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EXHIBIT 1
SYNTEL, INC.
3,000,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
, 0000
XXXXXXXXX & XXXXX LLC
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXXXX, XXXXXXXX & COMPANY LLC
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Syntel, Inc., a Michigan corporation (herein called the Company), proposes
to issue and sell 3,000,000 shares of its authorized but unissued Common Stock,
no par value (herein called the Common Stock) (said 3,000,000 shares of Common
Stock being herein called the Underwritten Stock). The Company proposes to grant
to the Underwriters (as hereinafter defined) an option to purchase up to 450,000
additional shares of Common Stock (herein called the Option Stock and with the
Underwritten Stock herein collectively called the Stock). The Common Stock is
more fully described in the Registration Statement and the Prospectus
hereinafter mentioned.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters, for whom you are acting,
named in Schedule I hereto (herein collectively called the Underwriters, which
term shall also include any underwriter purchasing Stock pursuant to Section
3(b) hereof). You represent and warrant that you have been authorized by each of
the other Underwriters to enter into this Agreement on its behalf and to act for
it in the manner herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the Securities and
Exchange Commission (herein called the Commission) a registration statement on
Form S-1 (No. 333-28655), including the related preliminary prospectus, for the
registration under the Securities Act of 1933, as amended (herein called the
Securities Act), of the Stock. Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary prospectus (meeting
the requirements of Rule 430A of the rules and regulations of the Commission)
heretofore filed by the Company with the Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean such
registration statement, including all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the Securities Act with
respect to the Stock (herein called a Rule 462(b) registration statement), and,
in the event of any amendment thereto after the effective date of such
registration statement (herein called the Effective Date), shall also mean (from
and after the effectiveness of such amendment) such registration statement as so
amended (including any Rule 462(b) registration statement). The term Prospectus
as used in this Agreement shall mean the prospectus relating to the Stock first
filed with the Commission pursuant to Rule 424(b) and Rule 430A (or if no such
filing is required, as included in the Registration Statement as of the
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1 Plus an option to purchase from the Company up to 450,000 additional shares to
cover over- allotments.
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Effective Date) and, in the event of any supplement or amendment to such
prospectus after the Effective Date, shall also mean (from and after the filing
with the Commission of such supplement or the effectiveness of such amendment)
such prospectus as so supplemented or amended. The term Preliminary Prospectus
as used in this Agreement shall mean each preliminary prospectus included in
such registration statement prior to the time it becomes effective.
The Registration Statement has been declared effective under the Securities
Act, and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The Company has caused to be delivered
to you copies of each Preliminary Prospectus and has consented to the use of
such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company hereby represents and warrants as follows:
(i) Each of the Company and its affiliate, Syntel Software Private
Limited (herein called Syntel-India), has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and authority
to own or lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and as being conducted, and is
duly qualified as a foreign corporation and in good standing in all
jurisdictions in which the character of the property owned or leased or the
nature of the business transacted by it makes qualification necessary
(except where the failure to be so qualified would not have a material
adverse effect on the business, properties, financial condition or results
of operations of the Company and Syntel-India, taken as a whole). The
Company does not own any capital stock or other equity securities of any
entity and has no agreement to acquire any such stock or equity securities,
except for the acquisition of Syntel-India.
(ii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
materially adverse change in the business, properties, financial condition
or results of operations of the Company and Syntel-India, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, other than as set forth in the Registration Statement and the
Prospectus, and since such dates, except in the ordinary course of
business, neither the Company nor Syntel-India has entered into any
material transaction not referred to in the Registration Statement and the
Prospectus.
(iii) The Registration Statement and the Prospectus comply, and on the
Closing Date (as hereinafter defined) and any later date on which Option
Stock is to be purchased, the Prospectus will comply, in all material
respects, with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder; on the Effective Date, the
Registration Statement did not contain any untrue statement of a material
fact and did not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date the Prospectus did not and, on the
Closing Date and any later date on which Option Stock is to be purchased,
will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that none of the representations and warranties in this
subparagraph (iii) shall apply to statements in, or omissions from, the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished in writing to the Company by
Underwriters for use in the Registration Statement or the Prospectus.
(iv) The Stock, when issued and sold to the Underwriters as provided
herein, will be duly and validly issued, fully paid and nonassessable and
will conform to the description thereof in the Prospectus. No further
approval or authority of the shareholders or the Board of Directors of the
Company will be required for the issuance and sale of the Stock as
contemplated herein.
(v) The Company has filed a registration statement on Form 8-A
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (herein called the Exchange Act), and the Stock
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to be issued and sold by the Company has been authorized for listing by The
Nasdaq National Market upon official notice of issuance.
(vi) Each of (a) the Company and Syntel-India has good and marketable
title to all material properties and assets described in the Prospectus as
owned by it, free and clear of any liens, charges, encumbrances or
restrictions other than such as are described in the Prospectus or are not
materially significant or materially important when taken in the aggregate,
(b) the agreements which are filed as Exhibits 10.10 and 10.11 of the
Registration Statement and are described in the Prospectus are valid and
enforceable by the Company except as enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights and rules of law governing specific performance,
injunctive relief and other equitable remedies and, to the knowledge of the
Company, the other contracting party or parties thereto are not in breach
or default in any material respect under any of such agreements, and (c)
the Company and Syntel-India has valid and binding leases for the
properties described in the Prospectus as leased by it.
