EXHIBIT 1.1
SRA International, Inc.
2,750,000 Shares /1/
Class A Common Stock
($0.004 par value)
Underwriting Agreement
New York, New York
June __, 2003
Citigroup Global Markets Inc.
Xxxxxxx, Xxxxx & Co.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Xxxxx, Xxxxxxxx & Xxxx, Inc.
BB&T Capital Markets, a Division of Xxxxx & Xxxxxxxxxxxx, Inc.
RBC Xxxx Xxxxxxxx Inc.
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
SRA International, Inc., a corporation organized under the
laws of Delaware (the "Company"), proposes to sell to the several underwriters
named in Schedule I hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, 2,493,000 shares of Class A
Common Stock, $0.004 par value ("Common Stock") of the Company, and the persons
named in Schedule II hereto (the "Selling Stockholders") propose to sell to the
several Underwriters an aggregate of 257,000 shares of Common Stock (said shares
to be issued and sold by the Company and shares to be sold by the Selling
Stockholders collectively being hereinafter called the "Underwritten
Securities"). Certain of the Selling Stockholders identified on Schedule II are
executive officers of the Company and are sometimes referred to herein as the
"Inside Selling Stockholders." The remaining Selling Stockholder is sometimes
referred to herein as the "Outside Selling Stockholder." The Company and the
Inside Selling Stockholders also propose to grant to the Underwriters an option
to purchase up to 412,500 additional shares of Common Stock to cover
over-allotments (the "Option Securities;" the Option Securities, together with
the Underwritten Securities, being
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/1/ Plus an option to purchase from the Company and the Inside Selling
Stockholders up to 412,500 additional Securities to cover over-allotments.
hereinafter called the "Securities"). The use of the neuter in this Agreement
shall include the feminine and masculine wherever appropriate. Certain terms
used herein are defined in Section 17 hereof.
1. Representations and Warranties.
(i) The Company and each of the Inside Selling Stockholders
severally and not jointly represent and warrant to, and agree with, each
Underwriter as set forth below in this Section 1(i).
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-105626) on Form S-1, including
a related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a related preliminary prospectus,
each of which has previously been furnished to you. The Company will
next file with the Commission either (1) prior to the Effective Date of
such registration statement, a further amendment to such registration
statement (including the form of final prospectus) or (2) after the
Effective Date of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b). In the case of clause (2), the
Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in such
registration statement and the Prospectus. As filed, such amendment and
form of final prospectus, or such final prospectus, shall contain all
Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which Option Securities are purchased, if such date
is not the Closing Date (a "settlement date"), the Prospectus (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement
did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and,
on the Effective Date, the Prospectus, if not filed pursuant to Rule
424(b), will not, and on the date of any filing pursuant to Rule 424(b)
and on the Closing Date and any settlement date, the Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made,
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not misleading; provided, however, that no representations or
warranties are made as to the information contained in or omitted from
the Registration Statement or the Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(c) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business
as described in the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification except where the failure
to be so qualified would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business.
(d) All the outstanding shares of capital stock of each
subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the subsidiaries
are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
(e) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities being sold hereunder by the Company have been duly and
validly authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the Securities being sold hereunder by the Company are
duly listed, and admitted and authorized for trading, subject to
official notice of issuance and evidence of satisfactory distribution,
on the New York Stock Exchange; the certificates for the Securities are
in valid and sufficient form; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities; and, except as set forth in the
Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding.
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(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Prospectus
under the headings "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Related Party Transactions,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations--Commitments and Contingencies," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Acquisitions," "Business--Applied Research and Development
and Intellectual Property," "Related Party Transactions" and
"Underwriting" insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate
and fair summaries of such legal matters, agreements, documents or
proceedings.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable in accordance with its terms.
(h) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus.
(j) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter or by-laws of the Company or any of its
subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its
or their properties.
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(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(l) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included in
the Prospectus and the Registration Statement present fairly in all
material respects the financial condition, results of operations and
cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein).
The selected financial data set forth under the caption "Selected
Financial Data" in the Prospectus and Registration Statement fairly
present, on the basis stated in the Prospectus and the Registration
Statement, the information included therein. The pro forma financial
data set forth in Note 15 of the Notes to Consolidated Financial
Statements in the Prospectus and the Registration Statement include
assumptions that provide a reasonable basis for presenting the
significant effects directly attributable to the transactions and
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma adjustments
reflect the proper application of those adjustments to the historical
financial statement amounts in the pro forma financial statements
included in the Prospectus and the Registration Statement.
(m) The Company has calculated its backlog as of March 31,
2003 and June 30, 2002 in compliance with the requirements of Item 101
of Regulation S-K under the Act. As of the date hereof, the Company is
not aware of any facts or circumstances, including without limitation,
any notice of any program cancellation or change in program schedule,
contract reduction, modification or early termination, that could
reasonably be expected to have a material adverse effect on its ability
to recognize revenues in the fourth quarter of its 2003 fiscal year
from approximately 7% of its total backlog as of March 31, 2003.
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator or claim
involving the Company or any of its subsidiaries or its or their
property is pending or, to the best knowledge of the Company,
threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation
of any of the transactions contemplated hereby or (ii) could reasonably
be expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
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(o) Each of the Company and each of its subsidiaries owns or
leases all such properties as are necessary to the conduct of its
operations as presently conducted.
(p) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its
properties, as applicable.
(q) Deloitte & Touche L.L.P., who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(r) There are no transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Securities.
