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EXHIBIT 1.1
5,000,000 Shares of Common Stock
THE TRIZETTO GROUP, INC.
UNDERWRITING AGREEMENT
June __, 2001
BEAR, XXXXXXX & CO. INC.
UBS WARBURG LLC
XXXXXXX XXXXX BARNEY INC.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies/Gentlemen:
The TriZetto Group, Inc., a corporation organized and existing under the
laws of Delaware (the "COMPANY"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several underwriters named in SCHEDULE I
hereto (the "UNDERWRITERS") an aggregate of 4,520,000 shares (the "COMPANY FIRM
SHARES") of its common stock, par value $.001 per share (the "COMMON STOCK"),
the stockholders listed on SCHEDULE II hereto (the "SELLING STOCKHOLDERS"),
propose, subject to the terms and conditions stated herein, to sell to the
Underwriters an aggregate of 480,000 shares of Common Stock (the "SELLING
STOCKHOLDERS FIRM SHARES" and, collectively, with the Company Firm Shares, the
"FIRM SHARES"). The Company and the Selling Stockholders propose to sell, for
the sole purpose of covering over-allotments in connection with the sale of the
Firm Shares, at the option of the Underwriters, up to an additional 750,000
shares (the "ADDITIONAL SHARES") of Common Stock. The Firm Shares and any
Additional Shares purchased by the Underwriters are referred to herein as the
"SHARES". The Shares are more fully described in the Registration Statement
referred to below.
1. Representations and Warranties of the Company. The Company and each of
its subsidiaries set forth on SCHEDULE IV hereto (the "MATERIAL SUBSIDIARIES")
jointly and severally, represent and warrant to, and agree with, each of the
Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement on Form S-3 (No. 333-58982), and
amendments thereto, and related preliminary prospectuses for the registration
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), of Shares,
which registration statement, as so amended (including any post-effective
amendments), has been declared effective
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by the Commission and copies of which have heretofore been delivered to the
Underwriters. The registration statement, as amended at the time it became
effective, including the exhibits thereto and (i) the information incorporated
by reference into the prospectus contained in the latest Registration Statement
at the time of effectiveness or (ii) information (if any) deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430A or
Rule 434(b) under the Securities Act, is hereinafter referred to as the
"REGISTRATION STATEMENT." If the Company has filed or is required pursuant to
the terms hereof to file a registration statement pursuant to Rule 462(b) under
the Securities Act registering additional shares of Common Stock (a "RULE 462(B)
REGISTRATION STATEMENT"), then, unless otherwise specified, any reference herein
to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration Statement, which
became effective upon filing, no other document with respect to the Registration
Statement or with respect to any document incorporated by reference into the
Registration Statement has heretofore been filed with the Commission. No stop
order suspending the effectiveness of either the Registration Statement or the
Rule 462(b) Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or, to the Company's knowledge, threatened
by the Commission. The Company, if required by the rules and regulations of the
Commission promulgated under the Securities Act and the Exchange Act (the "RULES
AND REGULATIONS"), proposes to file the Prospectus with the Commission pursuant
to Rule 424(b) of the Rules and Regulations. The Prospectus, in the form in
which it is to be filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations, or, if the Prospectus is not to be filed with the Commission
pursuant to Rule 424(b), the Prospectus in the form included as part of the
Registration Statement at the time the Registration Statement became effective,
is hereinafter referred to as the "PROSPECTUS," except that if any revised
prospectus or prospectus supplement shall be provided to the Underwriters by the
Company for use in connection with the offering and sale of the Shares (the
"OFFERING") which differs from the Prospectus (whether or not such revised
prospectus or prospectus supplement is required to be filed by the Company
pursuant to Rule 424(b) of the Rules and Regulations), the term "Prospectus"
shall refer to such revised prospectus or prospectus supplement, as the case may
be, from and after the time it is first provided to the Underwriters for such
use. Any preliminary prospectus or prospectus subject to completion included in
the Registration Statement or filed with the Commission pursuant to Rule 424
under the Securities Act is hereafter called a "Preliminary Prospectus." Any
reference herein to the Registration Statement, any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")
on or before the effective date of the Registration Statement, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case may be, and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include (i) the filing of any
document under the Exchange Act after the effective date of the Registration
Statement, the date of such Preliminary Prospectus or the date of the
Prospectus, as the case may be, which is incorporated therein by reference and
(ii) any such document so filed. All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, a Preliminary
Prospectus and the Prospectus, or any amendments or supplements to any of the
foregoing, shall be deemed to include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("XXXXX").
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(b) At the time of the effectiveness of the Registration Statement or
the effectiveness of any post-effective amendment to the Registration Statement,
when the Prospectus is first filed with the Commission pursuant to Rule 424(b)
or Rule 434 of the Rules and Regulations, when any supplement to or amendment of
the Prospectus is filed with the Commission, when any document filed under the
Exchange Act is filed and at the Closing Date and the Additional Closing Date,
if any, (as hereinafter respectively defined), the Registration Statement and
the Prospectus and any amendments thereof and supplements thereto complied or
will comply in all material respects with the applicable provisions of the
Securities Act, the Exchange Act and the Rules and Regulations and did not and
will not contain an untrue statement of a material fact and did not and will not
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein (i) in the case of the Registration
Statement, not misleading and (ii) in the case of the Prospectus or any related
Preliminary Prospectus in light of the circumstances under which they were made,
not misleading. When any related Preliminary Prospectus was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
of the Rules and Regulations) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Securities Act, the Exchange Act and the
Rules and Regulations and did not contain an untrue statement of a material fact
and did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. No representation and warranty is
made in this subsection (b), however, with respect to any information contained
in or omitted from the Registration Statement or the Prospectus or any related
Preliminary Prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through Bear, Xxxxxxx & Co. Inc.
specifically for use therein ("UNDERWRITERS' INFORMATION"). The parties
acknowledge and agree that the Underwriters' Information consists solely of the
material included in third and twelfth paragraphs under the caption
"Underwriting" in the Prospectus. If Rule 434 is used, the Company will comply
with the requirements of Rule 434.
(c) PricewaterhouseCoopers LLP who have certified the financial
statements and supporting schedules included in the Registration Statement, and
KPMG LLP, who have certified certain financial statements of Resource
Information Management Systems, Inc., each are independent public accountants as
required by the Securities Act and the Rules and Regulations.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth in
the Registration Statement and the Prospectus, there has been no material
adverse change or any development which has a reasonable likelihood of resulting
in a prospective material adverse change in the business, prospects, properties,
operations, condition (financial or other) or results of operations of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business ("MATERIAL ADVERSE EFFECT"), and
since the date of the latest balance sheet presented in the Registration
Statement and the Prospectus, neither the Company nor any of its subsidiaries
has incurred or undertaken any liabilities or obligations, direct or
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contingent, or entered into any transactions which are material to the Company
and it subsidiaries taken as a whole except for liabilities or obligations which
are reflected in the Registration Statement and Prospectus or which were
incurred in the ordinary course of business consistent with past practice after
the date of the latest balance sheet in the Prospectus.
(e) This Agreement and the transactions contemplated herein have been
duly and validly authorized by the Company and this Agreement has been duly and
validly executed and delivered by the Company and constitutes the valid and
binding agreement of the Company, enforceable against it in accordance with its
terms.
(f) The execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement, instrument, franchise, license or permit to
which the Company or any of its subsidiaries is a party or by which the Company
or any of it subsidiaries or their respective properties or assets may be bound
and which is material to the business of the Company and its subsidiaries taken
as a whole or (ii) violate or conflict with any provision of the certificate of
incorporation or by-laws of the Company or any of its subsidiaries or any
judgment, decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or assets. No
consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their respective properties or assets is required for the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, including the issuance, sale and delivery of
the Shares to be issued, sold and delivered by the Company hereunder, except (A)
the registration under the Securities Act of the Shares, (B) such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses and permits as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Shares by the
Underwriters and (C) those which have been duly obtained at or prior to the
Closing Date.
(g) The Company has the authorized capitalization set forth in the
Prospectus and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and were not issued in violation of or subject to any preemptive or similar
rights that entitle or will entitle any person to acquire any Shares from the
Company upon issuance thereof by the Company, except for such rights as may have
been fully satisfied or waived prior to the effectiveness of the Registration
Statement; the Shares to be delivered on the Closing Date and the Additional
Closing Date, if any, (as hereinafter respectively defined) have been duly and
validly authorized and, when delivered by the Company in accordance with this
Agreement, will be duly and validly issued, fully paid and non-
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assessable and will not have been issued in violation of or subject to any
preemptive or similar rights that entitle or will entitle any person to acquire
any Shares from the Company upon issuance thereof by the Company; and all of the
issued shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued and are fully paid and non-assessable and
(except for directors' qualifying shares and except as set forth in the
Prospectus) are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims; the Common Stock and the Shares
conform to the descriptions thereof contained in the Registration Statement and
the Prospectus. Except as disclosed in or specifically contemplated by the
Prospectus, the Company has no outstanding options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's stock
option and other stock plans or arrangements, and the options or other rights
granted and exercised thereunder, set forth in the Prospectus accurately and
fairly presents in all material respects the information required to be shown
with respect to such plans, arrangements, options and rights. No further
approval or authority of the stockholders or the Board of Directors of the
Company will be required for the issuance and sale of the Shares to be sold by
the Company to the Underwriters as contemplated herein.
