EXHIBIT 1.1
3,666,667 Shares
STARTEK, INC.
Common Stock
UNDERWRITING AGREEMENT
_______ __, 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX XXXXXXX & CO. INCORPORATED
As representatives of the
several underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
STARTEK, INC., a Delaware corporation (the "Company"), and the
stockholders of the Company named in Schedule II hereto, (collectively, the
"Selling Stockholders"), severally propose to sell an aggregate of 3,666,667
shares of Common Stock, par value $.01 per share, of the Company (the "Firm
Shares"), to the several underwriters named in Schedule I hereto (the
"Underwriters"). The Firm Shares consist of 3,000,000 shares to be issued and
sold by the Company and 666,667 outstanding shares to be sold by the Selling
Stockholders. The Selling Stockholders also propose to sell to the several
Underwriters not more than 550,000 additional shares of Common Stock, par value
$.01 per share, of the Company (the "Additional Shares"), if requested by the
Underwriters as provided in Section 2 hereof. The Firm Shares and the
Additional Shares are herein collectively called the "Shares". The shares of
common stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "Common Stock". The
Company and the Selling Stockholders are hereinafter collectively called the
"Sellers".
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1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-1 including a prospectus relating to
the Shares, which may be amended. The registration statement as amended at the
time when it becomes effective, including a registration statement (if any)
filed pursuant to Rule 462(b) under the Act increasing the size of the offering
registered under the Act and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the "Registration Statement"; and the
prospectus in the form first used to confirm sales of Shares is hereinafter
referred as the "Prospectus".
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, (i) the Company agrees to issue and sell 3,000,000 Firm Shares,
(ii) each Selling Stockholder agrees, severally and not jointly, to sell the
number of Firm Shares set forth opposite such Selling Stockholder's name in
Schedule II hereto and (iii) each Underwriter agrees, severally and not jointly,
to purchase from each Seller at a price per share of $______ (the "Purchase
Price") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) which bears the same proportion to the
total number of Firm Shares to be sold by such Seller as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto
bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) each Selling Stockholder
agrees to sell up to the number of Additional Shares set forth opposite such
Selling Stockholder's name on Schedule II hereto and (ii) the Underwriters shall
have the right to purchase, severally and not jointly, up to an aggregate
550,000 Additional Shares from the Selling Stockholders at the Purchase Price.
The Additional Shares may be purchased solely for the purpose of covering over-
allotments made in connection with the offering of the Firm Shares. The
Underwriters may exercise their right to purchase the Additional Shares in whole
or in part from time to time by giving written notice thereof to either
Attorney-in-Fact (as hereinafter defined) within 30 days after the date of this
Agreement. You shall give any such notice on behalf of the Underwriters and
such notice shall specify the aggregate number of Additional Shares to be
purchased pursuant to such exercise and the date for payment and delivery
thereof. The date specified in any such notice shall be a business day
(i) no earlier than the Closing Date (as hereinafter defined), (ii) no later
than ten business days after such notice has been given and (iii) no earlier
than two business days after such notice has been given. If any Additional
Shares are to be purchased, each Underwriter, severally and not jointly, agrees
to purchase from the Selling Stockholders the number of Additional Shares
(subject to
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such adjustments to eliminate fractional shares as you may determine) which
bears the same proportion to the total number of Additional Shares to be
purchased from the Selling Stockholders as the number of Firm Shares set forth
opposite the name of such Selling Stockholder in Schedule II bears to the total
number of Firm Shares sold by the Selling Stockholders.
The Sellers hereby agree, severally and not jointly, and the Company
shall, concurrently with the execution of this Agreement, deliver an agreement
executed by (i) each of the directors and officers of the Company who is not a
Selling Stockholder and (ii) each stockholder listed on Annex I hereto, pursuant
to which each such person agrees, not to offer, sell, contract to sell, grant
any option to purchase, or otherwise dispose of any common stock of the Company
or any securities convertible into or exercisable or exchangeable for such
common stock or in any other manner transfer all or a portion of the economic
consequences associated with the ownership of any such common stock, except to
the Underwriters pursuant to this Agreement, for a period of 180 days after the
date of the Prospectus without the prior written consent of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation. Notwithstanding the foregoing, during such
period (i) the Company may grant stock options pursuant to the Company's
existing stock option plans and (ii) the Company may issue shares of its common
stock upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof.
3. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
4. DELIVERY AND PAYMENT. Delivery to the Underwriters of and payment for
the Firm Shares shall be made at 10:00 A.M., New York City time, on the third or
fourth business day unless otherwise permitted by the Commission pursuant to
Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") following the date of the initial public offering (the "Closing Date"), at
such place outside the State of New York as you shall designate. The Closing
Date and the location of delivery of and the form of payment for the Firm Shares
may be varied by agreement between you and the Sellers.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at such place as you shall
designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "Option
Closing Date"). Any such Option Closing Date and the location of delivery of
and the form of payment for such Additional Shares may be varied by agreement
between you and the Company.
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Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next preceding
the Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the respective Sellers, for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by wire
transfer of funds to the order of the applicable Sellers.
5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To use its best efforts to cause the Registration Statement to
become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment to it becomes effective, (ii) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, and (iv) of the
happening of any event during the period referred to in paragraph (e) below
which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(c) To furnish to you, without charge, three signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
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(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus of which you shall
not previously have been advised or to which you shall reasonably object;
and to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause the
same to become promptly effective.
(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the opinion of counsel
for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer
may reasonably request.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters
it becomes necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus,
as so amended or supplemented, will not in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter or
dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such qualification in effect
so long as required for distribution of the Shares and to file such
consents to service of process or other documents as may be necessary in
order to effect such registration or qualification. Notwithstanding the
foregoing, the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
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jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation.
(h) To mail and make generally available to its stockholders as soon
as reasonably practicable an earnings statement covering a period of at
least twelve months after the effective date of the Registration Statement
(but in no event commencing later than 90 days after such date) which shall
satisfy the provisions of Section 11(a) of the Act, and to advise you in
writing when such statement has been so made available.
(i) During the period of five years after the date of this Agreement,
(i) to mail as soon as reasonably practicable after the end of each fiscal
year to the record holders of its Common Stock a financial report of the
Company and its subsidiaries on a consolidated and combined basis (and a
similar financial report of all unconsolidated subsidiaries, if any), all
such financial reports to include a consolidated and combined balance
sheet, a consolidated and combined statement of operations, a consolidated
and combined statement of cash flows and a consolidated and combined
statement of stockholders' equity as of the end of and for such fiscal
year, together with comparable information as of the end of and for the
preceding year, certified by independent certified public accountants, and
(ii) to mail and make generally available as soon as practicable after the
end of each quarterly period (except for the last quarterly period of each
fiscal year) to such holders, a consolidated and combined balance sheet, a
consolidated and combined statement of operations and a consolidated and
combined statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period,
and for the period from the beginning of such year to the close of such
quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(j) During the period referred to in paragraph (i), to furnish to you
as soon as available a copy of each report or other publicly available
information of the Company mailed to the holders of Common Stock or filed
with the Commission and such other publicly available information
concerning the Company and its subsidiaries as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), each
preliminary prospectus and all amendments and supplements to any of them
prior to or during the period specified in paragraph (e), ((ii) the
printing and delivery of the
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Prospectus and all amendments or supplements to it during the period
specified in paragraph (e), ((iii) the printing and delivery of this
Agreement, the Preliminary and Supplemental Blue Sky Memoranda and all
other agreements, memoranda, correspondence and other documents printed and
delivered in connection with the offering of the Shares (including in each
case any disbursements of counsel for the Underwriters relating to such
printing and delivery), (iv) the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of the
several states (including in each case the fees and disbursements of
counsel for the Underwriters relating to such registration or qualification
and memoranda relating thereto), (v) filings and clearance with the
National Association of Securities Dealers, Inc. in connection with the
offering, (vi) the listing of the Shares for trading on the New York Stock
Exchange ("NYSE"), (vii) furnishing such copies of the Registration
Statement, the Prospectus and all amendments and supplements thereto as may
be requested for use in connection with the offering or sale of the Shares
by the Underwriters or by dealers to whom Shares may be sold and (viii) the
performance by the Sellers of their other obligations under this Agreement.