(vii) The Company has filed all necessary federal and state income and
franchise tax returns, and Syntel-India has filed all necessary foreign tax
returns, and each of the Company and Syntel-India has paid all taxes shown
thereon to the extent they are due or has received extensions for such
payment, and neither the Company nor Syntel-India has any tax deficiency
that has been or, to the knowledge of the Company or Syntel-India, might be
asserted against the Company or Syntel-India, as applicable, which would
materially and adversely affect the business or properties of the Company
and Syntel-India, taken as a whole; all tax liabilities accrued through the
date hereof have been adequately provided for on the books of the Company
in accordance with generally accepted accounting principles.
(viii) Each of the Company and Syntel-India is covered by insurance
underwritten by insurers of recognized financial responsibility in the
amounts and covering such risks as is customary in the business in which it
is engaged.
(ix) To the knowledge of the Company, no labor disturbance by the
employees of the Company or Syntel-India exists or is imminent.
(x) Except as described in the Prospectus, each of the Company and
Syntel-India owns, or if not owned has the right to use, all patents,
patent rights, inventions, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names, copyrights
and other intellectual property rights material to its business described
in the Prospectus. Neither the Company nor Syntel-India has received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing that, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would materially
adversely affect the business operations, financial conditions or income of
the Company and Syntel-India, taken as a whole.
(xi) Neither the Company nor Syntel-India has been advised, and has no
reason to believe, that it is not conducting business in compliance with
all applicable laws, rules and regulations of the jurisdiction in which it
is conducting business except where failure to be so in compliance would
not materially and adversely affect the business or properties of the
Company and Syntel-India, taken as a whole.
(xii) Except as may be described in the Prospectus, there is no
action, proceeding or investigation (of which the Company has been
notified) pending or, to the knowledge of the Company or Syntel-India,
threatened against the Company or Syntel-India before any court or
administrative agency which could reasonably be expected to result in any
material adverse change in the business or condition of the Company and
Syntel-India, taken as a whole.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the
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transactions herein contemplated (except such additional steps as may be
required by the National Association of Securities Dealers, Inc. (herein
called the NASD) or may be necessary under state securities or blue sky
laws in connection with the purchase and distribution of the Stock by the
Underwriters) has been obtained or made and is in full force and effect.
(xiv) Neither the Company nor Syntel-India has incurred any liability
for a fee, commission, or other compensation on account of the employment
of a broker or finder in connection with the transactions contemplated by
this Agreement other than as contemplated hereby.
(xv) The issued and outstanding shares of capital stock of the Company
are as set forth in the Prospectus and such shares have been duly
authorized and validly issued, are fully paid and nonassessable, and
conform in all material respects to the description thereof contained in
the Prospectus and, except as disclosed in the Prospectus, there are no
options, rights or warrants for the purchase from the Company of Common
Stock, or securities convertible into Common Stock and there are no
agreements to which the Company is a party with respect thereto. The form
of certificates for the Stock conforms to the corporate law of the
jurisdiction of the Company's incorporation.
(xvi) The financial statements of the Company and Syntel-India,
together with related notes and schedules as set forth in the Registration
Statement, present fairly the respective financial positions and the
results of operations and cash flows of the Company and Syntel-India, at
the indicated dates and for the indicated periods. Such financial
statements and related schedules have been prepared in accordance with
generally accepted accounting principles, consistently applied throughout
the periods involved, except as disclosed therein, and all adjustments
necessary for a fair presentation of results for such periods have been
made; provided, however, that the unaudited financial statements are
subject to normal year-end audit adjustments (which are not expected to be
material) and do not contain all footnotes required under generally
accepted accounting principles. The summary and selected financial and
statistical data included in the Registration Statement present fairly the
information shown thereon and such data have been compiled on a basis
consistent with the financial statements presented therein and in the books
and records of the Company, as applicable.
(xvii) The pro forma financial statements and other pro forma
information included in the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and other pro
forma information, have been properly compiled on the pro forma basis
described therein, and, in the opinion of the Company, the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate under the circumstances.
(xviii) Each of Coopers & Xxxxxxx LLP, who has certified the financial
statements of the Company, Xxxxxxxx Xxxx & Co., who has certified certain
financial statements of Syntel-India, and X.X. Xxxxxx & Co., who has
certified certain financial statements of Syntel-India, all such financial
statements being filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the Securities
Act and the rules and regulations thereunder.
(xix) Neither the Company nor Syntel-India is, nor with the giving of
notice or lapse of time or both, will be, in violation of or in default
under any agreement, lease or contract included as an exhibit to the
Registration Statement. The execution and delivery of this Agreement, and
the consummation of the transactions herein contemplated and the
fulfillment of the terms hereof, will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any material indenture, mortgage, deed of trust or other material agreement
or instrument to which the Company or Syntel-India is a party.
(xx) Each of the Company and Syntel-India maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that transactions are recorded as necessary to
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permit preparation of financial statements in conformity with generally
accepted accounting principles.
(xxi) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder (herein called ERISA); and each "pension plan"
for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(xxii) No relationship, direct or indirect, exists between or among
the Company or Syntel-India, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or Syntel-India, on the
other hand, which is required to be described in the Prospectus that is not
so described.
