1
XXXX AND XXXX
DRAFT OF 10/31/96
2,200,000 Shares
GEOTEL COMMUNICATIONS CORPORATION
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
November ____, 1996
Alex. Xxxxx & Sons Incorporated
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C.
As Representatives of the
Several Underwriters
c/o Alex. Xxxxx & Sons Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
GeoTel Communications Corporation, a Delaware corporation (the
"Company"), proposes to sell to the several underwriters (the
"Underwriters") named in Schedule I hereto for whom you are acting as
representatives (the "Representatives") an aggregate of 2,200,000
shares of the Company's Common Stock, $.01 par value (the "Firm
Shares"). The respective amounts of the Firm Shares to be so purchased
by the several Underwriters are set forth opposite their names in
Schedule I hereto. The Company and certain shareholders of the Company
(the "Selling Shareholders") also propose to sell at the Underwriters'
option an aggregate of up to 330,000 additional shares of the Company's
Common Stock (the "Option Shares") as set forth below. The maximum
number of Option Shares to be sold by the Company and the Selling
Shareholders are set forth opposite their names on Schedule II hereto.
The Company and the Selling Shareholders are sometimes referred to
herein collectively as the "Sellers."
As the Representatives, you have advised the Company and the
Selling Shareholders (a) that you are authorized to enter into this
Agreement on behalf of the several Underwriters, and (b) that the
several Underwriters are willing, acting severally and not jointly, to
purchase the numbers of Firm Shares set forth opposite their respective
names in Schedule I, plus their pro rata portion of the Option Shares
if you elect to exercise the over-allotment option in whole or in part
for the accounts of the
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several Underwriters. The Firm Shares and the Option Shares
(to the extent the aforementioned option is exercised) are herein
collectively called the "Shares."
In consideration of the mutual agreements contained herein and of
the interests of the parties in the transactions contemplated hereby,
the parties hereto agree as follows:
1. Representations and Warranties of the Company and the
Selling Shareholders.
(a) The Company represents and warrants as follows:
(i) A registration statement on Form S-1 (File No.
333-13263) with respect to the Shares has been carefully prepared
by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the Rules and
Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been
filed with the Commission. Copies of such registration statement,
including any amendments thereto, the preliminary prospectuses
(meeting the requirements of the Rules and Regulations) contained
therein and the exhibits, financial statements and schedules, as
finally amended and revised, have heretofore been delivered by the
Company to you. Such registration statement, together with any
registration statement filed by the Company pursuant to Rule
462(b) of the Act, herein referred to as the "Registration
Statement," which shall be deemed to include all information
omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, has been declared effective by the
Commission under the Act and no post-effective amendment to the
Registration Statement has been filed as of the date of this
Agreement. For purposes of this Agreement, the term "Prospectus"
means (a) the form of prospectus first filed with the Commission
pursuant to Rule 424(b) or (b) the last preliminary prospectus
included in the Registration Statement filed prior to the time it
becomes effective or filed pursuant to Rule 424(a) under the Act
that is delivered by the Company to the Underwriters for delivery
to purchasers of the Shares, together with the term sheet or
abbreviated term sheet filed with the Commission pursuant to Rule
424(b)(7) under the Act. Each preliminary prospectus included in
the Registration Statement prior to the time it becomes effective
is herein referred to as a "Preliminary Prospectus."
(ii) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own or
lease its properties and conduct its
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business as described in the Registration Statement. The Company
is duly qualified to transact business in all jurisdictions in
which the conduct of its business requires such qualification,
except where the failure so to qualify would not have a material
adverse effect on the earnings, business, management, properties,
assets, operations or condition (financial or otherwise) of the
Company. There is no corporation, partnership, joint venture or
other entity in which the Company has, directly or indirectly, any
equity interest.
(iii) The outstanding shares of Common Stock of the
Company, including all shares to be sold by the Selling
Shareholders, have been duly authorized and validly issued and are
fully paid and non-assessable; the portion of the Shares to be
issued and sold by the Company have been duly authorized and when
issued and paid for as contemplated herein will be validly issued,
fully paid and non-assessable; and no preemptive rights of
shareholders exist with respect to any of the Shares or the issue
and sale thereof. Neither the filing of the Registration Statement
nor the offering or sale of the Shares as contemplated by this
Agreement gives rise to any rights, other than those which have
been waived or satisfied, for or relating to the registration of
any shares of Common Stock.
