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EXHIBIT 1.1
DRAFT 03/10/00
3,000,000 SHARES
CYSIVE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED MARCH __, 2000
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TABLE OF CONTENTS
PAGE
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1. Representations and Warranties of the Company.....................................................2
(a) Effective Registration Statement........................................................2
(b) Contents of Registration Statement......................................................2
(c) Due Incorporation.......................................................................2
(d) Subsidiaries............................................................................2
(e) Underwriting Agreement..................................................................2
(f) Description of Capital Stock............................................................3
(g) Authorized Stock........................................................................3
(h) Validly Issued Shares...................................................................3
(i) No Conflict.............................................................................3
(j) No Material Adverse Change..............................................................3
(k) Legal Proceedings; Exhibits.............................................................3
(l) Compliance with Securities Act..........................................................3
(m) Not an Investment Company...............................................................3
(n) Compliance with Laws....................................................................4
(o) No Environmental Costs..................................................................4
(p) No Registration Rights..................................................................4
(q) Absence of Material Charges.............................................................4
(r) Good Title to Properties................................................................4
(s) Intellectual Property Rights............................................................4
(t) No Labor Disputes.......................................................................5
(u) Insurance...............................................................................5
(v) Governmental Permits....................................................................5
(w) Accounting Controls.....................................................................5
(x) Listing of Common Stock.................................................................5
(y) Year 2000 Compliance....................................................................5
2. Representations and Warranties of the Selling Stockholder.........................................6
(a) Due Authorization.......................................................................6
(b) Selling Stockholder Documents...........................................................6
(c) No Conflict.............................................................................6
(d) Validly Issued Shares...................................................................7
(e) Good Title to Shares....................................................................7
(f) Delivery of Common Shares...............................................................7
(g) No Registration Rights..................................................................7
(h) No Price Stabilization or Manipulation..................................................7
(i) Confirmation of Company Representations and Warranties..................................7
3. Purchase and Sale Agreements......................................................................7
(a) Firm Shares.............................................................................7
(b) Additional Shares.......................................................................7
(c) Market Standoff Provision...............................................................8
(d) Terms of Public Offering................................................................8
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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4. Payment and Delivery..............................................................................8
(a) Firm Shares.............................................................................8
(b) Additional Shares.......................................................................9
(c) Delivery of Certificates................................................................9
5. Covenants of the Company..........................................................................9
(a) Furnish Copies of Registration Statement and Prospectus.................................9
(b) Notification of Amendments or Supplements...............................................9
(c) Filings of Amendments or Supplements....................................................9
(d) Blue Sky Laws..........................................................................10
(e) Earnings Statement.....................................................................10
(f) Use of Proceeds........................................................................10
(g) Transfer Agent.........................................................................10
(h) Periodic Reporting Obligations.........................................................10
(i) Exchange Act Compliance................................................................10
6. Conditions to the Underwriters' Obligations......................................................10
(a) Effective Registration Statement.......................................................10
(b) Rule 462 Registration Statement........................................................10
(c) Prospectus Filed with Commission.......................................................11
(d) No Stop Order..........................................................................11
(e) No NASD Objection......................................................................11
(f) No Debt Downgrading....................................................................11
(g) No Material Adverse Change.............................................................11
(h) Officer's Certificate..................................................................11
(i) Opinion of Company and Selling Stockholder Counsel.....................................11
(j) Opinion of Underwriters Counsel........................................................11
(k) Accountant's Comfort Letter............................................................12
(l) Lock-Up Agreements.....................................................................12
(m) Selling Stockholder Certificate........................................................12
(n) Selling Stockholder Documents..........................................................12
(o) Additional Documents...................................................................12
7. Expenses.........................................................................................12
8. Indemnity and Contribution.......................................................................13
(a) Indemnification of the Underwriters....................................................13
(b) Indemnification of Company by the Selling Stockholder..................................14
(c) Indemnification of Underwriters by Selling Stockholder.................................14
(d) Indemnification by the Underwriters....................................................14
(e) Indemnification Procedures.............................................................15
(f) Limitation of Selling Stockholder Liability............................................16
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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(g) Contribution Agreement.................................................................16
(h) Contribution Amounts...................................................................16
(i) Survival of Provisions.................................................................17
9. Effectiveness....................................................................................17
10. Termination......................................................................................17
11. Defaulting Underwriters..........................................................................17
12. Counterparts.....................................................................................18
13. Headings; Table of Contents......................................................................18
14. Notices..........................................................................................18
15. Successors.......................................................................................19
16. Partial Unenforceability.........................................................................19
17. Governing Law....................................................................................20
18. Entire Agreement.................................................................................20
19. Amendments.......................................................................................20
20. Sophisticated Parties............................................................................20
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March __, 2000
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
First Union Securities Inc.
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
As Representatives of the several Underwriters
c/o Thomas ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Introduction. Cysive, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several underwriters named in Schedule A
hereto (the "UNDERWRITERS"), and certain stockholders of the Company (the
"Selling Stockholders") named in Schedule B hereto propose to sell to the
several Underwriters, an aggregate of 3,000,000 shares of the COMMON STOCK, par
value $.01 per share, of the Company (the "FIRM SHARES"), of which 1,500,000
shares are to be issued and sold by the Company and 1,500,000 shares are to be
sold by the Selling Stockholders.