(xxiii) Neither the Company nor Syntel-India, nor any director or
executive officer, nor, to the knowledge of the Company, any agent,
employee or other person associated with or acting on behalf of the Company
or Syntel-India, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provisions of the Foreign Corrupt
Practices Act of 1972; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(xxiv) The business, operations and facilities of the Company and
Syntel-India have been and are being conducted in compliance in all
material respects with all applicable laws, ordinances, rules, regulations,
licenses, permits, approvals, plans, authorizations or requirements
relating to health, pollution, protection of health or the environment or
otherwise relating to remediating real property in which the Company has or
had any interest, whether owned or leased, except for such failures to so
comply as would not, individually or in the aggregate, have a material
adverse effect on the business of the Company and Syntel-India, taken as a
whole; and neither the Company nor Syntel-India has received any notice
from a governmental instrumentality or any third party alleging any
violation thereof or liability thereunder, except for such violations or
liabilities which would not, individually or in the aggregate, have a
material adverse effect on the business of the Company and Syntel-India,
taken as a whole.
(xxv) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the 1940 Act
and such rules and regulations.
(xxvi) The Company has validly authorized, executed and delivered the
Stock Purchase Agreement ("Stock Purchase Agreement") between the Company
and the Shareholders (as defined below), filed as Exhibit 10.4 to the
Registration Statement; no consent, approval, authorizations or order of
any court or governmental agency or body is required for the consummation
of the transactions contemplated by the Stock Purchase Agreement, other
than such consents, approvals or authorizations that have been obtained.
(xxvii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
materially adverse change in the business, properties, financial condition
or results of operations of Syntel-India, other than as set forth in the
Registration Statement and the Prospectus, and since such dates, except in
the ordinary course of business, Syntel-India has not entered into any
material transaction not referred to in the Registration Statement and the
Prospectus; and Syntel-India is conducting its business in compliance with
all applicable laws, rules and regulations of the jurisdiction in which it
is conducting business, except where the failure to be so in compliance
would not materially and adversely affect the business or properties of
Syntel-India.
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(b) Each of Xxxxxx Xxxxx and Xxxxxx Xxxxx, shareholders of the Company and
the sole shareholders of Syntel-India (each a "Shareholder" and together the
"Shareholders"), hereby represents and warrants as follows:
(i) The Shareholders (a) own all of the capital stock of Syntel-India,
and all such capital stock has been validly issued, subscribed and paid up
and (b) have validly authorized, executed and delivered the Stock Purchase
Agreement.
(ii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated by the Stock Purchase Agreement, other than such
consents, approvals or authorizations that have been obtained.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
3,000,000 shares of the Underwritten Stock to the several Underwriters and each
of the Underwriters agrees to purchase from the Company the respective aggregate
number of shares of Underwritten Stock set forth opposite its name in Schedule
I. The price at which such shares of Underwritten Stock shall be sold by the
Company and purchased by the several Underwriters shall be $ per share. In
making this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in paragraphs (b) and (c) of this Section 3, the
agreement of each Underwriter is to purchase only the respective number of
shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 8 or 9 hereof) to purchase and pay for
the number of shares of the Stock agreed to be purchased by such Underwriter or
Underwriters, the Company shall immediately give notice thereof to you, and the
non-defaulting Underwriters shall have the right within 24 hours after the
receipt by you of such notice to purchase, or procure one or more other
Underwriters to purchase, in such proportions as may be agreed upon between you
and such purchasing Underwriter or Underwriters and upon the terms herein set
forth, all or any part of the shares of the Stock which such defaulting
Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares
and portion, the number of shares of the Stock which each non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
provided, however, that the non-defaulting Underwriters shall not be obligated
to purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of the
Stock exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of the
Stock which the defaulting Underwriter or Underwriters agreed to purchase shall
not be purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms herein
set forth. In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. If neither the non-defaulting Underwriters nor the Company shall
make arrangements within the 24-hour periods stated above for the purchase of
all the shares of the Stock which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall be terminated without further
act or deed and without any liability on the part of the Company to any
non-defaulting Underwriter and without any liability on the part of any non-
defaulting Underwriter to the Company. Nothing in this paragraph (b), and no
action taken
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hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the Company
grants an option to the several Underwriters to purchase, severally and not
jointly, up to 450,000 shares in the aggregate of the Option Stock from the
Company at the same price per share as the Underwriters shall pay for the
Underwritten Stock. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Stock by the Underwriters and may be exercised
in whole or in part at any time (but not more than once) on or before the
thirtieth day after the date of this Agreement upon written or telegraphic
notice by you to the Company setting forth the aggregate number of shares of the
Option Stock as to which the several Underwriters are exercising the option.