(s) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto)) and has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good
faith or as would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
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(t) The Company has settled all outstanding disputes relating
to the Internal Revenue Service (the "IRS") audit of its June 30, 1996
tax return. The Company has paid all deferred federal and state income
taxes, plus accrued interest as required pursuant to its settlement
with the IRS. As of the date hereof, there is no other dispute or claim
concerning any tax liability of the Company that is pending or, to the
Company's knowledge, threatened that could reasonably be expected to
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(u) There is no outstanding allegation of improper or illegal
activities arising from any government audit or non-audit review,
including without limitation, by the Defense Contract Audit Agency, of
the Company or work performed by the Company or any of its subsidiaries
or subcontractors that could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business. There are no pending civil or criminal
penalties or administrative sanctions arising from a government audit
or non-audit review of the Company or work performed by the Company or
any of its subsidiaries or subcontractors, including, but not limited
to, termination of contracts, forfeiture of profits, suspension of
payments, fines, or suspension or debarment from doing business with
any U.S. federal government agency. As of the date hereof, the Company
does not reasonably believe that it will be required to make any
adjustments to the financial statements included in the Registration
Statement and the Prospectus as a result of any pending government
audit or non-audit review of the Company.
(v) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its subsidiaries'
principal suppliers, contractors or customers, that could have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto).
(w) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; all policies of insurance
insuring the Company or any of its subsidiaries
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or their respective businesses, assets, employees, officers and
directors are in full force and effect; the Company and its
subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company or any of its subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(x) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in or contemplated by the Prospectus.
(y) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses except where the failure to
possess such licenses, certificates, permits or other authorizations
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, and neither the
Company nor any such subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto).
(z) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of
8
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(aa) The Company and each of its subsidiaries is in compliance
in all material respects with all laws, statutes, treaties, rules,
regulations, rights, privileges, qualifications, licenses or franchises
or determination of an arbitrator or a court or other governmental
agency or body applicable to the Company or any of its subsidiaries or
their respective property or to which the Company or any of its
subsidiaries is subject.
(bb) The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive or be in compliance with
required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto). Neither the Company nor any of
the subsidiaries has been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(cc) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
9
whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(dd) Each of the Company and its subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of
1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in which
employees of the Company and its subsidiaries are eligible to
participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and the
Internal Revenue Code of 1986, as amended (the "Code"), including the
related regulations and published interpretations, and has been
administered in all material respects in accordance with its terms.
Each Company plan which is intended to be qualified under Section
401(a) of the Code is so qualified; and each trust created under any
such plan is exempt from tax under Section 501(a) of the Code. The
Company and its subsidiaries have not incurred any unpaid liability to
the Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of
ERISA. No claim (other than routine claims for benefits) is pending
with respect to the administration or the investment of any assets of
any Company plan.
(ee) The subsidiaries listed on Annex A attached hereto are
the only significant subsidiaries of the Company as defined by Rule
1-02 of Regulation S-X (the "Significant Subsidiaries").
(ff) The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms and free and clear of all
security interests or liens, all patents, patent applications, trade
and service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how
and other intellectual property necessary for the conduct of the
Company's business as now conducted or as proposed in the Prospectus to
be conducted (collectively, the "Intellectual Property"). (i) To the
Company's best knowledge, there are no rights of third parties to any
such Intellectual Property, except for licensors' rights, if any; (ii)
the Company and each of its subsidiaries has performed all material
obligations imposed upon them under any material license, material
sublicense, material distribution agreement, or other material
agreement relating to any Intellectual Property not owned by the
Company or any of its subsidiaries and is not, nor to the Company's
best knowledge is any other party thereto, in material breach of any
material terms or default of any material terms thereunder in any
respect, nor is there any event known to the Company that with notice
or lapse of time or both would constitute a default of any material
term thereunder, and all such Intellectual Property
10
licenses are valid, enforceable, and in full force and effect and will
continue to be so on identical terms immediately following the
conclusion of the transaction contemplated hereby except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights; (iii) to
the Company's best knowledge, there is no material infringement by
third parties of any such Intellectual Property; (iv) there is no
pending or, to the Company's best knowledge, threatened action, suit,
proceeding or claim by others challenging the Company'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; (v) to
the Company's best knowledge, there is no pending or threatened
action, suit, proceeding or claim by others challenging the validity
or scope of any such Intellectual Property, and the Company is unaware
of any facts which would form a reasonable basis for any such claim;
(vi) 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;
(vii) to the Company's knowledge, there is no U.S. patent or published
U.S. patent application which contains claims that dominate or may
dominate any Intellectual Property described in the Prospectus as
being owned by or licensed to the Company or that interferes with the
issued or pending claims of any such Intellectual Property; (viii)
there is no prior art of which the Company is aware that may render
any U.S. patent held by the Company invalid or any U.S. patent
application held by the Company unpatentable which has not been
disclosed to the U.S. Patent and Trademark Office; (ix) to the
Company's best knowledge, no employee of the Company or any of its
subsidiaries is in violation of any employment agreement, patent or
invention disclosure agreement, or other agreement setting forth the
terms of employment of such employee with the Company or any of its
subsidiaries or any prior employee, except as would not reasonably be
expected to have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business; (x) to the
Company's best knowledge, none of the material trade secrets of the
Company, wherever located, the value of which is contingent upon
maintenance of the confidentiality thereof, has been disclosed to any
person other than to employees, representatives, and agents of the
Company or any of its subsidiaries or to other persons who have
executed appropriate nondisclosure agreements, except as required
pursuant to the filing of a patent application by the Company or any
of its subsidiaries; and (xi) all present key employees of the Company
and each of its subsidiaries have executed and delivered invention
agreements with the Company or the applicable subsidiary and are
obligated under the terms thereof to assign all inventions made by
them during the course of employment to the Company or to the
applicable subsidiary, and no such key employee of the Company or any
of its subsidiaries has excluded works or inventions made prior to his
or her employment with or
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work for the Company or any of its subsidiaries from his or her
assignment of inventions pursuant to such proprietary invention
agreements.
(gg) Except as disclosed in the Registration Statement and the
Prospectus, the Company (i) does not have any material lending or other
relationship with any bank or lending affiliate of Citigroup Global
Markets Holdings Inc. and (ii) does not intend to use any of the
proceeds from the sale of the Securities hereunder to repay any
outstanding debt owed to any affiliate of Citigroup Global Markets
Holdings Inc.