(h) Each of the Company and its subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation. Each of the Company and its
subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the character or location of
its properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to be so
qualified or in good standing which will not in the aggregate have a Material
Adverse Effect. Each of the Company and its subsidiaries has all requisite power
and authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies, to own, lease and operate its
properties and conduct its business as it is now being conducted and as
described in the Registration Statement and the Prospectus, and no such consent,
approval, authorization, order, registration, qualification, license or permit
contains a materially burdensome restriction which is required to be disclosed
under the Securities Act or the Regulations and which is not adequately
disclosed in the Registration Statement and the Prospectus; and, to the
knowledge of the Company, no proceeding has been instituted in any jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification. Other than its ownership of all of the
outstanding capital stock of each of TriZetto Application Services, Inc., a
Colorado corporation, Xxxxxxxx Health Enterprises, Inc., a California
corporation, Creative Business Solutions, Inc., a Texas corporation, Erisco,
Inc., a New York corporation, Finserv Health Care Systems, Inc., a New York
corporation, Healthcare Media Enterprises, Inc., a Delaware corporation, Xxxxxxx
Corporation, a Delaware corporation, Xxxxxxx Development & Licensing
Corporation, an Indiana corporation, Xxxxxxx Services Corporation, a Delaware
corporation, Xxxxxxx Development Corporation, a Delaware corporation, Digital
Insurance Systems Corporation, an Ohio corporation, Health Networks of America,
Inc., a Maryland corporation, Option Services Group, Inc., an Illinois
corporation, Resource Information Management Systems, Inc., an Illinois
corporation, Winthrop Financial Group, Inc., a Illinois corporation, HealthWeb,
Inc, a Delaware corporation and Healthcare Media Private Limited, an Indian
corporation, the Company does not own or control, either directly or indirectly,
any corporation, partnership, limited liability company, association or other
entity.
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(i) Except as described in the Prospectus, there is no legal or
governmental proceeding to which the Company or any of its subsidiaries is a
party, or of which any property of the Company or any of its subsidiaries is the
subject which, singularly or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, are reasonably likely to have a Material
Adverse Effect or which is required to be disclosed in the Registration
Statement and the Prospectus, and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
by others. There are no statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
filed as required.
(j) Neither the Company nor any of its affiliates have taken and nor
will take, directly or indirectly, any action designed to cause or result in, or
which constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(k) The financial statements, including the notes thereto, and
supporting schedules included in the Registration Statement and the Prospectus
present fairly the financial position of the Company and its consolidated
subsidiaries as of the dates indicated and condition and results of operations
for the periods specified; except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. Except as included in the Registration
Statement, no other financial statement or schedules are required by Form S-3 to
be included in the Registration Statement.
(l) The assumptions used in preparing the pro forma financial
statements included in each of the Registration Statement and the Prospectus
provide a reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the related pro
forma adjustments give appropriate effect to those assumptions, and the pro
forma columns therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(m) Except as disclosed in the Prospectus, no holder of securities of
the Company has any rights to the registration of securities of the Company
because of the filing of the Registration Statement or otherwise in connection
with the sale of the Shares contemplated hereby, and any such rights so
disclosed have either been fully complied with by the Company or effectively
waived by the holders thereof.
(n) None of the Company or any of its subsidiaries is, and upon
consummation of the transactions contemplated hereby none of such entities will
be, subject to registration as an "investment company" under the Investment
Company Act of 1940.
(o) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is
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permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(p) None the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws, (ii) is in default (and no event has occurred which,
with notice or lapse of time or both, would constitute such a default) under, or
has taken any action that would result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it
is bound or to which any of its property or assets is subject, or (iii) is in
violation in any respect of any statute or any judgment, decree, order, rule or
regulation of any court or governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets, except any violation or default that would not reasonably
be expected to have a Material Adverse Effect; and there does not exist any
state of facts which constitutes an event of default on the part of the Company
or its subsidiaries as defined in such documents or which, with notice or lapse
of time or both, would constitute such an event of default except as would not
reasonably be expected to be result in a Material Adverse Effect.
(q) There are no contracts or other documents which are required by
the Securities Act, the Exchange Act or the Rules and Regulations to be
described in the Prospectus or filed as exhibits to the Registration Statement
(or to any documents incorporated by reference into the Registration Statement)
and which have not been so described or filed. The contracts so described in the
Prospectus are in full force and effect on the date hereof and neither the
Company nor its subsidiaries nor, to the Company's knowledge, any other party is
in breach of or default under any of such contracts except as would not
reasonably be expected to result in a Material Adverse Effect.
(r) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Registration Statement and the
Prospectus or such as do not materially affect the value of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them 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 and its subsidiaries. Except as disclosed in the
Registration Statement and Prospectus, the Company and its subsidiaries own or
lease all such properties as are necessary to its operations as now conducted or
as currently proposed to be conducted.
(s) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, except as disclosed or specifically
contemplated therein: (i) neither the Company nor its subsidiaries has incurred
any material liabilities or obligations, indirect, direct or contingent, or
entered into any material agreement or other transaction which is not in the
ordinary course of business; (ii) 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; (iii) neither the Company nor its
subsidiaries has sustained any material loss or
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interference with its business or properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance; (iv) neither
the Company nor its subsidiaries has paid or declared any dividends or other
distributions with respect to its capital stock and neither the Company nor its
subsidiaries is in default in the payment of principal or interest on any
outstanding debt obligations; and (v) there has not been any change in the
capital stock (other than upon the sale of the Common Stock hereunder and upon
the exercise of options or warrants described in the Registration Statement).
(t) The Company and each of its subsidiaries own, possess or can
acquire adequate right to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx registrations,
copyrights, licenses, formulae, customer lists, and know-how and other
intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses as being conducted and
as presently proposed to be conducted and as described in the Registration
Statement and Prospectus and have no reason to believe that the conduct of their
respective businesses will materially conflict with, and have not received any
notice of any claim of conflict with, any such right of others which could
reasonably be expected to have a Material Adverse Effect nor is the Company
aware of any reasonable grounds for the same. To the best of the Company's
knowledge, all material technical information developed by and belonging to the
Company which has not been patented has been kept confidential. Neither the
Company nor any of it's subsidiaries has granted or assigned to any other person
or entity any right to manufacture, have manufactured, assemble or sell the
current products and services of the Company or those products and services
described in the Registration Statement and Prospectus.
(u) The Company and each of its subsidiaries have accurately prepared
and timely filed all federal, state and other tax returns that are required to
be filed by it and has paid or made provision for the payment of all taxes,
assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which the Company and each of
its subsidiaries is obligated to withhold from amounts owning to employees,
creditors and third parties, with respect to the periods covered by such tax
returns (whether or not such amounts are shown as due on any tax return), to the
extent that any of the foregoing is due and payable, except, in all cases, for
any such tax, assessment, fine or penalty that is being contested in good faith
(and except in any case in which the failure to so file or pay would not have a
Material Adverse Effect). No deficiency assessment with respect to a proposed
adjustment of the Company's or any of it's subsidiaries' Federal, state, or
other taxes is pending or, to the best of the Company's knowledge, threatened
which could reasonably be expected to result in a Material Adverse Effect. There
is no tax lien, whether imposed by any federal, state, or other taxing
authority, outstanding against the assets, properties or business of the Company
or any of its subsidiaries.
(v) The Company has not distributed and will not distribute prior to
the Closing Date any offering material in connection with the offering and sale
of the Shares other than the Prospectus, the Registration Statement and the
other materials permitted by the Securities Act.
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(w) The Company and its subsidiaries maintain insurance of the types
and in the amounts generally deemed adequate for their respective businesses and
all other risks customarily insured against, all of which insurance is in full
force and effect. None of the Company nor its subsidiaries has been refused any
insurance coverage sought or applied for; and the Company has no reason to
believe that it and its subsidiaries 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 result in a Material Adverse Effect.
(x) Neither the Company, any of its subsidiaries nor, to the Company's
knowledge, any of its employees or agents has at any time during the last five
years (i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States of any jurisdiction
thereof.
(y) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is imminent
which might be expected to have a Material Adverse Effect; and the Company is
not aware of any existing or threatened labor disturbance by the employees of
any of its principal suppliers, vendors or original equipment manufacturers,
would reasonably be expected to result in a Material Adverse Effect. No
collective bargaining agreement exists with any of the Company's or its
subsidiaries' employees and, to the Company's knowledge, no such agreement is
imminent.
(z) The Shares are registered pursuant to Section 12(g) of the
Exchange Act and are listed for quotation on The Nasdaq Stock Market's National
Market (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 Shares under the Exchange Act or de-listing the Shares from the Nasdaq
National Market, nor has the Company received any notification that the SEC or
the Nasdaq National Market is contemplating terminating such registration or
listing.