Delivery of certificates for the shares of Option Stock, and payment therefor,
shall be made as provided in Section 5 hereof. The number of shares of the
Option Stock to be purchased by each Underwriter shall be the same percentage of
the total number of shares of the Option Stock to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten Stock, as
adjusted by you in such manner as you deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of the
Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front cover page
and under "Underwriting" in the Registration Statement, any Preliminary
Prospectus and the Prospectus relating to the Stock filed by the Company
(insofar as such information relates to the Underwriters) constitutes the only
information furnished by the Underwriters to the Company for inclusion in the
Registration Statement, any Preliminary Prospectus, and the Prospectus, and you
on behalf of the respective Underwriters represent and warrant to the Company
that the statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock and
the Option Stock (if the option granted by Section 3(c) hereof shall have been
exercised not later than 7:00 A.M., San Francisco time, on the date two business
days preceding the Closing Date), and payment therefor, shall be made at the
office of Xxxxxx Xxxxxxx PLLC , Bloomfield Hills, Michigan, at 7:00 a.m., San
Francisco time, on the fourth business day after the date of this Agreement, or
at such time on such other day, not later than seven full business days after
such fourth business day, as shall be agreed upon in writing by the Company and
you. The date and hour of such delivery and payment (which may be postponed as
provided in Section 3(b) hereof) are herein called the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be exercised after
7:00 a.m., San Francisco time, on the date two business days preceding the
Closing Date, delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made at the office of Xxxxxx Xxxxxxx PLLC ,
Bloomfield Hills, Michigan, at 7:00 a.m., San Francisco time, on the third
business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made to the
Company or its order by one or more certified or official bank check or checks
in same day funds. Such payment shall be made upon delivery of certificates for
the Stock to you for the respective accounts of the several Underwriters against
receipt therefor signed by you. Certificates for the Stock to be delivered to
you shall be registered in such name or names and shall be in such denominations
as you may request at least one business day before the Closing Date, in the
case of Underwritten Stock, and at least one business day prior to the purchase
thereof, in the case of the Option Stock. Such certificates will be made
available to the Underwriters for inspection, checking and packaging at the
offices of Lewco
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Securities Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the business day
prior to the Closing Date or, in the case of the Option Stock, by 3:00 p.m., New
York time, on the business day preceding the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later date on which Option Stock is
purchased for the account of such Underwriter. Any such payment by you shall not
relieve such Underwriter from any of its obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE SHAREHOLDERS. Each of the
Company and, with respect to paragraph (k) only, the Shareholders respectively
covenants and agrees as follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at
the time of effectiveness of the Registration Statement in reliance on Rule
430A and (ii) not file any amendment to the Registration Statement or
supplement to the Prospectus of which you shall not previously have been
advised and furnished with a copy or to which you shall have reasonably
objected in writing or which is not in compliance with the Securities Act
or the rules and regulations of the Commission.
(b) The Company will promptly notify you in the event of (i) the
request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii)
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, (iii) the institution or
notice of intended institution of any action or proceeding for that
purpose, (iv) the receipt by the Company of any notification with respect
to the suspension of the qualification of the Stock for sale in any
jurisdiction, or (v) the receipt by it of notice of the initiation or
threatening of any proceeding for such purpose. The Company will make every
reasonable effort to prevent the issuance of such a stop order and, if such
an order shall at any time be issued, to obtain the withdrawal thereof at
the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you
a signed copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement
becomes effective and, promptly upon the filing thereof, a signed copy of
each post-effective amendment, if any, to the Registration Statement
(together with, in each case, all exhibits thereto unless previously
furnished to you) and will also deliver to you, for distribution to the
Underwriters, a sufficient number of additional conformed copies of each of
the foregoing (but without exhibits) so that one copy of each may be
distributed to each Underwriter, (ii) as promptly as possible deliver to
you and send to the several Underwriters, at such office or offices as you
may designate, as many copies of the Prospectus as you may reasonably
request, and (iii) thereafter from time to time during the period in which
a prospectus is required by law to be delivered by an Underwriter or
dealer, likewise send to the Underwriters as many additional copies of the
Prospectus and as many copies of any supplement to the Prospectus and of
any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing
by you, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or of counsel for the Underwriters, to supplement
or amend the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser of the Stock, the Company will forthwith prepare and file with
the Commission a supplement to the Prospectus or an amended prospectus so
that the Prospectus as so supplemented or amended will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time such Prospectus is delivered to such
purchaser, not
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misleading. If, after the initial public offering of the Stock by the
Underwriters and during such period, the Underwriters shall propose to vary
the terms of offering thereof by reason of changes in general market
conditions or otherwise, you will advise the Company in writing of the
proposed variation, and, if in the opinion either of counsel for the
Company or of counsel for the Underwriters such proposed variation requires
that the Prospectus be supplemented or amended, the Company will forthwith
prepare and file with the Commission a supplement to the Prospectus or an
amended prospectus setting forth such variation. The Company authorizes the
Underwriters and all dealers to whom any of the Stock may be sold by the
several Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance with
the applicable provisions of the Securities Act and the applicable rules
and regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment
to the Registration Statement and any supplement to the Prospectus or any
amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue
sky laws of such jurisdictions as you may designate and, during the period
in which a prospectus is required by law to be delivered by an Underwriter
or dealer, in keeping such qualifications in good standing under said
securities or blue sky laws; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified. The Company will, from time to time, prepare and file such
statements, reports, and other documents as are or may be required to
continue such qualifications in effect for so long a period as you may
reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to
shareholders of the Company and of all information, documents and reports
filed with the Commission (including the Report on Form SR required by Rule
463 of the Commission under the Securities Act).
(h) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the Effective Date,
the Company will make generally available to its security holders an
earnings statement in accordance with Section 11(a) of the Securities Act
and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs
and expenses incident to (i) the preparation, printing and filing with the
Commission and the National Association of Securities Dealers, Inc. of the
Registration Statement, any Preliminary Prospectus and the Prospectus, (ii)
the furnishing to the Underwriters of copies of any Preliminary Prospectus
and of the several documents required by paragraph (c) of this Section 6 to
be so furnished, (iii) the printing of this Agreement and related documents
delivered to the Underwriters, (iv) the preparation, printing and filing of
all supplements and amendments to the Prospectus referred to in paragraph
(d) of this Section 6, (v) the furnishing to you and the Underwriters of
the reports and information referred to in paragraph (g) of this Section 6
and (vi) the printing and issuance of stock certificates, including the
transfer agent's fees.
