underwriter Indemnified Parties, defendant or
defendants in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) the Company or such Principal
Shareholder shall have specifically authorized the retaining of such counsel or
(ii) the parties to such suit include any such Underwriter Indemnified Parties,
and the Company or such Principal Shareholder and such Underwriter Indemnified
Parties at law or in equity have been advised by counsel to the Underwriters and
have reasonably concluded based on such advice that one or more legal defenses
may be available to it or them which may not be available to the Company or such
Principal Shareholder, in which case the Company or such Selling Shareholder
shall not be entitled to assume the defense of such suit notwithstanding its
obligation to bear the fees and expenses of such counsel. This indemnity
agreement is not exclusive and will be in addition to any liability which each
of the Company and each Principal Shareholder might otherwise have and shall not
limit any rights or remedies which may otherwise be available at law or in
equity to each Underwriter Indemnified Party.
(b) Each of Summit Investors III, L.P. and Summit Ventures IV,
L.P. (the "Summit Selling Shareholders"), who comprise two of the Selling
Shareholders, severally and not jointly, agrees to indemnify and hold harmless
each Underwriter Indemnified Party against any losses, claims, damages,
liabilities or expenses (including the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred in connection
therewith), joint or several, which arise out of or are based in whole or in
part upon the Securities Act, the Exchange Act or any other federal, state,
local or foreign statute or regulation, or at common law, on the ground or
alleged ground that any Preeffective Prospectus, the Registration Statement or
the Prospectus (or any Preeffective Prospectus, the Registration Statement or
the Prospectus as from time to time amended or supplemented) includes or
allegedly includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading in each case only to the extent that the untrue statement or
alleged untrue statement or the omission or the alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Summit Selling Shareholder
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specifically for inclusion therein; provided, that, with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
Preeffective Prospectus, the indemnity agreement contained in this subsection
(b) shall not inure to the benefit of any Underwriter Indemnified Party from
whom the person asserting any such losses, claims, damages or liabilities
purchased the shares of Stock concerned to the extent that any such loss, claim,
damage or liability of such Underwriter Indemnified Party results from the fact
that a copy of the Prospectus was not sent or given to such person at or prior
to the written confirmation of the sale of such shares of Stock to such person
as required by the Securities Act and if the untrue statement or omission
concerned has been corrected in the Prospectus, unless such failure resulted
from non-compliance by the Company with Section 4(a)(ii). Such Summit Selling
Shareholder will be entitled to participate at its own expense in the defense
or, if it so elects, to assume the defense of any suit brought to enforce any
such liability, but if such Summit Selling Shareholder elects to assume the
defense, such defense shall be conducted by counsel chosen by it. In the event
such Summit Selling Shareholder elects to assume the defense of any such suit
and retain such counsel, any Underwriter Indemnified Parties, defendant or
defendants in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) such Summit Selling Shareholder shall
have specifically authorized the retaining of such counsel or (ii) the parties
to such suit include any such Underwriter Indemnified Parties, and such Summit
Selling Shareholder and such Underwriter Indemnified Parties at law or in equity
have been advised by counsel to the Underwriters and have reasonably concluded
based on such advice that one or more legal defenses may be available to it or
them which may not be available to such Summit Selling Shareholder, in which
case such Summit Selling Shareholder shall not be entitled to assume the defense
of such suit notwithstanding its obligation to bear the fees and expenses of
such counsel. The liability of a Summit Selling Shareholder under this Agreement
shall not exceed the net proceeds (before deducting offering expenses) received
by such Summit Selling Shareholder from the sale of Stock in the Offering. This
indemnity agreement is not exclusive and will be in addition to any liability
which each Summit Selling Shareholder might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in equity to
each Underwriter Indemnified Party.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively, the "Company
Indemnified Parties") and each Selling Shareholder and each person, if any, who
controls a Selling Shareholder within the meaning of the Securities Act
(collectively, the "Shareholder Indemnified Parties"), against any losses,
claims, damages, liabilities or expenses (including, unless the Underwriter or
Underwriters elect to assume the defense, the
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reasonable cost of investigating and defending against any claims therefor and
counsel fees incurred in connection therewith), joint or several, which arise
out of or are based in whole or in part upon the Securities Act, the Exchange
Act or any other federal, state, local or foreign statute or regulation, or at
common law, on the ground or alleged ground that any Preeffective Prospectus,
the Registration Statement or the Prospectus (or any Preeffective Prospectus,
the Registration Statement or the Prospectus, as from time to time amended and
supplemented) includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading, but only insofar as any such statement or omission was made in
reliance upon, and in conformity with, written information furnished to the
Company through the Representatives by or on behalf of any Underwriter,
specifically for use in the preparation thereof; provided, however, that in no
case is such Underwriter to be liable with respect to any claims made against
any Company Indemnified Party or Shareholder Indemnified Party against whom the
action is brought unless such Company Indemnified Party or Shareholder
Indemnified Party shall have notified such Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Company
Indemnified Party or Shareholder Indemnified Party, but failure to notify such
Underwriter of such claim shall not relieve it from any liability which it may
have to any Company Indemnified Party or Shareholder Indemnified Party otherwise
than on account of its indemnity agreement contained in this paragraph. Such
Underwriter shall be entitled to participate at its own expense in the defense,
or, if it so elects, to assume the defense of any suit brought to enforce any
such liability, but, if such Underwriter elects to assume the defense, such
defense shall be conducted by counsel chosen by it. In the event that any
Underwriter elects to assume the defense of any such suit and retain such
counsel, the Company Indemnified Parties or Shareholder Indemnified Parties and
any other Underwriter or Underwriters or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of any
additional counsel retained by them, respectively. The Underwriter against whom
indemnity may be sought shall not be liable to indemnify any person for any
settlement of any such claim effected without such Underwriter's consent. This
indemnity agreement is not exclusive and will be in addition to any liability
which such Underwriter might otherwise have and shall not limit any rights or
remedies which may otherwise be available at law or in equity to any Company
Indemnified Party or Shareholder Indemnified Party.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified
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party as a result of such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) 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 from the offering of the Stock. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Shareholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses (or actions in
respect thereof), 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
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Selling Shareholders or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contribution 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 which does not
take account of the equitable considerations referred to above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to above shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating, defending, settling or
compromising any such claim. Notwithstanding the provisions of this subsection
(d), (x) no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the shares of the Stock
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and (y) no Summit Selling Shareholder shall be required to
contribute any amount in excess of the net proceeds (before deducting offering
expenses) received by such Summit Selling Shareholder from the sale of Stock in
the Offering. The Underwriters' obligations to contribute are several in
proportion to their respective underwriting obligations and not joint. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall
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be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. Survival of Indemnities, Representations, Warranties, etc.