(aa) Except as set forth in the Registration Statement and Prospectus,
(i) the Company is in compliance with all rules, laws and regulations relating
to the use, treatment, storage and disposal of toxic substances and protection
of health or the environment ("ENVIRONMENTAL LAWS") which are applicable to its
business, except as would not reasonably be expected to have a Material Adverse
Effect, (ii) the Company has received no notice from any governmental authority
or third party of an asserted claim under Environmental Laws, which claim is
required to be disclosed in the Registration Statement and the Prospectus, (iii)
the Company will not be required to make future material capital expenditures to
comply with Environmental Laws and (iv) no property which is owned, leased or
occupied by the Company has been designated as a Superfund site pursuant to the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et seq.) ("CERCLA"), or otherwise designated
as a contaminated site under applicable state or local law except in each case
as would not reasonably be expected to have a Material Adverse Effect. There has
been no storage, generation, transportation, handling, treatment, disposal,
discharge, emission, or other release of any kind of toxic or other wastes or
other hazardous substances by, due to, or caused by the Company (or, to the
Company's knowledge, any other entity for whose
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acts or omissions the Company is or may be liable) upon any other property now
or previously owned or leased by the Company or any of its subsidiaries, or upon
any other property, in violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit or which would, under any statute
or any ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any violation
or liability which would not have, singularly or in the aggregate with all such
violations and liabilities, a Material Adverse Effect; there has been no
disposal discharge, emission or other release of any kind onto such property or
into the environment surrounding such property of any toxic or other wastes or
other hazardous substances with respect to which the Company or any of its
subsidiaries has knowledge, except for any such disposal, discharge, emission,
or other release of any kind which would not have, singularly or in the
aggregate with all such discharges and other releases, have a Material Adverse
Effect. The Company has not agreed to assume, undertake or provide
indemnification for any liability of any other person under any Environmental
Law, including any obligation for cleanup or remedial action, except as would
not reasonably be expected to have a Material Adverse Effect.
(bb) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the executive
officers or directors of the Company or any of the members of the families of
any of them of the sort required to be disclosed in the Registration Statement
and Prospectus, except as disclosed therein. No relationship, direct or
indirect, exists between or among the Company or any of its subsidiaries on the
one hand, and the directors, officers, stockholders of the Company or its
subsidiaries, customers or suppliers of the Company or its subsidiaries, on the
other hand, which is required to be described in the Prospectus which is not so
described.
(cc) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the "CODE"),
or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(b) of ERISA (other than events with
respect to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan which could
have a Material Adverse Effect; each employee benefit plan is in compliance in
all material respects with applicable law; including ERISA and the Code; the
Company or its subsidiaries has not incurred and does not expect to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from any "pension plan;" and each "pension plan" (as defined in
ERISA) for which the Company or any of its subsidiaries would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which could cause the loss of such qualification.
(dd) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, and
none of the Company, or any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of
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an unfavorable decision, ruling or finding, would result in a Material Adverse
Effect, except as described in the Prospectus.
(ee) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(ff) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
under the Exchange Act, and, when read together with the other information in
the Prospectus, at the time the Registration Statement and any amendments
thereto become effective and at the Closing Date, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(gg) The statistical and market-related data included in the
Prospectus are based on or derived from sources which the Company believes to be
reliable and accurate.
2. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder severally represents and warrants to, and agrees with, each
of the Underwriters that:
(a) This Agreement has been duly and validly authorized, executed and
delivered by or on behalf of the Selling Stockholders and is a valid and binding
agreement of the Selling Stockholders, enforceable against each Selling
Stockholder 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) Each of the Custody Agreements and Powers of Attorney (each, a
"CUSTODY AGREEMENT AND POWER OF ATTORNEY") signed by (i) each Selling
Stockholder, (ii) U.S. Stock Transfer Corporation, as custodian (in such
capacity, the "CUSTODIAN") and (iii) Xxxxxxx X. Xxxxxxxx as the Selling
Stockholders' attorney-in-fact (in such capacity, the "ATTORNEY-IN-FACT"), to
the extent set forth therein relating to the transactions contemplated hereby
and by the Prospectus, has been duly and validly authorized, executed and
delivered by each Selling Stockholder and is a valid and binding agreement of
each Selling Stockholder, enforceable against it in accordance with its 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. Each
Selling Stockholder agrees that the Shares to be sold by each Selling
Stockholder on deposit with the Custodian are subject to the interests of the
Underwriters, that the arrangements made for such custody are to that extent
irrevocable, and that the obligations of each Selling Stockholder hereunder
shall not be terminated, except as provided in this Agreement or in the Custody
Agreement and Power of Attorney, by any act of the Selling Stockholder, by
operation of law, by death or incapacity of such Selling Stockholder or by the
occurrence of any other event. If a Selling Stockholder
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should die or become incapacitated, or if any other event should occur, before
the delivery of the Shares to be sold by a Selling Stockholder hereunder, the
documents evidencing the Shares to be sold by such Selling Stockholder then on
deposit with the Custodian shall be delivered by the Custodian in accordance
with the terms and conditions of this Agreement as if such death, incapacity or
other event had not occurred, regardless of whether or not the Custodian shall
have received notice thereof.
(c) Each Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder hereunder and upon sale and delivery of, and
payment for, such Shares, as provided herein, each Selling Stockholder will
convey to the Underwriters good and marketable title to such Shares, free and
clear of all liens, encumbrances, equities, claims and security interests
whatsoever.
(d) Each Selling Stockholder has, and on the Closing Date will have,
good and valid title to all of the Shares which may be sold by such Selling
Stockholder pursuant to this Agreement on such date and the legal right and
power, and all authorizations and approvals required by law and under its
charter or by-laws, partnership agreement, trust agreement or other
organizational documents, if applicable, to enter into this Agreement and the
applicable Custody Agreement and Power of Attorney, to sell, transfer and
deliver all of the Shares which may be sold by such Selling Stockholder pursuant
to this Agreement and to comply with its other obligations hereunder and
thereunder.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Selling
Stockholders of the transactions contemplated herein, except such as may have
been obtained under the Securities Act and such as may be required under the
state securities laws or the blue sky laws or any jurisdiction in connection
with the purchase and distribution of the Shares by the Underwriters and such
other approvals as have been obtained.
(f) Neither the sale of the Shares being sold by the Selling
Stockholders nor the consummation of any other of the transactions herein
contemplated by the Selling Stockholders or the fulfillment of the terms hereof
by the Selling Stockholders will conflict with, result in a breach or violation
of, or constitute a default under any law or the terms of any indenture or other
agreement or instrument to which any Selling Stockholder is party or bound, any
judgment, order or decree applicable to any Selling Stockholder or any court or
regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over any Selling Stockholder.
(g) None of the Selling Stockholders has 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, except for such rights as have been waived or
which are described in the Prospectus.
(h) The Selling Stockholders do not have, or have waived prior to the
date hereof, any preemptive right, co-sale right or right of first refusal or
other similar right to purchase any of the Shares that are to be sold by the
Company to the Underwriters pursuant to this Agreement; and the Selling
Stockholders do not own any warrants, options or similar rights
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to acquire, and do not have any right or arrangement to acquire, any capital
stock, right, warrants, options or other securities from the Company, other than
those described in the Registration Statement and the Prospectus.
(i) All information furnished by or on behalf of the Selling
Stockholders in writing expressly for use in the Registration Statement and
Prospectus is, and on the Closing Date and the Additional Closing Date, if any,
(as hereinafter defined) will be, true, correct, and complete in all material
respects, and does not, and on the Closing Date and the Additional Closing Date,
if any, will not, contain any untrue statement of a material fact or omit to
state any material fact necessary to make such information not misleading. To
the extent such information appears in the Prospectus, each Selling Stockholder
confirms as accurate the number of Shares set forth opposite such Selling
Stockholder's name and as described in the related footnote in the Prospectus
under the caption "Selling Stockholders" (both prior to and after giving effect
to the sale of the Shares).
(j) The Selling Stockholders have 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.
(k) The Selling Stockholders have not distributed and will not
distribute, prior to the later of the Additional Closing Date, if any, (as
hereinafter defined) and the completion of the Underwriters' distribution of the
Shares, any offering material in connection with the offering and sale of the
Shares by the Selling Stockholders other than a preliminary prospectus, the
Prospectus or the Registration Statement.
(l) Without limiting the generality of the representations and
warranties of the Executive Selling Stockholders set forth in paragraph 1 above,
each Selling Stockholder 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 result in a Material Adverse Effect, and is not prompted to sell the Shares
to be sold by the Selling Stockholders by any information concerning the Company
which is not set forth in the Registration Statement and the Prospectus.
(m) The representations and warranties of the Selling Stockholders in
the respective Custody Agreements and Powers of Attorney are, and on the Closing
Date will be, true and correct.
Any certificate signed by or on behalf of the Selling Stockholder and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Stockholder to each
Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company and the Selling Stockholders agree to sell to the
Underwriters and the Underwriters, severally and not jointly, agree to purchase
from the Company and the Selling Stockholders, at a
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purchase price per share of $_______, the number of Firm Shares set forth
opposite the respective names of the Underwriters on SCHEDULE I hereto plus any
additional number of Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of Xxxxxx, Xxxx & Xxxxxxxx LLP,
Jamboree Center, 0 Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000-0000 ("UNDERWRITERS'
COUNSEL"), or at such other place as shall be agreed upon by Bear, Xxxxxxx & Co.
Inc. and the Company, at 10:00 A.M., New York City time, on the third or fourth
business day (as permitted under Rule 15c6-1 under the Exchange Act) (unless
postponed in accordance with the provisions of Section 10 hereof) following the
date of the effectiveness of the Registration Statement (or, if the Company has
elected to rely upon Rule 430A of the Regulations, the third or fourth business
day (as permitted under Rule 15c6-1 under the Exchange Act) after the
determination of the public offering price of the Shares), or such other time
not later than ten business days after such date as shall be agreed upon by you
and the Company (such time and date of payment and delivery being herein called
the "Closing Date").