The Selling Stockholders also propose to issue and sell to the
several Underwriters not more than an additional 450,000 shares of COMMON STOCK,
par value $.01 per share (the "ADDITIONAL SHARES"), if and to the extent that
you shall have determined to exercise, on behalf of the Underwriters, the right
to purchase such shares of common stock granted to the Underwriters in Section 2
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "SHARES". The shares of COMMON STOCK, par value $.01 per
share, of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK". The
Company and the Selling Stockholders are hereinafter sometimes referred to as
the "SELLERS". ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC, First Union Securities Inc.,
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Incorporated and ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated have agreed to act as representatives of the
several Underwriters (in such capacity, the "REPRESENTATIVES") in connection
with the offering and sale of the Shares.
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement on Form S-1 (file no. 333-30822),
including a prospectus, relating to the Shares. The registration statement as
amended at the time it became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION STATEMENT";
the prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "PROSPECTUS". If the Company has filed a registration
statement to register additional shares of Common Stock pursuant to Rule 462(b)
under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any
reference herein to the term
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"REGISTRATION STATEMENT" shall be deemed to include such Rule 462 Registration
Statement. All references in this Agreement to the Registration Statement, the
Rule 462 Registration Statement, a preliminary prospectus, the Prospectus, or
any amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("▇▇▇▇▇").
1. Representatives and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) Effective Registration Statement. The Registration
Statement has become effective; no stop order suspending the effectiveness of
the Registration Statement is in effect, and no proceedings for such purpose are
pending before or, to the knowledge of the Company, threatened by the
Commission.
(b) Contents of Registration Statement. (i) The
Registration Statement, when it became effective, did not contain and, as
amended or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through you expressly for use
therein.
(c) Due Incorporation. The Company has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company.
(d) Subsidiaries. The Company has no subsidiaries.
(e) Underwriting Agreement. This Agreement has been
duly authorized, executed and delivered by the Company, and is a valid and
binding agreement of the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable law
and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
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(f) Description of Capital Stock. The authorized capital
stock of the Company conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus.
(g) Authorized Stock. The shares of Common Stock
outstanding (including the Shares to be sold by the Selling Stockholders) prior
to the issuance of the Shares to be sold by the Company have been duly
authorized and are validly issued, fully paid and non-assessable.
(h) Validly Issued Shares. The Shares to be sold by the
Company have been duly authorized and, when issued and delivered in accordance
with the terms of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.
(i) No Conflict. The execution and delivery by the
Company of, and the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any agreement or other instrument
binding upon the Company that is material to the Company, or any judgment, order
or decree of any governmental body, agency or court having jurisdiction over the
Company, and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be required
by the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares.
(j) No Material Adverse Change. There has not occurred
any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to
the date of this Agreement).
(k) Legal Proceedings; Exhibits. There are no legal or
governmental proceedings pending or, to the knowledge of the Company, threatened
to which the Company or any of its subsidiaries is a party or to which any of
the properties of the Company is subject that are required to be described in
the Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
(l) Compliance with Securities Act. Each preliminary
prospectus filed as part of the registration statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder.
(m) Not an Investment Company. The Company is not and,
after giving effect to the offering and sale of the Shares and the application
of the proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
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(n) Compliance with Laws. The Company (i) is in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) is in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, individually or in the
aggregate, have a material adverse effect on the Company.
(o) No Environmental Costs. There are no costs or
liabilities associated with Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, individually or in the aggregate,
have a material adverse effect on the Company.
(p) No Registration Rights. There are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company or to require
the Company to include such securities with the Shares registered pursuant to
the Registration Statement other than as described in the Registration Statement
and as have been waived in writing in connection with the offering contemplated
hereby.
(q) Absence of Material Charges. Subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus and except for this Agreement, (1) the Company and its
subsidiaries have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary course
of business; (2) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock other than ordinary and customary dividends; and (3)
there has not been any material change in the capital stock, short-term debt or
long-term debt of the Company and its subsidiaries, except in each case as
described in the Prospectus.
(r) Good Title to Properties. The Company does not own
any real property. The Company has good and marketable title to all personal
property owned by it which is material to the business of the Company, in each
case free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by the Company; and any real property and buildings held under
lease by the Company are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the Company.
(s) Intellectual Property Rights. The Company owns or
possesses, or can acquire on reasonable terms, all material patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
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currently employed by it in connection with the business now operated by it, and
the Company has not received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse affect on the Company.
(t) No Labor Disputes. No material labor dispute with
the employees of the Company or any of its subsidiaries exists, or, to the
knowledge of the Company, is imminent; and the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors that could have a material
adverse effect on the Company.
(u) Insurance. The Company is insured by the insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which it is engaged;
and the Company has no 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 have a material adverse effect on the Company.
(v) Governmental Permits. The Company possesses all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
business other than those which, singly or in the aggregate, if not so
possessed, would not have a material adverse effect on the Company, and neither
the Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(w) Accounting Controls. The Company maintains a system
of internal accounting controls sufficient to provide reasonable assurance that
(1) transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (3) access to assets
is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(x) Listing of Common Stock. The Common Stock
(including the Shares and the Directed Shares) is registered pursuant to Section
12(g) of the Exchange Act and is listed on the Nasdaq National Market, and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the Nasdaq National Market, nor has the Company
received any notification that the Commission or the National Association of
Securities Dealers, Inc. (the "NASD") is contemplating terminating such
registration or listing.
