Exhibit 1.1
5,750,000 Shares of Common Stock
OPEN SOLUTIONS INC.
UNDERWRITING AGREEMENT
November [__], 2003
BEAR, XXXXXXX & CO. INC.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
U.S. BANCORP XXXXX XXXXXXX INC.
As Representatives (the "Representatives") of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Open Solutions 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 4,820,000 shares (the
"Company Shares") of its common stock, par value .01 per share (the "Common
Stock"). The stockholders of the Company listed on Schedule I hereto (the
"Selling Stockholders") severally and not jointly propose to sell to the
Underwriters an aggregate of 180,000 shares of Common Stock (the "Selling
Stockholders' Shares" and, together with the Company Shares, the "Firm Shares").
For the sole purpose of covering over-allotments in connection with the sale of
the Firm Shares, at the option of the Underwriters, the Company also proposes to
issue and sell to 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 and Prospectus referred
to below. Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx" or the "Lead Manager") is
acting as lead manager in connection with the offering and sale of the Shares
(the "Offering").
The Company also proposes, subject to the terms of this
agreement (this "Agreement"), the applicable rules, regulations and
interpretations of the NASD (as defined below) and all other applicable laws,
rules and regulations, that up to 100,000 Firm Shares (the "Directed Shares")
shall be reserved for sale by the Underwriters to certain officers, directors,
employees and other persons designated by the Company ("Directed Share
Purchasers"). To the extent that sales of any Directed Shares are not orally
confirmed for purchase by Directed Share
Purchasers by the end of the first business day after the date of this
Agreement, such Directed Shares will be offered to the public as part of the
Offering.
1. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees 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-1
(No. 333-108293), and amendments thereto, and related preliminary prospectuses
for the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of the Shares which registration statement, as so amended
(including post-effective amendments, if any), has been declared effective 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 and information (if any) deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430A or
434(d) 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 increasing the size of the Offering by 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, if filed, becomes effective upon filing,
no other document with respect to the Registration Statement has heretofore been
filed with the Commission. All of the Shares have been registered under the
Securities Act pursuant to the Registration Statement or, if any Rule 462(b)
Registration Statement is filed, will be duly registered under the Securities
Act with the filing of such Rule 462(b) Registration Statement. 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 threatened by the Commission. The Company, if
required by the rules and regulations of the Commission (the "Rules and
Regulations") or by the Securities Act, proposes to file the Prospectus with the
Commission pursuant to Rule 424(b) under the Securities Act ("Rule 424(b)"). The
prospectus, in the form in which it is to be filed with the Commission pursuant
to Rule 424(b), 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 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)), the term
"Prospectus" shall also 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 any wrapper or supplement thereto prepared in connection with the
distribution of Directed Shares in any jurisdiction outside the United States.
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
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include any copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System (the "XXXXX System").
(b) At the time of the effectiveness of the
Registration Statement or any Rule 462(b) 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 under the Securities Act ("Rule 434"), when any supplement to or
amendment of the Prospectus is filed with the Commission 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 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) under the Securities Act) 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 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. If Rule 434 is used, the Company
will comply with the requirements of Rule 434 and the Prospectus shall not be
"materially different," as such term is used in Rule 434, from the Prospectus
included in the Registration Statement at the time it became effective. 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 specifically for use therein. The parties
acknowledge and agree that such information provided by or on behalf of any
Underwriter consists solely of the statements set forth in the first paragraph
under the subcaption "Commissions and Discounts," in the last paragraph under
the subcaption "No Sales of Similar Securities," in the first two paragraphs
under the subcaption "Price Stabilization, Short Positions" and under the
subcaptions "Passive Market Making" and "Other Relationships" under the caption
"Underwriting" in the Prospectus.
(c) PricewaterhouseCoopers LLP, who have
certified the financial statements and supporting schedules and information of
(i) the Company and its subsidiaries and (ii) Liberty FiTech Systems, Inc., each
of which are included in the Registration Statement, and whose reports appear in
the Registration Statement or the Prospectus, are independent public accountants
as required by the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the Rules and Regulations.
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(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, the
Company has not declared, paid or made any dividends or other distributions of
any kind on or in respect of its capital stock and there has been no material
adverse change or any development involving a prospective material adverse
change, whether or not arising from transactions in the ordinary course of
business, in or affecting (i) the business, condition (financial or otherwise),
results of operations, stockholders' equity or properties of the Company and
each subsidiary of the Company listed on Exhibit A hereto (collectively, the
"Subsidiaries"); (ii) the long-term debt or capital stock of the Company or any
of its Subsidiaries; or (iii) the Offering or any other transaction contemplated
by this Agreement, the Registration Statement or the Prospectus with respect to
the Offering (any of the events described in clauses (i) through (iii), a
"Material Adverse Change"). Since the date of the latest balance sheet presented
in the Registration Statement and the Prospectus, neither the Company nor any
Subsidiary has incurred or undertaken any liabilities or obligations, whether
direct or indirect, liquidated or contingent, matured or unmatured, or entered
into any transactions which are material to the Company and the Subsidiaries
individually or taken as a whole, except for liabilities, obligations and
transactions which are disclosed in the Registration Statement and the
Prospectus.
(e) The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the column
headed "Actual" under the caption "Capitalization" and, after giving effect to
the Offering and the other transactions contemplated by this Agreement, the
Registration Statement and the Prospectus with respect to the Offering, will be
as set forth in the column headed "Pro Forma As Adjusted" under the caption
"Capitalization". All of the issued and outstanding shares of capital stock of
the Company, including the Selling Stockholders' Shares, are fully paid and
non-assessable and have been duly and validly authorized and issued, in
compliance with all applicable state, federal and foreign securities laws and
not in violation of or subject to any preemptive or similar right that does or
will entitle any person, upon the issuance or sale of any security, to acquire
from the Company or any Subsidiary any Common Stock or other security of the
Company or any Subsidiary or any security convertible into, or exercisable or
exchangeable for, Common Stock or any other such security (each a "Relevant
Security"), 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 in accordance with this Agreement, will be duly and validly
issued, fully paid and non-assessable, will have been issued in compliance with
all applicable state, federal and foreign securities laws and will not have been
issued in violation of or subject to any preemptive or similar right that does
or will entitle any person to acquire any Relevant Security from the Company or
any Subsidiary upon issuance or sale of Shares in the Offering. The Common Stock
and the Shares conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus. Except as disclosed
in the Registration Statement and the Prospectus, neither the Company nor any
Subsidiary has outstanding options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, or any contracts or commitments to
issue or sell, any Relevant Security.
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(f) The Subsidiaries are the only subsidiaries
of the Company within the meaning of Rule 405 under the Securities Act. Except
for the Subsidiaries, the Company holds no ownership or other interest, nominal
or beneficial, direct or indirect, in any corporation, partnership, joint
venture or other business entity. All of the issued shares of capital stock of
or other ownership interests in each Subsidiary have been duly and validly
authorized and issued and are fully paid and non-assessable and are owned
directly or indirectly by the Company free and clear of all liens, encumbrances,
equities, defects or claims.
(g) Each of the Company and the Subsidiaries has
been duly organized and validly exists as a corporation, partnership or limited
liability company in good standing under the laws of its jurisdiction of
organization. Each of the Company and the Subsidiaries is duly qualified to do
business and is in good standing as a foreign corporation, partnership or
limited liability company 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 (individually or in the aggregate)
would not reasonably be expected to have a material adverse effect on (i) the
business, condition (financial or otherwise), results of operations,
stockholders' equity or properties of the Company and the Subsidiaries; (ii) the
long-term debt or capital stock of the Company or any of its Subsidiaries; or
(iii) the Offering or any other transaction contemplated by this Agreement, the
Registration Statement or the Prospectus in connection with the Offering (a
"Material Adverse Effect"). Each of the Company and the Subsidiaries has all
requisite power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses, filings and
permits (collectively, the "Consents") of, with and from all judicial,
regulatory and other legal or governmental agencies and bodies and all third
parties, foreign and domestic, to own, lease and operate its properties and
conduct its business as it is now being conducted and as disclosed in the
Registration Statement and the Prospectus, and each such Consent is valid and in
full force and effect except for those failures to obtain such Consents that
would not, individually or in the aggregate, result in a Material Adverse
Effect. Neither the Company nor any Subsidiary has received notice of any
investigation or proceedings which would reasonably be expected to result in the
revocation of any such Consent. Each of the Company and the Subsidiaries is in
compliance with all applicable laws, rules, regulations, ordinances, directives,
judgments, decrees and orders, foreign and domestic, except where failure to be
in compliance would not, individually or in the aggregate, result in a Material
Adverse Effect. No Consent contains a materially burdensome restriction not
adequately disclosed in the Registration Statement and the Prospectus.