(iv) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct as of the
dates indicated in the information included under such caption.
All of the Shares conform to the description thereof contained in
the Registration Statement. The form of certificates for the
Shares conforms to the corporate law of the jurisdiction of the
Company's incorporation.
(v) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed
offering of the Shares nor instituted proceedings for that
purpose. The Registration Statement contains, and the Prospectus
and any amendments or supplements thereto will contain, all
statements which are required to be stated therein by, and in all
respects conform or will conform, as the case may be, to the
requirements of, the Act and the Rules and Regulations. The
Registration Statement and any amendment thereto do not contain,
and will not contain, any untrue statement of a material fact and
do not omit, and will not omit, to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The Prospectus and any amendments and supplements
thereto do not contain, and will not contain, any untrue statement
of material fact and do not omit, and will not omit, to state
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any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to
information contained in or omitted from the Registration
Statement or the Prospectus, or any such amendment or supplement,
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 use in the
preparation thereof.
(vi) The financial statements of the Company, together
with related notes as set forth in the Registration Statement,
present fairly the financial position and the results of
operations and cash flows of the Company at the indicated dates
and for the indicated periods. Such financial statements have been
prepared in accordance with generally accepted accounting
principles, consistently applied throughout the periods involved,
and all adjustments necessary for a fair presentation of results
for such periods have been made. The summary financial and
statistical data included in the Registration Statement presents
fairly the information shown therein and such data has been
compiled on a basis consistent with the financial statements
presented therein and the books and records of the Company.
(vii) Each of Coopers & Xxxxxxx L.L.C. and Xxxxxx
Xxxxxxxx LLP, who have certified certain of the financial
statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the
Act and the Rules and Regulations.
(viii) There is no action, suit, claim or proceeding
pending or, to the knowledge of the Company, threatened against
the Company before any court or administrative agency or otherwise
which if determined adversely to the Company might result in any
material adverse change in the earnings, business, management,
properties, assets, operations or condition (financial or
otherwise) of the Company or prevent the consummation of the
transactions contemplated hereby, except as set forth in the
Registration Statement.
(ix) The Company has good and marketable title to all of
the properties and assets reflected in the financial statements
(or as described in the Registration Statement) hereinabove
described, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such financial
statements (or as described in the Registration Statement) or
which are not material in amount.
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The Company occupies its leased properties under valid and binding
leases conforming to the description thereof set forth in the
Registration Statement.
(x) The Company has filed all federal, state, local and
foreign income tax returns which has been required to be filed and
has paid all taxes indicated by said returns and all assessments
received by it to the extent that such taxes have become due,
except for amounts which are not material to the financial
condition of the Company. All tax liabilities have been adequately
provided for in the financial statements of the Company, except
for amounts which are not material to the financial condition of
the Company.
(xi) Since the respective dates as of which information
is given in the Registration Statement, as it may be amended or
supplemented, there has not been any material adverse change or
any development involving a prospective material adverse change in
or affecting the earnings, business, management, properties,
assets, operations or condition (financial or otherwise) of the
Company, whether or not occurring in the ordinary course of
business, and there has not been any material transaction entered
into by the Company or any material transaction that is probable
of being entered into by the Company, other than transactions in
the ordinary course of business and changes and transactions
described in the Registration Statement, as it may be amended or
supplemented. The Company does not have any material contingent
obligations which are not disclosed in the Company's financial
statements which are included in the Registration Statement.
(xii) The Company is not and with the giving of notice
or lapse of time, or both, will not be in violation of or in
default under its Certificate of Incorporation or By-laws or under
any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it or any of its
properties is bound and which default is of material significance
in respect of the business, management, properties, assets,
operations or condition (financial or otherwise) of the Company.
The execution and delivery of this Agreement and the consummation
of the transactions herein contemplated and the fulfillment of the
terms hereof will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party, or of the Certificate
of Incorporation or Bylaws of the Company or any order, rule or
regulation
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applicable to the Company of any court or of any regulatory body
or administrative agency or other governmental body having
jurisdiction.