(l) During the period when representatives of the Company and the
Underwriters travel to meetings with potential investors (the "Roadshow"),
to pay (i) one-half of all costs, expenses, fees and taxes incident to the
renting or chartering of private planes to be used for travel during the
Roadshow, (ii) all costs, expenses, fees and taxes associated with the
presentation materials to be used by the Company and the Underwriters
during the Roadshow, and (iii) all costs, expenses, fees and taxes for
personal expenses (including, without limitation, all food, lodging and
personal services) of representatives of the Company participating in the
Roadshow.
(m) To use its best efforts to maintain the listing for trading of
the Common Stock on the NYSE (or on the Nasdaq National Market) for a
period of five years after the effective date of the Registration
Statement.
(n) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company
prior to the Closing Date or any Option Closing Date, as the case may be,
and to satisfy all conditions precedent to the delivery of the Shares.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of
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the Registration Statement is in effect, and no proceedings for such
purpose are pending before or threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement and the Prospectus comply and, as amended
or supplemented, if applicable, will comply in all material respects with
the Act and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set
forth in this paragraph (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and authority to carry on its business as it is currently being conducted
and to own, lease and operate its properties, and each is duly qualified
and is in good standing as a foreign corporation authorized to do business
in each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(d) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and
are owned by the Company, free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature.
(e) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights; and the Shares to be
issued and sold by the Company hereunder have been duly authorized and,
when issued and delivered to the Underwriters against payment therefor as
provided
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by this Agreement, will be validly issued, fully paid and non-assessable,
and the issuance of such Shares will not be subject to any preemptive or
similar rights.
(f) The authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained in
the Prospectus.
(g) Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws or in default in the performance of
any obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other agreement,
indenture or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of its subsidiaries or their respective
property is bound, which violation or default would have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(h) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except as such may
be required under the securities or Blue Sky laws of the various states)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or
any of its subsidiaries or, except as to defaults, violations or conflicts
which individually or in the aggregate would not be material to the Company
and its subsidiaries, taken as a whole, any agreement, indenture or other
instrument to which it or any of its subsidiaries is a party or by which it
or any of its subsidiaries or their respective property is bound, or
violate or conflict with any laws, administrative regulations or rulings or
court decrees applicable to the Company, any of its subsidiaries or their
respective property, which violation or conflict would have a material
adverse effect on the business, prospects, financial condition or results
of operation of the Company and its subsidiaries, taken as a whole.
(i) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any of their respective
property is the subject, and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated. No contract or document
of a character required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit
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to the Registration Statement is not so described or filed as required.
(j) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder, which in
each case might result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company and
its subsidiaries, taken as a whole.
(k) The Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and operate
its respective properties and to conduct their respective businesses,
except where the failure to have such permits would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole; the
Company and each of its subsidiaries has fulfilled and performed all of its
material obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit; and, except as described in the
Prospectus, there are no restrictions contained in such permits, compliance
with which would have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(l) The Company has conducted a review of the effect of Environmental
Laws on the business, operations and properties of the Company and its
subsidiaries, in the course of which it identified and evaluated 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 Company and its
subsidiaries, taken as a whole.
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(m) Except as otherwise set forth in the Prospectus or such as are
not material to the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole, the
Company and each of its subsidiaries has good and marketable title, free
and clear of all liens, claims, encumbrances and restrictions except liens
for taxes not yet due and payable, to all property and assets described in
the Registration Statement as being owned by it. All leases to which the
Company or any of its subsidiaries is a party are valid and binding and no
default has occurred or is continuing thereunder, which might result in any
material adverse change in the business, prospects, financial condition or
results of operation of the Company and its subsidiaries taken as a whole,
and the Company and its subsidiaries enjoy peaceful and undisturbed
possession under all such leases to which any of them is a party as lessee
with such exceptions as do not materially interfere with the use made by
the Company or such subsidiary.
(n) The Company and each of its subsidiaries maintains reasonably
adequate insurance.
(o) Ernst & Young LLP are independent public accountants with respect
to the Company as required by the Act.