The respective indemnities, covenants, agreements, representations, warranties
and other statements of the Company, the Selling Shareholders and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Selling
Shareholders, the Company or any of its officers or directors or any controlling
person, and shall survive delivery of and payment for the Stock.
8. Conditions of Underwriters' Obligations. The respective
obligations of the several Underwriters hereunder shall be subject to the
accuracy, at and (except as otherwise stated herein) as of the date hereof, at
and as of each Closing Date, of the representations and warranties made herein
by the Company and the Selling Shareholders, to compliance at and as of each
Closing Date by the Company and the Selling Shareholders with their covenants
and agreements herein contained and other provisions hereof to be satisfied at
or prior to the Closing Dates, and to the following additional conditions:
(a) The Registration Statement shall have become
effective and no stop order suspending the effectiveness thereof shall
have been issued and no proceedings for that purpose shall have been
initiated or, to the knowledge of the Company or the Representatives,
shall be threatened by the Commission, and any request for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representatives.
Any filings of the Prospectus, or any supplement thereto, required
pursuant to Rule 424(b) or Rule 434 of the Rules and Regulations, shall
have been made in the manner and within the time period required by
Rule 424(b) and Rule 434 of the Rules and Regulations, as the case may
be.
(b) The Representatives shall have been satisfied
that there shall not have occurred any change, on a consolidated basis,
prior to each Closing Date in the condition (financial or otherwise),
properties, business, management, prospects, net worth or results of
operations of the Company and its subsidiaries considered as a whole,
or any change in the capital stock, short-term or long-term debt of the
Company and its subsidiaries considered as a whole, such that (i) the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact which, in the
opinion of the Representatives, is material, or omits to state a fact
which, in the opinion of the Representatives, is required to be stated
therein or is necessary to make the statements therein not misleading,
or
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(ii) it is unpracticable in the reasonable judgment of the
Representatives to proceed with the public offering or purchase the
Stock as contemplated hereby.
(c) The Representatives shall be satisfied that no
legal or governmental action, suit or proceeding affecting the Company
which is material and adverse to the Company or which affects or may
affect the Company's or the Selling Shareholders' ability to perform
their respective obligations under this Agreement shall have been
instituted or threatened and there shall have occurred no material
adverse development in any such existing action, suit or proceeding.
(d) At the time of execution of this Agreement, the
Representatives shall have received from Xxxxxx Xxxxxxxx LLP,
independent certified public accountants, a letter, dated the date
hereof, in form and substance satisfactory to the Underwriters.
(e) The Representatives shall have received from
Xxxxxx Xxxxxxxx LLP, independent certified public accountants, a
letter, dated each Closing Date, to the effect that such accountants
reaffirm, as of each Closing Date, and as though made on each Closing
Date, the statements made in the letter furnished by such accountants
pursuant to paragraph (d) of this Section 8.
(f) The Representatives shall have received from
Xxxxxxxx Ingersoll, counsel for the Company and the Selling
Shareholders, an opinion, dated each Closing Date, addressed to the
Underwriters to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of New Jersey.
(ii) The Company has corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and to
enter into and perform its obligations under the Underwriting
Agreement.
(iii) To the best of such counsel's knowledge, the
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which
such qualification is required and in which the failure to so
qualify would, individually or in the aggregate, have a
material adverse effect on the condition (financial or
otherwise), properties, business, management, prospects, net
worth or results of the Company.
(iv) Each subsidiary of the Company (excluding
Intelligroup Europe Limited and Intelligroup New
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Zealand Limited, as to which no opinion is being rendered) has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement
and, to the best of such counsel's knowledge, is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required and in which
the failure to so qualify would, individually or in the aggregate, have
a material adverse effect on the condition (financial or otherwise),
properties, business, management, prospects, net worth or results of
the Company and its subsidiaries taken as a whole; and all of the
issued and outstanding capital stock of each such subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and, to the best of such counsel's knowledge, is owned by the Company
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity, and no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights
to convert any obligations into shares of capital or ownership interest
in any such subsidiary are outstanding.
(v) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization";
and all of the outstanding shares of the Company's capital stock,
including the shares of Stock to be sold by the Company and the Selling
Shareholders pursuant to the Underwriting Agreement, have been duly
authorized and validly issued and are fully paid and non-assessable.
(vi) The issuance and sale of the Stock by the Company and the
sale of the Stock by the Selling Shareholders are not subject to
preemptive rights arising by operation of law or, to the best of such
counsel's knowledge, otherwise.
(vii) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company and each Selling Shareholder.
(viii) The Power of Attorney and Custody Agreement has been
duly authorized, executed and delivered by or on behalf of each Selling
Shareholder.
(ix) Each Attorney-in-Fact has been duly authorized by each
Selling Shareholder to deliver the Stock to be so sold by such Selling
Shareholder on
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behalf of such Selling Shareholder in accordance with the terms of this
Agreement.
(x) Immediately prior to the applicable Closing Date, to the
best knowledge of such counsel after due inquiry of corporate books and
records, review of certificates representing the Shares to be sold by
each Selling Shareholder and review of all representations and
warranties by and certificates from such Selling Shareholder, each
Selling Shareholder had good and valid title to the Stock to be sold by
such Selling Shareholder hereunder on such date, free and clear of all
liens, encumbrances, equities and claims.