(hh) Neither the Company nor any of its subsidiaries nor any
of its or their properties or assets has any immunity from the
jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution or otherwise) under the laws of the State of Delaware or the
Commonwealth of Virginia.
(ii) In connection with the offer and sale of an aggregate of
2,117,645 shares of Common Stock (the "GA Private Placement Shares")
pursuant to the Stock Purchase Agreement dated April 22, 2002 by and
among the Company, the Purchasers named therein and the Selling
Stockholders listed on Schedule I thereto, no form of general
solicitation or general advertising was used by the Company or its
representatives. No registration of the GA Private Placement Shares
under the Act or any state securities or "blue sky" laws was required
by the offer, sale or issuance of the GA Private Placement Shares.
(jj) In connection with the offer and sale of an aggregate of
160,905 shares of Common Stock (the "Adroit Private Placement Shares")
pursuant to Stock Purchase Agreements, each dated January 31, 2003, by
and among the Company and the Purchasers named therein, no form of
general solicitation or general advertising was used by the Company or
its representatives. No registration of the Adroit Private Placement
Shares under the Act or any state securities or "blue sky" laws was
required by the offer, sale or issuance of the Adroit Private Placement
Shares.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
(ii) Each Selling Stockholder severally and not jointly
represents and warrants to, and agrees with, each Underwriter that:
(a) Such Selling Stockholder is, or will be no later than the
business day immediately preceding the Closing Date in the case of
Securities to be issued upon the exercise of options, the record and
beneficial owner of the Securities to be sold by it hereunder free and
clear of all liens, encumbrances, equities and
12
claims and has, or will have no later than the business day
immediately preceding the Closing Date in the case of Securities to be
issued upon the exercise of options, duly endorsed such Securities in
blank, and, assuming that each Underwriter acquires its interest in the
Securities it has purchased from such Selling Stockholder without
notice of any adverse claim (within the meaning of Section 8-105 of the
New York Uniform Commercial Code ("UCC")), each Underwriter that has
purchased such Securities delivered on the Closing Date to The
Depository Trust Company or other securities intermediary by making
payment therefor as provided herein, and that has had such Securities
credited to the securities account or accounts of such Underwriters
maintained with The Depository Trust Company or such other securities
intermediary will have acquired a security entitlement (within the
meaning of Section 8-102(a)(17) of the UCC) to such Securities
purchased by such Underwriter, and no action based on an adverse claim
(within the meaning of Section 8-105 of the UCC) may be asserted
against such Underwriter with respect to such Securities.
(b) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(c) Certificates in negotiable form for such Selling
Stockholder's Securities or option agreements with a signed notice of
exercise representing such Selling Stockholder's Securities and one or
more checks payable to the Company endorsed by such Selling Stockholder
in an aggregate amount equal to the aggregate exercise price of the
options (collectively, the "Option Exercise Materials") have been
placed in custody, for delivery pursuant to the terms of this
Agreement, under an Irrevocable Power of Attorney and Custody Agreement
duly authorized (if applicable) executed and delivered by such Selling
Stockholder, in the form heretofore furnished to you (the "Custody
Agreement") with the Company, as Custodian (the "Custodian"); the
Securities represented by the certificates or the Option Exercise
Materials so held in custody for each Selling Stockholder are subject
to the interests hereunder of the Underwriters; the arrangements for
custody and delivery of such certificates or Option Exercise Materials,
made by such Selling Stockholder hereunder and under the Custody
Agreement, are not subject to termination by any acts of such Selling
Stockholder, or by operation of law, whether by the death or incapacity
of such Selling Stockholder or the occurrence of any other event; and
if any such death, incapacity or any other such event shall occur
before the delivery of such Securities hereunder, certificates for the
Securities will be delivered by the Custodian in accordance with the
terms and conditions of this Agreement and the Custody Agreement as if
such death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice of such death,
incapacity or other event.
13
(d) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters and
such other approvals as have been obtained.
(e) Neither the sale of the Securities being sold by such
Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law or, if applicable, the charter or by-laws of such
Selling Stockholder or the terms of any indenture or other agreement or
instrument to which such Selling Stockholder or any of its subsidiaries
is a party or is bound, or any judgment, order or decree applicable to
such Selling Stockholder or, if applicable, any of its subsidiaries, of
any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Stockholder or any of
its subsidiaries.
Any certificate signed by any Selling Stockholder or any
officer of any Selling Stockholder and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Securities
shall be deemed a representation and warranty by such Selling Stockholder, as to
matters covered thereby, to each Underwriter.
(iii) The Outside Selling Stockholder further represents and
warrants to, and agrees with, each Underwriter that:
(a) Such Outside Selling Stockholder has no reason to believe
that the representations and warranties of the Company and the Inside
Selling Stockholders contained in this Section 1 are not true and
correct, is familiar with the Registration Statement and has no
knowledge of any material fact, condition or information not disclosed
in the Prospectus or any supplement thereto which has adversely
affected or may adversely affect the business of the Company or any of
its subsidiaries; and the sale of Securities by such Outside Selling
Stockholder pursuant hereto is not prompted by any information
concerning the Company or any of its subsidiaries which is not set
forth in the Prospectus or any supplement thereto.
(b) In respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto
made in reliance upon and in conformity with information furnished in
writing to the Company by such Outside Selling Stockholder specifically
for use in connection with the preparation thereof, such Outside
Selling Stockholder hereby makes the same representations and
warranties to each Underwriter as the Company and the Inside Selling
Stockholders severally and not jointly make to such Underwriter under
paragraph (i)(b) of this Section 1.