(h) The Company has full right, power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus. This Agreement and the transactions
contemplated by this Agreement, the Registration Statement and the Prospectus
have been duly and validly authorized by the Company. This Agreement has been
duly and validly executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
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(i) The execution, delivery, and performance of
this Agreement and consummation of the transactions contemplated by this
Agreement, the Registration Statement and the Prospectus do not and will not (i)
conflict with, require consent under 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 Subsidiary pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement, instrument, franchise, license
or permit to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or their respective properties, operations or assets
may be bound or (ii) violate or conflict with any provision of the certificate
or articles of incorporation, by-laws, certificate of formation, limited
liability company agreement, partnership agreement or other organizational
documents of the Company or any Subsidiary, or (iii) violate or conflict with
any law, rule, regulation, ordinance, directive, judgment, decree or order of
any judicial, regulatory or other legal or governmental agency or body, domestic
or foreign, except (in the case of clauses (i) and (iii) above) as would not,
individually or in the aggregate, result in a Material Adverse Effect. No
Consent of, with or from any judicial, regulatory or other legal or governmental
agency or body or any third party, foreign or domestic, is required for the
execution, delivery and performance of this Agreement or consummation of the
transactions contemplated by this Agreement, the Registration Statement and the
Prospectus, including the issuance, sale and delivery of the Shares to be
issued, sold and delivered hereunder, except the registration under the
Securities Act of the Shares, which has become effective, and such Consents as
may be required under state securities or blue sky laws or the by-laws and rules
of the National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution of the Shares by the Underwriters,
each of which has been obtained and is in full force and effect.
(j) Except as disclosed in the Registration
Statement and the Prospectus, there is no judicial, regulatory or other legal or
governmental proceeding or other litigation pending to which the Company or any
Subsidiary is a party or of which any property, operations or assets of the
Company or any Subsidiary is the subject which, if determined adversely to the
Company or any Subsidiary, would not, individually or in the aggregate, result
in a Material Adverse Effect; to the best of the Company's knowledge, no such
proceeding or litigation is threatened or contemplated.
(k) The financial statements, including the
notes thereto, and the supporting schedules included in the Registration
Statement and the Prospectus present fairly in all material respects the
financial position as of the dates indicated and the cash flows and results of
operations for the periods specified of the Company and its consolidated
subsidiaries and of Liberty FiTech Systems, Inc. Except as otherwise stated in
the Registration Statement and the Prospectus, said financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except that
interim financial information is subject to normal year-end audit adjustments);
and the supporting schedules included in the Registration Statement and the
Prospectus present fairly in all material respects the information required to
be stated therein. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The other financial and
statistical information included in the Registration Statement and the
Prospectus present fairly in all material respects the information included
therein and have been prepared on
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a basis consistent with that of the financial statements that are included in
the Registration Statement and the Prospectus and the books and records of the
respective entities presented therein.
(l) There are no pro forma or as adjusted
financial statements which are required to be included in the Registration
Statement and the Prospectus in accordance with Regulation S-X which have not
been included as so required. The pro forma and pro forma as adjusted financial
information included in the Registration Statement and the Prospectus have been
properly compiled and prepared in accordance with the applicable requirements of
the Securities Act and the Rules and Regulations.
(m) The assumptions used in preparing the pro
forma and pro forma as adjusted financial information included in 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 adjustments made in the preparation of
such pro forma and pro forma as adjusted financial information give appropriate
effect to those assumptions; and such pro forma and pro forma as adjusted
financial information reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(n) The Shares have been approved for quotation
on The NASDAQ National Market (the "NASDAQ") subject to notice of issuance and
evidence of satisfactory distribution, and the Company has taken no action
designed to terminate, or likely to have the effect of terminating, the
quotation of the Shares on the NASDAQ, nor has the Company received any
notification that the NASDAQ is contemplating terminating such quotation.
(o) The statistical (not including any
statistical data derived from the financial statements), industry-related and
market-related data included in the Registration Statement and the Prospectus
are based on or derived from sources which the Company reasonably and in good
faith believes are reliable and accurate, and such data agree with the sources
from which they are derived.
(p) The Company and its Subsidiaries maintain a
system of internal accounting and other 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 permitted only in accordance with management's
general or specific authorization, and (iv) the recorded accounting for assets
is compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(q) Neither the Company nor any of its
affiliates (within the meaning of Rule 144 under the Securities Act) has taken,
directly or indirectly, any action which constitutes or is designed to cause or
result in, or which might reasonably be expected to constitute, cause or result
in, the stabilization or manipulation of the price of any security to facilitate
the sale or resale of the Shares.
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(r) The Company has not prior to the date hereof
made any offer or sale of any securities which would be "integrated" for
purposes of the Securities Act or Rules and Regulations with the offer and sale
of the Shares pursuant to the Registration Statement. Except as disclosed in the
Registration Statement and the Prospectus, the Company has not sold or issued
any Relevant Security during the six-month period preceding the date of the
Prospectus, including but not limited to any sales pursuant to Rule 144A or
Regulation D or S under the Securities Act, other than shares of Common Stock
issued pursuant to employee benefit plans, qualified stock option plans or the
employee compensation plans or pursuant to outstanding options, rights or
warrants as described in the Registration Statement and the Prospectus.
(s) Except as disclosed in the Registration
Statement and the Prospectus, no holder of any Relevant Security has any rights
to require registration of any Relevant Security as part or on account of, or
otherwise in connection with, the offer and 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, and any such waivers
remain in full force and effect.
(t) The Company is not and, at all times up to
and including consummation of the transactions contemplated by this Agreement,
the Registration Statement and the Prospectus in connection with the Offering,
and after giving effect to application of the net proceeds of the Offering, will
not be, subject to registration as an "investment company" under the Investment
Company Act of 1940, as amended, and is not and will not be an entity
"controlled" by an "investment company" within the meaning of such act.
(u) There are no contracts or other documents
(including, without limitation, any voting agreement), which are required to be
described in the Registration Statement and the Prospectus or filed as exhibits
to the Registration Statement by the Securities Act or the Rules and Regulations
and which have not been so described or filed.
(v) No relationship, direct or indirect, exists
between or among any of the Company or any affiliate of the Company, on the one
hand, and any director, officer, stockholder, customer or supplier of the
Company or any affiliate of the Company, on the other hand, which is required by
the Securities Act or the Rules and Regulations to be described in the
Registration Statement or the Prospectus which is not so described as required.
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 their respective family members, except as disclosed in the
Registration Statement and the Prospectus.
(w) Except as disclosed in the Registration
Statement and the Prospectus, there are no contracts, agreements or
understandings between the Company and any person that would give rise to a
valid claim against the Company or any Underwriter for a brokerage commission,
finder's fee or other like payment in connection with the transactions
contemplated by this Agreement, the Registration Statement and the Prospectus
or, to the Company's knowledge, any arrangements, agreements, understandings or
payments with respect
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to the Company or any of its officers, directors, stockholders, employees,
Subsidiaries or affiliates that may affect the Underwriters' compensation as
determined by the NASD.
(x) The Company and each Subsidiary owns or
leases all such tangible real and personal properties as are necessary to the
conduct of its business as presently operated and as proposed to be operated as
described in the Registration Statement. The Company and each Subsidiary 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, equities, defects and claims except such as
are described in the Registration Statement and the Prospectus or such as do not
(individually or in the aggregate) materially affect the value of such property
or materially interfere with the use made or proposed to be made of such
property by the Company and the Subsidiaries; and any real property and
buildings held under lease or sublease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as are not material to, and do not materially interfere with, the use made and
proposed to be made of such property and buildings by the Company and the
Subsidiaries. Neither the Company nor any Subsidiary has received any notice of
any claim adverse to its ownership of any real or personal property or of any
claim against the continued possession of any real property, whether owned or
held under lease or sublease by the Company or any Subsidiary.