(p) The financial statements, together with related schedules and
notes forming part of the Registration Statement and the Prospectus (and
any amendment or supplement thereto), present fairly the combined financial
position, results of operations and changes in financial position of the
Company and its subsidiaries on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any amendment
or supplement thereto) is, in all material respects, accurately presented
and prepared in good faith on the basis of the assumptions described in the
Registration Statement and such assumptions are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(q) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
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(r) No holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the
Company.
(s) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(t) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of, or other ownership interest in, the Company
or any subsidiary thereof except as otherwise disclosed in the Registration
Statement.
(u) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein by Item 404 of Regulation S-K of the Commission.
(v) There is (i) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries or, to the best
knowledge of the Company, threatened against any of them, before the
National Labor Relations Board or any state or local labor relations board,
and no significant grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Company
or any of its subsidiaries or, to the best knowledge of the Company,
threatened against any of them, and (ii) no significant strike, labor
dispute, slowdown or stoppage pending against the Company or any of its
subsidiaries or, to the best knowledge of the Company, threatened against
it or any of its subsidiaries except for such actions specified in
clause (i) and (ii) above, which, singly or in the aggregate could not
reasonably be expected to have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(w) The Company and each of its subsidiaries maintains 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 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.
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(x) The Company has filed a registration statement pursuant to
Section 12(b) of the Exchange Act, to register the Common Stock, has filed
an application to list the Shares for trading on the NYSE, and has received
notification that the listing has been approved, subject to notice of
issuance.
7. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, represents and warrants to and
agrees with each Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has, and on
the Closing Date (and Option Closing Date, if applicable) will have, good
and clear title to such Shares, free of all restrictions on transfer,
liens, encumbrances, security interests and claims whatsoever.
(b) Upon delivery of and payment for such Shares pursuant to this
Agreement and assuming the Underwriters purchase such Shares in good faith
without notice of any adverse claim, good and clear title to such Shares
will pass to the Underwriters, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever.
(c) Such Selling Stockholder has, and on the Closing Date (and Option
Closing Date, if applicable) will have, full legal right, power and
authority to enter into this Agreement and the Custody Agreement between
the Selling Stockholders and UMB Bank, N.A., as Custodian (the "Custody
Agreement") and to sell, assign, transfer and deliver such Shares in the
manner provided herein and therein, and this Agreement and the Custody
Agreement have been duly authorized, executed and delivered by such Selling
Stockholder and each of this Agreement and the Custody Agreement is a valid
and binding agreement of such Selling Stockholder enforceable in accordance
with its terms, except as rights to indemnity and contribution hereunder
may be limited by applicable law, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity).
(d) The power of attorney signed by such Selling Stockholder
appointing A. Xxxxx Xxxxxxxxxx, Xx. and Xxxxxxx X. Xxxxxx, or either one of
them, as his attorney-in-fact (the "Attorney-in-Fact") to the extent set
forth therein with regard to the transactions contemplated hereby and by
the Registration Statement and the Custody Agreement has been duly
authorized, executed
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and delivered by or on behalf of such Selling Stockholder and is a valid
and binding instrument of such Selling Stockholder enforceable in
accordance with its terms, except to the extent that enforcement thereof
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and,
pursuant to such power of attorney, such Selling Stockholder has authorized
A. Xxxxx Xxxxxxxxxx, Xx. and Xxxxxxx X. Xxxxxx, or either one of them, to
execute and deliver on his behalf this Agreement and any other document
necessary or desirable in connection with transactions contemplated hereby
and to deliver the Shares to be sold by such Selling Stockholder pursuant
to this Agreement.
(e) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably
be expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares pursuant to the distribution contemplated by this Agreement, and
other than as permitted by the Act, such Selling Stockholder has not
distributed and will not distribute any prospectus or other offering
material in connection with the offering and sale of the Shares.
(f) The execution, delivery and performance of this Agreement by such
Selling Stockholder, compliance by such Selling Stockholder with all the
provisions hereof and the consummation of the transactions contemplated
hereby will not require any consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental
body (except as such may be required under the Act, state securities laws
or Blue Sky laws) and will not conflict with or constitute a breach of any
of the terms or provisions of, or a default under, organizational documents
of such Selling Stockholder, if not an individual, or any agreement,
indenture or other instrument to which such Selling Stockholder is a party
or by which such Selling Stockholder or property of such Selling
Stockholder is bound, or violate or conflict with any laws, administrative
regulation or ruling or court decree applicable to such Selling Stockholder
or property of such Selling Stockholder.