(y) Year 2000 Compliance. The Company has reviewed its
operations and that of its subsidiaries and any third parties with which the
Company or any of its subsidiaries has a material relationship to evaluate the
extent to which the business or operations of the Company or its
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subsidiaries will be, or has been, affected by the Year 2000 Problem. As a
result of such review, the Company has no reason to believe, and does not
believe, that the Year 2000 Problem will have, or has had, a material adverse
effect on the Company, or result in any material loss or interference with the
Company's business or operations. The "Year 2000 Problem" as used herein means
any significant risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval, retransmission or
other utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
2. Representations and Warranties of the Selling Stockholders. Each
of the Selling Stockholders represents and warrants to and agrees with each of
the Underwriters that:
(a) Due Authorization. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling Stockholder
and is a valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(b) Selling Stockholder Documents. The Custody Agreement
signed by such Selling Stockholder and First Union National Bank, as Custodian,
relating to the deposit of the Shares to be sold by such Selling Stockholder
(the "CUSTODY AGREEMENT"), which Custody Agreement has been executed only by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇▇▇▇▇▇▇, for himself and as trustee of The ▇▇▇▇
▇▇▇▇▇▇▇ Annuity Trust, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., and the Power of Attorney
appointing certain individuals as such Selling Stockholder's attorneys-in-fact
(the "Attorneys-in-Fact") to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the "POWER
OF ATTORNEY"), have been duly authorized, executed and delivered by such Selling
Stockholder and are valid and binding agreements of such Selling Stockholder,
enforceable in accordance with their respective terms, except as rights to
indemnification thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
(c) No Conflict. The execution and delivery by such
Selling Stockholder of, and the performance by such Selling Stockholder of its
obligations under, this Agreement, the Custody Agreement, if such Selling
Stockholder executed a Custody Agreement, and the Power of Attorney will not
contravene any provision of applicable law, or any agreement or other instrument
binding upon such Selling Stockholder or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over such Selling
Stockholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by such Selling Stockholder of its obligations under this Agreement
or the Custody Agreement, if such Selling Stockholder executed a Custody
Agreement, or Power of Attorney of such Selling Stockholder, except such as may
be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
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(d) Validly Issued Shares. The Shares to be sold by
such Selling Stockholder, if such Selling Stockholder is ▇▇. ▇▇▇▇▇▇▇▇▇, Jr. or
▇▇. ▇▇▇▇▇▇▇, pursuant to this Agreement have been duly authorized and are
validly issued, fully paid and non-assessable.
(e) Good Title to Shares. Such Selling Stockholder has,
and on each Closing Date will have, valid title to the Shares to be sold by such
Selling Stockholder and the legal right and power, and all authorization and
approval required by law, to enter into this Agreement, the Custody Agreement
and the Power of Attorney and to sell, transfer and deliver the Shares to be
sold by such Selling Stockholder.
(f) Delivery of Common Shares. Delivery of the Shares to
be sold by such Selling Stockholder pursuant to this Agreement will pass title
to such Shares free and clear of any security interests, claims, liens, equities
and other encumbrances.
(g) No Registration Rights. Such Selling Stockholder
does not have any registration or other similar rights to have any equity or
debt securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement, other than
as described in the Registration Statement and as have been waived in writing in
connection with the offering contemplated hereby.
(h) No Price Stabilization or Manipulation. Such Selling
Stockholder has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares.
(i) Confirmation of Company Representations and
Warranties. Such Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1 hereof are
not true and correct, is familiar with the Registration Statement and the
Prospectus and has no knowledge of any material fact, condition or information
not disclosed in the Registration Statement or the Prospectus which has had or
may have a material adverse effect on the Company, and is not prompted to sell
any of the Shares by any information concerning the Company which is not set
forth in the Registration Statement and the Prospectus.
3. Purchase and Sale Agreements
(a) Firm Shares. Each Seller, severally and not jointly,
hereby agrees to sell to the several Underwriters, and each Underwriter, upon
the basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the Seller at $_____ a share (the "PURCHASE PRICE") the number of
Firm Shares that bears the same proportion to the number of Firm Shares to be
sold by such Seller as the number of Firm Shares set forth in Schedule A hereto
opposite the name of such Underwriter bears to the total number of Firm Shares.
(b) Additional Shares. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Selling Stockholders, severally and not jointly, agree
to sell to the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 450,000
Additional Shares at the Purchase Price. If you, on behalf of the Underwriters,
elect to exercise such
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option, you shall so notify the Attorneys-in-Fact in writing not later than
thirty (30) days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the Underwriters and the date
on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten (10) business days after the date of such notice. Additional Shares may
be purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule A hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
(c) Market Standoff Provision. Each Seller hereby agrees
that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the 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 Shares to be sold hereunder, (B) the grant by the Company of options
for the purchase of shares of Common Stock under the Amended and Restated 1994
Stock Option Plan or 1999 Employee Stock Purchase Plan and the issuance by the
Company of shares of Common Stock upon the exercise of options or warrants or
the conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing and which is described in the
Prospectus, (C) transactions by any person other than the Company relating to
shares of Common Stock or other securities acquired in open market transactions
after the completion of the offering of the Shares or (D) the issuance by the
Company of shares of Common Stock in an acquisition or other strategic
transaction, provided that the recipients of such shares execute "lock-up
agreements" substantially in the form of Exhibit B hereto.