(y) Except as otherwise disclosed in the
Registration Statement, the Company and each Subsidiary (i) owns or possesses
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,
"Intellectual Property") necessary for the conduct of their respective
businesses as being conducted and as described in the Registration Statement and
Prospectus, except where the failure to own or possess such rights would not,
individually or in the aggregate, result in a Material Adverse Effect, and (ii)
have no reason to believe that the conduct of their respective businesses does
or will conflict with, and have not received any notice of any claim of conflict
with, any such right of others. To the best of the Company's knowledge, all
material technical information developed by and belonging to the Company which
has not been patented and which the Company considers to be its trade secrets
has been kept confidential. Except as otherwise disclosed in the Registration
Statement, neither the Company nor any of its 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. To the Company's knowledge, there is no infringement by third
parties of any such Intellectual Property; there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's or any Subsidiary's rights in or to any such
Intellectual Property, and the Company is unaware of any facts which would form
a reasonable basis for any such claim; and there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others that
the Company infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and the Company is unaware
of any other fact which would form a reasonable basis for any such claim.
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(z) The Company and each Subsidiary carry, or
are covered by, insurance in such amounts and covering such risks as the Company
reasonably considers adequate for the conduct of its business and the value of
its properties and as is customary for companies engaged in similar businesses
in similar industries, all of which insurance is in full force and effect.
(aa) Each of the Company and the Subsidiaries has
accurately prepared and timely filed all material federal, state and other tax
returns that are required to be filed by it (or has received timely extensions
therefore) and has paid or made provision for the payment of all material taxes,
assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which the Company or any
Subsidiary is obligated to withhold from amounts owing 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). No deficiency
assessment with respect to a proposed adjustment of the Company's or any
Subsidiary' federal, state, local or foreign taxes is pending or, to the best of
the Company's knowledge, threatened. The Company believes that the accruals and
reserves on the books and records of the Company and the Subsidiaries in respect
of tax liabilities for any taxable period not finally determined are adequate to
meet any assessments and related liabilities for any such period and, since
December 31, 2002, the Company and the Subsidiaries have not incurred any
liability for taxes other than in the ordinary course of its business or as
otherwise disclosed in the Registration Statement. 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 Subsidiary.
(bb) No labor disturbance by the employees of the
Company or any Subsidiary exists or, to the best of the Company's knowledge, is
imminent and the Company is not aware of any existing or imminent labor
disturbances by the employees of any of its or any Subsidiary's principal
suppliers, manufacturers', customers or contractors, which, in either case
(individually or in the aggregate), could reasonably be expected to have a
Material Adverse Effect.
(cc) No "prohibited transaction" (as defined in
either 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")), "accumulated funding deficiency" (as defined in
Section 302 of ERISA) or other event of the kind described 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 for which the Company or any Subsidiary would have any
liability which could (individually or in the aggregate) reasonably be expected
to have a Material Adverse Effect; each employee benefit plan for which the
Company or any Subsidiary would have any liability is in compliance in all
material respects with applicable law, including (without limitation) ERISA and
the Code, except for any failure to so comply that would not, individually or in
the aggregate, result in a Material Adverse Effect; the Company 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 plan for
which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified and, to the knowledge of the
Company, and nothing
10
has occurred, whether by action or by failure to act, which could cause the loss
of such qualification.
(dd) 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 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
Subsidiary, or upon any other property, which would be a violation of or give
rise to any liability under any applicable law, rule, regulation, order,
judgment, decree or permit relating to pollution or protection of human health
and the environment ("Environmental Law"), except for violations and liabilities
which would not, individually or in the aggregate, result in 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 Subsidiary has knowledge, except as would not, individually or in
the aggregate, result in 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, individually or in the aggregate, result
in a Material Adverse Effect. There is no pending or, to the best of the
Company's knowledge, threatened, administrative, regulatory or judicial action,
claim or notice of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any Subsidiary.
(ee) Neither the Company, any Subsidiary 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 duties, other than
payments required or permitted by the laws of the United States of any
jurisdiction thereof.
(ff) Neither the Company nor any Subsidiary (i)
is in violation of its certificate or articles of incorporation, by-laws
effective as of the Closing Date, certificate of formation, limited liability
company agreement, partnership agreement or other organizational documents, (ii)
is in default under, and no event has occurred 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 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 law, rule, regulation, ordinance,
directive, judgment, decree or order of any judicial, regulatory or other legal
or governmental agency or body, foreign or domestic, except (in the case clauses
(ii) and (iii) above) violations or defaults that would not, individually or in
the aggregate, result in a Material Adverse Effect and except (in the case of
clause (ii) alone) for any lien, charge or encumbrance disclosed in the
Registration Statement and the Prospectus.
(gg) The Registration Statement, the Prospectus
and any Preliminary Prospectus comply in all material respects, and any further
amendments or supplements thereto
11
will comply in all material respects, with all applicable laws, rules,
regulations, ordinances, directives, judgments, decrees and orders of foreign
jurisdictions in which Directed Shares are offered or the Prospectus or any
Preliminary Prospectus, as amended or supplemented, if applicable, may be
distributed in connection therewith; and no Consent of, from or with any
judicial, regulatory or other legal or governmental agency or body, other than
such as have been obtained, is necessary under the any such law, rule,
regulation, ordinance, directive, judgment, decree or order.
(hh) The Company has not offered, or caused the
Underwriters to offer, Directed Shares to any person with the intention of
unlawfully influencing (i) a customer or supplier of the Company or any
Subsidiary to alter the customer's or supplier's level or type of business with
the Company or any Subsidiary or (ii) a trade journalist or publication to write
or publish favorable information about the Company, any Subsidiary or its
products.
Any certificate signed by or on behalf of the Company and
delivered to you or to counsel for the Underwriters' on the Closing Date and the
Additional Closing Date, if any (as hereinafter respectively defined), shall be
deemed to be a representation and warranty by the Company to each Underwriter as
to the matters covered thereby.
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) Such Selling Stockholder has full right,
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated by this
Agreement, the Registration Statement and the Prospectus. This Agreement and the
transactions contemplated by this Agreement, the Registration Statement and the
Prospectus have been duly and validly authorized by such Selling Stockholder.
This Agreement has been duly and validly executed and delivered by such Selling
Stockholder and constitutes the legal, valid and binding obligation of such
Selling Stockholder, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(b) Such Selling Stockholder has full right,
power and authority to execute and deliver a Custody Agreement and Power of
Attorney substantially in the form of Exhibits B and C hereto (such Selling
Stockholder's "Custody Agreement" and "Power of Attorney", respectively), to
perform its obligations thereunder and to consummate the transactions
contemplated by its Custody Agreement and Power of Attorney. The Custody
Agreement and Power of Attorney and the transactions contemplated by the Custody
Agreement and Power of Attorney have been duly and validly authorized by such
Selling Stockholder. The Custody Agreement and Power of Attorney have each been
duly and validly executed and delivered by such Selling Stockholder and
constitute the legal, valid and binding obligation of such Selling Stockholder,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and except as enforceability
may be subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in
12
equity or at law). Counterparts of such Selling Stockholder's Custody Agreement,
duly signed by (i) the Company, as custodian (in such capacity, the "Custodian")
and (ii) Xxxxx Xxxxxxxxx, Xx. and Xxxx X. Xxxxxxxx as such Selling Stockholders'
attorney-in-fact (in such capacity, the "Attorney-In-Fact") have been delivered
to the Company and Bear Xxxxxxx on or prior to the date of this Agreement.
(c) Such Selling Stockholder agrees that the
Shares to be sold by such Selling Stockholder, whether or not 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 such Selling Stockholder hereunder shall not be terminated,
except as provided in this Agreement or in the Custody Agreement or Power of
Attorney, by any act of such Selling Stockholder, by operation of law or by the
occurrence of any other event. If such Selling Stockholder should die or become
incapacitated, or if any other event should occur affecting the legal status or
capacity of such Selling Stockholder 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 event had not occurred, regardless of whether or not the
Custodian shall have received notice thereof.
(d) Such Selling Stockholder has, and on the
Closing Date will have, good and marketable title to, and is the lawful owner
of, the Selling Stockholders' Shares to be sold by such Selling Stockholder
hereunder, and upon sale and delivery of, and payment for, such Shares as
provided herein, such Selling Stockholder will convey to the Underwriters good
and marketable title to such Selling Stockholders' Shares, free and clear of all
liens, encumbrances, equities, defects and claims. Certificates for all of the
Selling Stockholders' Shares to be sold by such Selling Stockholder pursuant to
this Agreement, in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank with signatures
guaranteed, have been placed in custody with the Custodian with irrevocable
conditional instructions to deliver such Shares to the Underwriters pursuant to
this Agreement.