(xi) Each Selling Shareholder has full legal right, power and
authority, and has obtained any approval required by law (other than as
required by State securities and Blue Sky laws as to which such counsel
need express no opinion), to sell, assign, transfer and deliver the
Stock to be sold by such Selling Shareholder.
(xii) The Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code) have
acquired good and marketable title to the shares of Stock being sold by
the Selling Shareholders on each Closing Date, free and clear of all
liens, encumbrances, equities and claims.
(xiii) Except as described in the Prospectus, to such
counsel's knowledge, there are no outstanding securities of the Company
convertible or exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and there are
no outstanding or authorized options, warrants or rights of any
character obligating the Company to issue any shares of its capital
stock or any securities convertible or exchangeable into or evidencing
the right to purchase or subscribe for any shares of such stock; and
except as described in the Prospectus, to such counsel's knowledge, no
holder of any securities of the Company or any other person has the
right, contractual or otherwise, which has not been satisfied or
effectively waived, to cause the Company to sell or otherwise issue to
them, or to permit them to underwrite the sale of, any of the shares of
Stock or the right to have any shares of Stock or other securities of
the Company included in the Registration Statement or the right, as a
result of the filing of the Registration Statement, to require
registration under the Securities Act of any shares of Stock or other
securities of the Company.
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(xiv) The Registration Statement is effective under
the Securities Act and, to the best of such counsel's
knowledge, no stop order proceedings with respect thereto have
been instituted or are pending or threatened under the
Securities Act and all filings required by Rule 424(b) of the
Rules and Regulations have been timely made.
(xv) At the time the Registration Statement became
effective and on each Closing Date, the Registration
Statement, the Preeffective Prospectus, the Prospectus and
each amendment or supplement thereto (other than the financial
statements and supporting schedules including therein, as to
which no opinion need be rendered) complied as to form in all
material respects with the requirements of the Securities Act
and the Rules and Regulations.
(xvi) The shares of Stock conform to the description
thereof contained in the Prospectus, and the form of
certificate used to evidence the shares of Stock is in due and
proper form and complies with all applicable statutory
requirements.
(xvii) Such counsel does not know of any contracts or
documents required to be filed as exhibits to the Registration
Statement or described in the Registration Statement or the
Prospectus which are not so filed or described as required,
and such contracts and documents as are summarized in the
Registration Statement or the Prospectus are fairly summarized
in all material respects.
(xviii) There is no litigation or governmental or
other action, suit, proceeding or investigation before any
court or before or by any public, regulatory or governmental
agency or body including, but not limited to, investigations
and proceedings against the Company with respect to INS
issues, known to such counsel to be pending or threatened
against, or involving the properties or business of, the
Company or any of its subsidiaries which is of a character
required to be disclosed in the Registration Statement and the
Prospectus which has not been properly disclosed therein.
(xix) No authorization, approval, consent or order of
any court or governmental authority or agency is required in
connection with the sale of the Stock to the Underwriters,
except such as may be required under the Securities Act or the
Rules and Regulations or State securities law; to the best of
such counsel's knowledge, the execution, delivery and
performance of the Underwriting Agreement and the consummation
of the
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transactions contemplated herein and compliance by the Company
with its obligations hereunder will not conflict with or
constitute a breach of, or default (or an event which with
notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture,
mortgage, deed of trust, note agreement, or other agreement or
instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound, or to
which any of the properties or assets of the Company or any of
its subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company, or any applicable
law, administrative regulation or any order, rule or
regulation known to such counsel of any court, regulatory
body, administrative agency or other governmental body having
jurisdiction over the Company or any of its subsidiaries.
(xx) The statements under the captions "Description
of Capital Stock," insofar as they purport to constitute a
summary of the terms of the share capital, "Certain
Transactions," and "Shares Eligible for Future Sale," in the
Prospectus, insofar as they constitute a summary of relevant
matters of law, the Company's Certificate of Incorporation or
documents referred to therein, and "Principal and Selling
Shareholders" are in all material respects accurate summaries
and fairly and correctly present the information called for
with respect to such documents and matters; the descriptions
of certain provisions of the Company's stock option plans
contained under the caption "Management" are materially
accurate; and the statements made with respect to Rule 144
under the Act set forth in "Shares Eligible for Future Sale"
are fair and correct statements about the provisions described
without purporting to summarize or describe all material
aspects of those rules and regulations.
(xxi) The Company has options to purchase shares of
the Company's capital stock as set forth in the Prospectus;
and all of such granted options have been duly and validly
authorized by the Company and conform to the descriptions
thereof contained in the Prospectus.
(xxii) To the best of such counsel's knowledge, and
except as disclosed in the Registration Statement and
Prospectus, nothing has come to such counsel's attention which
indicates that the Company is not conducting its business in
compliance with all laws,
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rules and regulations of the United States of America and of
the State of New Jersey except for such violations that would
not, individually or in the aggregate, have a material adverse
effect on the Company's condition (financial or otherwise),
properties, business, management, prospects, net worth or
results.
(xxiii) The Company is not, and will not become, as a
result of the consummation of the transactions contemplated by
the Underwriting Agreement, and application of the net
proceeds therefrom as described in the Prospectus, required to
register as an investment company under the Investment Company
Act.
(xxiv) The Company is not and will not become, as a
result of the consummation of the transactions contemplated by
the Underwriting Agreement, and the application of the net
proceeds therefrom as described in the Prospectus, (a) a
controlled foreign corporation, as such term is defined in the
Code, (b) a passive foreign investment company within the
meaning of Section 1296(a) of the Code or (c) a foreign
personal holding corporation, as such term is defined in the
Code.
(xxv) The shares of Stock to be sold under the
Underwriting Agreement to the Underwriters are duly authorized
for quotation and trading on the Nasdaq National Market,
subject to official notice of effectiveness.