14
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company and the Selling
Stockholders agree, severally and not jointly, to sell to each Underwriter, and
each Underwriter agrees, severally and not jointly, to purchase from the Company
and the Selling Stockholders, at a purchase price of $_____ per share, the
amount of the Underwritten Securities set forth opposite such Underwriter's name
in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company and the Inside
Selling Stockholders hereby grant an option to the several Underwriters to
purchase, severally and not jointly, up to 412,500 Option Securities at the same
purchase price per share as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover over-allotments in the
sale of the Underwritten Securities by the Underwriters. Said option may be
exercised in whole or in part at any time (but not more than once) on or before
the 30th day after the date of the Prospectus upon written or telegraphic notice
by the Representatives to the Company and the Inside Selling Stockholders
setting forth the number of shares of the Option Securities as to which the
several Underwriters are exercising the option and the settlement date. The
maximum number of Option Securities to be sold by the Company is 33,878. The
maximum number of Option Securities which each Inside Selling Stockholder agrees
to sell is set forth in Schedule II hereto. In the event that the Underwriters
exercise less than their full over-allotment option, the number of Option
Securities to be sold by the Company and by each Inside Selling Stockholder
shall be, as nearly as practicable, in the same proportion to the total number
of Option Securities to be sold as the maximum number of Option Securities to be
sold by the Company and by each Inside Selling Stockholder is to the maximum
number of Option Securities to be sold. The number of Option Securities to be
purchased by each Underwriter shall be the same percentage of the total number
of shares of the Option Securities to be purchased by the several Underwriters
as such Underwriter is purchasing of the Underwritten Securities, subject to
such adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
June __, 2003, or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement among the Representatives, the Company
and the Selling Stockholders or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the respective aggregate purchase
prices of the Securities being sold by the Company and each of the Selling
Stockholders to or upon the order of the Company and the Selling Stockholders by
wire transfer payable in same-day funds to the accounts specified by the Company
and the
15
Selling Stockholders. Delivery of the Securities shall be made at such location
as Citigroup Global Markets Inc. shall reasonably designate at least one
Business Day in advance of the Closing Date. Certificates for the Securities
shall be registered in such names and in such denominations as Citigroup Global
Markets Inc. may request not less than two Business Days in advance of the
Closing Date.
The Company agrees to have the Securities available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 1:00 PM on the Business Day prior to the Closing Date.
Each Selling Stockholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the several Underwriters of
the Securities to be purchased by them from such Selling Stockholder and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company and the
Inside Selling Stockholders will deliver the Option Securities (at the expense
of the Company) to the Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, xx the date specified by the Representatives (which shall be within three
Business Days after exercise of said option) for the respective accounts of the
several Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company and the Inside Selling Stockholders by wire transfer payable in same-day
funds to the account specified by the Company and the Inside Selling
Stockholders. If settlement for the Option Securities occurs after the Closing
Date, the Company and the Inside Selling Stockholders will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if the Registration Statement has
become or
16
becomes effective pursuant to Rule 430A, or filing of the Prospectus
is otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company
will promptly advise the Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become
effective, (2) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of the
offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (4) of any
request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or
for any supplement to the Prospectus or for any additional
information, (5) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and
(6) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the rules thereunder, the Company
promptly will (1) notify the Representatives of any such event, (2)
prepare and file with the Commission, subject to the second sentence of
paragraph (i)(a) of this Section 5, an amendment or supplement which
will correct such statement or omission or effect such compliance and
(3) supply any supplemented Prospectus to you in such quantities as you
may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each
17
Preliminary Prospectus and the Prospectus and any supplement thereto
as the Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and will maintain
such qualifications in effect so long as required for the distribution
of the Securities; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to service
of process in suits, other than those arising out of the offering or
sale of the Securities, in any jurisdiction where it is not now so
subject.
(f) The Company will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge,
or otherwise dispose of (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or
any affiliate of the Company), directly or indirectly, including the
filing (or participation in the filing) of a registration statement
with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act, any other shares
of Common Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock; or publicly announce an
intention to effect any such transaction, for a period of 90 days after
the date of the Underwriting Agreement, provided, however, that the
Company may issue and sell Common Stock pursuant to its 401(k) Plan
(such issuance to be consistent with the Company's past practice) any
employee stock option plan or stock ownership plan of the Company in
effect at the Execution Time, the Company may issue Common Stock
issuable upon the conversion of securities or the exercise of warrants
outstanding at the Execution Time and the Company's 401(k) Plan may
sell Common Stock if and only if required to satisfy diversification
elections made by plan participants.
(g) The Company will comply in all material respects with all
applicable securities and other applicable laws, rules and regulations,
including, without limitation, the Xxxxxxxx-Xxxxx Act of 2002, and to
use its best efforts to cause the Company's directors and officers, in
their capacities as such, to comply in all material respects with such
laws, rules and regulations, including, without limitation, the
provisions of the Sarbanes Oxley Act.
(h) The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
18
(i) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary
Prospectus, the Prospectus, and each amendment or supplement to any of
them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary Prospectus,
the Prospectus, and all amendments or supplements to any of them, as
may, in each case, be reasonably requested for use in connection with
the offering and sale of the Securities; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the
Securities, including any stamp or transfer taxes in connection with
the original issuance and sale of the Securities; (iv) the printing (or
reproduction) and delivery of this Agreement, any blue sky memorandum
and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (v) the
registration of the Securities under the Exchange Act and the listing
of the Securities on the New York Stock Exchange; (vi) any registration
or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states (including filing
fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such registration and qualification); (vii)
any filings required to be made with the National Association of
Securities Dealers, Inc. (including filing fees and the reasonable fees
and expenses of counsel for the Underwriters relating to such filings);
(viii) the transportation and other expenses incurred by or on behalf
of Company representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of
the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company and the Inside
Selling Stockholders; and (x) all other costs and expenses incident to
the performance by the Company and the Inside Selling Stockholders of
their obligations hereunder.