(e) No Consent of, with or from any judicial,
regulatory or other legal or governmental agency or body or any third party,
foreign or domestic, is required for the execution, delivery and performance by
the Selling Stockholder of this Agreement or its Custody Agreement or Power of
Attorney, or consummation of the transactions contemplated herein or therein,
including the sale and delivery of the Selling Stockholders' Shares to be sold
and delivered hereunder, except the registration under the Securities Act of
such Selling Stockholders' Shares and such Consents as may be required under
state securities or blue sky laws and the rules of the NASD in connection with
the purchase and distribution of such Selling Stockholder's Shares by the
Underwriters, each of which has been obtained and is in full force and effect.
(f) The execution, delivery and performance of
this Agreement, the Power of Attorney and the Custody Agreement by such Selling
Stockholder and consummation of any of the other transactions contemplated
herein and therein by the Selling Stockholder or the fulfillment of the terms
hereof by the Selling Stockholder do not and will not (A) conflict with, require
consent under or result in a breach of any of the terms and provisions of, or
constitute a
13
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 such Selling
Stockholder pursuant to any indenture, mortgage, deed of trust, loan agreement
or other agreement, instrument, franchise, license or permit to which such
Selling Stockholder is party or by which such Selling Stockholder or its
properties or assets may be bound, or (B) violate or conflict with any law, rule
regulation, ordinance, directive, decree or order of any judicial, regulatory or
other legal or governmental agency or body, domestic or foreign.
(g) Except as disclosed in the Registration
Statement and the Prospectus, such Selling Stockholder does not have any right
to require registration of any Relevant Security as part or on account of, or
otherwise in connection with, the offer and 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 such Selling Stockholder, and any such
waiver remains in full force and effect.
(h) Such Selling Stockholder does not have, or
has 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 or any other Selling Stockholder to the
Underwriters pursuant to this Agreement; and such Selling Stockholder does not
own any warrants, options or similar rights to acquire, and does 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) Except as disclosed in the Registration
Statement and the Prospectus, there are no contracts, agreements or
understandings between such Selling Stockholder and any person that would give
rise to a valid claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with the
transactions contemplated by this Agreement, the Registration Statement of the
Prospectus or, to such Selling Stockholder's knowledge, any arrangements,
agreements, understandings or payments with respect to the Company or any of its
officers, directors, stockholders, employees, Subsidiaries or affiliates that
may affect the Underwriters' compensation as determined by the NASD.
(j) The information in the Registration
Statement and the Prospectus under the caption "Principal and Selling
Stockholders" which specifically relates to such Selling Stockholder does not,
and will not on the Closing Date, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. In the event there is any change in
the information under the caption "Principal and Selling Stockholders" which
specifically relates to such Selling Stockholder from the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, such Selling Stockholder will immediately notify the Underwriters of
such change.
14
(k) Such Selling Stockholder has not taken, and
will not take, directly or indirectly, any action which constitutes or is
designed to cause or result in, or which might reasonably be expected to
constitute, cause or result in, the stabilization or manipulation of the price
of the Common Stock to facilitate the sale or resale of the Shares.
(l) Such Selling Stockholder has not distributed
and will not distribute, prior to the later of the Additional Closing Date, if
any, 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.
(m) The representations and warranties of such
Selling Stockholder in its Custody Agreement and Power of Attorney are, and on
the Closing Date will be, true and correct.
Any certificate signed by or on behalf of the Selling
Stockholders and delivered to you or to counsel for the Underwriters on the
Closing Date 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 agrees, and each Selling
Stockholder (severally and not jointly) agrees, to sell to each Underwriter and
each Underwriter, severally and not jointly, agrees to purchase from the
Company, at a purchase price per share of $_______, the number of Firm Shares
set forth opposite their respective names on Schedule I hereto together with 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 representing, the Firm Shares shall be made at the
office of Xxxxxx & Xxxxxxx LLP ("Underwriters' Counsel"), or at such other place
as shall be agreed upon by Bear Xxxxxxx 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 under the
Securities Act, 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 Bear Xxxxxxx and the Company (such time and date of
payment and delivery being herein called the "Closing Date").
Payment of the purchase price for the Firm Shares shall be
made by wire transfer in same day funds to or as directed by the Company and the
Custodian (pursuant to each Selling Stockholder's Custody Agreement and Power of
Attorney), as the case may be, upon delivery of certificates for the Firm Shares
to Bear Xxxxxxx through the facilities of The Depository Trust
15
Company for the respective accounts of the several 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
Firm Shares to be sold by the Selling Stockholders to the several Underwriters,
or otherwise in connection with the performance of such Selling Stockholder's
obligations hereunder and (ii) the Custodian is authorized to deduct for such
payment any such amounts from the proceeds to such Selling Stockholder hereunder
and to hold such amounts for the account of such Selling Stockholder with the
Custodian under the Custody Agreement and Power of Attorney. Certificates for
the Firm Shares shall be registered in such name or names and shall be in such
denominations as Bear Xxxxxxx may request at least two business days before the
Closing Date. The Company will permit Bear Xxxxxxx to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(c) In addition, on the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company hereby grants
to the Underwriters, acting severally and not jointly, the option to purchase up
to 750,000 Additional Shares at the same purchase price per share to be paid by
the Underwriters for the Firm Shares as set forth in Section 3(a) above, 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 one or more occasions, on or before the thirtieth day
following the date of the Prospectus, by written notice from Bear Xxxxxxx to the
Company. Such notice shall set forth the aggregate number of Additional Shares
as to which the option is being exercised and the date and time, as reasonably
determined by Bear Xxxxxxx, when the Additional Shares are to be delivered (any
such date and time being herein sometimes referred to as the "Additional Closing
Date"); provided, however, that no Additional Closing Date shall occur 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). Upon any exercise of the option as to all or any portion of
the Additional Shares, each Underwriter, acting severally and not jointly,
agrees to purchase from the Company the number of Additional Shares that bears
the same proportion of the total number of Additional Shares then 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 10 hereof) bears to the total number of Firm Shares that the
Underwriters have agreed to purchased hereunder, subject, however, to such
adjustments to eliminate fractional shares as Bear Xxxxxxx in its sole
discretion shall make.
(d) Payment of the purchase price for, and
delivery of certificates representing, the Additional Shares shall be made at
the office of Underwriters' Counsel, or at such other place as shall be agreed
upon by Bear Xxxxxxx and the Company, at 10:00 A.M., New York City time, on the
Additional Closing Date (unless postponed in accordance with the provisions of
Section 10 hereof), or such other time as shall be agreed upon by Bear Xxxxxxx
and the Company.
Payment of the purchase price for the Additional Shares shall
be made by wire transfer in same day funds to or as directed by the Company upon
delivery of certificates for the Additional Shares to Bear Xxxxxxx through the
facilities of The Depository Trust Company for the respective accounts of the
several Underwriters. Certificates for the Additional Shares shall
16
be registered in such name or names and shall be in such denominations as Bear
Xxxxxxx may request at least two business days before the Additional Closing
Date. The Company will permit Bear Xxxxxxx to examine and package such
certificates for delivery at least one full business day prior to the Additional
Closing Date.
4. Offering. Upon authorization of the release of the
Firm Shares by Bear Xxxxxxx, 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. The Company covenants and
agrees with the Underwriters that:
(a) The Registration Statement and any
amendments thereto have been declared effective, 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 of such timely filing. 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, and the Prospectus shall not be
"materially different," as such term is used in Rule 434, from the Prospectus
included in the Registration Statement at the time it became effective.
The Company will notify you promptly (and, if requested by
Bear Xxxxxxx, will confirm such notice in writing) (i) when the Registration
Statement and any amendments thereto 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 Company's
intention to file or prepare any supplement or amendment to the Registration
Statement or the Prospectus, (iv) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, including but not limited to Rule 462(b) under the
Securities Act, (v) 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, it being understood that the Company shall make every commercially
reasonable effort to avoid the issuance of any such stop order, (vi) of the
receipt of any comments from the Commission, and (vii) 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 to which Bear Xxxxxxx shall reasonably object in
writing after being timely furnished in advance a copy thereof. The Company will
provide Bear Xxxxxxx with copies of all such amendments, filings and other
documents a sufficient time prior to any filing or other publication thereof to
permit Bear Xxxxxxx a reasonable opportunity to review and comment thereon.