(d) Terms of Public Offering. The Sellers are advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Sellers
are further advised by you that the Shares are to be offered to the public
initially at $_____ a share (the "PUBLIC OFFERING PRICE") and to certain dealers
selected by you at a price that represents a concession not in excess of $____ a
share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $____ a share, to any
Underwriter or to certain other dealers.
4. Payment and Delivery.
(a) Firm Shares. Payment for the Firm Shares to be sold
by each Seller shall be made to such Seller in immediately available funds
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on March __, 2000, or at such
other time on the same or such other date, not later than March __, 2000, as
shall be
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designated in writing by you. The time and date of such payment are hereinafter
referred to as the "CLOSING DATE".
(b) Additional Shares. Payment for any Additional Shares
shall be made to each Seller in immediately available funds in New York City
against delivery of such Additional Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on the date specified in
the notice described in Section 3(b) or at such other time on the same or on
such other date, in any event not later than April __, 2000, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "OPTION CLOSING DATE".
(c) Delivery of Certificates. Certificates for the Firm
Shares and Additional Shares shall be in definitive form and registered in such
names and in such denominations as you shall request in writing not later than
one (1) full business day prior to the Closing Date or the Option Closing Date,
as the case may be. The certificates evidencing the Firm Shares and Additional
Shares shall be delivered to you on the Closing Date or the Option Closing Date,
as the case may be, for the respective accounts of the several Underwriters,
with any transfer taxes payable in connection with the transfer of the Shares to
the Underwriters duly paid, against payment of the Purchase Price therefor.
5. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) Furnish Copies of Registration Statement and
Prospectus. To furnish to you, without charge, six signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge, prior
to 10:00 a.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 5(c) below, as many
copies of the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Notification of Amendments or Supplements. Before
amending or supplementing the Registration Statement or the Prospectus to
furnish to you a copy of each such proposed amendment or supplement and not to
file any such proposed amendment or supplement to which you reasonably object,
and to file with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed pursuant to
such rule.
(c) Filings of Amendments or Supplements. If, during
such period after the first date of the public offering of the Shares as in the
opinion of counsel for the Underwriters the Prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer (the "PROSPECTUS
DELIVERY PERIOD"), any event shall occur or condition exist as a result of which
it is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose names
and addresses you will furnish to the Company) to which Shares may have been
sold by you on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the
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statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will comply
with law.
(d) Blue Sky Laws. To endeavor to qualify the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions as
you shall reasonably request; provided, however, that the Company shall not be
required to file a general consent to service of process in any foreign
jurisdiction.
(e) Earnings Statement. To make generally available to
its securityholders as soon as practicable, but in any event not later than
eighteen (18) months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Securities Act), an earnings statement of the
Company (which need not be audited) complying with Section 11(a) of the
Securities Act and the rules and regulations thereunder (including, at the
option of the Company, Rule 158).
(f) Use of Proceeds. The Company shall apply the net
proceeds from the sale of the Shares sold by it in the manner described under
the caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and
maintain, at its expense, a registrar and transfer agent for the Common Stock.
(h) Periodic Reporting Obligations. During the
Prospectus Delivery Period, the Company shall file, on a timely basis, with the
Commission and the Nasdaq National Market all reports and documents required to
be filed under the Exchange Act. Additionally, the Company shall file with the
Commission such information on Form 10-Q or Form 10-K as may be required by Rule
463 under the Securities Act.
(i) Exchange Act Compliance. During the Prospectus
Delivery Period, the Company will file all documents required to be filed with
the Commission pursuant to Section 13, 14 or 15 of the Exchange Age in the
manner and within the time periods required by the Exchange Act.
6. Conditions to the Underwriters' Obligations. The obligations of
the Sellers to sell the Shares to the several Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the following conditions:
(a) Effective Registration Statement. The Registration
Statement shall have become effective not later than 8:00 a.m. (New York City
time) on the date hereof.
(b) Rule 462 Registration Statement. If the Company
elects to rely upon Rule 462(b), the Company shall file a Rule 462 Registration
Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., New
York City time, on the date of this Agreement, and the Company shall at the time
of filing either pay to the Commission the filing fee for the Rule 462
Registration Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the Securities Act.
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(c) Prospectus Filed with Commission. The Company shall
have filed the Prospectus with the Commission (including the information
required by Rule 430A under the Securities Act) in the manner and within the
time period required by Rule 424(b) under the Securities Act; or the Company
shall have filed a post-effective amendment to the Registration Statement
containing the information required by such Rule 430A, and such post-effective
amendment shall have become effective.
(d) No Stop Order. No stop order suspending the
effectiveness of the Registration Statement, any Rule 462 Registration
Statement, or any post-effective amendment to the Registration Statement, shall
be in effect and no proceedings for such purpose shall have been instituted or,
to the Company's knowledge, threatened by the Commission.
(e) No NASD Objection. The NASD shall have raised no
objection to the fairness and reasonableness of the underwriting terms and
arrangements.
(f) No Debt Downgrading. There shall not have occurred
any downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act.