Payment for the shares shall be made to or upon the order of the Company of
the purchase price by wire transfer in Federal (same day) funds to the with
respect to the Firm Shares sold by it and to the Selling Stockholders (or to the
Custodian) with respect to the Firm Shares sold by the Selling Stockholders upon
delivery of certificates for the Shares to you through the facilities of the
Depository Trust Company, if you so elect, for the respective accounts of the
several Underwriters against receipt therefor signed by you. Certificates for
the Shares to be delivered to you shall be registered in such name or names and
shall be in such denominations as you may request at least one business day
before the Closing Date. The Company will permit you to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(c) In addition, the Company and the Selling Stockholders hereby grant
to the Underwriters the option to purchase up to an aggregate of 750,000
Additional Shares at the same purchase price per share to be paid by the
Underwriters to the Company and the Selling Stockholders for the Firm Shares as
set forth in this Section 3, for the sole purpose of covering over-allotments in
the sale of Firm Shares by the Underwriters. This option may be exercised at any
time and from time to time, in whole or in part, on or before the thirtieth day
following the date of the Prospectus, by written notice by you to the Selling
Stockholders. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised and the date and time, as
reasonably determined by you, when the Additional Shares are to be delivered
(such date and time being herein sometimes referred to as the "ADDITIONAL
CLOSING DATE"); provided, however, that, unless otherwise agreed to by Bear,
Xxxxxxx & Co. Inc. and the Company, the Additional Closing Date shall not be
earlier than the Closing Date or earlier than the second full business day after
the date on which the option shall have been exercised nor later than the eighth
full business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 10 hereof). Certificates for the Additional Shares shall be registered
in such name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will permit you to examine
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and package such certificates for delivery at least one full business day prior
to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall be the
number which bears the same ratio to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter in SCHEDULE I hereto (or such number increased as set forth in
Section 9 hereof) bears to 5,000,000, subject, however, to such adjustments to
eliminate any fractional shares as Bear, Xxxxxxx & Co. Inc. in its sole
discretion shall make. The number of Additional Shares to be sold by (i) the
Company shall be the number which bears the same ratio to the aggregate number
of Additional Shares being purchased as 678,000 bears to 750,000 and (ii) each
Selling Stockholder shall be the number which bears the same ratio to the
aggregate number of Additional Shares being purchased as the number of
Additional Shares set forth opposite the name of such Selling Stockholder in the
third column of SCHEDULE II hereto bears to 750,000, subject in each case,
however, to such adjustments to eliminate any fractional shares as Bear, Xxxxxxx
& Co. Inc. in its sole discretion shall make.
(d) Payment for the Additional Shares shall be made to or upon the
order of the Selling Stockholders of the purchase price by wire transfer in
Federal (same day) funds to the Selling Stockholders [[OR THE CUSTODIAN]] at the
offices of Underwriters' Counsel, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional Shares to Bear,
Xxxxxxx & Co. Inc. for the respective accounts of the Underwriters. Each Selling
Stockholder hereby agrees that (i) it will pay all stock transfer taxes, stamp
duties and other similar taxes, if any, payable upon the sale or delivery of the
Shares to be sold by the Selling Stockholders to the several Underwriters, or
otherwise in connection with the performance of the Selling Stockholders'
obligations hereunder and (ii) the Custodian is authorized to deduct for such
payment any such amounts from the proceeds to the Selling Stockholders hereunder
and to hold such amounts for the account of the Selling Stockholders with the
Custodian under the Custody Agreement and Power of Attorney.
4. Offering. Upon your authorization of the release of the Firm Shares,
the Underwriters propose to offer the Shares for sale to the public upon the
terms and conditions set forth in the Prospectus.
5. Covenants of the Company; Covenants of the Selling Stockholders.
A. The Company covenants and agrees with the Underwriters that:
(a) If the Registration Statement has not yet been declared effective
the Company will use its best efforts to cause the Registration Statement and
any amendments thereto to become effective as promptly as possible, and if Rule
430A is used or the filing of the Prospectus is otherwise required under Rule
424(b) or Rule 434, the Company will file the Prospectus (properly completed if
Rule 430A has been used) pursuant to Rule 424(b) within the prescribed time
period and will provide evidence satisfactory to Bear, Xxxxxxx & Co. Inc. of
such timely filing and will provide the Underwriters with copies of such filings
prior to filing or use. If the Company elects to rely on Rule 434, the Company
will prepare and file a term sheet that complies with the requirements of Rule
434.
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The Company will notify you immediately (and, if requested by you, will
confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto (including any post-effective amendments) become effective,
(ii) of any request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional information,
(iii) of the mailing or the delivery to the Commission for filing of any
amendment of or supplement to the Registration Statement or the Prospectus, (iv)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto or of the
initiation, or the threatening, of any proceedings therefor, (v) of the receipt
of any comments from the Commission, and (vi) of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for that purpose. If the Commission shall propose or enter a stop
order at any time, the Company will make every reasonable effort to prevent the
issuance of any such stop order and, if issued, to obtain the lifting of such
order as soon as possible. The Company will not file any amendment to the
Registration Statement or any amendment of or supplement to the Prospectus
(including the prospectus required to be filed pursuant to Rule 424(b) or Rule
434) that differs from the prospectus on file at the time of the effectiveness
of the Registration Statement before or after the effective date of the
Registration Statement or file any document under the Exchange Act if such
document would be deemed to be incorporated by reference into the Prospectus to
which you shall reasonably object in writing after being furnished a reasonable
amount of time prior to its proposed filing or use.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act or the Exchange Act in
connection with sales of Shares any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would, in the judgment of
the Underwriters or the Company include an untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement to comply with the
Securities Act or the Regulations, or to file under the Exchange Act so as to
comply therewith any document incorporated by reference in the Registration
Statement or the Prospectus or in any amendment thereof or supplement thereto,
the Company will notify you promptly and prepare and file with the Commission an
appropriate amendment or supplement (in form and substance satisfactory to you)
which will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to each of the Underwriters and
Underwriters' Counsel a signed copy of the Registration Statement, including all
consents and exhibits filed therewith and all documents incorporated by
reference therein and all amendments thereto, and the Company will promptly
deliver to each of the Underwriters such number of copies of any preliminary
prospectus, the Prospectus, the Registration Statement, all amendments of and
supplements to such documents, if any, and all documents incorporated by
reference in the Registration Statement and Prospectus or any amendment thereof
or supplement thereto, as you may reasonably request. Prior to 10:00 A.M., New
York time, on the business day next succeeding the date of this Agreement and
from time to time thereafter the Company
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will furnish each Underwriter without charge with copies of the Prospectus in
New York City in such quantities as you may reasonably request.
(d) The Company will use its reasonable best efforts, in cooperation
with the Underwriters, at or prior to the time of effectiveness of the
Registration Statement, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of such
jurisdictions as you may designate and to maintain such qualification in effect
for so long as required for the distribution thereof; except that in no event
shall the Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process.
(e) The Company will make generally available to its security holders
and to the Underwriters as soon as practicable, but in any event not later than
eighteen 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 and its subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the Rules and Regulations.
(f) During the period of 90 days from the date of the Prospectus, the
Company will not, directly or indirectly, without your prior written consent,
issue, sell, offer or agree to sell, grant any option for the sale of, pledge,
make any short sale or maintain any short position, establish or maintain a "put
equivalent position" (within the meaning of Rule 16-a-1(h) under the Securities
Exchange Act of 1934, as amended), enter into any swap, derivative transaction
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 is to be settled by delivery of Common Stock, other securities, cash
or other consideration) or otherwise dispose of, any Common Stock (or any
securities convertible into, exercisable for or exchangeable for Common Stock)
or interest therein of the Company or of any of its subsidiaries, and the
Company will obtain the undertaking of each of its officers and directors and
such of its shareholders as have been heretofore designated by you and listed on
SCHEDULE III attached hereto not to engage in any of the aforementioned
transactions on their own behalf, other than the Company's sale of Shares
hereunder and the Company's issuance of Common Stock upon (i) the conversion or
exchange of outstanding convertible or exchangeable securities; (ii) the
exercise of presently outstanding options; (iii) the exercise of currently
outstanding warrants; (iv) the grant and exercise of options or share purchase
rights under, or the issuance and sale of shares pursuant to, employee stock
option and stock purchase plans in effect on the date hereof, provided, such
options are not exercisable for 90 days after the date of the Prospectus, or if
such options are exercisable within such period, such options are subject to
lockup provisions substantially the same as those set forth in this Section 5(f)
or (v) the issuance of shares of Common Stock in acquisition, strategic partner
or investment transactions approved by the Company's Board of Directors,
provided such shares are subject to lockup provisions substantially similar to
those set forth in this Section 5(f) and so long as such shares are not
transferable until the expiration of such lockup, which expiration shall not
occur until 90 days after the date of the Prospectus. During the period of 90
days from the date of the Prospectus, the Company shall enforce all, and shall
not materially amend any, provisions of all outstanding option agreements (and
any new option agreement entered into during such period) in order to ensure
that no holder of options to purchase capital stock of the Company may sell or
otherwise dispose of the stock acquired upon exercise of any such option without
the prior written consent
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of Bear, Xxxxxxx & Co. Inc.. The Company acknowledges that the intent of the
foregoing sentence is to restrict, pursuant to the terms of such option
agreements, the ability of option holders to dispose of shares of stock acquired
upon exercise of such options in the same manner as if such persons had executed
written undertakings provided for in the first sentence of this paragraph.
(g) During the period of three years from the effective date of
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to security holders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company listed; and
(ii) such additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission).
(h) The Company will apply the net proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will use its best efforts to list for quotation the
Shares on The Nasdaq National Market.