(j) The Company agrees to reimburse you, for the account of the
several Underwriters, for blue sky fees and related disbursements
(including counsel fees and disbursements and cost of printing memoranda
for the Underwriters) paid by or for the account of the Underwriters or
their counsel in qualifying the Stock under state securities or blue sky
laws and in the review of the offering by the NASD.
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(k) The Company and each of the Shareholders hereby agrees that,
without the prior written consent of Xxxxxxxxx & Xxxxx LLC on behalf of the
Underwriters, the Company or such Shareholder, as the case may be, will
not, for a period of 180 days following the commencement of the public
offering of the Stock by the Underwriters, directly or indirectly, (i)
sell, offer, contract to sell, make any short sale, pledge, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of
any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire Common
Stock or (ii) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences or ownership of Common
Stock, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (A) the Stock
to be sold to the Underwriters pursuant to this Agreement, (B) options to
purchase Common Stock granted under the stock option plan of the Company
described in the Prospectus and (C) shares of Common Stock issued by the
Company under the employee stock purchase plan of the Company described in
the Prospectus.
(l) The Company agrees to use its best efforts to cause all directors
and executive officers to agree that, without the prior written consent of
Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, such person or entity
will not, for a period of 180 days following the commencement of the public
offering of the Stock by the Underwriters, directly or indirectly, (i)
sell, offer, contract to sell, make any short sale, pledge, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of
any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire Common
Stock or (ii) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences or ownership of Common
Stock, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise.
(m) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after
written notice from you advising the Company to the effect set forth above,
forthwith prepare, consult with you concerning the substance of, and
disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor, publication
or event unless the Company shall in good faith believe any such press
release or other public statement would be detrimental to its business or
operations.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Shareholders jointly and severally agree to
indemnify and hold harmless each Underwriter and each person (including each
partner or officer thereof) who controls any Underwriter within the meaning of
Section 15 of the Securities Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Securities Act, the Securities Exchange
Act of 1934, as amended (herein called the Exchange Act), or the common law or
otherwise, and the Company agrees to reimburse each such Underwriter and
controlling person for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement), or the
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omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that (1) the indemnity agreements of the Company contained in
this paragraph (a) shall not apply to any such losses, claims, damages,
liabilities or expenses if such statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by any
Underwriter for use in any Preliminary Prospectus or the Registration Statement
or the Prospectus or any such amendment thereof or supplement thereto and (2)
the indemnity agreement contained in this paragraph (a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages, liabilities or
expenses purchased the Stock which is the subject thereof (or to the benefit of
any person controlling such Underwriter) if at or prior to the written
confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with paragraph (c) of Section 6 hereof. The indemnity agreements of
the Company contained in this paragraph (a) and the representations and
warranties of the Company contained in Section 2 hereof shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any indemnified party and shall survive the delivery of and payment
for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its officers who signs the Registration Statement on his own
behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Securities Act, and the Shareholders from and against any and all
losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise and to reimburse each of them
for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by such
indemnifying Underwriter for use in the Registration Statement or the Prospectus
or any such amendment thereof or supplement thereto. The indemnity agreement of
each Underwriter contained in this paragraph (b) shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any indemnified party and shall survive the delivery of and payment for the
Stock.
(c) Each party indemnified under the provision of paragraphs (a) and (b) of
this Section 7 agrees that, upon the service of a summons or other initial legal
process upon it in any action or suit instituted against it or upon its receipt
of written notification of the commencement of any investigation or
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inquiry of, or proceeding against, it in respect of which indemnity may be
sought on account of any indemnity agreement contained in such paragraphs, it
will promptly give written notice (herein called the Notice) of such service or
notification to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be available
to any party who shall fail so to give the Notice if the party to whom such
Notice was not given was unaware of the action, suit, investigation, inquiry or
proceeding to which the Notice would have related and was prejudiced by the
failure to give the Notice, but the omission so to notify such indemnifying
party or parties of any such service or notification shall not relieve such
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of such
indemnity agreement. Any indemnifying party shall be entitled at its own expense
to participate in the defense of any action, suit or proceeding against, or
investigation or inquiry of, an indemnified party. Any indemnifying party shall
be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the Notice of Defense) to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the counsel
chosen by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding,
except that (A) the indemnifying party or parties shall bear the legal and other
expenses incurred in connection with the conduct of the defense as referred to
in clause (i) of the proviso to the preceding sentence and (B) the indemnifying
party or parties shall bear such other expenses as it or they have authorized to
be incurred by the indemnified party or parties. If, within a reasonable time
after receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under paragraph (a) or (b) of
this Section 7, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in paragraph (a) or (b) of this Section 7 (i) in such proportion as
is appropriate to reflect the relative benefits received by each indemnifying
party from the offering of the Stock or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of each indemnifying party in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Shareholders on the one hand and the Underwriters on the other hand shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Stock received by the Company and the total underwriting
discount received by the Underwriters, as set forth in the table on the cover
page of the Xxxxxxxxxx,
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bear to the aggregate public offering price of the Stock. 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 each indemnifying party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first sentence
of this paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of this paragraph (d). Notwithstanding the provisions of this paragraph
(d), no Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Stock purchased by such Underwriter. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this paragraph (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) Neither the Company nor the Shareholders will, without the prior
written consent of each Underwriter settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which indemnification may be sought hereunder (whether or not such
Underwriter or any person who controls such Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding) unless such settlement, compromise or
consent includes an unconditional release of such Underwriter and each such
controlling person from all liability arising out of such claim, action, suit or
proceeding.