(g) No Material Adverse Change. There shall not have
occurred any change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
(h) Officer's Certificate. The Underwriters shall have
received on the Closing Date a certificate, dated the Closing Date and signed by
the Chief Executive Officer or President of the Company, to the effect set forth
in Sections 6(d) and 6(g) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as of
the Closing Date and that the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
(i) Opinion of Company and Selling Stockholders Counsel.
The Underwriters shall have received on the Closing Date an opinion of ▇▇▇▇▇ &
▇▇▇▇▇▇▇ L.L.P., counsel for the Company and the Selling Stockholders, dated the
Closing Date, the form of which is attached hereto as Exhibit A. The opinion
shall be rendered to the Underwriters at the request of the Company and shall so
state therein.
(j) Opinion of Underwriters Counsel. The Underwriters
shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Underwriters, dated the Closing Date, covering the matters
referred to in Exhibit A, the first clause of paragraph (iii) and paragraphs
(iv), (vii) (but only as to the statements in the Prospectus under "Description
of Capital Stock" and "Underwriters") and (xiv). With respect to paragraph (x)
of Exhibit A, such counsel may
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state that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto and review and discussion of the contents thereof, but are
without independent check or verification, except as specified.
(k) Accountant's Comfort Letter. The Underwriters shall
have received, on each of the date hereof and the Closing Date, a letter dated
the date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, from Ernst & Young LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided that the letter delivered on
the Closing Date shall use a "cut-off date" not earlier than the date hereof.
(l) Lock-Up Agreements. The "lock-up" agreements, each
substantially in the form of Exhibit B hereto, between you and certain
shareholders, officers and directors of the Company, delivered to you on or
before the date hereof, shall be in full force and effect on the Closing Date.
(m) Selling Stockholders Certificate. The Underwriters
shall have received on the Closing Date a certificate, dated the Closing Date
and signed by the Attorney-in-Fact of each Selling Stockholder, to the effect
that the representations and warranties of the Selling Stockholders contained in
this Agreement are true and correct as of the Closing Date and that the Selling
Stockholders have complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before the
Closing Date.
(n) Selling Stockholder Documents. On the date hereof,
the Company and the Selling Stockholders shall have furnished for review by the
Representatives copies of the Powers of Attorney and Custody Agreements executed
by each of the Selling Stockholders and such further information, certificates
and documents as the Representatives may reasonably request.
(o) Additional Documents. On the Closing Date, the
Representatives and counsel for the Underwriters shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Shares as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.
7. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Sellers agree to
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's and Selling Stockholders' counsel and the Company's
accountants in connection with the registration and delivery of the Shares under
the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or legal
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investment memorandum in connection with the offer and sale of the Shares under
state securities laws and all expenses in connection with the qualification of
the Shares for offer and sale under state securities laws as contemplated by
Section 5(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the NASD, (v) all costs and
expenses incident to listing the Shares on the Nasdaq National Market and other
national securities exchanges and foreign stock exchanges, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) the costs and expenses of
the Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with the
road show, (ix) all expenses in connection with any offer and sale of the
Shares outside of the United States, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with
offers and sales outside of the United States, and (x) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 7
entitled "Indemnity and Contribution", and the last paragraph of Section 10
below, the Underwriters will pay all of their costs and expenses, including
fees and disbursements of their counsel and any advertising expenses connected
with any offers they may make.
The provisions of this Section shall not supersede or otherwise
affect any agreement that the Sellers may otherwise have for the allocation of
such expenses among themselves.
8. Indemnity and Contribution.
(a) Indemnification of the Underwriters. Each of the
Company and ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., agrees, jointly and severally, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except (i) insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein and (ii) that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit of
any Underwriter from whom the person asserting any loss, claim, damage or
liability purchased Shares, or any person controlling such Underwriter, if
copies of the Prospectus were timely delivered to the
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Underwriter pursuant to Section 5 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. Notwithstanding the
foregoing provisions, ▇▇. ▇▇▇▇▇▇▇▇▇, Jr., shall be liable for indemnification
under this Section 8(a) only if the Company shall have failed to indemnify the
Underwriters in accordance with this Section 8(a) within 90 days after demand
therefor has been made to the Company by the Underwriters.
(b) Indemnification of Company by the Selling
Stockholders. Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder expressly for
use in the Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto.
(c) Indemnification of Underwriters by Selling
Stockholders. Each Selling Stockholder (other than ▇▇. ▇▇▇▇▇▇▇▇▇) agrees,
severally and not jointly, to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with reference
to information relating to such Selling Stockholder furnished in writing by or
on behalf of such Selling Stockholder expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto.
(d) Indemnification by the Underwriters. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, the Selling Stockholders, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company or any Selling Stockholder within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused
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by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only
with reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(e) Indemnification Procedures. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to this Section 8,
such person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing, and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the Company,
its directors, its officers who sign the Registration Statement and each person,
if any, who controls the Company within the meaning of either such Section, and
that all such fees and expenses shall be reimbursed as they are incurred and
(iii) the fees and expenses of more than one separate firm (in addition to any
local counsel) for the Selling Stockholders and all persons, if any, who control
any Selling Stockholder within the meaning of either such Section, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Underwriters and such control persons of any
Underwriters, such firm shall be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇
Partners. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Stockholders and such control persons of any Selling Stockholder,
such firm shall be designated in writing by the persons named as
attorneys-in-fact for the Selling Stockholders under the Powers of Attorney.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of
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any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(f) Limitation of Selling Stockholder Liability. The
liability of each Selling Stockholder under the indemnity and contribution
provisions of this Section 8 shall be limited to an amount equal to the initial
public offering price of the Shares sold by such Selling Stockholder, less the
underwriting discount, as set forth on the front cover page of the Prospectus.