(xiii) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection
with the execution and delivery by the Company of this Agreement
and the consummation of the transactions herein contemplated
(except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for
public offering by the Underwriters under state securities or Blue
Sky laws) has been obtained or made and is in full force and
effect.
(xiv) The Company holds all material licenses,
certificates and permits from governmental authorities which are
necessary to the conduct of its business; and, to the Company's
knowledge, the Company has not infringed any patents, patent
rights, trade names, trademarks or copyrights, which infringement
is material to the business of the Company.
(xv) Neither the Company, nor to the Company's
knowledge, any of its affiliates, has taken or may take, directly
or indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the
shares of Common Stock to facilitate the sale or resale of the
Shares.
(xvi) The Company is not, and after giving effect to the
issuance of the Shares hereunder will not be, an "investment
company" within the meaning of such term under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations of the Commission thereunder.
(xvii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with management's
general or specific authorization; (B) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for
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assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(xviii) The Company carries, or is covered by, insurance
in such amounts and covering such risks as is adequate for the
conduct of its business and the value of its properties and as is
customary for companies engaged in similar industries.
(xix) The Company confirms as of the date hereof that it
is in compliance with all provisions of Section 1 of Laws of
Florida, Chapter 92-198, An Act Relating to Disclosure of doing
Business with Cuba, and the Company further agrees that if it
commences engaging in business with the government of Cuba or with
any person or affiliate located in Cuba after the date the
Registration Statement becomes or has become effective with the
Commission or with the Florida Department of Banking and Finance
(the "Department"), whichever date is later, or if the information
reported or incorporated by reference in the Prospectus, if any,
concerning the Company's business with Cuba or with any person or
affiliate located in Cuba changes in any material way, the Company
will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(xx) The Company owns or possesses adequate licenses or
other rights to use all patents, patent applications, trademarks,
trademark applications, service marks, service xxxx applications,
trade names, copyrights, trade secrets and know-how or other
information (collectively "Intellectual Property") described in
the Prospectus as owned or used by it or which is necessary for
the conduct of its business as now conducted or proposed to be
conducted as described in the Prospectus. To the Company's
knowledge, none of the Company's products, services or
Intellectual Property infringes or conflicts with the rights or
claims of others. The Company is not aware of any infringement of
any of the Company's Intellectual Property rights by any third
party which could have a material adverse effect on the earnings,
business, management, properties, assets, operations or condition
(financial or otherwise) of the Company.
(xxi) Except as otherwise set forth in the Prospectus,
there are no material legal, governmental, regulatory or
administrative proceedings pending to which the Company is a party
or to which any of its property is subject and, to the Company's
knowledge, no such proceedings are threatened or contemplated.
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(xxii) 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 to the Registration Statement is not so
described or filed as required.
(b) Each of the Selling Shareholders severally
represents and warrants as follows:
(i) Such Selling Shareholder now has and at any Option
Closing Date (as such date is hereinafter defined) will have good
and marketable title to any Option Shares to be sold by such
Selling Shareholder, free and clear of any liens, encumbrances,
equities and claims, and full right, power and authority to effect
the sale and delivery of such Option Shares; and upon the delivery
of and payment for such Option Shares pursuant to this Agreement,
the Underwriters will acquire good and marketable title thereto,
free and clear of any liens, encumbrances, equities and claims.
(ii) Such Selling Shareholder has full right, power and
authority to execute and deliver this Agreement and the Power of
Attorney and Custodian Agreement referred to below and to perform
such Selling Shareholder's obligations under such documents. The
execution and delivery of this Agreement, the Power of Attorney
and the Custodian Agreement, the consummation by such Selling
Shareholder of the transactions herein and therein contemplated
and the fulfillment by such Selling Shareholder of the terms
hereof and thereof will not require any consent, approval,
authorization or order of or declaration or filing with any court,
regulatory body, administrative agency or other governmental body
(except as may be required under the Act, state securities laws or
Blue Sky laws) and will not result in a breach of any of the terms
and provisions of, or constitute a default under, organizational
documents of such Selling Shareholder, if not an individual, or
any indenture, mortgage, deed of trust or other agreement or
instrument to which such Selling Shareholder is a party, or of any
order, rule or regulation applicable to such Selling Shareholder
of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction.