(j) The Company, during the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act, will file all
documents required to be filed with the Commission pursuant to Section 13, 14 or
15 of the Exchange Act within the time periods required by the Exchange Act and
the rules and regulations thereunder.
B. Each Selling Stockholder covenants and agrees with each Underwriter:
(a) To deliver to the Representatives prior to the Closing Date a
properly completed and executed United States Treasury Department Form W-8 (if
the Selling Stockholder is a non-United States Person) or Form W-9 (if the
Selling Stockholder is a United States Person).
(b) If, at any time prior to the date on which the distribution of the
Shares as contemplated herein and in the Prospectus has been completed, as
determined by the Representatives, such Selling Stockholder has knowledge of the
occurrence of any event as a result of which the Prospectus or the Registration
Statement, in each case as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, such Selling Stockholder will promptly notify the Company
and the Representatives.
(c) to cooperate to the extent necessary to cause the Registration
Statement or any post-effective amendment thereto to become effective at the
earliest possible time and to do and perform all things to be done and performed
under this Agreement prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Shares pursuant to this Agreement.
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(d) pay or to cause to be paid all transfer taxes with respect to the
Shares to be sold by such Selling Stockholder.
6. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including the following: (i) the fees,
disbursements and expenses of the Company's counsel, accountants and other
advisors in connection with the registration of the Shares under the Securities
Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of preparing,
printing (or reproduction) and delivery of any Agreement among Underwriters,
this Agreement, the Blue Sky Memoranda closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state securities
laws as provided in Section 5(A)(d) hereof, including the disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey; (iv) all fees and expenses in connection
with listing the Shares on The Nasdaq National Market; (v) all travel expenses
of the Company's officers and employees and any other expense of the Company
incurred in connection with attending or hosting meetings with prospective
purchasers of the Shares, (vi) the filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Shares and (vii) fees of the Custodian and other fees and
expenses related to the offering of the Shares by the Selling Stockholders,
other than any of the Selling Stockholder's expenses and any taxes payable by or
on behalf of the Selling Stockholder in connection with the sale of Shares
hereunder. The Company also will pay or cause to be paid: (i) the cost of
preparing stock certificates; (ii) the cost and charges of any transfer agent or
registrar; and (iii) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section 6. It is understood, however, that except as provided in this
Section, and Sections 8 and 12 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, stock transfer
taxes on resale of any of the Shares by them, and any advertising expenses
connected with any offers they may make.
7. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 7 "CLOSING DATE" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Underwriters' Counsel
pursuant to this Section 7 of any misstatement or omission, to the performance
by the Company of its obligations hereunder, and to each of the following
additional terms and conditions:
(a) The Registration Statement (including any Rule 462(b) Registration
Statement) shall have become effective not later than 5:30 P.M., New York time,
on the date of this Agreement, or at such later time and date as shall have been
consented to in
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writing by you; if the Company shall have elected to rely upon Rule 430A or Rule
434 of the Regulations, the Prospectus shall have been filed with the Commission
in a timely fashion in accordance with Section 5(A)(a) hereof; and, at or prior
to the Closing Date no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof shall have been
issued and no proceedings therefor shall have been initiated or threatened by
the Commission.
(b) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(c) At the Closing Date you shall have received the favorable written
opinion of Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, a Professional corporation, counsel
for the Company, dated the Closing Date addressed to the Underwriters in the
form attached hereto as ANNEX I.
(d) At the Closing Date you shall have received the written opinion of
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, a Professional corporation, counsel for the
Selling Stockholders, dated the Closing Date addressed to the Underwriters in
the form attached hereto as ANNEX II.
In rendering the opinions referenced in paragraphs (c) and (d) above, such
counsel may rely (x) as to matters involving the application of laws other than
the laws of the United States and jurisdictions in which they are admitted, to
the extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' Counsel) of other counsel reasonably
acceptable to Underwriters' Counsel, familiar with the applicable laws; (y) as
to matters of fact, to the extent they deem proper and is applicable, on
certificates of officers of the Company or the Selling Stockholder, if
applicable, and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of each Selling Stockholder, if applicable,
provided that copies of any such statements or certificates shall be delivered
to Underwriters' Counsel. The opinion of such counsel for the Company or the
respective Selling Stockholder shall state that the opinion of any such other
counsel is in form satisfactory to such counsel and, in their opinion, you and
they are justified in relying thereon.
(e) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be reasonably
satisfactory in form and substance to you and to Underwriters' Counsel, and the
Underwriters shall have received from Underwriters' Counsel a favorable opinion,
dated as of the Closing Date, with respect to the issuance and sale of the
Shares, the Registration Statement and the Prospectus and such other related
matters as you may reasonably require, and the Company shall have furnished to
Underwriters' Counsel such documents as they reasonably request for the purpose
of enabling them to pass upon such matters.
(f) At the Closing Date you shall have received a certificate of the
Company executed on its behalf by its Chief Executive Officer and Chief
Financial Officer,
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dated the Closing Date to the effect that (i) the condition set forth in
subsection (a) of this Section 7 has been satisfied, (ii) as of the date hereof
and as of the Closing Date, the representations and warranties of the Company
set forth in Section 1 hereof are accurate, (iii) as of the Closing Date, the
obligations of the Company to be performed hereunder on or prior thereto have
been duly performed and (iv) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, the
Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development involving a prospective
material adverse change, in the business prospects, properties, operations,
condition (financial or otherwise), or results of operations of the Company as
presently conducted or as proposed to be conducted and its subsidiaries taken as
a whole, except in each case as described in or contemplated by the Prospectus.
(g) At the time this Agreement is executed and at the Closing Date,
you shall have received a comfort letter, from PricewaterhouseCoopers LLP,
independent public accountants for the Company, dated, respectively, as of the
date of this Agreement and as of the Closing Date addressed to the Underwriters
and in form and substance satisfactory to the Underwriters and Underwriters'
counsel.
(h) You shall have also received from PricewaterhouseCoopers LLP, a
letter stating that the Company's system of internal accounting controls taken
as a whole is sufficient to meet the broad objectives of internal accounting
control insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts that would be material in relation to the
financial statements of the Company and its subsidiaries.
(i) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business, properties or
prospects of the Company and its subsidiaries taken as a whole, the effect of
which, in any such case described above, is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares on the terms
and in the manner contemplated in the Prospectus (exclusive of any supplement).
(j) You shall have also received a lock-up agreement from each person
who is a director or officer of the Company and each shareholder as shall have
been heretofore designated by you and listed on SCHEDULE III hereto
substantially in the form attached hereto as ANNEX III.
(k) At the Closing Date, the Shares shall have been approved for
quotation on The Nasdaq National Market.
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(l) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the next business
day succeeding the date of this Agreement.
(m) The Company shall have furnished the Underwriters and
Underwriters' Counsel with such other certificates, opinions or other documents
as they may have reasonably requested.
(n) At the Closing Date you shall have received a written certificate
executed by Xxxxxxx X. Xxxxxxxx in his capacity as Attorney-in-Fact on behalf of
the Selling Stockholders, dated as of the Closing Date, to the effect that (i)
the representations, warranties and covenants of the Selling Stockholders set
forth in Sections 1 and 2 of this Agreement are true and correct with the same
force and effect as though expressly made by the Selling Stockholders on and as
of the Closing Date and (ii) the Selling Stockholders have complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to you or to Underwriters'
Counsel pursuant to this Section 7 shall not be in all material respects
reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, all obligations of the Underwriters hereunder may be cancelled by you
at, or at any time prior to, the Closing Date and the obligations of the
Underwriters to purchase the Additional Shares may be cancelled by you at, or at
any time prior to, the Additional Closing Date. Notice of such cancellation
shall be given to the Company in writing, or by telephone. Any such telephone
notice shall be confirmed promptly thereafter in writing.
8. Indemnification.
(a) The Company and each of its Material Subsidiaries jointly and
severally, and each Selling Stockholder severally but not jointly, shall
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act, against any and all losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but not limited
to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the registration statement for
the registration of the Shares, as originally filed or any amendment thereof, or
any related preliminary prospectus or the Prospectus, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading provided, however,
that the Company, its Material Subsidiaries and the Selling Stockholders will
not be liable in any such case to the extent but only to the extent that any
such loss, liability, claim, damage or expense
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arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through you expressly for use therein; and provided further,
that the Selling Stockholders shall be liable in any such case to the extent but
only to the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished by the Selling Stockholder to the
Company by or on behalf of any Underwriter through you expressly for use
therein, it being understood and agreed that the only such information furnished
by each Selling Stockholder consists of the information in the Prospectus
relating to such Selling Stockholder under the caption "Selling Stockholders"
(including without limitation the information set forth in the footnotes
thereto). The foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, liabilities, claims, damages or expenses
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any such amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if such is required by law, at or
prior to the written confirmation of the sale of such Shares to such person and
if the Prospectus (as so amended or supplemented) would have corrected the
defect giving rise to such loss, liability, claim, damage or expense. This
indemnity agreement will be in addition to any liability which the Company, its
subsidiaries and/or the Selling Stockholders may otherwise have including under
this Agreement.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its Material Subsidiaries, each Selling Stockholder,
each of the directors of the Company, each of the officers of the Company who
shall have signed the Registration Statement, and each other person, if any, who
controls the Company or any of its Material Subsidiaries within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, against
any losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Shares, as originally filed
or any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
you expressly for use therein, provided, however, that in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such
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Underwriter hereunder. This indemnity will be in addition to any liability which
any Underwriter may otherwise have including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve it
from any liability which it may have under this Section 8, except to the extent
the indemnifying party is substantially prejudiced, and then only to the extent
thereof). An indemnifying party may participate at its own expense in the
defense of any such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying parties.