The Company and the Selling Stockholders may agree, as among themselves and
without limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
(g) Contribution Agreement. To the extent the
indemnification provided for in this Section 8 is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party or parties on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause 8(g)(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 8(g)(i) above
but also the relative fault of the indemnifying party or parties on the one hand
and of the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by the Sellers and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the Sellers
on the one hand and the Underwriters on the other hand 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 Sellers or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 8 are several in proportion
to the respective number of Shares they have purchased hereunder, and not joint.
(h) Contribution Amounts. The Sellers and the
Underwriters agree that it would not be just or equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in
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Section 8(g). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. 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 remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(i) Survival of Provisions. The indemnity and
contribution provisions contained in this Section 8 and the representations,
warranties and other statements of the Company contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any
Underwriter, any Selling Stockholder or any person controlling any Underwriter
or Selling Stockholder or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
9. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York or California shall have been declared by either federal
or New York or California state authorities, (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse, or (v) in
the judgment of the Representatives, there shall have occurred any material
adverse change, or any development that could reasonably be expected to result
in a material adverse change, in the condition, financial or otherwise, or in
the earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company, and (b) in the
case of any of the events specified in clauses 10(a)(i) through 10(a)(v), such
event, individually or together with any other such event, makes it, in your
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
11. Defaulting Underwriters. If, on the Closing Date or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares
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which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of the Shares to
be purchased on such date, the other Underwriters shall be obligated severally
in the proportions that the number of Firm Shares set forth opposite their
respective names in Schedule A bears to the aggregate number of Firm Shares set
forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as you may specify, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the number of Shares that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 11 by an amount in excess of one-ninth of such number
of Shares without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased, and arrangements satisfactory to you, the Company and the Selling
Stockholders for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter and the Company. In any such case either you
or the relevant Sellers shall have the right to postpone the Closing Date, but
in no event for longer than seven (7) days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, on the Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional Shares
and the aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
13. Headings; Table of Contents. The headings of the sections of
this Agreement and the table of contents have been inserted for convenience of
reference only and shall not be deemed a part of this Agreement.
14. Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
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If to the Representatives:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to the Company:
Cysive, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
15. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the officers and directors and
controlling persons referred to in Section 7, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The
term "successors,, shall not include any purchaser of the Shares as such from
any of the Underwriters merely by reason of such purchase.
16. 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
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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.
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
18. Entire Agreement. 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.
19. Amendments. This Agreement may only be amended or modified in
writing, signed by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit.
20. Sophisticated Parties. Each of the parties hereto acknowledges
that it is a sophisticated business person who was adequately represented by
counsel during negotiations regarding the provisions hereof, including, without
limitation, the indemnification and contribution provisions of Section 8, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Section 8 hereto fairly allocate the risks
in light of the ability of the parties to investigate the Company, its affairs
and its business in order to assure that adequate disclosure has been made in
the Registration Statement, any preliminary prospectus and the Prospectus (and
any amendments and supplements thereto), as required by the Securities Act and
the Exchange Act.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
CYSIVE, INC.
By:
--------------------------------------
Name:
Title:
The Selling Stockholders named in Schedule B
hereto, acting severally
By:
--------------------------------------
Attorney-in-Fact
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
First Union Securities, Inc.
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule A hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
By:
----------------------------------------
Name:
Title:
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SCHEDULE A
UNDERWRITER NUMBER OF FIRM
SHARES
TO BE PURCHASED
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC,
First Union Securities, Inc.
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
---------
Total 3,000,000
=========
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SCHEDULE B
SELLING STOCKHOLDER NUMBER OF FIRM NUMBER OF ADDITIONAL
SHARES TO BE SOLD SHARES TO BE SOLD
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. 719,200 323,819
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 407,625 _____
▇▇▇▇ ▇. ▇▇▇▇ 71,250 32,080
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 48,375 21,781
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 37,125 16,715
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 29,250 4,500
▇▇▇▇ ▇▇▇▇▇ 6,975 3,141
▇▇▇ ▇▇▇▇▇ 6,750 3,039
▇▇▇▇ ▇▇▇▇▇ 22,500 2,813
▇▇▇▇▇ ▇▇▇▇▇ 15,188 6,838
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 15,560 5,743
The ▇▇▇▇ ▇▇▇▇▇▇▇ Annuity Trust 10,000 _____
▇▇▇▇ ▇▇▇▇ 13,164 4,862
▇▇▇▇ ▇▇▇▇▇ 14,360 5,304
▇▇▇ ▇▇▇▇▇▇▇▇ 14,068 5,196
▇▇▇▇ ▇▇▇▇▇▇▇ 14,360 5,304
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 15,000 _____
▇▇▇▇▇ ▇'▇▇▇▇▇▇ 13,164 4,862
▇▇▇▇ ▇▇▇▇▇▇▇ 10,836 4,002
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2,250 _____
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,000 _____
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. 3,000
----- -----
Total 1,500,000 450,000
========= =======
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EXHIBIT A
FORM OF LEGAL OPINION OF COMPANY COUNSEL
(i) The Company has been duly incorporated, and is validly existing as
a corporation and in good standing as of the date of the certificate, under the
laws of the State of Delaware. The Company has the corporate power and corporate
authority under its Certificate of Incorporation and the Delaware General
Corporation Law to own its property and to conduct its business as described in
the Prospectus and is authorized to transact business as a foreign corporation
and is in good standing as of the respective dates of the certificates and in
each jurisdiction listed in Schedule 1 hereto.