(g) Such parts of the Registration Statement under the caption
"Principal and Selling Stockholders" which specifically relate to such
Selling Stockholder do not, and will not on the Closing Date (and any
Option Closing Date, if applicable), contain any untrue statement of a
material fact or omit to state any material fact required
-14-
to be stated therein or necessary to make the statements therein, in light
of circumstances under which they were made, not misleading.
(h) To the best of such Selling Stockholder's knowledge (except with
respect to the FASSET and MASSET Trusts, which make no representation or
warranty hereunder), the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and that the Prospectus, as amended or
supplemented, if applicable (except for financial statements, as aforesaid)
does not contain 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, not misleading,
except that the representations and warranties set forth in this
paragraph (h) do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use therein.
(i) At any time during the period described in paragraph 5(e) hereof,
if there is any change in the information referred to in paragraph 7(g)
above, the Selling Stockholders will immediately notify you of such change.
8. INDEMNIFICATION. (a) The Company and each Selling Stockholder,
jointly and severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all losses, claims,
damages, liabilities and judgments caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished in writing
to the Company by or on behalf of any Underwriter through you expressly for use
therein. Notwithstanding the foregoing, the aggregate liability of any Selling
Stockholder pursuant to the provisions of this paragraph shall be limited to an
amount equal to the aggregate purchase price received by such Selling
Stockholder from the sale of such Selling Stockholder's Shares hereunder;
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PROVIDED, HOWEVER, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages and liabilities and
judgments purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended and supplemented)
would have cured the defect giving rise to such loss, claim, damage, liability
or judgment.
(b) In case any action shall be brought against any Underwriter or
any person controlling such Underwriter, based upon any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the Company
and the Selling Stockholders, such Underwriter shall promptly notify the Company
and the Selling Stockholders in writing and the Company and the Selling
Stockholders shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such indemnified party and payment of all
fees and expenses. Any Underwriter or any such controlling person shall have
the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the employment
of such counsel has been specifically authorized in writing by the Company,
(ii) the Company and the Selling Stockholders shall have failed to assume the
defense and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both such Underwriter or such
controlling person and the Company or any Selling Stockholder, as the case may
be, and such Underwriter or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the Company or the
Selling Stockholders, as the case may be, (in which case the Company and the
Selling Stockholders shall not have the right to assume the defense of such
action on behalf of such Underwriter or such controlling person, it being
understood, however, that the Company and the Selling Stockholders shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all such
Underwriters and controlling persons, which firm shall be designated in writing
by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and that all such fees
and expenses shall be reimbursed as they are incurred). A Seller shall not be
liable for any settlement of any such action effected without the written
consent of such Seller but if settled with the written consent of such Seller,
such Seller agrees to indemnify and hold harmless any Underwriter and any such
controlling person from and
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against any loss or liability by reason of such settlement. Notwithstanding the
immediately preceding sentence, if in any case where the fees and expenses of
counsel are at the expense of the indemnifying party and an indemnified party
shall have requested the indemnifying party to reimburse the indemnified party
for such fees and expenses of counsel as incurred, such indemnifying party
agrees that it shall be liable for any settlement of any action effected without
its written consent if (i) such settlement is entered into more than ten
business days after the receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall have failed to reimburse the
indemnified party in accordance with such request for reimbursement prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person controlling the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Stockholder and each person, if any, controlling such Selling Stockholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Sellers to each Underwriter but
only with reference to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus. In case
any action shall be brought against the Company, any of its directors, any such
officer or any person controlling the Company or any Selling Stockholder or any
person controlling such Selling Stockholder based on the Registration Statement,
the Prospectus or any preliminary prospectus and in respect of which indemnity
may be sought against any Underwriter, the Underwriter shall have the rights and
duties given to the Sellers (except that if any Seller shall have assumed the
defense thereof such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Company, its directors, any such officers and any person controlling the Company
and the Selling Stockholders and any person controlling such Selling
Stockholders shall have the rights and duties given to the Underwriter, by
Section 8(b) hereof.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
-17-
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Sellers on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Sellers and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Sellers and the Underwriters shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Sellers, and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Shares, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers and the Underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the Company, the Selling Stockholders or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 8(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.