In no event shall the indemnifying parties be liable for the fees and expenses
of more than one counsel (in addition to any local counsel) for all indemnified
parties; such counsel shall be approved by Bear, Xxxxxxx & Co. Inc., whose
approval shall not be unreasonably withheld. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or reasonably could have been a party and indemnity or contribution may be or
could have been sought hereunder by the indemnified party, unless such
settlement, compromise or judgment (i) includes and unconditional release of the
indemnified party from all liability on claims that are or reasonably could have
been the subject matter of such action and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act, by or on behalf of
the indemnified party.
(d) Without limiting the generality of the foregoing, each Selling
Stockholder severally agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act, against any and
all losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to reasonable attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based
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upon a breach of any of the representations or warranties of the Selling
Stockholders set forth in Section 2 hereof.
9. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 8 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, each of its Material
Subsidiaries, each Selling Stockholder and the Underwriters shall contribute to
the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and expenses
suffered by the Company and its Material Subsidiaries any contribution received
by the Company or its Material Subsidiaries from persons, other than the
Underwriters, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company) as incurred to which the
Company, any of its Material Subsidiaries and one or more of the Underwriters
may be subject, in such proportions as is appropriate to reflect the relative
benefits received by the Company and its Material Subsidiaries, the Selling
Stockholders and the Underwriters from the offering of the Shares or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 8 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and its Material Subsidiaries, the Selling Stockholders and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and its Material Subsidiaries, the Selling Stockholders and the Underwriters
shall be deemed to be in the same proportion as (x) the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company or the Selling Stockholders and (y) the
underwriting discount received by the Underwriters, respectively, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company and/or its Material Subsidiaries, the Selling Stockholders
and of the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and its Material Subsidiaries, the Selling Stockholders
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, its Material Subsidiaries, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares are underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
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omission. No person guilty of fraudulent misrepresentation (within in 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. For purposes of this Section 9, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 9. Notwithstanding anything else to the contrary contained herein,
the liability of the Selling Stockholders under the indemnity and reimbursement
agreements contained in the provisions of Sections 8 and 9 hereof shall be
limited to an amount equal to (i) the gross proceeds of the Shares sold by the
Selling Stockholders to the Underwriters, less (ii) the underwriting discounts
and commissions with respect to such Shares sold by the Selling Stockholders.
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 9 or otherwise except to the extent the indemnifying
party is substantially prejudiced, and then only to the extent thereof. The
obligations of the Underwriters to contribute pursuant to this Section 9 are
several in proportion to the respective number of Shares purchased by each of
the Underwriters hereunder and not joint. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
provided, however, that such consent was not unreasonably withheld.
10. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective names in SCHEDULE I hereto bear to the aggregate number of Firm
Shares set forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within five (5) calendar days
after such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 10, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares shall thereupon terminate, without
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liability on the part of the Company or the Selling Stockholders with respect
thereto (except in each case as provided in Section 6, 8(a) and 9 hereof) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(c) In the event that the Firm Shares or Additional Shares to which
the default relates are to be purchased by the non-defaulting Underwriters, or
are to be purchased by another party or parties as aforesaid, you or the Company
shall have the right to postpone the Closing Date or Additional Closing Date, as
the case may be for a period, not exceeding five business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 10 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Additional Shares.
11. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters and the Company, its
Material Subsidiaries and the Selling Stockholders contained in this Agreement,
including the agreements contained in Section 6, the indemnity agreements
contained in Section 8 and the contribution agreements contained in Section 9,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person
thereof or by or on behalf of the Company, any of its officers and directors or
any controlling person thereof or by or on behalf of each Selling Stockholder,
and shall survive delivery of and payment for the Shares to and by the
Underwriters. The representations contained in Section 1 and the agreements
contained in Sections 6, 8, 9 and 12(d) hereof shall survive the termination of
this Agreement, including termination pursuant to Section 10 or 12 hereof.
12. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later of when (i)
you and the Company shall have received notification of the effectiveness of the
Registration Statement or (ii) the execution of this Agreement. If either the
initial public offering price or the purchase price per Share has not been
agreed upon prior to 5:00 P.M., New York City time, on the fifth full business
day after the Registration Statement shall have become effective, this Agreement
shall thereupon terminate without liability to the Company or the Underwriters
except as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying Bear, Xxxxxxx & Co.
Inc. or by Bear, Xxxxxxx & Co. Inc. notifying the Company. Notwithstanding the
foregoing, the provisions of this Section 12 and of Sections 1, 6, 8,. 9 and 11
hereof shall at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement at any time
prior to the Closing Date or the obligations of the Underwriters to purchase the
Additional Shares at any time prior to the Additional Closing Date, as the case
may be, if: (A) trading in the Company's securities on The Nasdaq National
Market has been suspended or made subject to
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material limitations; (B) if trading on the New York Stock Exchange or on The
Nasdaq National Market shall have been suspended or been made subject to
material limitations, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, on
the New York Stock Exchange or on The Nasdaq National Market or by order of the
Commission or any other governmental authority having jurisdiction; (C) if a
banking moratorium has been declared by a state or federal authority or if any
new restriction materially adversely affecting the distribution of the Firm
Shares or the Additional Shares, as the case may be, shall have become
effective; (D) there has been since the date of this Agreement or since the
respective dates as of which information is given on the Registration Statement,
any Material Adverse Effect; or (E) (i) if the United States becomes engaged in
hostilities or there is an escalation of hostilities involving the United States
or there is a declaration of a national emergency or war by the United States or
(ii) if there shall have been such change in political, financial or economic
conditions such that the effect of any such event in (i) or (ii) in your sole
judgment makes it impracticable or inadvisable to proceed with the offering,
sale and delivery of the Firm Shares or the Additional Shares, as the case may
be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 12 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification to you as
provided in Section 12(a) hereof or (ii) Section 10(b) or 12(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the Underwriters in connection herewith.
13. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or faxed
and confirmed in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital Markets, with a
copy to Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 X. Xxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000,
Attention: Xxxxxxx X. Xxxxx;
(b) if sent to the Company, shall be mailed, delivered, or faxed and
confirmed in writing to the Company at the addresses set forth in the
Registration Statement, Attention: Chief Executive Officer, with a copy to
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx
Xxxxx, XX 00000, Attention: X.X. Xxxxxx; and if sent to the Selling Stockholders
shall be mailed, delivered, or faxed and confirmed in writing to the respective
address for each Selling Stockholder set forth on SCHEDULE II hereto with a copy
to Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx Xxxxx, XX 00000, Attention: X.X. Xxxxxx.
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provided, however, that any notice to an Underwriter pursuant to Section 8 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to you, which address will be
supplied to any other party hereto by you upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof.
14. Parties. This Agreement shall insure solely to the benefit of, and
shall be binding upon, the Underwriters, the Selling Stockholders, the Company
and the Material Subsidiaries and the controlling persons, directors, officers,
employees and agents referred to in Section 8 and 9, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. The term "successors
and assigns" shall not include a purchaser, in its capacity as such, of Shares
from any of the Underwriters.
15. Failure of the Selling Stockholders to Sell and Deliver Common Shares.
If the Selling Stockholders shall fail to sell and deliver to the Underwriters
the Shares to be sold and delivered by the Selling Stockholders at the Closing
Date, or the Additional Closing Date, if any, pursuant to this Agreement, the
Company hereby agrees to sell and deliver to the Underwriters that number of
Shares equal to the number of Shares not sold and delivered by the Selling
Stockholders, in which case the Underwriters shall have the right, by written
notice from the Representatives to the Company and the Selling Stockholders, to
postpone the Closing Date, or the Additional Closing Date, if any, for a period
of not more than seven (7) days in order that the required changes, if any, to
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. Counterparts
may be delivered by facsimile and a signature delivered by facsimile shall have
the same effect as an original signature.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
19. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
[signature pages follow]
29
30
If the foregoing correctly sets forth the understanding between you and the
Company, the Selling Stockholders and each of the other entities listed below,
please so indicate in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement among us. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination, upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
THE TRIZETTO GROUP, INC.
By:
---------------------------
Name:
Title:
ERISCO, INC.
By:
---------------------------
Name:
Title:
RESOURCE INFORMATION MANAGEMENT
SYSTEMS, INC.
By:
---------------------------
Name:
Title:
SELLING STOCKHOLDERS
By:
---------------------------
Xxxxxxx X. Xxxxxxxx, as
Attorney-in-Fact
S-1
31
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
UBS WARBURG LLC
XXXXXXX XXXXX XXXXXX INC.
By:
------------------------------
Name:
Title:
On behalf of themselves and the other
Underwriters named in SCHEDULE I hereto.
S-2
32
SCHEDULE I
Total Number of Firm Shares
Name of Underwriter to be Purchased
------------------- ---------------------------
Bear, Xxxxxxx & Co. Inc..........................
UBS Warburg LLC..................................
Xxxxxxx Xxxxx Xxxxxx Inc.........................
Total........... 5,000,000
=========
SCHEDULE I
Page 1 of ___
33
SCHEDULE II
SELLING STOCKHOLDERS
Number of Additional Shares
Total Number of Firm to be Sold to the
Shares to be sold to the Underwriters if Maximum
Name of Selling Stockholder Underwriters Option Exercised
--------------------------- ------------------------ ---------------------------
Xxxxxxx X. Xxxxxxxx............ 140,000 21,000
Xxxxxx X. Xxxxxx............... 40,000 6,000
Delphi Ventures IV, L.P. ...... 300,000 45,000
Delphi BioInvestments IV, L.P.