(ii) The authorized, issued and outstanding capital stock of the
Company, as of December 31, 1999, is set forth under the "Actual" column of the
table under the caption "Capitalization" in the Prospectus. All shares of common
stock of the Company shown as issued and outstanding under said column under
said caption (including the Shares to be sold by the Selling Stockholders) are
duly authorized and, assuming the receipt of consideration therefor as provided
in resolutions of the Company's Board of Directors authorizing issuance thereof,
are validly issued, fully paid and non-assessable.
(iii) The Shares to be sold by the Company have been duly authorized,
and when issued and delivered in accordance with the provisions of the
Underwriting Agreement, the Shares will be validly issued, fully paid and
non-assessable. No holder of outstanding shares of common stock of the Company
has any statutory preemptive right under the Delaware General Corporation Law or
the Company's Certificate of Incorporation or Bylaws and no person has any
preemptive right under any agreement or other instrument filed as an exhibit to
the Registration Statement to subscribe for any of the Shares.
(iv) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(v) The execution, delivery and performance as of the date of such
opinion by the Company of its obligations under the Underwriting Agreement do
not (i) violate the Delaware General Corporation Law, the Virginia Corporation
Law or the Certificate of Incorporation or Bylaws of the Company, (ii) breach or
constitute a default under any agreement or other contract binding upon the
Company that has been filed as an exhibit to the Registration Statement, or
(iii) to such counsel's knowledge, violate any judgment, order or decree of any
federal, Delaware or Virginia governmental body, agency or court having
jurisdiction over the Company (other than with respect to federal and state
securities statutes and regulations, certain matters with respect to federal
securities statutes and regulations being addressed elsewhere in the opinion).
(vi) No approval or consent of, or registration or filing with, any
federal, Delaware or Virginia governmental agency or body is required for the
performance as of the date of such opinion by the Company of its obligations
under the Underwriting Agreement, except such as may be required under federal
securities laws (certain matters with respect to which are addressed herein)
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and state securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares (as to which such counsel expresses no
opinion).
(vii) The information (A) in the Prospectus under the captions
"Description of Capital Stock" and "Underwriting" and (B) in the Registration
Statement in Item 15, to the extent that such information constitutes matters of
law or legal conclusions, has been reviewed by us, and is correct in all
material respects. The authorized capital stock conforms in all material
respects to the description thereof set forth in the Prospectus under the
caption "Description of Capital Stock."
(viii) The Company is not and, immediately after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(ix) The Registration Statement and the Prospectus (except for the
financial statements and supporting schedules included therein, as to which such
counsel expresses no opinion) comply as to form in all material respects with
the requirements of the Securities Act and the applicable rules and regulations
thereunder.
(x) The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Stockholders.
(xi) The execution and delivery by each Selling Stockholder of, and the
performance as of the date of such opinion by such Selling Stockholder of its
obligations under, the Underwriting Agreement and the Custody Agreement and the
Power of Attorney do not violate: (i) to such counsel's knowledge, any
applicable provisions of federal statutes or regulations (other than with
respect to federal securities statutes and regulations, as to which such counsel
need express no opinion) or the contract law of the State of New York (but not
including any statute, ordinances, administrative decisions, rules or
regulations of any political subdivision of the State of New York); or (ii) to
such counsel's knowledge, any judgment, order or decree of any federal or
Virginia governmental body, agency or court having jurisdiction over such
Selling Stockholder. No approval, or consent of, or registration or filing with,
any federal or Virginia governmental agency or body is required for the
performance as of the date of such opinion by the Selling Stockholder of its
obligations under the Underwriting Agreement or the Custody Agreement and the
Power of Attorney, except such as may be required under federal securities laws
and under state securities or Blue Sky laws (as to which such counsel need
express no opinion).
(xii) The Custody Agreement and the Power of Attorney of each
Selling Stockholder have been duly executed and delivered by such Selling
Stockholder and constitute valid and binding obligations of such Selling
Stockholder, enforceable in accordance with their terms, except (i) as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights (including, without limitation, the effect of
statutory and other law regarding fraudulent conveyances, fraudulent transfers
and preferential transfers), (ii) as may be limited by the exercise of judicial
discretion and the application of principles of equity including, without
limitation, requirements of good faith, fair dealing, conscionability and
materiality (regardless of whether such agreements are considered in a
proceeding at equity or at law), and (iii) no opinion is expressed as to the
enforceability of any indemnification or contribution provisions under the
federal securities laws.