(ii) Each Selling Stockholder agrees with the several
Underwriters that:
(a) Such Selling Stockholder will not, without the prior
written consent of Citigroup Global Markets Inc., offer, sell, contract
to sell, pledge or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Selling
Stockholder or any affiliate of the Selling Stockholder or any person
in privity with the Selling Stockholder or any affiliate of the Selling
Stockholder), directly or indirectly, or file (or participate in the
filing of) a registration statement with the Commission in respect of,
or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of
the Exchange Act with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or
exchangeable for such capital stock, or publicly announce an intention
to effect any such transaction, for a period of 90 days after the date
of this Agreement, other than shares of Common Stock disposed of as
bona fide gifts approved by Citigroup Global Markets Inc.;
19
provided, however, that notwithstanding anything to the contrary
herein, any Inside Selling Stockholder may transfer his or her
Securities (A) as a bona fide gift or gifts to a member of his or her
immediate family, including any grandchildren of such Inside Selling
Stockholder; or (B) to any trust the beneficiaries of which are
exclusively such Inside Selling Stockholder or a member of the
immediate family of such Inside Selling Stockholder, including
grandchildren; provided, however, that for any such case under either
(A) or (B) above, it shall be a condition to such transfer that the
transferee execute an agreement stating that the transferee is
receiving and holding the Securities subject to, and the transferee
agrees to be bound by, the provisions of this Section 5(ii), and there
shall be no further transfer of such Securities except in accordance
with this Section 5(ii)(a); and provided further that any such
transfer under either (A) or (B) above shall not involve a disposition
for value.
(b) Such Selling Stockholder will not take, directly or
indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(c) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities by an underwriter
or dealer may be required under the Act, of any of the following which
comes to the attention of such Selling Stockholder: (i) any material
change in the Company's condition (financial or otherwise), prospects,
earnings, business or properties, (ii) any change in information in the
Registration Statement or the Prospectus relating to such Selling
Stockholder or (iii) any new material information relating to the
Company or relating to any matter stated in the Prospectus.
(iii) The Outside Selling Stockholder further agrees with the
several Underwriters to pay (a) the fees and expenses of counsel (including
local counsel and special counsel) for such Outside Selling Stockholder and
(b) all other costs and expenses incident to the performance by such Outside
Selling Stockholder of its obligations hereunder.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
contained herein as of the Execution Time, the Closing Date and any settlement
date pursuant to Section 3 hereof, to the accuracy of the statements of the
Company and the Selling Stockholders made in any certificates pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following additional
conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in writing to a
later time, the
20
Registration Statement will become effective not later than (i) 6:00 PM New York
City time on the date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on such date,
or (ii) 9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after 3:00 PM New
York City time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus, and any such
supplement, will be filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have requested and caused Xxxx and Xxxx
LLP, counsel for the Company, to have furnished to the Representatives their
opinion, dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) each of the Company and its Significant Subsidiaries has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business
as such properties and business are described in the Prospectus, and is
duly qualified to do business as a foreign corporation in good standing
under the laws of each jurisdiction listed on Annex B attached hereto;
(ii) all the outstanding shares of capital stock of each of
the Company's Significant Subsidiaries have been duly authorized and
validly issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Prospectus, all outstanding shares of
capital stock of each of the Significant Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and
clear of any perfected security interest and, to the knowledge of such
counsel, any other security interest, claim, lien or encumbrance, other
than the security interest created by the Security Agreement, dated
August 15, 2001, among the Company, Systems Research and Applications
Corporation, SRA Technical Services Center, Inc., and SunTrust Bank as
filed as Exhibit 10.15 to the Registration Statement;
(iii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock;" the
outstanding shares of Common Stock have been duly authorized and
validly issued and are fully paid and nonassessable; the Securities
being sold hereunder by the Company have been duly authorized, and,
when issued and delivered to and paid for by the Underwriters pursuant
to this Agreement, will be validly issued, fully paid and
nonassessable; the Securities being sold hereunder by the Company are
duly listed, and admitted and authorized for trading, subject to
official notice of issuance and evidence of satisfactory distribution,
on the New York Stock Exchange; the certificates for the
21
Securities are in valid and sufficient form under the Delaware General
Corporation Law statute, under the charter and by-laws of the Company
and under all applicable requirements of the New York Stock Exchange;
the holders of outstanding shares of capital stock of the Company are
not entitled to preemptive rights under the Delaware General
Corporation Law statute or, to such counsel's knowledge, other similar
contractual rights to subscribe for the Securities; and, except as set
forth in the Prospectus, to the knowledge of such counsel, no options,
warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests in
the Company are outstanding;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries listed on Annex C attached hereto
(the "Subsidiaries") or its or their property of a character required
to be disclosed in the Registration Statement which is not disclosed in
the Prospectus, and, to the knowledge of such counsel, there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to be filed
as an exhibit thereto, which has not been described or filed;
(v) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose have been
instituted or threatened and the Registration Statement and the
Prospectus (other than the financial statements, including the notes
and schedules thereto and any other financial information contained
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements of the
Act and the rules thereunder;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as defined in the Investment Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such as
have been obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
22
contemplated in this Agreement and in the Prospectus and such other
approvals (specified in such opinion) as have been obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or its Subsidiaries pursuant
to (i) the charter or by-laws of the Company or its Subsidiaries, (ii)
any United States federal or Virginia state statute, law, rule or
regulation or, (iii) any judgment, order or decree, known to such
counsel and specifically naming the Company or its Subsidiaries, of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
its Subsidiaries or any of its or their properties; and
(x) to the knowledge of such counsel, no holders of securities
of the Company have rights to the registration of such securities under
the Registration Statement.