(xxvi) To the best of such counsel's knowledge, the
Company is not subject to any current claim and has not
received any notice of infringement or other violation of any
copyright, copyright application, trade secret, trademark,
service xxxx, trademark registration or other proprietary
information or materials (collectively, "Intellectual
Property") of others; to the best of such counsel's knowledge
and except as set forth in the Prospectus, (A) there are no
legal or governmental proceedings pending relating to
Intellectual Property owned or used by the Company or any of
its subsidiaries, other than review of pending copyright
applications and trademark or service xxxx registrations, and
(B) no such proceedings, including without limitation
interference proceedings, are currently threatened or
contemplated by governmental authorities or others; such
counsel has no knowledge of any facts which would preclude the
Company from having clear title to the Company's Intellectual
Property. Except as otherwise described in the Prospectus,
such counsel has no knowledge of any facts that the Company
lacks any rights or licenses to use all Intellectual
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Property materially necessary to the conduct of its business
as now being or proposed to be conducted by the Company as
described in the Prospectus. To such counsel's knowledge, the
Company has not received any notice of conflict with rights or
claims of others with respect to any Intellectual Property
owned or currently being used by, or intended to be used by
it, except as described in the Prospectus.
(xxvii) The Indemnification Agreement, the Escrow
Agreement and the Pledge Agreement have been duly executed and
delivered by each of the Principal Shareholders and each
constitutes the legal, valid and binding obligation of such
Principal Shareholder, enforceable against such Principal
Shareholder in accordance with its terms and, in the case of
the Indemnification Agreement, except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general
application relating to or affecting the enforcement of
creditors' rights and the application of equitable principles
relating to the availability of remedies.
(xxviii) To the best of such counsel's knowledge, the
execution, delivery and performance of the Indemnification
Agreement, the Escrow Agreement and the Pledge Agreement and
the compliance by the Principal Shareholders with their
obligations thereunder will not conflict with, or constitute a
breach of, or default (or an event which with notice or lapse
of time, or both, would constitute a default) by any Principal
Shareholder under any indenture, mortgage, deed of trust,
trust (constructive or other), loan agreement, lease,
franchise, license or other agreement or instrument to which
any Principal Shareholder or any of his properties is bound,
or any judgment of any court or governmental agency or body
applicable to such Principal Shareholder or any of his
properties, or to any statute, decree, order, rule or
regulation of any court or governmental agency or body
applicable to such Principal Shareholder or any of his
properties.
(xxix) The provisions of the Escrow Agreement and the
Pledge Agreement are effective to create in favor of the
Escrow Agent for the benefit of the Company a valid and
enforceable security interest in the cash and Pledged Shares
described therein. Upon the delivery to the Escrow Agent of
certificates evidencing (a) such Pledged Shares and duly
executed transfer instruments with respect thereto and (b) the
cash provided for in the Escrow Agreement, the Pledge
Agreement and the Escrow Agreement, respectively, created in
favor of the Escrow Agent for the benefit of
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the Company a perfected security interest in such Pledged
Shares and cash which rank prior to any security interest
which may be created under the Uniform Commercial Code of the
State of New Jersey. In rendering the foregoing opinion, such
counsel may assume that the Escrow Agent acted in good faith
and without notice or knowledge of any adverse claim to any of
such Pledged Shares.
(xxx) No stamp or other issuance or transfer taxes or
duties are payable in the State of New Jersey or in the State
of New York in connection with (a) the sale and delivery by
the Selling Shareholders of the Stock owned by them to the
Underwriters in the manner contemplated under this Agreement
or (b) the consummation of any other transaction contemplated
by this Agreement in connection with the issuance and sale of
the Stock by the Selling Shareholders.
In rendering such opinion, Xxxxxxxx Xxxxxxxxx may
rely (A) as to all matters governed other than by United States federal
laws and the laws of the State of New York and the State of New Jersey
and on local counsel in the relevant jurisdictions reasonably
satisfactory to the Representatives and counsel to the Underwriters,
provided that in each case Xxxxxxxx Ingersoll shall state that they
believe that they and the Underwriters are justified in relying on such
other counsel; and (B) as to matters of fact, to the extent they deem
proper, on the representations and warranties of the Company set forth
in this Agreement and on certificates of responsible officers of the
Company or its subsidiaries and certificates or other written
statements of officers of departments of various jurisdictions having
custody of documents respecting the corporate existence or good
standing of the Company or of its subsidiaries; provided that copies of
any such statements or certificates shall be delivered to counsel to
the Underwriters. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has
come to the attention of such counsel which leads them to believe that
the Registration Statement, as of the time it became effective under
the Securities Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the Securities Act),
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
amendment or supplement thereto, on the date it was filed pursuant to
Rule 424(b), and the Registration Statement and the Prospectus, or any
amendment or supplement thereto, as of each Closing Date, 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
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light of the circumstances under which they were made, not
misleading (except that such counsel need express no view as
to financial statements, schedules and other financial
information included therein). With respect to such statement,
Xxxxxxxx Xxxxxxxxx may state that their belief is based upon
the procedures set forth therein, but is without independent
check and verification.
(g) The Representatives shall have received from
Mulla & Mulla & Craigie Blunt & Caroe, local Indian counsel for the
Company and the Selling Shareholders, an opinion, dated each Closing
Date, addressed to the Underwriters to the effect that:
(i) Intelligroup Asia has been duly incorporated as a
private company under the provisions of the Companies Act,
1956 which is the law governing, inter alia, limited liability
companies in India. Intelligroup Asia is validly existing as a
private company in good standing under the laws of India.
(ii) Intelligroup Asia has corporate power and
authority to own, lease and operate its properties, and to
conduct its business as described in the Registration
Statement and to enter into and perform its obligations under
the Take-over Agreement and the Support Agreement.
(iii) Intelligroup Asia is entitled to the benefit of
all instruments (including, but not limited to, contracts,
leases, lease deeds, bonds, agreements, permissions, and
approval certificates) acquired by Ms. Intelligroup Asia,
prior to and subsequent to the execution of the Take-Over
Agreement, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim, charge or equity.
(iv) Intelligroup Asia has not borrowed any amount
from any bank, financial institution or other creditor. So far
as Ms. Intelligroup Asia is concerned, its indebtedness is as
reflected in its balance sheet for the year ended March 31,
1996, which is annexed to the Take-Over Agreement.