(f) The liability of the Shareholders under the Shareholders'
representations and warranties contained in paragraph (b) of Section 2 hereof
and under the indemnity, contribution and reimbursement agreements contained in
the provisions of this Section 7 and Section 11 hereof shall be limited to
[ ].
8. Termination. This Agreement may be terminated by you at any time prior
to the Closing Date by giving written notice to the Company if after the date of
this Agreement trading in the Common Stock shall have been suspended, or if
there shall have occurred (i) the engagement in major hostilities or an
escalation of major hostilities by the United States or the declaration of war
or a national emergency by the United States on or after the date hereof, (ii)
any outbreak of hostilities or other national or international calamity or
crisis or drastic change in economic or political conditions if the effect of
such outbreak, calamity, crisis or change in economic or political conditions in
the financial markets of the United States would, in the Underwriters'
reasonable judgment, make the offering or delivery of the Stock impracticable,
(iii) suspension of trading in securities generally or a material adverse
decline in value of securities generally on the New York Stock Exchange, the
American Stock Exchange, The Nasdaq Stock Market, or limitations on prices
(other than limitations on hours or numbers of days of trading) for securities
on either such exchange or system, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or
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order of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company and
Syntel-India, taken as a whole, (v) declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in the Underwriters' reasonable opinion has a material
adverse effect on the securities markets in the United States. If this Agreement
shall be terminated pursuant to this Section 8, there shall be no liability of
the Company to the Underwriters and no liability of the Underwriters to the
Company; provided, however, that in the event of any such termination the
Company agrees to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company under
this Agreement, including all costs and expenses referred to in paragraphs (i)
and (j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the several
Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company of all its obligations to be performed hereunder at
or prior to the Closing Date or any later date on which Option Stock is to be
purchased, as the case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective; and no
stop order suspending the effectiveness thereof shall have been issued and
no proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder
and the validity and form of the certificates representing the Stock, all
corporate proceedings and other legal matters incident to the foregoing,
and the form of the Registration Statement and of the Prospectus (except as
to the financial statements contained therein), shall have been approved at
or prior to the Closing Date by Sidley & Austin, counsel for the
Underwriters, exercising reasonable judgment.
(c) You shall have received from Xxxxxx Xxxxxxx PLLC, counsel for the
Company, an opinion, addressed to the Underwriters and dated the Closing
Date, covering the matters set forth in Annex A hereto, and an opinion from
Shah, Xxxxx Xxxxxxx and Phatarpheka, counsel for Syntel-India, addressed to
the Underwriters and dated the Closing Date, covering the matters set forth
in Annex B hereto, and if Option Stock is purchased at any date after the
Closing Date, an additional opinion from each such counsel, addressed to
the Underwriters and dated such later date, confirming that the statements
expressed as of the Closing Date in such opinions remain valid as of such
later date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true
and correct in all material respects and neither the Registration Statement
nor the Prospectus omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, respectively,
not misleading, (ii) since the Effective Date, no event has occurred which
should have been set forth in a supplement or amendment to the Prospectus
which has not been set forth in such a supplement or amendment, (iii) since
the respective dates as of which information is given in the Registration
Statement in the form in which it originally became effective and the
Prospectus contained therein, there has not been any material adverse
change or any development involving a prospective material adverse change
in or affecting the business, properties, financial condition or results of
operations of the Company, whether or not arising from transactions in the
ordinary course of business, and, since such dates, except in the ordinary
course of business, the Company has not entered into any material
transaction not referred to in the Registration Statement in the form in
which it originally became effective and the Prospectus contained therein,
(iv) the Company does not have any material contingent obligations which
are not disclosed in the Registration Statement and the Prospectus, (v)
there are not any pending or known threatened legal proceedings to which
the Company is a party or of which property of the Company is the
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subject which are material and which are not disclosed in the Registration
Statement and the Prospectus, (vi) there are not any franchises, contracts,
leases or other documents which are required to be filed as exhibits to the
Registration Statement which have not been filed as required, and (vii) the
representations and warranties of the Company herein (other than the
representations and warranties contained in Section 2(a)(xxvii)) are true
and correct in all material respects as of the Closing Date or any later
date on which Option Stock is to be purchased, as the case may be.
(e) You shall have received on the Closing Date and on any later date
on which Option Stock is purchased a certificate, dated the Closing Date or
such later date, as the case may be, and signed by the President and the
Chief Financial Officer of the Company, stating that the respective signers
of said certificate have carefully examined the Registration Statement in
the form in which it originally became effective and the Prospectus
contained therein and any supplements or amendments thereto, and that the
statements included in clauses (i) through (vii) of paragraph (d) of this
Section 9 are true and correct.