Total........... 480,000 72,000
======= ======
SCHEDULE II
Page 1 of 1
34
SCHEDULE III
[[Note: Preliminary list]]
Xxxxxxxx Family Trust
Xxxxxxx X. Xxxxxxxx Grantor Retained Annuity Trust
Xxxxxxx Xxxx Xxxxxxxx Grantor Retained Annuity Trust
Delphi Ventures IV, L.P.
Delphi BioInvestments IV, L.P.
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxx X. Xxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx, Xx.
Xxxx X. XxXxxx
Xxxx X. Xxxx
Xxxx Xxxx Holding Partnership, L.P.
Prairie Street Partners, L.P.
Xxxxxx X. Xxxxxxxx
Xxxxx Xxxxx
SCHEDULE III
Page 1 of ___
35
SCHEDULE IV
Material Subsidiaries
Erisco, Inc.
Resource Information Management Systems, Inc.
SCHEDULE IV
Page 1 of 1
36
ANNEX I
Form of Opinion of Company Counsel
(i) Each of the Company and its Material Subsidiaries has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. Each of the Company and its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in good
standing which will not in the aggregate have a Material Adverse Effect. Each of
the Company and its Material Subsidiaries has all requisite corporate authority
to own, lease and license its respective properties and conduct its business as
it is presently being conducted and as described in the Registration Statement
and Prospectus.
(ii) The authorized capital stock of the Company (including the Common
Stock) conforms to the description thereof set forth in the Registration
Statement and the Prospectus. All of the outstanding shares of Common Stock are
duly and validly authorized and issued, are fully paid and nonassessable and
were not issued in violation of or subject to any preemptive rights pursuant to
the Certificate of Incorporation or Bylaws of the Company and, to the knowledge
of such counsel, pursuant to any other document, instrument or agreement. The
Shares to be delivered on the Closing Date have been duly and validly authorized
and, when delivered by the Company in accordance with this Agreement, will be
duly and validly issued, fully paid and nonassessable and, to the knowledge of
such counsel, will not have been issued in violation of or subject to any
preemptive rights. The Common Stock, the Firm Shares and the Additional Shares
conform in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus. No further approval or authority of
the stockholders or the Board of Directors of the Company will be required for
the issuance and the sale of the Shares to be sold by the Company as
contemplated herein. All of the issued and outstanding capital stock of each
[MATERIAL] Subsidiary of the Company (A) has been duly and validly issued and is
fully paid and nonassessable, (B) to the knowledge of such counsel, were not
issued in violation of preemptive rights and (C) is owned directly or indirectly
by the Company and, to the knowledge of such counsel, free and clear of any
lien, encumbrance, claim, security interest, restriction on transfer,
stockholders' agreement, voting trust or other defect of title whatsoever.
Except as disclosed in or specifically contemplated by the Prospectus, to the
knowledge of such counsel, the Company has no outstanding options to purchase,
or any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's stock
option, employee stock purchase and other stock plans or arrangements, and the
options or other rights granted and exercised thereunder, set forth in the
Prospectus fairly presents the information required to be shown with respect to
such plans, arrangements, options and rights and is accurate in all material
respects.
(iii) The Common Stock currently outstanding is listed, and the Shares to
be sold under this Agreement to the Underwriters are duly authorized for
quotation on The Nasdaq National Market.
ANNEX I
Page 1 of 5
37
ANNEX I
(iv) This Agreement has been duly and validly authorized, executed and
delivered by the Company.
(v) To the knowledge of such counsel after due inquiry, there is no
litigation or governmental or other action, suit, proceeding or investigation
before any court or before or by any public, regulatory or governmental agency
or body pending or to such counsel's knowledge, threatened against, or involving
the properties or business of, the Company or any of its subsidiaries, which is
of a character required to be disclosed in the Registration Statement and the
Prospectus which has not been properly disclosed therein.
(vi) The execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereby by the Company do not and
will not (A) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any material agreement,
instrument, franchise, license or permit known to such counsel to which the
Company or any of its subsidiaries is a party or by which any of the Company or
any of its subsidiaries or their respective properties or assets may be bound or
(B) violate or conflict with any provision of the certificate of incorporation
or by-laws of the Company or any of its Material Subsidiaries, or, to the best
knowledge of such counsel, any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of its Material Subsidiaries or any
of their respective properties or assets.
(vii) No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over the Company
or any of its Material Subsidiaries or any of their respective properties or
assets is required for the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby, except for (1) such
as may be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the Underwriters (as to which
such counsel need express no opinion), (2) such as have been made or obtained
under the Securities Act and (3) the clearance of the offering by the National
Association of Securities Dealers, Inc.
(viii) The Registration Statement and the Prospectus and any amendments
thereof or supplements thereto (other than the financial statements and
schedules and other financial or statistical data included or incorporated by
reference therein, as to which no opinion need be rendered) comply as to form in
all material respects with the requirements of the Securities Act and the Rules
and Regulations. The documents filed under the Exchange Act and incorporated by
reference in the Registration Statement and the Prospectus or any amendment
thereof or supplement thereto (other than the financial statements and schedules
and other financial or statistical data included or incorporated by reference
therein, as to which no opinion need be rendered) when they became effective or
were filed with the Commission, as the case may be, complied as to form in all
material respects with the Securities Act or the Exchange Act, as applicable,
and the Rules and Regulations.
ANNEX I
Page 2 of 5
38
ANNEX I
(ix) The Registration Statement is effective under the Securities Act, and,
to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof has been issued and no proceedings therefor have been initiated or
threatened by the Commission and all filings required by Rule 424(b) and Rule
430A of the Rules and Regulations have been made.
(x) To the knowledge of such counsel, neither the Company nor any of its
Material Subsidiaries is in violation of its respective certificate of
incorporation or by-laws or other organizational documents and, to the best of
such counsel's knowledge, neither the Company nor any of its Material
Subsidiaries is in breach or default with respect to any provision of any
agreement, judgment, decree, order, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other agreement or instrument to which the Company
or any of its Material Subsidiaries is a party or by which the Company or any of
its Material Subsidiaries or their respective property is bound except as would
not be material to the Company and its subsidiaries' business, results of
operations or financial condition, taken as a whole; and to the best of such
counsel's knowledge, there does not exist any state of facts which constitutes
an event of default on the part of the Company or any of its Material
Subsidiaries as defined in such documents or which, with notice or lapse of time
or both, would constitute such an event of default except as would not be
material to the Company and its subsidiaries' business, results of operations or
financial condition, taken as a whole.
(xi) To the best knowledge of such counsel, no contract or agreement is
required to be described in the Registration Statement or to be filed as an
exhibit to the Registration Statement that is not accurately described in all
material respects or filed as required. Except as otherwise disclosed in the
Prospectus, the contracts filed and described in the Prospectus are in full
force and effect on the date hereof; and, to such counsel's knowledge, neither
the Company nor any other party is in breach of or default under any of such
contracts except as would not be material to the Company and its subsidiaries'
business, results of operations or financial condition, taken as a whole.
(xii) Such counsel has no knowledge of any material infringement by it of
trademark, trade name rights, patent rights, copyrights, licenses, trade secret
or other similar rights of others, and to such counsel's knowledge, except as
disclosed in the Prospectus, there is no claim pending or threatened against the
Company regarding trademark, trade name, patent, copyright, license, trade
secret or other infringement which could have a material adverse effect on the
condition (financial or otherwise), business, results of operations or prospects
of the Company and its subsidiaries, taken as a whole, nor is such counsel aware
of any reasonable grounds for any such claim.
(xiii) To such counsel's knowledge, there are no outstanding loans,
advances (except normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company or any of the members of the
families of any of them, which is required to be disclosed in the Registration
Statement or the Prospectus, except as disclosed therein.
(xiv) The statements (i) under the following captions in the Prospectus [or
in the documents incorporated by reference] into the Prospectus:
[["BUSINESS--OUR PRODUCTS AND
ANNEX I
Page 3 of 5
39
ANNEX I
SERVICES," "BUSINESS--INTELLECTUAL PROPERTY," "BUSINESS--GOVERNMENT REGULATION,"
"CERTAIN TRANSACTIONS," "DESCRIPTION OF CAPITAL STOCK," "MANAGEMENT--BOARD
COMPOSITION," "MANAGEMENT--BOARD COMMITTEES," "MANAGEMENT--OPTION GRANTS,"
"MANAGEMENT--EMPLOYEE AGREEMENT," "MANAGEMENT--1998 STOCK OPTION PLAN,"
"MANAGEMENT--EMPLOYEE STOCK PURCHASE PLAN," "MANAGEMENT--SECTION 401(k) PLAN,"
"RISK FACTORS--WE COULD LOSE CUSTOMERS AND REVENUE IF WE FAIL TO MEET THE
PERFORMANCE STANDARDS IN OUR CONTRACTS," "RISK FACTORS--WE ARE SUBJECT TO
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER AND IN OUR CONTRACTS THAT COULD DELAY OR
PREVENT AN ACQUISITION OF OUR COMPANY, EVEN IF SUCH AN ACQUISITION WOULD BE
BENEFICIAL TO OUR STOCKHOLDERS" AND "RISK FACTORS--CHANGES IN GOVERNMENT
REGULATION OF THE HEALTHCARE INDUSTRY COULD ADVERSELY AFFECT OUR BUSINESS,"
"RISK FACTORS - PART OF OUR BUSINESS IS SUBJECT TO GOVERNMENTAL REGULATION
RELATING TO THE INTERNET THAT COULD IMPAIR OUR OPERATIONS," "RISK FACTORS - A
SIGNIFICANT PORTION OF OUR OUTSTANDING CAPITAL STOCK IS CONTROLLED BY IMS HEALTH
INCORPORATED AND COULD RESULT IN IMS BEING ABLE TO INFLUENCE TRIZETTO AFTER THIS
OFFERING," AND "RISK FACTORS - A LARGE NUMBER OF SHARES OF OUR COMMON STOCK WILL
BE ELIGIBLE FOR SALE SHORTLY AFTER THE OFFERING, WHICH COULD RESULT IN A DECLINE
IN OUR STOCK PRICE"]] and (ii) in Items 14 and 15 of Part II of the Registration
Statement, insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and proceedings.