(v) Xxxxxxxx Xxxxxx is a non-resident Indian under
the exchange control laws of India and all necessary filings
have been made with governmental authorities of India
including, but not limited to, the Reserve Bank, for Xx.
Xxxxxx to freely invest by way of capital contribution in
Intelligroup Asia.
(vi) To the best of such counsel's knowledge,
Intelligroup Asia is duly qualified as a company incorporated
under the Xxxxxxxxx Xxx, 0000 to transact
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business and is in good standing in Indian jurisdiction in
which such qualification is required and in which the failure
to so qualify would, individually or in the aggregate, have a
material adverse effect on the condition (financial or
otherwise), properties, business, management, prospects, net
worth or results of Intelligroup Asia or the Company; the 200
Asia Shares owned by Xxxxxxxx Xxxxxx, the 200 Asia Shares
owned by Xxxxxxxx Xxxxxxxxxxxx, the 100 Asia Shares owned by
K. Xxxx Xxxxxx and the 100 Asia Shares owned by X. Xxxxxx
represent all of the issued and outstanding capital stock of
Intelligroup Asia and all such capital stock has been duly
authorized and validly issued, is fully paid and
non-assessable and, to the best of such counsel's knowledge,
is owned, as described in the Registration Statement and
Prospectus, by Xx. Xxxxxx, Xx. Xxxxxxxxxxxx, Xx. Xxxxxx and
Xx. Xxxxxx, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim, charge or equity, and no
options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any
obligations into shares of capital or ownership interest in
Intelligroup Asia are outstanding, save and except the
transactions contemplated by the Fifth and Fourth Transfer
Agreements, respectively.
(vii) Each of the Intelligroup Asia Documents has
been duly executed and delivered by the parties thereto
subject to the requisite permissions/approvals of the Reserve
Bank of India and constitutes the legal, valid and binding
obligations of the parties thereto, enforceable against them
in accordance with its terms.
(viii) To the best of such counsel's knowledge, the
execution, delivery and performance of the Intelligroup Asia
Documents and the compliance by each party thereto with its
obligations thereunder will not conflict with, or constitute a
breach of, or default (or an event which with notice or lapse
of time, or both, would constitute a default) under any (1)
indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other
agreement or instrument to which any party to the Intelligroup
Asia Documents or any of his properties is bound, (2) any
judgment of any court or governmental agency or body
applicable to it or any of its properties, or (3) any statute,
decree, order, rule or regulation of any court or governmental
agency or body applicable to it or any of its properties.
(ix) Each of K. Xxxx Xxxxxx and X. Xxxxxx has full
legal right, power and authority, and has applied for
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any and all approvals required by law, to sell, assign,
transfer and deliver 100 Asia Shares each (the "Transfer
Shares") to Xxxxx Xxxxxx pursuant to Fifth and Fourth Transfer
Agreements, respectively. Each such Agreement requires
approval only of the Reserve Bank to complete the transfer of
the Transfer Shares from Xx. Xxxxxx and Xx. Xxxxxx to Xx.
Xxxxxx, for which all necessary applications have been made,
and such counsel has no reason to believe that approvals for
the Transfer Shares from Xx. Xxxxxx and Xx. Xxxxxx to Xx.
Xxxxxx will not be granted.
(x) Each Principal Shareholder has full legal right,
power and authority, and has obtained any and all approvals
required by law, to sell, assign, transfer and deliver all 600
issued and outstanding Asia Shares to the Company pursuant to
the First, Second and Third Transfer Agreements, respectively.
Each such Agreement requires approval only of the Reserve Bank
to complete the transfer of all issued and outstanding Asia
Shares from Xx. Xxxxxx, Xx. Xxxxxxxxxxxx and Xx. Xxxxxx to the
Company, all necessary applications are proposed to be made
immediately subsequent to obtaining the approvals of the
Reserve Bank pursuant to Section 8(g)(ix) above, and such
counsel has no reason to believe that approval by the Reserve
Bank for transfer of all the issued and outstanding Asia
Shares from Xx. Xxxxxx, Xx. Xxxxxxxxxxxx and Xx. Xxxxxx to the
Company will not be granted.
(xi) To the best of such counsel's knowledge, there
are no outstanding securities of Intelligroup Asia convertible
or exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of Intelligroup Asia
and there are no outstanding or authorized options, warrants
or rights of any character obligating Intelligroup Asia to
issue any shares of its capital stock or any securities
convertible or exchangeable into or evidencing the right to
purchase or subscribe for any shares of such stock; and, to
the best of such counsel's knowledge, no holder of any
securities of Intelligroup Asia or any other person has the
right, contractual or otherwise, which has not been satisfied
or effectively waived, to cause Intelligroup Asia to sell or
otherwise issue to them, or to permit them to underwrite the
sale of, any of the shares of Stock of Intelligroup Asia or
the right to have any shares of Stock of Intelligroup Asia or
other securities of Intelligroup Asia or the right, as a
result of the filing of the Registration Statement, to require
registration under the Securities Act of any shares of Stock
of Intelligroup Asia or other securities of Intelligroup Asia.
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(xii) The form of certificate used to evidence the
shares of Stock of Intelligroup Asia is in due and proper form
and complies with all applicable statutory requirements. Under
the Indian law, this is governed by the Companies Act, 1956,
read with the Companies (Issue of Share Certificates) Rules,
1960.
(xiii) All contracts and documents with respect to
Intelligroup Asia summarized in the Registration Statement or
the Prospectus are fairly summarized in all material respects.
(xiv) Such counsel is not aware of any litigation or
governmental or other action, suit, proceeding or
investigation before any court or before or by any public,
regulatory or governmental agency or body including, but not
limited to, investigations and proceedings against
Intelligroup Asia known to such counsel to be pending or
threatened against, or involving the properties or business
of, the Company or Intelligroup Asia.