17
(b) The Company shall comply with the Securities
Act to permit completion of the distribution as contemplated in this Agreement,
the Registration Statement and the Prospectus. If at any time when a prospectus
relating to the Shares is required to be delivered under the Securities Act in
connection with the 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
existing at the time of delivery to the purchaser, not misleading, or if to
comply with the Securities Act or the Rules and Regulations it shall be
necessary at any time to amend or supplement the Prospectus or Registration
Statement the Company will notify you promptly and prepare and file with the
Commission, subject to Section 5(a) hereof, an appropriate amendment or
supplement (in form and substance satisfactory to Bear Xxxxxxx) which will
correct such statement or omission 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
you and Underwriters' Counsel a signed or conformed copy of the Registration
Statement, as initially filed and all amendments thereto, including all consents
and exhibits filed therewith, and will maintain in the Company's files manually
signed copies of such documents for at least five years after the date of
filing. The Company will promptly deliver to each of the Underwriters such
number of copies of any Preliminary Prospectus, the Prospectus, the Registration
Statement and all amendments of and supplements to such documents, if any, as
you may reasonably request. As promptly as possible on the business day next
succeeding the date of this Agreement and from time to time thereafter, the
Company will furnish the Underwriters with copies of the Prospectus in New York
City in such quantities as you may reasonably request.
(d) The Company consents to the use and delivery
of the Preliminary Prospectus by the Underwriters in accordance with Rule 430
and Section 5(b) of the Securities Act.
(e) The Company will use its commercially
reasonable efforts, in cooperation with Bear Xxxxxxx, 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, domestic or foreign, as Bear Xxxxxxx 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 become subject to taxation, to qualify as a foreign
corporation or to execute a general consent to service of process in such
jurisdiction.
(f) 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 45 days after the end of the first fiscal quarter ending
after the first anniversary of the effective date of the Registration Statement
(as defined in Rule 158(c) under the Securities Act), an earnings statement of
the Company and the Subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations (including, at
the option of the Company, Rule 158).
18
(g) During the period of 180 days from the date
of the Prospectus, without the prior written consent of Bear Xxxxxxx, the
Company (i) will not, directly or indirectly, issue, offer, sell, agree to
issue, offer or sell, solicit offers to purchase, grant any call option, warrant
or other right to purchase, purchase any put option or other right to sell,
pledge, borrow or otherwise dispose of any Relevant Security, or make any
announcement of any of the foregoing, (ii) will not establish or increase any
"put equivalent position" or liquidate or decrease any "call equivalent
position" (in each case within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder) with respect to any Relevant
Security, and (iii) will not otherwise enter into any swap, derivative or other
transaction or arrangement that transfers to another, in whole or in part, any
economic consequence of ownership of a Relevant Security, whether or not such
transaction is to be settled by delivery of Relevant Securities, other
securities, cash or other consideration; and the Company will assist the
Underwriters in obtaining an undertaking in substantially the form of Annex II
hereto of each of its officers, directors and stockholders listed on Schedule II
attached hereto not to engage in any of the aforementioned transactions on their
own behalf, other than the sale of Shares as contemplated by this Agreement, the
Company's issuance of Common Stock upon (i) the conversion or exchange of
convertible or exchangeable securities outstanding on the date hereof; (ii) the
exercise of currently outstanding options; (iii) the grant and exercise of
options under, or the issuance and sale of shares pursuant to, employee stock
option plans in effect on the date hereof, each as described in the Registration
Statement and the Prospectus, and (iv) the issuance by the Company of securities
in order to acquire assets or equity of one or more businesses by merger, asset
purchase, stock purchase or otherwise in an aggregate amount not to exceed five
percent (5%) of the outstanding shares of common stock of the Company as of the
Closing Date; provided that each person who receives any securities pursuant to
this clause (iv) executes and delivers to the Underwriters an undertaking in
substantially the form of Annex II hereto for the remainder of the 180-day
period referred to therein. The Company will not file a registration statement
under the Securities Act in connection with any transaction by the Company or
any person that is prohibited pursuant to the foregoing, except for registration
statements on Form S-8 relating to employee benefit plans or Form S-4 relating
to corporate reorganizations or other transactions under Rule 145.
(h) During the period of five years from the
effective date of the Registration Statement, the Company will furnish to Bear
Xxxxxxx and, upon request, any other Representative copies of all reports or
other communications (financial or other) furnished to security holders or from
time to time published or publicly disseminated by the Company, and will deliver
to Bear Xxxxxxx and, upon request, any other Representative (i) as soon as they
are available, copies of any reports, financial statements and proxy or
information statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed
(unless available on the XXXXX System); and (ii) such additional information
concerning the business and financial condition of the Company as the
Representative may from time to time reasonably request (such financial
information to be on a consolidated basis to the extent the accounts of the
Company and the Subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission), provided that Bear Xxxxxxx or
such Representative agree to keep such additional information confidential (and
to cause its employees and agents to do the same) prior to its publication or
public dissemination by the Company unless otherwise required by applicable law.
19
(i) The Company will apply the net proceeds from
the sale of the Shares substantially as set forth under the caption "Use of
Proceeds" in the Prospectus.
(j) The Company will use its best efforts to
list the Shares for quotation on NASDAQ and maintain the listing of the Shares
on the NASDAQ.
(k) The Company, during the period when the
Prospectus is required to be delivered under the Securities Act, will file all
documents required to be filed with the Commission pursuant to the Securities
Act and the Rules and Regulations within the time periods required thereby.
(l) The Company will use its commercially
reasonable efforts to do and perform all things required to be done or performed
under this Agreement by the Company prior to the Closing Date or the Additional
Date, as the case may be, and to satisfy all conditions precedent to the
delivery of the Firm Shares and the Additional Shares.
(m) The Company will comply in all material
respects with all applicable securities and other applicable laws, rules and
regulations in each foreign jurisdiction in which the Directed Shares are
offered.
(n) Based on NASD questionnaires which have been
delivered to the Company by Bear Xxxxxxx prior to the date hereof, the Company
hereby agrees that it will ensure that the Directed Shares will be restricted as
required by the NASD or NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this Agreement.
At the request of Bear Xxxxxxx, the Company will direct the transfer agent to
place a stop transfer restriction upon such securities for such period of time.
(o) The Company will not take, and will cause
its affiliates (within the meaning of Rule 144 under the Securities Act) not to
take, directly or indirectly, any action which constitutes or is designed to
cause or result in, or which might reasonably be expected to constitute, cause
or result in, the stabilization or manipulation of the price of any security to
facilitate the sale or resale of the Shares.
(p) During the period of 180 days from the date
of the Prospectus, the Company shall (i) maintain its principal place of
business in the State of Connecticut, (ii) base a numerical majority of the sum
of its employees in the State of Connecticut and (iii) conduct a majority of its
operations(including manufacturing and production), directly or through
subcontractors, in the State of Connecticut.
6. Payment of Expenses. Whether or not the transactions
contemplated by this Agreement, the Registration Statement and the Prospectus
are consummated or this Agreement is terminated, the Company hereby agrees to
pay all costs and expenses incident to the performance of its obligations
hereunder, including the following: (i) all expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and any and all amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the
Securities Act and the Offering; (iii) the cost of producing
20
this Agreement and any agreement among Underwriters, blue sky survey, closing
documents and other instruments, agreements or documents (including any
compilations thereof) in connection with the Offering; (iv) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities or blue sky laws as provided in Section 5(e) hereof and any
offering of Directed Shares outside the United States, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification or offering and in connection with any blue sky survey (which fees
and disbursements shall not exceed $7,500); (v) the filing fees incident to
securing any required review by the NASD of the terms of the Offering, including
the fees and disbursements of counsel for the Underwriters in connection with,
such filing (which fees and disbursements shall not exceed $20,000); (vi) all
fees and expenses in connection with listing the Shares on the NASDAQ; (vii) 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; (viii) any stock transfer taxes incurred
in connection with this Agreement or the Offering; and (ix) any reasonable
expenses (including, without limitation, legal expenses) incurred by the
Underwriters in connection with any release, or any effort by the Company or any
Directed Share Purchaser to seek the release, of any of the Directed Shares from
the restrictions referred to in Section 5(n) above. The Company also will pay or
cause to be paid: (x) the cost of preparing stock certificates representing the
Shares; (y) the cost and charges of any transfer agent or registrar for the
Shares; and (z) 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, 9 and 12 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel and stock transfer taxes
on resale of any of the Shares by them. Notwithstanding anything to the contrary
in this Section 6, in the event that this Agreement is terminated pursuant to
Section 7 or 12(b) hereof, or subsequent to a Material Adverse Change, the
Company will pay all reasonable out-of-pocket expenses of the Underwriters
(including but not limited to reasonable fees and disbursements of counsel to
the Underwriters) incurred in connection herewith.