(f) You shall have received from each of Coopers & Xxxxxxx LLP and
Xxxxxxxx Xxxx & Company, a letter or letters, addressed to the Underwriters
and dated the Closing Date and any later date on which Option Stock is
purchased, confirming that they are independent public accountants with
respect to the Company within the meaning of the Securities Act and the
applicable published rules and regulations thereunder and based upon the
procedures described in their respective letters delivered to you
concurrently with the execution of this Agreement (each herein called the
Original Letter), but carried out to a date not more than three business
days prior to the Closing Date or such later date on which Option Stock is
purchased (i) confirming, to the extent true, that the statements and
conclusions set forth in the Original Letter are accurate as of the Closing
Date or such later date, as the case may be, and (ii) setting forth any
revisions and additions to the statements and conclusions set forth in the
Original Letter which are necessary to reflect any changes in the facts
described in the Original Letter since the date of the Original Letter or
to reflect the availability of more recent financial statements, data or
information. The letters shall not disclose any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company which, in your sole judgment, makes it impractical or
inadvisable to proceed with the public offering of the Stock or the
purchase of the Option Stock as contemplated by the Prospectus.
(g) You shall have received from Coopers & Xxxxxxx LLP a letter
stating that their review of the Company's system of internal accounting
controls, to the extent they deemed necessary in establishing the scope of
their examination of the Company's financial statements as at December 31,
1996, did not disclose any weakness in internal controls that they
considered to be material weaknesses.
(h) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several
jurisdictions, or other evidence satisfactory to you, of the qualification
referred to in paragraph (f) of Section 6 hereof.
(i) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly authorized for listing by The Nasdaq National
Market upon official notice of issuance.
(j) On or prior to the Closing Date, you shall have received from all
holders (prior to the execution of this Agreement) of shares of Common
Stock, or any securities convertible into or exchangeable or exercisable
for or any rights to purchase or acquire Common Stock, agreements, in form
reasonably satisfactory to Xxxxxxxxx & Xxxxx LLC, stating that without the
prior written consent of Xxxxxxxxx & Xxxxx LLC on behalf of the
Underwriters, such person or entity will not, for a period of 180 days
following the commencement of the public offering of the Stock by the
Underwriters, directly or indirectly, (i) sell, offer, contract to sell,
make any short sale, pledge, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of any shares of Common Stock
or any
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securities convertible into or exchangeable or exercisable for or any
rights to purchase or acquire Common Stock or (ii) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Sidley & Austin, counsel for the Underwriters,
exercising reasonable judgment, shall be satisfied that they comply in form and
scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein, to fulfill any of the conditions herein, or to comply with any
provision hereof other than by reason of a default by any of the Underwriters,
the Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the transactions
contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by the Company by giving notice to
you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other obligations
under Section 7 of this Agreement, the Company and the Shareholders hereby
jointly and severally agree to reimburse on a quarterly basis the Underwriters
for all reasonable legal and other expenses incurred in connection with
investigating or defending 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 paragraph (a) of Section 7 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 11 and the
possibility that such payments might later be held to be improper; provided,
however, that (i) to the extent any such payment is ultimately held to be
improper, the persons receiving such payments shall promptly refund them and
(ii) such persons shall provide to the Company and the Shareholders, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to
the benefit of the Company, the Shareholders and the several Underwriters and,
with respect to the provisions of Section 7 hereof, the several parties (in
addition to the Company, the Shareholders and the several Underwriters)
indemnified under the provisions of said Section 7, and their respective
personal representatives, successors and assigns. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation
any legal or equitable remedy or claim under or in respect of this Agreement or
any provision herein contained. The term "successors and assigns" as
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herein used shall not include any purchaser, as such purchaser, of any of the
Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; and if to the Company, shall be mailed,
facsimiled or delivered to it at its office, 0000 Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxx, Xxxxxxxx 00000, Attention: General Counsel and Secretary. All notices
given by telegraph shall be promptly confirmed by letter.
14. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or their respective directors or officers, and (c) delivery and
payment for the Stock under this Agreement; provided, however, that if this
Agreement is terminated prior to the Closing Date, the provisions of paragraphs
(k) and (l) of Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California.
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
SYNTEL, INC.
By
------------------------------------
Xxxx Xxxxxx
Chief Financial Officer
--------------------------------------
Xxxxxx Xxxxx
--------------------------------------
Xxxxxx Xxxxx
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXXXX, XXXXXXXX & COMPANY LLC
By Xxxxxxxxx & Xxxxx LLC
By
----------------------------------
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
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SCHEDULE I
UNDERWRITERS
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
------------ ----------------
Xxxxxxxxx & Xxxxx LLC.......................................
Prudential Securities Incorporated..........................
Xxxxxxxxx, Xxxxxxxx & Company LLC...........................
-------
Total..................................................
=======
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ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF XXXXXX XXXXXXX PLLC
COUNSEL FOR THE COMPANY
(i) The Company (a) has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, (b) is duly qualified as a foreign corporation and in good
standing in each state of the United States of America in which its
ownership or leasing of property requires such qualification except where
the failure to so qualify would not have a material adverse effect upon the
condition (financial or otherwise) or results of operations of the Company,
and (c) has full corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement; provided, that, in making the statement set forth in (b) such
counsel may rely upon a certificate of the Company as to the jurisdictions
in which it owns or leases property or conducts its business.