(xv) Except for the approvals of the Reserve Bank of
India with respect to the Transfer Agreements and the Support
Agreement, no authorization, approval, consent or order of any
court or governmental authority or agency is required in
connection with the execution of the Intelligroup Asia
Documents; to the best of such counsel's knowledge, the
execution, delivery and performance of the Intelligroup Asia
Documents and the consummation of the transactions
contemplated therein and compliance by each of the parties
thereto will not conflict with or constitute a breach of, or
default (or an event which with notice or lapse of time, or
both, would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of Intelligroup Asia or the Company or
any of its subsidiaries pursuant to, any indenture, mortgage,
deed of trust, note agreement, or other agreement or
instrument to which Intelligroup Asia or the Company or any of
its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the properties or assets of
Intelligroup Asia or the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the
provisions of the Memorandum and Articles of Association of
Intelligroup Asia or the Certificate of Incorporation of the
Company, or any applicable law, administrative regulation or
any order, rule or regulation known to such counsel of any
court, regulatory body, administrative agency or other
governmental body having jurisdiction over Intelligroup Asia
or the Company or any of its subsidiaries.
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(xvi) The statements in the Prospectus under the
captions "International Operations" and "Certain Transactions"
insofar as they purport to constitute a summary of the terms
of the ownership of Intelligroup Asia are in all material
respects accurate summaries and fairly and correctly present
the information called for with respect to such documents and
matters.
(xvii) Nothing has come to such counsel's attention
which indicates that Intelligroup Asia is not conducting its
business in compliance with all laws, rules and regulations of
India except for such violations that would not, individually
or in the aggregate, have a material adverse effect on
Intelligroup Asia's condition (financial or otherwise),
properties, business, management, prospects, net worth or
results.
(xviii) Intelligroup Asia is not subject to any
current claim and has not received any notice of infringement
or other violation of any Intellectual Property of others; to
the best of such counsel's knowledge, (A) there are no legal
or governmental proceedings pending relating to Intellectual
Property owned or used by Intelligroup Asia and (B) no such
proceedings, including without limitation interference
proceedings, are currently threatened or contemplated by
governmental authorities or others; such counsel has no
knowledge of any facts which would preclude Intelligroup Asia
from having clear title to Intelligroup Asia's Intellectual
Property. Such counsel has no knowledge of any facts that
Intelligroup Asia lacks any rights or licenses to use all
Intellectual Property materially necessary to the conduct of
its business as now being or proposed to be conducted by
Intelligroup Asia as described in the Prospectus. To such
counsel's knowledge, Intelligroup Asia has not received any
notice of conflict with rights or claims of others with
respect to any Intellectual Property owned or currently being
used by, or intended to be used by it, except as described in
the Prospectus.
In rendering such opinion, Mulla & Mulla & Craigie
Blunt & Caroe may rely as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Intelligroup
Asia or its subsidiaries and certificates or other written statements
of officers of departments of various jurisdictions having custody of
documents respecting the corporate existence or good standing of
Intelligroup Asia or of its subsidiaries; provided that copies of any
such statements or certificates shall be delivered to counsel to the
Underwriters. In addition to the matters set forth above, such opinion
shall also include a statement to
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the effect that nothing has come to the attention of such counsel which
leads them to believe that the Registration Statement, as of the time
it became effective under the Securities Act (but after giving effect
to any modifications incorporated therein pursuant to Rule 430A under
the Securities Act), contained, in relation to Intelligroup Asia, 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 amendment or
supplement thereto, on the date it was filed pursuant to Rule 424(b),
and the Registration Statement and the Prospectus, or any amendment or
supplement thereto, as of the Closing Date, contain, in relation to
Intelligroup Asia, 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 were made, not misleading (except that such counsel need
express no view as to financial statements, schedules and other
financial information included therein). With respect to such
statement, Mulla & Mulla & Craigie Blunt & Caroe may state that their
belief is based upon the procedures set forth therein, but is without
independent check and verification.
(h) The Representatives shall have received from
Fragomen, Del Rey & Xxxxxxx, P.C. ("Fragomen"), special immigration
counsel for the Company and the Selling Shareholders, an opinion, dated
each Closing Date, addressed to the Underwriters to the effect that:
(i) The statements under the caption "Legal
Proceedings," insofar as they relate to INS matters, are in
all material respects accurate summaries and fairly and
correctly present the investigations of the Company by the
Immigration and Naturalization Service or any other
Governmental Authority concerning violations of the INS
Regulations.
(ii) There is no litigation or governmental
or other action, suit, proceeding or investigation before any
court or before or by any public, regulatory or governmental
agency or body with respect to matters arising under the INS
Regulations known to such counsel to be pending or threatened
against, or involving the properties or business of, the
Company or any of its subsidiaries which is of a character
required to be disclosed in the Registration Statement and the
Prospectus which has not been properly disclosed therein.
In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has
come to the attention of such counsel which
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leads them to believe that, with respect to all INS related issues, the
Registration Statement, as of the time it became effective under the
Securities Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the Securities Act),
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
amendment or supplement thereto, on the date it was filed pursuant to
Rule 424(b), and the Registration Statement and the Prospectus, or any
amendment or supplement thereto, as of each Closing Date, with respect
to such INS-related issues, 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 were made, not misleading. With respect
to such statement, Fragomen may state that their belief is based upon
the procedures set forth therein, but is without independent check and
verification.
(i) The Representatives shall have received from
Xxxxxxx Xxxx & Xxxxxxxxx counsel for the Underwriters, their opinion or
opinions dated each Closing Date with respect to the incorporation of
the Company, the validity of the Stock, the Registration Statement and
the Prospectus and such other related matters as it may reasonably
request, and the Company and the Selling Shareholders shall have
furnished to such counsel such documents as they may request for the
purpose of enabling them to pass upon such matters.