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 and each of the Selling
Stockholder 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 and each of the Selling Stockholders of their respective obligations
hereunder, and to each of the following additional conditions:
(a) The Registration Statement shall have become
effective and all necessary regulatory or stock exchange approvals shall have
been received 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
writing by Bear Xxxxxxx; if the Company shall have elected to rely upon Rule
430A or Rule 434 under the Securities Act, the Prospectus shall have been filed
with the Commission in a timely fashion in accordance with Section 5(a) hereof
and a form of the Prospectus containing information relating to the description
of the Shares and the method of
21
distribution and similar matters shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period; 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) At the Closing Date you shall have received
the favorable written opinion of Xxxx and Xxxx LLP, counsel for the Company and
the Selling Stockholders, dated the Closing Date and addressed to the
Underwriters in the form attached hereto as Annex I.
(c) 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 Bear Xxxxxxx and to
Underwriters' Counsel, and the Underwriters shall have received from
Underwriters' Counsel a favorable written 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 Bear Xxxxxxx may require,
and the Company shall have furnished to Underwriters' Counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
(d) At the Closing Date you shall have received
a certificate of the Chief Executive Officer and Chief Financial Officer of the
Company, 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 true and correct, (iii) as of the
Closing Date all agreements, conditions and obligations of the Company to be
performed or complied with hereunder on or prior thereto have been duly
performed or complied with in all material respects, (iv) the Company and the
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, (v) 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 (vi) subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus
there has not been any Material Adverse Change, except in each case as disclosed
in the Prospectus.
(e) At the Closing Date you shall have received
a certificate of the Selling Stockholders, dated the Closing Date, to the effect
that such Selling Stockholder has examined the Registration Statement, the
Prospectus and any supplement to the Prospectus and this Agreement and (i) as of
the date hereof and as of the Closing Date, the representations and warranties
of such Selling Stockholder set forth in Section 2 hereof are true and correct
and (ii) as of the Closing Date all agreements, conditions and obligations of
such Selling Stockholder to be performed or complied with hereunder on or prior
thereto have been duly performed or complied with in all material respects.
(f) 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 (within the meaning
of the Securities Act) for the Company and Liberty FiTech
22
Systems, Inc., dated, respectively, as of the date of this Agreement and as of
the Closing Date addressed to the Underwriters and in form and substance
reasonably satisfactory to the Underwriters and Underwriters' Counsel.
(g) 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 the Subsidiaries or
any change or development involving a change, whether or not arising from
transactions in the ordinary course of business, in the business, condition
(financial or otherwise), results of operations, stockholders' equity,
properties or prospects of the Company and the Subsidiaries, individually or
taken as a whole, including but not limited to the occurrence of any fire,
flood, storm, explosion, accident or other calamity at any of the properties
owned or leased by the Company or any of its Subsidiaries, the effect of which,
in any such case described above, is, in the reasonable judgment of Bear
Xxxxxxx, so material and adverse as to make it impracticable or inadvisable to
proceed with the Offering on the terms and in the manner contemplated in the
Prospectus (exclusive of any supplement).
(h) You shall have received a duly executed
lock-up agreement from the directors, officers and stockholders listed on
Schedule II hereto, in each case substantially in the form attached hereto as
Annex II.
(i) At the Closing Date, the Shares shall have
been approved for quotation on the NASDAQ.
(j) Prior to the Closing Date, the NASD shall
have confirmed that it has not raised any objection with respect to the fairness
and reasonableness of the underwriting terms and arrangements.
(k) 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.
(l) No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date, prevent the issuance or sale of the Shares; and no
injunction or order of any federal, state or foreign court shall have been
issued that would, as of the Closing Date, prevent the issuance or sale of the
Shares.
(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.
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 reasonably
satisfactory in form and substance to Bear Xxxxxxx and to Underwriters' Counsel,
all obligations of the Underwriters hereunder may be cancelled by Bear Xxxxxxx
at, or at any time
23
prior to, the Closing Date and the obligations of the Underwriters to purchase
the Additional Shares may be cancelled by Bear Xxxxxxx 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 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 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 other expenses incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim, and any
and all amounts paid in settlement of any claim or litigation in accordance with
the terms of this Agreement), 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, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, (ii) the
omission or alleged omission to state in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) any untrue statement or alleged untrue statement of a
material fact included in the supplement or prospectus wrapper material
distributed in connection with the reservation and sale of the Directed Shares
in any jurisdiction outside the United States or the omission or alleged
omission therefrom of a material fact necessary to make the statements therein,
when considered in conjunction with the Prospectus or Preliminary Prospectus,
not misleading; provided, however, that (i) the Company 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 arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, as originally filed or any amendment
thereof, or any related Preliminary Prospectus or the Prospectus, or in any
supplement thereto or amendment thereof, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Underwriter
through Bear Xxxxxxx expressly for use therein and (ii) with respect to any
untrue statement or omission of material fact made in any Preliminary
Prospectus, the indemnity agreement contained in this section shall not inure to
the benefit of any Underwriter from whom the person asserting any such loss,
claim, damage, liability or action purchased the securities concerned, to the
extent that any such loss, claim, damage, liability or action of such
Underwriter occurs under the circumstance where it shall have been determined by
a court of competent jurisdiction in a decision not subject to further appeal
that (w) the Company had furnished copies of the Prospectus, as amended or
supplemented, to the Representatives in the requisite quantity and on a timely
basis to permit proper delivery on or prior to the time at which written
confirmation of the sale of such securities was delivered by the Underwriter,
(x) delivery of the Prospectus, as amended or supplemented, was required by the
Securities Act to be made to such person at such time, (y) the untrue statement
or omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus as amended or supplemented, and (z) the Underwriter
did not send or give to such
24
person, at or prior to the written confirmation of the sale of such securities
to such person, a copy of the Prospectus as amended or supplemented. The parties
agree that such information provided by or on behalf of any Underwriter through
Bear Xxxxxxx consists solely of the material referred to in the last sentence of
Section 1(b) hereof. This indemnity agreement will be in addition to any
liability which the Company may otherwise have, including but not limited to
other liability under this Agreement.
(b) Each of the Selling Stockholders, jointly
with the Company and severally, 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 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 other
expenses incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim, and any and all amounts paid
in settlement of any claim or litigation in accordance with the terms of this
Agreement), 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) a breach by such Selling Stockholder of the
representations and warranties contained in Section 2 hereof and (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, 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 information furnished in writing to the Company by or on
behalf of such Selling Stockholder specifically for use therein. This indemnity
agreement will be in addition to any liability which each of the Selling
Stockholders may otherwise have, including but not limited to other liability
under this Agreement; provided, however, that in no case shall any Selling
Stockholder be liable or responsible for any amount in excess of the product of
(i) the number of Shares sold by such Selling Stockholder, and (ii) the initial
public offering price of the Shares as set forth in the Prospectus, net of
underwriting discounts and commissions.
(c) Each Underwriter, severally and not jointly,
shall indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement, the Selling Stockholders and each other person, if any,
who controls the Company or any Selling Stockholder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to reasonable attorneys' fees and other expenses
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim, and any and all amounts paid in
settlement of any claim or litigation in accordance with the terms of this
Agreement), 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, as originally filed or
any
25
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 information furnished in
writing to the Company by or on behalf of any Underwriter through Bear Xxxxxxx
specifically for use therein, it being expressly understood and agreed by the
parties that, such information provided by or on behalf of any Underwriter
through Bear Xxxxxxx consists solely of the information set forth in the last
sentence of Section 1(b) hereof; 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 to be purchased by such
Underwriter hereunder. This indemnity will be in addition to any liability which
any Underwriter may otherwise have, including but not limited to other liability
under this Agreement.