(iii) Such Selling Shareholder has not taken and will
not take, directly or indirectly, any action designed to, or which
has constituted, or which might reasonably be expected to cause or
result in the stabilization or manipulation of the price of the
Common Stock of the Company and, other than as permitted by the
Act, the Selling
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Shareholder will not distribute any prospectus or other offering
material in connection with the offering of the Shares.
(iv) Without having undertaken to determine
independently the accuracy or completeness of either the
representations and warranties of the Company contained herein or
the information contained in the Registration Statement, such
Selling Shareholder has no reason to believe that the
representations and warranties of the Company 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 Registration
Statement which has adversely affected or may reasonably be
expected to adversely affect the business of the Company; and the
sale of any Option Shares by such Selling Shareholder pursuant
hereto is not prompted by any information concerning the Company
which is not set forth in the Registration Statement. The
information pertaining to such Selling Shareholder under the
caption "Principal and Selling Stockholders" in the Prospectus is
complete and accurate in all material respects.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein
set forth, the Company agrees to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at a
price of $_____ per share, the number of Firm Shares set forth
opposite the name of each Underwriter in Schedule I hereof,
subject to adjustment in accordance with Section 9 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be
made in New York Clearing House funds by certified or bank
cashier's checks drawn to the order of the Company against
delivery of certificates therefor to the Representatives for the
several accounts of the Underwriters. Such payment and delivery
are to be made at the offices of Alex. Xxxxx & Sons Incorporated,
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, at 10:00 a.m.,
Baltimore time, on the third business day after the date of this
Agreement or at such other time and date not later than five
business days thereafter as you and the Company shall agree upon,
such time and date being herein referred to as the "Closing Date."
(As used herein, "business day" means a day on which the New York
Stock Exchange is open for trading and on which banks in New York
are open for business and not permitted by law or executive order
to be closed.) The certificates for the Firm Shares will be
delivered in such
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denominations and in such registrations as the Representatives
request in writing not later than the second full business day
prior to the Closing Date, and will be made available for
inspection by the Representatives at least one business day prior
to the Closing Date.
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Company and the Selling
Shareholders listed on Schedule II hereto hereby grant an option
to the several Underwriters to purchase the Option Shares at the
price per share as set forth in the first paragraph of this
Section 2. The maximum number of Option Shares to be sold by the
Company and such Selling Shareholders is set forth opposite their
respective names on Schedule II hereto. The option granted hereby
may be exercised in whole or in part by giving written notice (i)
at any time before the Closing Date and (ii) only once thereafter
within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company and
the Custodian setting forth the number of Option Shares as to
which the several Underwriters are exercising the option, the
names and denominations in which the Option Shares are to be
registered and the time and date at which such certificates are to
be delivered. If the option granted hereby is exercised in part,
the respective number of Option Shares to be sold by the Company
and each of the Selling Shareholders listed in Schedule II hereto
shall be determined on a pro rata basis in accordance with the
percentages set forth opposite their names on Schedule II hereto,
adjusted by you in such manner as to avoid fractional shares. The
time and date at which certificates for Option Shares are to be
delivered shall be determined by the Representatives but shall not
be earlier than three nor later than 10 full business days after
the exercise of such option, nor in any event prior to the Closing
Date (such time and date being herein referred to as the "Option
Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall
set the Closing Date as the Option Closing Date. The number of
Option Shares to be purchased by each Underwriter shall be in the
same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such
Underwriter bears to the total number of Firm Shares, adjusted by
you in such manner as to avoid fractional shares. The option with
respect to the Option Shares granted hereunder may be exercised
only to cover over-allotments in the sale of the Firm Shares by
the Underwriters. You, as Representatives of the several
Underwriters, may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to the
Company. To the extent, if any, that
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the option is exercised, payment for the Option Shares shall be
made on the Option Closing Date in New York Clearing House funds
by certified or bank cashier's check drawn to the order of the
Company for the Option Shares to be sold by it and to the order of
"GeoTel Communications Corporation, as Custodian" for the Option
Shares to be sold by the Selling Shareholders listed on Schedule
II against delivery of certificates therefor at the offices of
Alex. Xxxxx & Sons Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx.