In addition, such counsel shall state that, in connection with
the preparation of the Registration Statement and the Prospectus, they have
participated in conferences with officers and representatives of the Company,
counsel for the Underwriters and the independent accountants of the Company, at
which conferences they made inquiries of such persons and others and discussed
the contents of the Registration Statement and the Prospectus, and that, while
the limitations inherent in the independent verification of factual matters and
the character of determinations involved in the registration process are such
that they are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, subject to the foregoing and based on
such participation, inquiries and discussions, no facts have come to their
attention which have caused them to believe that the Registration Statement, as
of the Effective Date (but after giving effect to changes incorporated pursuant
to Rule 430A under the Act), contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading (except that they express
no such view with respect to the financial statements, including the notes and
schedules thereto, or any other financial information contained therein), that
the Prospectus, as of the date it was filed with the Commission pursuant to Rule
424(b)(4) under the Act, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (except that they express no such view with respect to the financial
statements, including the notes and schedules thereto, or any other financial
information contained therein), or that the Registration Statement or the
Prospectus, as of the date of such opinion, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading (except that they express no such view with respect to the
financial
23
statements, including the notes and schedules thereto, or any other financial
information contained therein).
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent they deem proper, on certificates of responsible officers
of the Company and public officials. References to the Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
(c) The Selling Stockholders shall have requested and caused
Xxxx and Xxxx LLP, counsel for the Selling Stockholders, to have furnished to
the Representatives their opinion dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) this Agreement and the Custody Agreement and Power of
Attorney have been duly authorized, executed and delivered by the
Selling Stockholders, the Custody Agreement is valid and binding on the
Selling Stockholders;
(ii) based solely on certificates of the Selling Stockholders
and the representations and warranties of the Selling Stockholders in
the Custody Agreement and the Underwriting Agreement, which such
counsel has no knowledge are inaccurate, each Selling Stockholder has
full legal right and authority to sell, transfer and deliver in the
manner provided in this Agreement and the Custody Agreement the
Securities being sold by such Selling Stockholder hereunder;
(iii) assuming that each Underwriter acquires its interest in
the Securities it has purchased from such Selling Stockholder without
notice of any adverse claim (within the meaning of Section 8-105 of the
UCC), each Underwriter that has purchased such Securities delivered on
the Closing Date to The Depository Trust Company or other securities
intermediary by making payment therefor as provided herein, and that
has had such Securities credited to the securities account or accounts
of such Underwriters maintained with The Depository Trust Company or
such other securities intermediary will have acquired a security
entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to
such Securities purchased by such Underwriter, and no action based on
an adverse claim (within the meaning of Section 8-105 of the UCC) may
be asserted against such Underwriter with respect to such Securities;
(iv) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by any
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters and
such other approvals (specified in such opinion) as have been obtained;
and
24
(v) neither the sale of the Securities being sold by any
Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by any Selling Stockholder or the
fulfillment of the terms hereof by any Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any United States federal or Virginia state law or, if
applicable, the charter or by-laws of such Selling Stockholder or the
terms of any indenture or other agreement or instrument known to such
counsel and to which such Selling Stockholder or any of its
subsidiaries is a party or is bound, or any judgment, order or decree
known to such counsel and specifically naming such Selling Stockholder
or, if applicable, any of its subsidiaries, of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder or any of its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the Commonwealth of Virginia
or the federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters, and (B) as to matters of fact, to the extent they deem proper, on
certificates of the Selling Stockholders or, if applicable, responsible officers
of the Selling Stockholders, and public officials.
(d) The Representatives shall have received from Xxxx Xxxxxxx,
Vice President and Corporate Counsel for the Company, her opinion, dated the
Closing Date and addressed to the Representatives, to the effect that neither
the issue and sale of the Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to, (i) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or its
Subsidiaries is a party or bound or to which its or their property is subject or
(ii) any judgment, order or decree applicable to the Company or its subsidiaries
of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or its
subsidiaries or any of its or their properties.
(e) The Representatives shall have received from Xxxxx &
Xxxxxxx L.L.P., counsel for the Underwriters, such opinion or opinions, dated
the Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement, the Prospectus
(together with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company and each Selling
Stockholder shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that
25
the signers of such certificate have carefully examined the Registration
Statement, the Prospectus, any supplements to the Prospectus and this Agreement
and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company has complied
with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there
has been no material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto).
(g) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by or on behalf of such Selling
Stockholder or, in the case of the Outside Selling Stockholder, the Chairman of
the Board or the President and the principal financial or accounting officer of
such Outside Selling Stockholder, dated the Closing Date, to the effect that the
signer(s) of such certificate have carefully examined the Registration
Statement, the Prospectus, any supplement to the Prospectus and this Agreement
and that the representations and warranties of such Selling Stockholder in this
Agreement are true and correct on and as of the Closing Date to the same effect
as if made on the Closing Date.
(h) The Company shall have requested and caused Deloitte &
Touche L.L.P. to have furnished to the Representatives letters, at the Execution
Time and at the Closing Date, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the applicable rules and regulations adopted by the Commission thereunder
and that they have performed a review of the unaudited financial information of
the Company for the fiscal year ended June 30, 1998 in accordance with Statement
on Auditing Standards No. 71, and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement
and the Prospectus and reported on by them comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related rules and regulations adopted by the Commission;
26
(ii) on the basis of a reading of the latest audited financial
statements made available by the Company and its subsidiaries; their
limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited financial
information for the fiscal year ended June 30, 1998, carrying out
certain specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter; a reading of the minutes of the meetings of the
stockholders, directors and audit and compensation committees of the
Company and the Significant Subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to March 31, 2003, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements included in
the Registration Statement and the Prospectus do not comply as
to form in all material respects with applicable accounting
requirements of the Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus;
(2) with respect to the period subsequent to March
31, 2003, there were any changes, at a specified date not more
than five days prior to the date of the letter, in the
long-term debt or other long-term liabilities of the Company
and its subsidiaries or the capital stock of the Company or
decreases in the stockholders' equity or total assets of the
Company as compared with the amounts shown on the March 31,
2003, consolidated balance sheet included in the Registration
Statement and the Prospectus, or for the period from April 1,
2003, to such specified date there were any decreases, as
compared with April 1, 2002, in revenues, operating income or
net income of the Company and its subsidiaries, except in all
instances for changes or decreases set forth in such letter,
in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Representatives; and
(3) the information included in the Registration
Statement and Prospectus in response to Regulation S-K, Item
301 (Selected Financial Data), and Item 402 (Executive
Compensation) is not in conformity with the applicable
disclosure requirements of Regulation S-K; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus, agrees
27
with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (h) include any
supplement thereto at the date of the letter.