(d) In connection with the offer and sale of
Directed Shares the Company agrees, promptly upon written notice, to indemnify
and hold harmless the Underwriters from and against any and all losses,
liabilities, claims, damages and expenses incurred by them (i) as a result of
the failure of any Directed Share Purchaser, who makes an oral agreement,
properly evidenced and confirmed by the Underwriters, to purchase Directed
Shares within twenty-four hours of establishing the public offering price, to
pay for and accept delivery of the Directed Shares and (ii) the violation by the
Company of any applicable laws or regulations of any foreign jurisdictions where
Directed Shares have been offered. Under no circumstances will Bear Xxxxxxx or
any other Underwriter be liable to the Company or to any Directed Share
Purchaser for any action taken or omitted to be taken in connection with the
Directed Shares or any transaction effected with any Directed Share Purchaser,
except to the extent found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted primarily and
directly from the gross negligence or willful misconduct of Bear Xxxxxxx or such
other Underwriter, as the case may be.
(e) Promptly after receipt by an indemnified
party under subsection (a), (b), (c) or (d) 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 the indemnifying party from any liability which it may
have under this Section 8 to the extent that it is not materially prejudiced as
a result thereof and in any event shall not relieve it from any liability that
such indemnifying party may have otherwise than on account of the indemnity
agreement hereunder). In case any such claim or action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate, at its own
expense in the defense of 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
reasonably satisfactory to such indemnified party; provided however, that
counsel to the indemnifying party shall not (except with the written consent of
the indemnified party) also be counsel to the indemnified party. Notwithstanding
the foregoing, the indemnified
26
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 period of time after notice of commencement of the action, (iii) the
indemnifying party does not diligently defend the action after assumption of the
defense, or (iv) such indemnified party or parties shall have reasonably
concluded that there are 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 reasonable fees and expenses shall be borne by the
indemnifying parties. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees and expenses of more than one separate counsel
(plus local counsel) for all such indemnified parties. No indemnifying party
shall, without the prior written consent of the indemnified parties, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened claim, investigation, action or proceeding in
respect of which indemnity or contribution may be or could have been sought by
an indemnified party under this Section 8 or Section 9 hereof (whether or not
the indemnified party is an actual or potential party thereto), unless (x) such
settlement, compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such claim, investigation,
action or proceeding and (ii) does not include a statement as to or an admission
of fault, culpability or any failure to act, by or on behalf of the indemnified
party, and (y) the indemnifying party confirms in writing its indemnification
obligations hereunder with respect to such settlement, compromise or judgment.
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 and
the Selling Stockholders (collectively, the "Sellers") 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 Sellers, any contribution received by
the Sellers 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 of the Exchange Act, officers
of the Company who signed the Registration Statement and directors of the
Company) as incurred to which the Sellers and one or more of the Underwriters
may be subject, in such proportions as is appropriate to reflect the relative
benefits received by the Sellers and the Underwriters from the Offering or, if
such allocation is not permitted by applicable law, in such proportions as are
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Sellers 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 Sellers 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
27
commissions but before deducting expenses) received by the Sellers bears to (y)
the underwriting discount or commissions received by the respective
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of each of the Sellers 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 Sellers or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Sellers
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 in this Section 9. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any judicial, regulatory or other legal or
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission. Notwithstanding the provisions of this Section 9, (i) no Underwriter
shall be required to contribute any amount in excess of the amount by which the
discounts and commissions applicable to the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, (ii) no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation, and (iii) no Selling Stockholder
shall be required to contribute an amount in excess of the product of (A) the
number of Shares sold by such Selling Stockholder, and (B) the initial public
offering price of the Shares as set forth in the Prospectus, net of underwriting
discounts and commissions. 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 of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the any Seller within
the meaning of Section 15 of the Securities Act or Section 20 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 and any Selling Stockholder, as applicable, subject
in each case to clauses (i) and (ii) of the immediately preceding sentence. 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. The obligations of the Underwriters to
contribute pursuant to this Section 9 are several in proportion to the
respective number of Shares to be purchased by each of the Underwriters
hereunder and not joint.
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
28
Additional Shares with respect to which such default relates (the "Default
Shares") do not (after giving effect to arrangements, if any, made by Bear
Xxxxxxx pursuant to subsection (b) below) exceed in the aggregate 10% of the
number of Firm Shares or Additional Shares, each non-defaulting Underwriter,
acting severally and not jointly, agrees to purchase from the Company that
number of Default Shares that bears the same proportion of the total number of
Default Shares then being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters, subject, however, to such adjustments to eliminate
fractional shares as Bear Xxxxxxx in its sole discretion shall make.
(b) In the event that the aggregate number of
Default Shares exceeds 10% of the number of Firm Shares or Additional Shares, as
the case may be, Bear Xxxxxxx may in its discretion arrange for itself or for
another party or parties (including any non-defaulting Underwriter or
Underwriters who so agree) to purchase the Default Shares on the terms contained
herein. In the event that within five calendar days after such a default Bear
Xxxxxxx does not arrange for the purchase of the Default Shares as provided in
this Section 10(b), 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
liability on the part of the Company or the Selling Stockholders with respect
thereto (except in each case as provided in Sections 6, 8, 9, 11 and 12(d)) 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 and the Selling Stockholders for damages occasioned
by its or their default hereunder.
(c) In the event that any Default Shares are to
be purchased by the non-defaulting Underwriters, or are to be purchased by
another party or parties as aforesaid, Bear Xxxxxxx 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 reasonable 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,
the Company and the Selling Stockholders contained in this Agreement or in
certificates of officers of the Company or any Subsidiary or any Selling
Stockholder submitted pursuant hereto, 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
the Selling Stockholders and shall survive delivery of and payment for the
Shares to and by the Underwriters. The representations contained in Section 1,
Section 2
29
and the agreements contained in Sections 6, 8, 9, 11 and 12(d) hereof shall
survive any 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 (i) receipt by Bear Xxxxxxx and the Company of notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. If either the 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, the
Selling Stockholders or the Underwriters except as herein expressly provided.
Until this Agreement becomes effective as aforesaid, it may be terminated by the
Company by notifying you or by Bear Xxxxxxx notifying the Company.
Notwithstanding any termination of this Agreement, the provisions of this
Section 12 and of Sections 1, 2, 6, 8, 9 and 13 through 18, inclusive, shall be
in full force and effect at all times after the execution hereof.
(b) Bear Xxxxxxx shall have the right to
terminate this Agreement at any time prior to the Closing Date or to terminate
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) any
domestic or international event or act or occurrence has materially disrupted,
or in the opinion of Bear Xxxxxxx will in the immediate future materially
disrupt, the market for the Company's securities or securities in general; or
(B) if trading on The New York Stock Exchange ("the NYSE") or the NASDAQ 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 NYSE or the NASDAQ or by order
of the Commission or any other governmental authority having jurisdiction; or
(C) if a banking moratorium has been declared by any state or federal authority
or if any material disruption in commercial banking or securities settlement or
clearance services shall have occurred; or (D) in the reasonable judgment of
Bear Xxxxxxx, any Material Adverse Change shall have occurred since the
respective dates as of which information is given in the Prospectus; or (E) (i)
if there shall have occurred any outbreak or escalation of hostilities or acts
of terrorism 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 any other
calamity or crisis or any change in political, financial or economic conditions
if the effect of any such event in (i) or (ii), in the judgment of Bear Xxxxxxx,
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 and in the manner 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 (other than pursuant to (i)
notification by Bear Xxxxxxx as provided in Section 12(a) hereof or (ii) Section
10(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 or any Selling
30
Stockholder to perform any agreement herein or comply with any provision hereof,
the Company and the Selling Stockholders will, subject to demand by Bear
Xxxxxxx, reimburse the Underwriters for all reasonable out-of-pocket expenses
(including the reasonable 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 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Equity Capital Markets, with a copy to Underwriters' Counsel at the address, and
to the attention of the persons, set forth in the Registration Statement;
(b) if sent to the Company, shall be mailed,
delivered, or faxed and confirmed in writing to the Company and its counsel at
the respective addresses, and to the attention of the respective persons, set
forth in the Registration Statement;
(c) if sent to any Selling Stockholder, shall be
mailed, delivered, or faxed and confirmed in writing to the Company and its
counsel at the respective addresses, and to the attention of the respective
persons, set forth in the Registration Statement;
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 Bear Xxxxxxx, which address
will be supplied to any other party hereto by Bear Xxxxxxx upon request. Any
such notices and other communications 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 Company and the
Selling Stockholders and the controlling persons, directors, officers, employees
and agents referred to in Sections 8 and 9 hereof, 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. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and said controlling persons and their
respective successors, officers, directors, heirs and legal representatives, and
it is not for the benefit of any other person, firm or corporation. The term
"successors and assigns" shall not include a purchaser, in its capacity as such,
of Shares from any of the Underwriters.