(ii) The Stock Purchase Agreement between the Company and Xxxxxx Xxxxx
and Xxxxxx Xxxxx, filed as Exhibit 10.4 to the Registration Statement, has
been duly authorized, executed and delivered by the Company;
(iii) Upon the closing of the sale of the Underwritten Stock, the
authorized capital stock of the Company consists of 5,000,000 shares of
Preferred Stock, no par value and 40,000,000 shares of Common Stock, no par
value, and proper corporate proceedings have been validly taken to
authorize such authorized capital stock; the amount of outstanding capital
stock of the Company as set forth in the Prospectus conforms with the stock
ledger of the Company; all of the outstanding shares of such capital stock
have been duly and validly issued and, based upon a certificate of the
President and the Chief Financial Officer of the Company, are fully paid
and nonassessable; the Underwritten Stock and any Option Stock purchased
after the Closing Date, when issued and delivered to and paid for by the
Underwriters as provided in the Underwriting Agreement, will have been duly
and validly issued and be fully paid and nonassessable; the certificates
for the Stock are in due and proper form; and no preemptive rights of, or
rights of refusal in favor of, shareholders exist with respect to the
Stock, or the issue and sale thereof, pursuant to the Articles of
Incorporation or Bylaws of the Company and, to the knowledge of such
counsel, there are no contractual preemptive rights that have not been
waived, rights of first refusal or rights of co-sale which exist with
respect to the issue and sale of the Stock;
(iv) the Registration Statement has become effective under the
Securities Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus is in effect and no proceedings for
that purpose have been instituted or are pending or contemplated by the
Commission;
(v) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial or statistical data
contained therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Securities
Act and with the rules and regulations of the Commission thereunder (the
"Rules");
(vi) the information required to be set forth in the Registration
Statement in answer to Items 9, 10 (insofar as it relates to such counsel)
and 11(c) of Form S-1 is to the best of such counsel's knowledge set forth
therein in all material respects to the extent required by the Securities
Act and the Rules or no response is required with respect to such Items,
and the description of the Company's stock option plan and the options
granted and which may be granted thereunder set forth in the Prospectus
presents the information required to be shown with respect to said plan and
options to the extent required by the Securities Act and the Rules;
(vii) to such counsel's knowledge, there are no franchises, contracts,
leases or documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
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(viii) the Underwriting Agreement has been duly authorized, executed
and delivered by the Company;
(ix) the issue and sale by the Company of the shares of Stock sold by
the Company as contemplated by the Underwriting Agreement do not conflict
with, or result in a breach of, the Articles of Incorporation or Bylaws of
the Company or, to such counsel's knowledge, any agreement or instrument to
which the Company is a party, any applicable law or regulation, or any
order, writ, injunction or decree, of any jurisdiction, court or
governmental instrumentality;
(x) to such counsel's knowledge, no consent, approval, authorization
or order of any court or governmental agency or body is required for the
consummation of the transactions contemplated in the Underwriting
Agreement, except such as have been obtained under the Securities Act and
such as may be required by the NASD or under state securities or blue sky
laws in connection with the purchase and distribution of the Stock by the
Underwriters as to which such counsel need not express any opinion; and
(xi) the Stock issued and sold by the Company has been duly authorized
for listing by The Nasdaq National Market upon official notice of issuance.
Such counsel shall state that, in the course of the preparation of the
Registration Statement and the Prospectus, they have considered the information
set forth therein in light of the matters required to be set forth therein, and
they have participated in conferences with representatives and officers of the
Company, including its internal counsel and independent public accountants,
during the course of which the contents of the Registration Statement and the
Prospectus and related matters were discussed. Such counsel may state that they
have not independently checked the accuracy or completeness of, or otherwise
verified, and accordingly are not passing upon, and do not assume responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus; and such counsel may state that they
have relied as to materiality, to a large extent, upon the judgment of officers
and representatives of the Company. Such counsel shall state, however, that as a
result of such consideration and participation, nothing has come to their
attention which causes them to believe that the Registration Statement (other
than the financial statements, financial data, statistical data and supporting
schedules included therein or in the exhibits thereto, as to which such counsel
need not express any belief), at the time each such Registration Statement
became effective (but after giving effect to Rule 430A under the Securities
Act), contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (other than the financial
statements, financial data, statistical data and supporting schedules included
therein or in the exhibits thereto, as to which such counsel need not express
any belief), as of its date (but after giving effect to Rule 430A under the
Securities Act), included any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
2
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ANNEX B
MATTERS TO BE COVERED IN THE OPINION OF
XXXX XXXXX XXXXXXX AND PHATARPHEKA
COUNSEL FOR SYNTEL INDIA
(1) Syntel India is a corporation duly organized, validly existing and in
good standing under the laws of the country of India and has corporate power and
authority to own, lease and operate its business as now being conducted.
(2) The Stock Purchase Agreement has been duly authorized, executed and
delivered by the Stockholders and constitutes a legal, valid and binding
obligation of the Stockholders.
(3) Neither the execution and delivery of the Stock Purchase Agreement by
the Stockholders and Syntel nor the consummation of the transactions
contemplated thereby (i) will violate the organizational documents of Syntel
India or any law, statute, rule or regulation under the laws of the country of
India, and (ii) will require the consent of any governmental body or agency,
other than the Reserve Bank Permission, which has been duly obtained.
(4) Upon the closing of the transactions contemplated under the Stock
Purchase Agreement, Syntel will own all of the capital stock of Syntel India,
free and clear of all liens, encumbrances and security interests, other than
those referenced in the Reserve Bank Permission.