(e) Each Seller hereby designates StarTek, Inc., 000 Xxxxxx Xxxxxx,
Xxxxxx, XX 00000, a Delaware corporation, as its authorized agent, upon which
process may be served in any
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action, suit or proceeding which may be instituted in any state or federal court
in the State of New York by any Underwriter or person controlling an Underwriter
asserting a claim for indemnification or contribution under or pursuant to this
Section 8, and each Seller will accept the jurisdiction of such court in such
action, and waives, to the fullest extent permitted by applicable law, any
defense based upon lack of personal jurisdiction or venue. A copy of any such
process shall be sent or given to such Seller, at the address for notices
specified in Section 12 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Firm Shares under this Agreement are subject to
the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the
same force and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective not later
than 5:00 P.M.(and in the case of a Registration Statement filed under
Rule 462(b) of the Act, not later than 10:00 p.m.), New York City time, on
the date of this Agreement or at such later date and time as you may
approve in writing, and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of the Company, (ii) since the date of the
latest balance sheet included in the Registration Statement and the
Prospectus there shall not have been any change, or any development
involving a prospective material adverse change, in the capital stock or in
the long-term debt of the Company from that set forth in the Registration
Statement and Prospectus, (iii) the Company and its subsidiaries shall have
no liability or obligation, direct or contingent, which is material to the
Company and its subsidiaries, taken as a whole, other than those reflected
in the Registration Statement and the Prospectus and (iv) on the Closing
Date you shall have received a certificate dated the Closing Date, signed
by A. Xxxxx Xxxxxxxxxx, Xx. and Xxxxxxx X. Xxxxxx, in their capacities as
the Chairman of the Board and President of the Company, respectively,
confirming
-19-
the matters set forth in paragraphs (a), (b), and (c) of this Section 9.
(d) All the representations and warranties of the Selling
Stockholders contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the
Closing Date and you shall have received a certificate to such effect,
dated the Closing Date, from each Selling Stockholder.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Xxxxx, Johnson, Robinson, Xxxx & Xxxxxxxxx, P.C. ("Xxxxx,
Xxxxxxx") counsel for the Company and the Selling Stockholders, to the
effect that:
(i) the Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation with the corporate
power to own, lease and operate its properties and assets and to carry
on its businesses as described in the Registration Statement;
(ii) the Company and each of its subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) the outstanding shares of capital stock of each
subsidiary have been duly authorized by all necessary corporate action
on the part of such subsidiary and are validly issued, fully paid and
non-assessable, and are owned of record by the Company;
(iv) the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have
been duly authorized by all necessary corporate action on the part of
the Company and are validly issued, fully paid and non-assessable;
(v) the Shares to be issued and sold by the Company
hereunder have been duly authorized by all necessary corporate action
on the part of the Company, and, upon payment for and delivery of such
Shares by the Company in
-20-
accordance with this Agreement and the counter-signing of the
certificate or certificates representing such Shares by a duly
authorized signatory of the Registrar for the Company's Common Stock,
such Shares will be validly issued, fully paid and non-assessable.