15. Governing Law and Jurisdiction; Waiver of Jury Trial.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York. Each of the Company and each Selling Stockholder
irrevocably (a) submits to the jurisdiction of any court of the State of New
York or the United State District Court for the Southern District of the State
of New York for the purpose of any suit, action, or other proceeding arising out
of this Agreement, or any of the agreements or transactions contemplated by this
Agreement, the Registration Statement and the Prospectus (each, a "Proceeding"),
(b) agrees that all claims in respect of any Proceeding may be heard and
determined in any such court, (c) waives, to the
31
fullest extent permitted by law, any immunity from jurisdiction of any such
court or from any legal process therein, (d) agrees not to commence any
Proceeding other than in such courts, and (e) waives, to the fullest extent
permitted by law, any claim that such Proceeding is brought in an inconvenient
forum. EACH OF THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT
PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) AND
EACH SELLING STOCKHOLDER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION
STATEMENT AND THE PROSPECTUS.
16. 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.
Delivery of a signed counterpart of this Agreement by facsimile transmission
shall constitute valid and sufficient delivery thereof.
17. 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.
18. 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]
32
If the foregoing correctly sets forth your understanding,
please so indicate in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement among us.
Very truly yours,
OPEN SOLUTIONS INC.
By:_____________________________________
Name:
Title:
SELLING STOCKHOLDERS
________________________________________
Xxxxx Xxxxxxxxx, Xx.
________________________________________
Xxxx X. Xxxxxxxx
________________________________________
Xxxx X. Xxxxxx
________________________________________
Xxxxxxx X. Xxxxxxxx
________________________________________
Xxxxx Xxxxx
________________________________________
Xxxx X. XxXxxx
________________________________________
Xxxx Xxxxxxx
________________________________________
Xxxxx X. Xxxxxxxx
________________________________________
Xxxxxx X. Xxxxxxx
________________________________________
Xxxxxxxx X. Xxxxxxxxxxx
________________________________________
Xxxx Xxxxxx
________________________________________
Xxxxx Xxxxxxxx
________________________________________
Xxxx X. Xxxxxxxx
________________________________________
Xxx X. Xxxxxxx
________________________________________
Xxxxxx X. Xxxxxx
________________________________________
Xxx Xxxxxx
________________________________________
Xxxx Xxxxx
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
U.S. BANCORP XXXXX XXXXXXX INC.
By: Bear, Xxxxxxx & Co. Inc.
By:_______________________________________
Name:
Title:
On behalf of itself and the other
Underwriters named in Schedule I hereto.
SCHEDULE I
Underwriters
Number of Additional
Total Number of Firm Shares to be Purchased if
Name of Underwriter Shares to be Purchased Option is Fully Exercised
------------------- ---------------------- -------------------------
Bear, Xxxxxxx & Co. Inc.
Friedman, Billings, Xxxxxx & Co., Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Total....................... _____________________ ___________________
Selling Stockholders
Name of Selling Stockholder Total Number of Firm Shares to be Purchased
--------------------------- -------------------------------------------
(which reflects the Company's contemplated
one- for-1.45 reverse stock split)
Xxxxx Xxxxxxxxx, Xx. 71,615
Xxxx X. Xxxxxxxx 22,186
Xxxx X. Xxxxxx 23,397
Xxxxxxx X. Xxxxxxxx 14,772
Xxxxx Xxxxx 14,416
Xxxx X. XxXxxx 6,163
Xxxx Xxxxxxx 5,087
Xxxxx X. Xxxxxxxx 4,517
Xxxxxx X. Xxxxxxx 2,880
Xxxxxxxx X. Xxxxxxxxxxx 2,880
Xxxx Xxxxxx 2,700
Xxxxx Xxxxxxxx 2,340
Xxxx X. Xxxxxxxx 2,314
Xxx X. Xxxxxxx 2,005
Xxxxxx X. Xxxxxx 959
Xxx Xxxxxx 900
Xxxx Xxxxx 869
SCHEDULE II
Menlo Ventures VI, L.P.
Menlo Entrepreneurs Fund VI, L.P.
The BISYS Group, Inc.
Axiom Venture Partners, L.P.
Axiom Venture Partners III Limited Partnership
Aetna Life Insurance Company
Connecticut Innovations, Incorporated
Connecticut Innovations/Xxxxxxx LLC
HNC Software Inc.
Key Principal Partners LLC
Xxxxx Xxxxxxxxx, Xx.
Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx
Xxxxx Xxxx
Xxxxxx X. XxXxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxx Xxxxxxxx
Xxxxxxx X. Xxxxx
EXHIBIT A
Subsidiaries
Open Solutions Imaging Systems, Inc.
Sound Software Development, Inc.
Open Solutions FiTech, Inc.
EXHIBIT B
Form of Custody Agreement
1
EXHIBIT C
Form of Power of Attorney
1
ANNEX I
Form of Opinion of Xxxx and Xxxx LLP
1
ANNEX II
Form of Lock-Up Agreement
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxx Xxxxxxxx Xxxxxx
U.S. Bancorp Xxxxx Xxxxxxx Inc.
As Representatives of the several
Underwriters referred to below
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Capital Markets
Open Solutions, Inc. Lock-Up Agreement
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed public
offering (the "Offering") by Open Solutions, Inc., a Delaware corporation (the
"Company"), of its common stock, $.01 par value (the "Stock").
In order to induce you and the other underwriters for which you act as
representatives (the "Underwriters") to underwrite the Offering, the undersigned
hereby agrees that, without the prior written consent of Bear, Xxxxxxx & Co.
Inc. ("Bear Xxxxxxx") on behalf of the Underwriters, during the period from the
date hereof until one hundred eighty (180) days from the date of the final
prospectus for the Offering (the "Lock-Up Period"), the undersigned (a) will
not, directly or indirectly, 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),
and (b) will not establish or increase any "put equivalent position" or
liquidate or decrease any "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 economic consequence of ownership of a 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 Stock, any other equity security of the Company or
any of its subsidiaries and any security convertible into, or exercisable or
exchangeable for, any Stock or other such equity security.
Notwithstanding the foregoing, (a)(i) the undersigned may transfer
Relevant Securities by bona fide gift, will or intestate succession, (ii) the
undersigned may transfer Relevant Securities to any trust for the direct or
indirect benefit of the undersigned or an immediate family member (i.e. any
relationship by blood, marriage or adoption, not more remote than first cousin)
and (iii)
if the undersigned is a partnership, limited liability company or corporation,
the undersigned may make a general distribution of Relevant Securities to its
partners, members or shareholders, (b) this Agreement shall not restrict the
sale or other disposition of Relevant Securities that are acquired by the
undersigned in the open market after the Offering is priced and (c) the
undersigned may sell the Stock set forth opposite the undersigned's name on
Schedule I to the Underwriting Agreement to be entered into among the Company,
the Underwriters and the selling stockholders named therein, provided, as to
clauses (a) and (b) above, (x) that each resulting transferee of Relevant
Securities executes and delivers to you an agreement satisfactory to you
certifying that such transferee is bound by the terms of this Agreement and has
been in compliance with the terms hereof since the date first above written as
if it had been an original party hereto and (y) that any such sale or other
disposition fully complies with, and is not required to be disclosed or reported
under, applicable law (including but not limited to Section 16 under the
Exchange Act of 1934).
The undersigned hereby authorizes the Company during the Lock-Up Period
to cause any transfer agent for the Relevant Securities to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without the prior written consent of Bear Xxxxxxx, 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 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 Agreement and that this 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 Agreement shall terminate and be of no further force and effect in
the event the Company has not consummated the Offering by March 31, 2004.
2
This 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
facsimile transmission shall be effective as delivery of the original hereof.
Very truly yours,
By: _______________________________
Name: _______________________
Title (if applicable): ___________________
3