(j) The Representatives shall have received a
certificate, dated each Closing Date, of the chief executive officer or
the President and the chief financial or accounting officer of the
Company to the effect that:
(i) No stop order suspending the
effectiveness of the Registration Statement has been
issued, and, to the best of the knowledge of the
signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the
Securities Act;
(ii) Neither any Preeffective
Prospectus, as of its date, nor the Registration
Statement nor the Prospectus, nor any amendment or
supplement thereto, as of the time when the
Registration Statement became effective and at all
times subsequent thereto up to the delivery of such
certificate, included any untrue statement of a
material fact or omitted to state any material fact
required to be stated therein or necessary to make
the statements therein, in light of the
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circumstances under which they were made, not
misleading;
(iii) Subsequent to the respective
dates as of which information is given in the
Registration Statement and the Prospectus, and except
as set forth or contemplated in the Prospectus,
neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations,
direct or contingent, nor entered into any material
transactions not in the ordinary course of business
and there has not been any material adverse change in
the condition (financial or otherwise), properties,
business, management, prospects, net worth or results
of operations of the Company and its subsidiaries
considered as a whole, or any change in the capital
stock, short-term or long-term debt of the Company
and its subsidiaries considered as a whole;
(iv) The representations and
warranties of the Company in this Agreement are true
and correct at and as of each Closing Date, and the
Company has complied with all the agreements and
performed or satisfied all the conditions on its part
to be performed or satisfied at or prior to each
Closing Date; and
(v) Since the respective dates as of
which information is given in the Registration
Statement and the Prospectus, and except as disclosed
in or contemplated by the Prospectus, (i) there has
not been any material adverse change or a development
involving a material adverse change in the condition
(financial or otherwise), properties, business,
management, prospects, net worth or results of
operations of the Company and its subsidiaries
considered as a whole; (ii) the business and
operations conducted by the Company and its
subsidiaries have not sustained a loss by strike,
fire, flood, accident or other calamity (whether or
not insured) of such a character as to interfere
materially with the conduct of the business and
operations of the Company and its subsidiaries
considered as a whole; (iii) no legal or governmental
action, suit or proceeding is pending or threatened
against the Company which is material to the Company,
whether or not arising from transactions in the
ordinary course of business, or which may materially
and adversely affect the transactions contemplated by
this Agreement; (iv) since such dates and except as
so disclosed, the Company has not incurred any
material liability or obligation, direct,
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contingent or indirect, made any change in its
capital stock (except pursuant to its stock plans),
made any material change in its short-term or funded
debt or repurchased or otherwise acquired any of the
Company's capital stock; and (v) the Company has not
declared or paid any dividend, or made any other
distribution, upon its outstanding capital stock
payable to stockholders of record on a date prior to
each Closing Date.
(k) The Representatives shall have received a
certificate or certificates, dated each Closing Date, of each Selling
Shareholder to the effect that as of the Closing Date its
representations and warranties in this Agreement are true and correct
as if made on and as of each Closing Date, and that it has performed
all its obligations and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
(l) The Company and each Selling Shareholder shall
have furnished to the Representatives such additional certificates as
the Representatives may have reasonably requested as to the accuracy,
at and as of the Closing Dates, of the representations and warranties
made herein by them and as to compliance at and as of each Closing Date
by them with their covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to the Closing Dates, and
as to satisfaction of the other conditions to the obligations of the
Underwriters hereunder.
(m) [Intentionally left blank]
(n) The Indemnification Agreement, the Escrow
Agreement and the Pledge Agreement Shall have been duly executed and
delivered by the parties thereto, shall be in full force and effect and
no default shall exist thereunder; and each of the Principal
Shareholders shall have delivered to the Escrow Agent the cash, Pledged
Shares and other documents and instruments required to be delivered
thereunder.
All opinions, certificates, letters and other
documents will be in compliance with the provisions hereunder only if
they are satisfactory in form and substance to the Representatives. The
Company will furnish to the Representatives conformed copies of such
opinions, certificates, letters and other documents as the
Representatives shall reasonably request. If any of the conditions
hereinabove provided for in this Section shall not have been satisfied
when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such
termination in writing or by telegram at or prior to each Closing Date,
but Cowen shall be entitled to waive any of such conditions.
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9. Effective Date. This Agreement shall become effective
immediately as to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to
all other provisions, at 11:00 a.m. New York City time on the first full
business day following the effectiveness of the Registration Statement or at
such earlier time after the Registration Statement becomes effective as the
Representatives may determine on and by notice to the Company or by release of
any of the Stock for sale to the public. For the purposes of this Section 9, the
Stock shall be deemed to have been so released upon the release for publication
of any newspaper advertisement relating to the Stock or upon the release by you
of telegrams (i) advising Underwriters that the shares of Stock are released for
public offering or (ii) offering the Stock for sale to securities dealers,
whichever may occur first.
10. Termination. This Agreement (except for the provisions of
Section 5) may be terminated by the Company at any time before it becomes
effective in accordance with Section 9 by notice to the Representatives and may
be terminated by the Representatives at any time before it becomes effective in
accordance with Section 9 by notice to the Company. In the event of any
termination of this Agreement under this or any other provision of this
Agreement, there shall be no liability of any party to this Agreement to any
other party, other than as provided in Sections 5, 6 and 11 and other than as
provided in Section 12 as to the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by
the Representatives by notice to the Company (i) if at or prior to the First
Closing Date or the Option Closing Date (only for such portion) trading in
securities on any of the Nasdaq National Market shall have been suspended or
minimum or maximum prices shall have been established on any such exchange or
market, or a banking moratorium shall have been declared by New York or United
States authorities; (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market; (iii) if at or
prior to the First Closing Date or the Option Closing Date (only for such
portion) there shall have been (A) an outbreak or escalation of hostilities
between the United States and any foreign power or of any other insurrection or
armed conflict involving the United States or (B) any change in financial
markets or any calamity or crisis which, in the judgment of the Representatives,
makes it impractical or inadvisable to offer or sell the Firm Stock or Optional
Stock, as applicable on the terms contemplated by the Prospectus; (iv) if there
shall have been any development or prospective development involving
particularly the business or properties or securities of the Company or any of
its subsidiaries or the transactions contemplated by this Agreement, which, in
the judgment of the Representatives, makes it impracticable or inadvisable to
offer or deliver the Firm Stock or the Optional Stock, as applicable on the
terms contemplated by the Prospectus; (v) if there shall be any litigation or
proceeding, pending or threatened, which, in the judgment of the
Representatives, makes it impracticable or
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57
inadvisable to offer or deliver the Firm Stock or Optional Stock, as applicable,
on the terms contemplated by the Prospectus; or (vi) if there shall have
occurred any of the events specified in the immediately preceding clauses (i) -
(v) together with any other such event that makes it, in the judgment of the
Representatives, impractical or inadvisable to offer or deliver the Firm Stock
or Optional Stock, as applicable on the terms contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any other
provisions hereof, if this Agreement shall not become effective by reason of any
election of the Company or the Selling Shareholders pursuant to the first
paragraph of Section 10 or shall be terminated by the Representatives under
Section 8 or Section 10, the Company will bear and pay the expenses specified in
Section 5 hereof and, in addition to its their obligations pursuant to Section 6
hereof, the Company will reimburse the reasonable out-of-pocket expenses of the
several Underwriters (including reasonable fees and disbursements of counsel for
the Underwriters) incurred in connection with this Agreement and the proposed
purchase of the Stock, and promptly upon demand the Company will pay such
amounts to you as Representatives.