(i) Subsequent to the Execution Time 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 (i) any change or decrease specified in the letter or
letters referred to in paragraph (h) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the condition
(financial or otherwise), earnings, business or properties of the Company and
its subsidiaries taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto) the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto).
(j) Prior to the Closing Date, the Company and the Selling
Stockholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may reasonably
request.
(k) The Securities shall have been listed and admitted and
authorized for trading on the New York Stock Exchange, and satisfactory evidence
of such actions shall have been provided to the Representatives.
(l) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A hereto from
each director of the Company who is not an Inside Selling Stockholder, General
Atlantic Partners 75, L.P., GAP Coinvestment Partners II, L.P., GapStar, LLC and
GAPCO GmbH & Co. KG addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company and the Selling Stockholders in writing or by telephone or facsimile
confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Xxxxx & Xxxxxxx L.L.P., counsel for the
Underwriters, at 000 Xxxxxxxxxx Xxxxxx XX, Xxxxxxxxxx, X.X. 00000, on the
Closing Date.
28
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
or because of any refusal, inability or failure of the Company or any Selling
Stockholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through Citigroup Global Markets Inc. on
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities. If the Company is
required to make any payments to the Underwriters under this Section 7 because
of any Selling Stockholder's refusal, inability or failure to satisfy any
condition to the obligations of the Underwriters set forth in Section 6, such
Selling Stockholder shall reimburse the Company on demand for all amounts so
paid.
8. Indemnification and Contribution.
(a) The Company and each of the Inside Selling Stockholders
jointly and severally and not jointly agree to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in any 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, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company and the Inside Selling
Stockholders will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein; provided further, that with respect to any
untrue statement or omission of material fact made in any Preliminary
Prospectus, the indemnity agreement contained in this Section 8(a) shall not
inure to the benefit of any Underwriter from whom the person asserting any such
loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such Underwriter occurs
under the circumstances where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w) the Company
had previously furnished copies of the Prospectus to the Representatives, (x)
delivery of the Prospectus was required by the Act to be made to such person,
(y) the untrue statement or omission of a material fact
29
contained in the Preliminary Prospectus was corrected in the Prospectus and (z)
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the
Prospectus. This indemnity agreement will be in addition to any liability which
the Company or the Inside Selling Stockholders may otherwise have.
(b) The Outside Selling Stockholder severally agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person who controls
the Company or any Underwriter within the meaning of either the Act or the
Exchange Act and each Inside Selling Stockholder, to the same extent as the
indemnity from the Company and the Inside Selling Stockholders to each
Underwriter set forth in Section 8(a) above, but only with reference to written
information relating to such Outside Selling Stockholder furnished to the
Company by or on behalf of such Outside Selling Stockholder specifically for
inclusion in the documents referred to in the indemnity set forth in Section
8(a) above. This indemnity agreement will be in addition to any liability which
the Outside Selling Stockholder may otherwise have.
(c) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, each person who controls the
Company within the meaning of either the Act or the Exchange Act and each
Selling Stockholder, to the same extent as the indemnity to each Underwriter set
forth in Section 8(a) above, but only with reference to written information
relating to such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have. The
Company and each Selling Stockholder acknowledge that the statements set forth
in the last paragraph of the cover page regarding delivery of the Securities
and, under the heading "Underwriting" (i) the list of underwriters and their
respective participation in the sale of the Securities, (ii) the sentences
related to concessions and reallowances in the third paragraph, (iii) the
paragraphs related to short sales, stabilization, syndicate covering
transactions and penalty bids and (iv) the thirteenth paragraph relating to
electronic distribution in any Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a), (b) or (c) above unless
and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided
30
in paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 8 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the Company and the Inside Selling
Stockholders, severally and not jointly, the Outside Selling Stockholder,
severally, and the Underwriters, severally, agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company, one or more of the Selling
Stockholders and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Inside Selling Stockholders collectively, by the Outside Selling
Stockholder, and by the Underwriters, respectively, from the offering of the
Securities; provided, however, that in no case shall any Underwriter (except as
may be provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company, the Selling Stockholders
and the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the Inside Selling Stockholders collectively, of the Outside Selling
Stockholder, and of the Underwriters,
31
respectively, in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. Benefits
received by the Company and by the Selling Stockholders shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by each of them, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company and the
Selling Stockholders on the one hand or the Underwriters on the other hand, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Company, the Selling Stockholders and the Underwriters agree that it would not
be just and equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter; each person who controls the Company within the meaning of either
the Act or 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 each person who controls the
Outside Selling Stockholder within the meaning of either the Act or the Exchange
Act and each director, officer, employee and agent of the Outside Selling
Stockholder shall have the same rights to contribution as such Outside Selling
Stockholder, subject in each case to the applicable terms and conditions of this
paragraph (e).