Holders of the capital stock of the Company are not entitled to any
preemptive rights to subscribe for any additional shares of the
Company's Common Stock under the Company's Restated Certificate of
Incorporation or Restated Bylaws, any Delaware or Colorado statute or
regulation or any agreement filed as an exhibit to the Registration
Statement;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company and each of the Selling Stockholders;
(vii) the authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters to the
description thereof contained in the Prospectus;
(viii) the Registration Statement has become effective
under the Act, and to the knowledge of such counsel, no stop order
suspending its effectiveness has been issued and no proceedings for
that purpose are pending before or contemplated by the Commission;
(ix) the statements under the captions "Risk Factors -
Reliance on Principal Client Relationships," "Risk Factors - Risks
Associated with the Company's Contracts," "Risk Factors - Control by
Principal Stockholders," "Risk Factors - Anti-Takeover Provisions,"
"Risk Factors - Substantial Number of Shares Eligible for Future
Sale," "Offering Related Transactions," "Business -- Legal
Proceedings," "Management," "Certain Relationships and Related Party
Transactions," "Principal and Selling Stockholders," "Shares Eligible
for Future Sale," "Description of Capital Stock" and "Underwriting" in
the Prospectus and Items 14 and 15 of Part II of the Registration
Statement insofar as such statements constitute a summary of legal
matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings;
(x) neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws;
-21-
(xi) the execution, delivery and performance of this
Agreement by the Company and each Selling Stockholder, and the
consummation of the transactions contemplated hereby will not require
any consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
(except as such may be required under the Act or other securities or
Blue Sky laws) and will not conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the charter or
by-laws of the Company or any of its subsidiaries or the
organizational documents of any Selling Stockholder that is not an
individual or, to such counsel's knowledge, any agreement, indenture
or other instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or their
respective properties are bound, which is material to the business of
the Company and its subsidiaries, taken as a whole, or violate or
conflict with any laws, administrative regulations or, to such
counsel's knowledge, rulings or court decrees applicable to the
Company or any of its subsidiaries or their respective properties,
which violation or conflict would have a material adverse effect on
the business, prospects, financial condition or results of operation
of the Company and its subsidiaries, taken as a whole;
(xii) such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of their respective
property is subject which is required to be described in the
Registration Statement or the Prospectus and is not so described, or
of any contract or other document which is required to be described in
the Registration Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement which is not
described or filed as required;
(xiii) the Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(xiv) to such counsel's knowledge, no holder of any
security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company;
(xv) the Registration Statement (including any Registration
Statement filed under
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462(b) of the Act, if any) and the Prospectus and any supplement or
amendment thereto (except for financial statements and schedules and
other financial and statistical data included therein as to which such
counsel need not express any opinion) comply as to form in all
material respects with the Act;
(xvi) such counsel believes that (except for financial
statements and schedules and other financial and statistical data
included therein as to which such counsel need not express any
opinion) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and that the Prospectus, as amended
or supplemented, if applicable (except for financial statements and
schedules and other financial and statistical data included therein as
to which such counsel need not express any opinion) does not contain
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, not misleading;
(xvii) the Custody Agreement has been duly authorized,
executed and delivered by each Selling Stockholder and is a valid and
binding agreement of such Selling Stockholder enforceable in
accordance with its terms;
(xviii) each Selling Stockholder has full legal right,
power and authority, and any approval required by law (other than any
approval imposed by the applicable state securities and Blue Sky laws)
to sell, assign, transfer and deliver the Shares to be sold by such
Selling Stockholder in the manner provided in this Agreement and the
Custody Agreement;
(xix) each of the Selling Stockholders is the registered
owner of the Shares to be sold by such Selling Stockholder and,
assuming the Underwriters purchase such Shares for value, in good
faith and without notice of any adverse claim, upon delivery of the
Shares to be sold by each Selling Stockholder pursuant to this
Agreement, the Underwriters will acquire all of the rights of such
Selling Stockholder in such Shares free and clear of any security
interests, claims, liens, equities and other encumbrances; and
-23-
(xx) the power of attorney signed by each Selling
Stockholder with regard to the transactions contemplated hereby and by
the Registration Statement has been duly authorized, executed and
delivered by or on behalf of each Selling Stockholder and is a valid
and binding instrument of such Selling Stockholder enforceable in
accordance with its terms.
In giving such opinion with respect to the matters covered by clause
(xvi) such counsel may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, and relying as to materiality on the
opinions of officers and other representatives of the Company, but are
without independent check or verification of the accuracy, completeness, or
the fairness of the statements contained therein, and the limitations
inherent in the examination made by such counsel and the knowledge
available to such counsel are such that such counsel is unable to assume
and does not assume, any responsibility for such accuracy, completeness or
fairness, except as otherwise specifically stated in clause (ix) above.
The opinion of Xxxxx, Xxxxxxx described in paragraph (e) above shall
be rendered to you at the request of the Company or one or more of the
Selling Stockholders, as the case may be, and shall so state therein.