12. Substitution of Underwriters. If any Underwriter or
Underwriters shall default in its or their obligations to purchase shares of
Stock hereunder and the aggregate number of shares which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed ten
percent (10%) of the total number of shares underwritten, the other Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
shall so default and the aggregate number of shares with respect to which such
default or defaults occur is more than ten percent (10%) of the total number of
shares underwritten and arrangements satisfactory to the Representatives and the
Company for the purchase of such shares by other persons are not made within
forty-eight (48) hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are
required hereby or agree to take up all or part of the shares of Stock of a
defaulting Underwriter or Underwriters as provided in this Section 12, (i) the
Company and the Selling Shareholders shall have the right to postpone any
Closing Date for a period of not more than five (5) full business days in order
that the Company and the Selling Shareholders may effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective numbers of shares to be
purchased by the remaining Underwriters or substituted Underwriters shall be
taken as the basis of their underwriting
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obligation for all purposes of this Agreement. Nothing herein contained shall
relieve any defaulting Underwriter of its liability to the Company, the Selling
Shareholders or the other Underwriters for damages occasioned by its default
hereunder. Any termination of this Agreement pursuant to this Section 12 shall
be without liability on the part of any non-defaulting Underwriter, the Selling
Shareholders or the Company, except for expenses to be paid or reimbursed
pursuant to Section 5 and except for the provisions of Section 6.
13. Notices. All communications hereunder shall be in writing
and, if sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you, as their Representatives c/o Cowen & Company at Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, with a copy to Xxxxxxx Xxxx & Xxxxxxxxx, One
Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. Xxx, except that notices given to an Underwriter pursuant to Section
6 hereof shall be sent to such Underwriter at the address furnished by the
Representatives or, if sent to the Company or the Selling Shareholders, shall be
mailed, delivered or telegraphed and confirmed c/o Intelligroup, Inc. at 000
Xxxxx Xxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000, with a copy to Xxxxxxxx Xxxxxxxxx,
College Centre, 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, Attention:
Xxxxx X. Xxxxx.
14. Successors. This Agreement shall inure to the benefit of
and be binding upon the several Underwriters, the Company and the Selling
Shareholders and their respective successors and legal representatives. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the persons mentioned in the preceding sentence any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Company and the Selling Shareholders contained in this Agreement shall also be
for the benefit of the person or persons, if any, who control any Underwriter or
Underwriters within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, and the indemnities of the several Underwriters shall
also be for the benefit of each director of the Company, each of its officers
who has signed the Registration Statement and the person or persons, if any, who
control the Company or any Selling Shareholders within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act.
15. Applicable Law; Submission to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to its conflict-of-law principles. Each of the
parties hereto consents to the jurisdiction of and venue in federal and state
courts located
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in the Borough of Manhattan, City and State of New York, over any suit, action
or proceeding with respect to this Agreement.
16. Authority of the Representatives. In connection with this
Agreement, you will act for and on behalf of the several Underwriters, and any
action taken under this Agreement by Cowen, as Representative, will be binding
on all the Underwriters; and any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all the Selling Shareholders.
17. Partial Unenforceability. The invalidity or
unenforceability of any Section , paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section , paragraph or
provision hereof. If any Section , paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
18. General. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section headings in
this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company, the Selling Shareholders and
the Representatives.
19. Counterparts. This Agreement may be signed in two (2) or
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
Any person executing and delivering this Agreement as
Attorney-in-fact for the Selling Shareholders represents by so doing that he has
been duly appointed as Attorney-in-fact by such Selling Shareholder pursuant to
a validly existing and binding Power of Attorney which authorizes such
Attorney-in-fact to take such action.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement between us.
Very truly yours,
INTELLIGROUP, INC.
By:____________________________
Name:Xxxxx Xxxxxx
Title: President
SELLING SHAREHOLDERS LISTED
IN SCHEDULE B
By: Attorney-in-fact
By:________________________
Attorney-in-fact
Acting on behalf of the
Selling Shareholders
listed in Schedule B.
Accepted and delivered in
New York, New York as of
the date first above written.
XXXXX & COMPANY
XXXXXXXXXX SECURITIES
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: Xxxxx & Company
By: Cowen Incorporated,
its general partner
By:______________________________
Title:
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SCHEDULE A
Number of
shares of
Number of shares of Optional
Firm Stock to Be Stock
Name Purchased to Be Purchased
---- --------- ---------------
Xxxxx & Company...............................................
Xxxxxxxxxx Securities.........................................
Total......................................................... 1,800,000 270,000
========= =======
62
SCHEDULE B
Number of
Optional
Number of Firm Shares Shares
to Be Sold to Be Sold
---------- -----------
Intelligroup, Inc............................... 900,000 --
Selling Shareholders
Xxxxx Xxxxxx.................................... 250,000 75,000
Xxxxxxxx Xxxxxx................................. 250,000 75,000
Xxxxxxxx Xxxxxxxxxxxx........................... 250,000 75,000
Summit Investors III, L.P....................... 7,500 2,250
Summit Ventures IV, L.P......................... 142,500 42,750
--------- -------
Total........................................... 1,800,000 270,000
========= =======