(f) The liability of each Selling Stockholder under such
Selling Stockholder's representations and warranties contained in Section 1
hereof and under the indemnity and contribution agreements contained in this
Section 8 shall be limited to an amount equal to the aggregate net proceeds
received by such Selling Stockholder hereunder as set forth on the cover page of
the Prospectus and shall be several in such proportion as the aggregate net
proceeds received by such Selling Stockholder bears to the aggregate net
proceeds received by all Selling Stockholders. The Company and the Selling
Stockholders may agree, as among themselves and without limiting the rights of
the Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the
32
aggregate amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate amount of
Securities set forth in Schedule I hereto, the remaining Underwriters shall have
the right to purchase all, but shall not be under any obligation to purchase
any, of the Securities, and if such nondefaulting Underwriters do not purchase
all the Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter, the Selling Stockholders or the Company. In the event
of a default by any Underwriter as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company, the Selling
Stockholders and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Citigroup Global Markets Inc. General
Counsel (fax no.: (000) 000-0000) and confirmed to the General Counsel,
Citigroup Global Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: General Counsel; or, if sent to the Company or any Inside
Selling Stockholder, will be mailed, delivered or telefaxed to the
33
Chief Executive Officer (fax no.: (000) 000-0000) and confirmed to it at 0000
Xxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, attention of Chief Executive Officer,
with a copy to Xxxxx X. Xxxxx, Xxxx and Xxxx LLP, 00000 Xxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxx 00000 (fax no: (000) 000-0000); or if sent to the Outside Selling
Stockholder, will be mailed, delivered or telefaxed and confirmed to it at the
address set forth in Schedule II hereto.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(i)(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
34
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto or
any Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended
or such Rule 462(b) Registration Statement, as the case may be. Such
term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
35
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
THE COMPANY:
SRA International, Inc.
By: ____________________________
Name:
Title:
THE INSIDE SELLING STOCKHOLDERS:
-------------------------------
Xxxxx Xxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxx
-------------------------------
Xxxxxx X. XxXxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxx X. Xxxxxx
THE OUTSIDE SELLING STOCKHOLDER:
The Xxxxxx Foundation
By: ____________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
Xxxxxxx, Sachs & Co.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Xxxxx, Xxxxxxxx & Xxxx, Inc.
BB&T Capital Markets, a Division of Xxxxx & Xxxxxxxxxxxx, Inc.
RBC Xxxx Xxxxxxxx Inc.
By: Citigroup Global Markets Inc.
By: ____________________________
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
Number of Underwritten
Underwriters Securities to be Purchased
------------ ---------------------------
Citigroup Global Markets Inc. ...................................
Xxxxxxx, Xxxxx & Co. ............................................
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated ............................
Xxxxx, Xxxxxxxx & Xxxx, Inc. ....................................
BB&T Capital Markets, a Division of Xxxxx & Xxxxxxxxxxxx, Inc. ..
RBC Xxxx Xxxxxxxx Inc. ..........................................
=========
Total .................................................. 2,750,000
SCHEDULE II
Maximum Number of
Number of Underwritten Option Securities
Selling Stockholders: Securities to be Sold to be Sold
-------------------- --------------------- -----------------
Inside Selling Stockholders:
Xx. Xxxxx Xxxxxxxx
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000 ................ 40,000 140,000
Xx. Xxxxxx X. XxXxxxxxx
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000 ................ 32,000 53,622
Xxxxxxx X. Xxxxxx
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000 ................ 10,000 10,000
Xxxxx X. Xxxxxx
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000 ................ 15,000 15,000
Xxxxxx X. Xxxxxxx
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000 ................ 90,000 160,000
Outside Selling Stockholder:
The Xxxxxx Foundation
000 Xxxxx Xxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000 ............... 70,000 --
------------- -------------
Total ........................ 257,000 378,622
============= =============
[Form of Lock-Up Agreement] EXHIBIT A
SRA International, Inc.
Public Offering of Class A Common Stock
June __, 2003
Citigroup Global Markets Inc.
Xxxxxxx, Sachs & Co.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Xxxxx, Xxxxxxxx & Xxxx, Inc.
BB&T Capital Markets, a Division of Xxxxx & Xxxxxxxxxxxx, Inc.
RBC Xxxx Xxxxxxxx Inc.
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), among SRA
International, Inc., a Delaware corporation (the "Company"), the persons named
in Schedule II therein (the "Selling Stockholders") and each of you as
representatives of a group of Underwriters named in Schedule I therein, relating
to an underwritten public offering (the "Offering") of Class A Common Stock,
$0.004 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of Citigroup Global Markets Inc., offer, sell, contract to sell,
pledge or otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock (collectively, the
"Securities"), or publicly announce an intention to effect any such transaction,
for a period of 90 days after the date of the Underwriting Agreement.
2
Notwithstanding anything to the contrary herein, the
undersigned may transfer the undersigned's Securities (A) as a bona fide gift or
gifts to a member of his or her immediate family, including any grandchildren of
the undersigned; or (B) to any trust the beneficiaries of which are exclusively
the undersigned or a member of the immediate family of the undersigned,
including grandchildren; provided, however, that for any such case under either
(A) or (B) above, it shall be a condition to such transfer that the transferee
execute an agreement stating that the transferee is receiving and holding the
Securities subject to, and the transferee agrees to be bound by, the provisions
of this letter agreement, and there shall be no further transfer of such
Securities except in accordance with this letter agreement; and provided further
that any such transfer under either (A) or (B) above shall not involve a
disposition for value.
If for any reason the Underwriting Agreement shall not be
executed by September 15, 2003, or, having been executed by such date, shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Address:
----------------------------
3
Annex A
Significant Subsidiaries as defined by Rule 1-02 of Regulation S-X:
Systems Research and Applications Corporation
Adroit Systems, Inc.
Annex B
SRA International, Inc.
Arizona
Louisiana
Minnesota
North Carolina
Virginia
Systems Research and Applications Corporation
Arizona
California
Delaware
District of Columbia
Florida
Illinois
Louisiana
Maryland
Massachusetts
Minnesota
North Carolina
North Dakota
Washington
Adroit Systems, Inc.
Florida
Annex C
Systems Research and Applications Corporation
The Xxxxxxx Xxxxxx Group Ltd.
SRA Technical Services Center, Inc.
SRA Ventures, LLC
Adroit Systems, Inc.