(f) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Milbank, Tweed, Xxxxxx & XxXxxx, counsel for the
Underwriters, as to the matters referred to in clauses (v), (vi) (but only
with respect to the Company), (viii), (ix) (but only with respect to the
statements under the captions "Description of Capital Stock" and
"Underwriting") and (xv) and (xvi) of the foregoing paragraph (e). In
giving such opinion with respect to the matters covered by clause (xvi)
such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
(g) You shall have received a letter on and as of the Closing Date,
in form and substance satisfactory to you, from Ernst & Young LLP,
independent public accountants, with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus and substantially in the form and substance of the
letter
-24-
delivered to you by Ernst & Young LLP on the date of this Agreement.
(h) The Company and the Selling Stockholders shall not have failed at
or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with
by the Company at or prior to the Closing Date.
(i) You shall have received on the Closing Date, a certificate of
each Selling Stockholder who is not a U.S. Person to the effect that such
Selling Stockholder is not a U.S. Person (as defined under applicable U.S.
federal tax legislation), which certificate may be in the form of a
properly completed and executed United States Treasury Department Form W-8
(or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable
Option Closing Date of such documents as you may reasonably request with
respect to the good standing of the Company, the due authorization and
issuance of such Additional Shares and other matters related to the
issuance of such Additional Shares.
10. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Sellers if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company and subsidiaries, taken as a whole, or
the earnings, affairs, or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not arising in the ordinary course of
business, which would, in your judgment, make it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and would, in your judgment, make it impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus, (iii) the
suspension or material limitation of trading in securities on the NYSE, the
American Stock Exchange or the NASDAQ National Market or limitation on prices
for securities on any such exchange or National Market, (iv) the enactment,
publication, decree or other promulgation of any federal or state
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statute, regulation, rule or order of any court or other governmental authority
which in your opinion materially and adversely affects, or will materially and
adversely affect, the business or operations of the Company or any Subsidiary,
(v) the declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; PROVIDED that in no event shall the number of Firm Shares
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on an Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Additional Shares, as the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
applicable Sellers for purchase of such Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the applicable Sellers. In any such case
which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
-26-
11. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
severally agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes with respect to
the Shares to be sold by such Selling Stockholder; and
(b) To take all reasonable actions in cooperation with the Company
and the Underwriters to cause the Registration Statement to become
effective at the earliest possible time, to do and perform all things to be
done and performed under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares pursuant to
this Agreement.
12. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to StarTek,
Inc., 000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000, (b) if to the Selling Stockholders,
to A. Xxxxx Xxxxxxxxxx, Xx., as Attorney-in-Fact c/o StarTek, Inc., 000 Xxxxxx
Xxxxxx, Xxxxxx, XX 00000 and (c) if to any Underwriter or to you, to you c/x
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Stockholders, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or by or on behalf of the Sellers, the officers or directors of
the Company or any controlling person of the Sellers, (ii) acceptance of the
Shares and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Sellers agree to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Sellers, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
-27-
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
[Remainder of Page Intentionally Blank]
-28-
Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
STARTEK, INC.
By____________________________
Title:
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE II HERETO
By____________________________
Attorney-in-fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXX XXXXXXX & CO. INCORPORATED
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By__________________________
-29-
SCHEDULE I
Number of Firm Shares
Underwriters to be Purchased
------------ --------------------
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation........................
Xxxxxx Xxxxxxx & Co. Incorporated...............
------------------------
Total 3,666,667
----------
----------
-30-
SCHEDULE II
SELLING STOCKHOLDERS
Name Number of Firm Number of Additional
---- Shares Being Sold Shares Being Sold
----------------- --------------------
A. Xxxxx Xxxxxxxxxx, Xx. 195,461 161,255
Xxxxxxx X. Xxxxxx 133,333 110,000
Xxxx X. Xxxxxxxxxx 195,461 161,255
FASSET Trust 71,206 58,745
MASSET Trust 71,206 58,745
Total: 666,667 550,000
------- -------
------- -------
-31-
ANNEX I
REQUIRED STOCKHOLDER LOCK-UPS
A. Xxxxx Xxxxxxxxxx, Xx.
Xxxxxxx X. Xxxxxx
E. Xxxxxxx Xxxxxx, Xx.
Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxxxx
FASSET Trust
MASSET Trust
Xxxxxx X. Xxxxxx, as Trustee
Xxxxxx X. Xxxxx
Xx Xxxxxx
-32-