(xv) The form of certificate used to evidence the Shares is in due and
proper form and complies in all material respects with all applicable statutory
requirements under the laws of the State of Delaware.
(xvi) The Company has duly authorized and reserved a number of shares of
Common Stock for issuance upon the exercise of options under the Company's Stock
Option Plan which is not less than the number of options issuable under such
plan, as of the Closing Date.
(xvii) No stockholder of the Company or any other person has any preemptive
right of first refusal or other similar right to subscribe for or purchase
securities of the Company which would apply to the Shares or continue in effect
following the Closing (i) arising by operation of the certificate of
incorporation or bylaws of the Company or the general corporation law of the
State of Delaware or (ii) arising from any contract or agreement filed or
incorporated by reference as an exhibit to the Registration Statement (including
without limitation any transaction document entered into in connection with any
of the Company's Preferred Stock financings) or to any document incorporated by
reference into the Registration Statement or otherwise known to such counsel,
except for such rights as have been validly and duly waived prior to the date
hereof.
(xviii) The Company has full corporate power and authority to execute and
deliver this Agreement and the Shares and to perform its obligations hereunder,
and all corporate action required to be taken for the due and proper
authorization, execution and delivery of this Agreement and the Shares and the
consummation of the transactions contemplated by this Agreement and as described
in the Prospectus have been duly and validly taken.
ANNEX I
Page 4 of 5
40
ANNEX I
In addition, such opinion shall also contain a statement that such counsel
has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Underwriters at which the contents and the Prospectus and related
matters were discussed and, although such counsel has not verified the accuracy
or completeness of each statement contained in the Registration Statement or
Prospectus, no facts have come to the attention of such counsel which would lead
such counsel to believe that either the Registration Statement, at the time it
became effective (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A(b) or
Rule 434, if applicable), or any amendment thereof made prior to the Closing
Date, as of the date of such amendment, contained or incorporated by reference
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus (including the documents incorporated by
reference therein), as of its date (or any amendment thereof or supplement
thereto made prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with respect to
the financial statements and schedules and other financial or statistical data
included or incorporated by reference therein).
ANNEX I
Page 5 of 5
41
ANNEX II
Form of Opinion of Selling Stockholder's Counsel
(i) Each Selling Stockholder has full legal right, power and authority, and
any approval required by law (other than any approval imposed by the applicable
state securities and Blue Sky laws), to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder in the manner provided in this
Agreement.
(ii) To the best of such counsel's knowledge, after due inquiry, each
Selling Stockholder has good and clear title to the certificates for the Shares
to be sold by such Selling Stockholder, and upon delivery thereof pursuant
hereto and payment therefor, good and clear title will pass to the Underwriters,
severally, free of all restrictions on transfer, liens, encumbrances, security
interests and claims whatsoever.
(iii) This Agreement has been duly and validly authorized, executed and
delivered by each Selling Stockholder.
(iv) The Custody Agreements and Powers of Attorney appointing U.S. Stock
Transfer Corporation as the Custodian and Xx. Xxxxxxx X. Xxxxxxxx as such
Selling Stockholder's Attorney-in-Fact, to the extent set forth therein with
regard to the transactions contemplated hereby and by the Registration
Statement, have been duly authorized, executed and delivered by or on behalf of
each Selling Stockholder and is the valid and binding instrument of each Selling
Stockholder enforceable in accordance with its terms, and pursuant to such power
of attorney, each Selling Stockholder has authorized such attorney-in-fact, to
execute and deliver on such Selling Stockholder's behalf this Agreement and any
other document necessary or desirable in connection with the transactions
contemplated hereby and to delivery the Shares to be sold by such Selling
Stockholder pursuant to this Agreement.
(v) The execution, delivery and performance of this Agreement by each
Selling Stockholder, compliance by each Selling Stockholder with all the
provisions hereof and the consummation of the transactions contemplated hereby
will not require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental body (except
as such may be required under the Securities Act, state securities laws or Blue
Sky laws or except as such may have been obtained) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of each Selling Stockholder, if applicable, or any
material agreement, indenture or other instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder or property of the
Selling Stockholder is bound, or, to the knowledge of such counsel, violate or
conflict with any laws, administrative regulation or ruling or court decree
applicable to such Selling Stockholder or property of such Selling Stockholder.
ANNEX II
Page 1 of 1
42
ANNEX III
Form of Lock-Up Agreement
_______, 2001
BEAR, XXXXXXX & CO. INC.
UBS WARBURG LLC
XXXXXXX XXXXX XXXXXX INC.
as Representatives
of the several Underwriters
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Capital Markets
The TriZetto Group, Inc. Lock-Up Agreement
Ladies and Gentlemen:
We refer to the proposed Underwriting Agreement (the "Underwriting
Agreement"), between The TriZetto Group, Inc., a Delaware corporation (the
"Company"), and you as representatives of the Underwriters named therein (the
"Underwriters") relating to an underwritten public offering (the "Offering") of
common stock, $.001 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned hereby agrees that, without the prior
written consent of Bear, Xxxxxxx & Co. Inc., the undersigned will not, directly
or indirectly, during the period from the date hereof until ninety (90) days
from the date of the final prospectus for the Offering (the "Lock-Up Period"),
(i) offer, sell, agree to offer or sell, solicit offers to purchase, grant any
call option or purchase any put option with respect to, pledge, borrow or
otherwise dispose of any Relevant Security (as defined below), (ii) establish or
increase a "put equivalent position" or liquidate or decrease a "call equivalent
position" with respect to any Relevant Security (in each case within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder (the "Exchange Act")), or otherwise enter
into any swap, derivative or other transaction or arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
any Relevant Security, whether or not such transaction is to be settled by
delivery of Relevant Securities, other securities, cash or other consideration.
As used herein "Relevant Security" means the Common Stock, any other equity
security of the Company or any of its subsidiaries and any security convertible
into, or exercisable or exchangeable for, any Common Stock or other such equity
security.
The undersigned hereby authorizes the Company during the Lock-Up Period to
cause the transfer agent to decline to transfer and/or to note stop transfer
restrictions on the transfer books and records of the Company with respect to
any shares of any Relevant Security for which the undersigned is the record
holder and, in the case of any such share or securities for which the
undersigned is the beneficial but not the record holder, agrees to cause the
record holder to cause the transfer agent to decline to transfer and/or note
stop transfer restrictions on such books and records with respect to such shares
or securities.
Notwithstanding the foregoing (i) if the undersigned is an individual, he
or she may transfer shares of a Relevant Security by gift, will, or intestate
succession to his or her immediate family or to a trust the beneficiaries of
which are exclusively the undersigned and/or a member or members of his or her
ANNEX III
Page 1 of 2
43
ANNEX III
immediate family (for purposes of this paragraph, "immediate family" shall mean
spouse, lineal descendant, father, mother, brother or sister of the transferor)
and (ii) if the undersigned is a corporation, partnership, limited liability
company or other entity, it may transfer shares of a Relevant Security to the
shareholders, partners or members of the undersigned on a pro rata basis in
accordance with their respective ownership interests in such entity as dividend
or other general distribution in respect of ownership interests in such entity
provided, however, that in any such case described in (i) or (ii) above it shall
be a condition to the transfer that (x) each transferee execute an agreement
stating that the transferee is receiving and holding the Relevant Security
subject to the provisions of this Agreement, and there shall be no further
transfer of the Relevant Security except in accordance with this Agreement and
(y) that each transferee certifies in writing to Bear, Xxxxxxx & Co. Inc. that
such transferee is in compliance with the terms of this agreement as if such
transferee had been bound by this agreement from the original date of this
agreement.
The undersigned hereby further agrees that, during the Lock-up Period, the
undersigned (x) will not file or participate in the filing with the Securities
and Exchange Commission of any registration statement, or circulate or
participate in the circulation of any preliminary or final prospectus or other
disclosure document with respect to any proposed offering or sale of a Relevant
Security by the undersigned and (y) will not exercise any rights the undersigned
may have to require registration with the Securities and Exchange Commission of
any proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement and that this
letter agreement constitutes the legal, valid and binding obligation of the
undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon the
successors and assigns of the undersigned from the date first above written.
This letter agreement shall be governed by and construed in accordance with
the laws of the State of New York. Delivery of a signed copy of this letter by
telecopier or facsimile transmission shall be effective as delivery of the
original hereof. This letter agreement shall expire by its terms if the
Underwriting Agreement is not executed on or before September 30, 2001.
Very truly yours,
By:
--------------------------------
Print Name:
------------------------
ANNEX III
Page 2 of 2