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(xiii) Each Selling Stockholder is the registered owner of the
Shares to be sold by such Selling Stockholder. Assuming the accuracy of the
certification made by the Selling Stockholder in the Selling Stockholder's
certificate referred to in the Opinion, each Selling Stockholder acquired the
Shares to be sold by such Selling Stockholder free of any adverse claims within
the meaning of Section 8.8A-102(a)(1) of the Commercial Code of the Commonwealth
of Virginia. Upon delivery to the Underwriters of the Shares to be sold by each
Selling Stockholder, endorsed to the Underwriters or in blank by an effective
endorsement pursuant to the Underwriting Agreement, or registration of such
Shares in the names of the Underwriters in the stock records of the Company, and
assuming in either case that the Underwriters have purchased such Shares for
value and without notice of any adverse claim to such Shares within the meaning
of Section 8.8A-102(a)(1) of the Commercial Code of the Commonwealth of
Virginia, the Underwriters will have acquired such Shares free of adverse
claims.
Such counsel shall also state that during the course of the
preparation of the Registration Statement such counsel participated in
conferences with officers and other representatives of the Company, with
representatives of the independent public accountants of the Company and with
you and your representatives. While such counsel has not undertaken to determine
independently, and such counsel does not assume any responsibility for, the
accuracy (except to the extent set forth in Opinion paragraph (vii) above),
completeness or fairness of the statements in the Registration Statement or
Prospectus, such counsel shall state on the basis of these conferences and its
activities as counsel to the Company in connection with the Registration
Statement that no facts have come to such counsel's attention which causes it to
believe that (i) the Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, as of the date hereof, contains an
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, (ii) there are any legal or governmental
proceedings pending or threatened against the Company that are required to be
disclosed in the Registration Statement or the Prospectus, other than those
disclosed therein, or (iii) there are any contracts or documents of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
referred to therein or so filed; provided that in making the foregoing
statements (which shall not constitute an opinion), such counsel need not
express any views as to the financial statements and supporting schedules and
other financial and statistical information and data included in or omitted from
the Registration Statement or the Prospectus.
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EXHIBIT B
FORM OF LOCK-UP AGREEMENT
____________, 2000
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
First Union Securities, Inc.
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
As Representatives of the several Underwriters
c/o Thomas ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: LOCK-UP AGREEMENT (THE "AGREEMENT")
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain
shares of Common Stock, par value $.01 per share (the "Common Stock"), of
Cysive, Inc., a Delaware corporation (the "Company"), or securities convertible
into or exchangeable or exercisable for Common Stock. The undersigned
understands that you, as representatives (the "Representatives"), propose to
enter into an Underwriting Agreement on behalf of the several Underwriters named
in Schedule A to such agreement (collectively, the "Underwriters"), with the
Company providing for a public offering of the Common Stock of the Company
pursuant to a Registration Statement on form S-1 filed with the Securities and
Exchange Commission (the "Public Offering"). The undersigned recognizes that the
Public Offering will be of benefit to the undersigned and will benefit the
Company by, among other things, raising additional capital for its operations.
The undersigned acknowledges that you and the other Underwriters are relying on
the representations and agreements of the undersigned contained in this letter
in carrying out the Public Offering and in entering into underwriting
arrangements with the Company with respect to the Public Offering.
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇ Partners (which consent may be withheld in its sole discretion), it will
not, during the period commencing on the date hereof and ending 90 days after
the date of the final prospectus relating to the Public Offering (the
"Prospectus"), (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or (2) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. In addition, the undersigned agrees that, without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners (which consent may be withheld in its sole
discretion), it will not, during the period commencing on the date hereof and
ending 90 days
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after the date of the Prospectus, make any demand for or exercise any right
with respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock. With respect
to the Public Offering, the undersigned waives any registration rights relating
to registration under the Securities Act of any Common Stock owned either of
record or beneficially by the undersigned, including any rights to receive
notice of the Public Offering.
The foregoing restrictions are expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or reasonably expected to lead to or result in a sale or disposition of the
Common Stock even if such Common Stock would be disposed of by someone other
than the undersigned. Such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or grant of any
right (including without limitation any put option or put equivalent position or
call option or call equivalent position) with respect to any of the Common Stock
or with respect to any security that includes, relates to, or derives any
significant part of its value from such Common Stock.
Notwithstanding the foregoing, the undersigned may transfer shares
of Common Stock (i) as a bona fide gift or gifts, provided that the donee or
donees thereof agree to be bound by the restrictions set forth herein, (ii) to
any trust for the direct or indirect benefit of the undersigned or the immediate
family of the undersigned, provided that the trustee of the trust agrees to be
bound by the restrictions set forth herein, and provided further that any such
transfer shall not involve a disposition for value, (iii) to the Underwriters
pursuant to the Underwriting Agreement, or (iv) in transactions relating to
shares of Common Stock acquired by the undersigned in open market transactions
after the completion of the Public Offering. For purposes of this Agreement,
"immediate family" shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin. In addition, notwithstanding the foregoing,
if the undersigned is a corporation, the corporation may transfer the capital
stock of the Company to any wholly-owned subsidiary of such corporation;
provided, however, that in any such case, it shall be a condition to the
transfer that the transferee execute an agreement stating that the transferee is
receiving and holding such capital stock subject to the provisions of this
Agreement and there shall be no further transfer of such capital stock except in
accordance with this Agreement, and provided further that any such transfer
shall not involve a disposition for value.
The undersigned understands that whether or not the Public Offering
actually occurs depends on a number of factors, including stock market
conditions. The Public Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to negotiation among the Company and
the Underwriters.
The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
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This agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives, and assigns of
the undersigned.
Very truly yours,
------------------------------------
(Name)
------------------------------------
(Address)
30