(d) Certificates in negotiable form for the total number of
the Option Shares to be sold hereunder by the Selling Shareholders
have been placed in custody with the Company as custodian (the
"Custodian") pursuant to the Custodian Agreement executed by each
Selling Shareholder for delivery of any Option Shares to be sold
hereunder by the Selling Shareholders. Each of the Selling
Shareholders specifically agrees that any Option Shares
represented by the certificates held in custody for the Selling
Shareholders under the Custodian Agreement are subject to the
interests of the Underwriters hereunder, that the arrangements
made by the Selling Shareholders for such custody are to that
extent irrevocable, and that the obligations of the Selling
Shareholders hereunder shall not be terminable by any act or deed
of the Selling Shareholders (or by any other person, firm or
corporation including the Company, the Custodian or the
Underwriters) or by operation of law (including the death of an
individual Selling Shareholder or the dissolution of a corporate
Selling Shareholder) or by the occurrence of any other event or
events, except as set forth in the Custodian Agreement. If any
such event should occur prior to the delivery to the Underwriters
of the Option Shares hereunder, certificates for the Option Shares
shall be delivered by the Custodian in accordance with the terms
and conditions of this Agreement as if such event has not
occurred. The Custodian is authorized to receive and acknowledge
receipt of the proceeds of sale of the Option Shares held by it
against delivery of such Option Shares.
3. Offering by the Underwriters.
It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representatives
deem it advisable to do so. The Firm Shares are to be initially
offered to the public at the initial public offering price set
forth in the Prospectus. The Representatives may from time to time
thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are
purchased
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pursuant to Section 2 hereof, the Underwriters will offer them to
the public on the foregoing terms.
It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of
the Shares in accordance with a Master Agreement Among
Underwriters entered into by you and the several other
Underwriters.
4. Covenants of the Company and the Selling Shareholders.
(a) The Company covenants and agrees with the several
Underwriters that:
(i) The Company will (A) use its best efforts to cause
the Registration Statement to become effective or, if the
procedure in Rule 430A of the Rules and Regulations is followed,
to prepare and timely file with the Commission under Rule 424(b)
of the Rules and Regulations a Prospectus in a form approved by
the Representatives containing information previously omitted at
the time of effectiveness of the Registration Statement in
reliance on Rule 430A of the Rules and Regulations, and (B) not
file any amendment to the Registration Statement or supplement to
the Prospectus of which the Representatives shall not previously
have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which
is not in compliance with the Rules and Regulations.
(ii) The Company will advise the Representatives
promptly (A) when the Registration Statement or any post-effective
amendment thereto shall have become effective, (B) of receipt of
any comments from the Commission, (C) of any request of the
Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information,
and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
use of the Prospectus or of the institution of any proceedings for
that purpose. The Company will use its best efforts to prevent the
issuance of any such stop order preventing or suspending the use
of the Prospectus and to obtain as soon as possible the lifting
thereof, if issued.
(iii) The Company will cooperate with the
Representatives in endeavoring to qualify the Shares for sale
under the securities laws of such jurisdictions as the
Representatives may reasonably have designated in writing and will
make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign
corporation or to file a general
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consent to service of process in any jurisdiction where it is not
now so qualified or required to file such a consent. The Company
will, from time to time, prepare and file such statements, reports
and other documents as are or may be required to continue such
qualifications in effect for so long a period as the
Representatives may reasonably request for distribution of the
Shares.
(iv) The Company will deliver to, or upon the order of,
the Representatives, from time to time, as many copies of any
Preliminary Prospectus as the Representatives may reasonably
request. The Company will deliver to, or upon the order of, the
Representatives during the period when delivery of a Prospectus is
required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the
Representatives may reasonably request. The Company will deliver
to the Representatives, at or before the Closing Date, four signed
copies of the Registration Statement and all amendments thereto,
including all exhibits filed therewith, and will deliver to the
Representatives such number of copies of the Registration
Statement (including such number of copies of the exhibits filed
therewith that may reasonably be requested), and of all amendments
thereto, as the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules
and Regulations, and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and
the Prospectus. If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer any
event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances
existing at the time the Prospectus is delivered to a purchaser,
not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company
promptly will either (A) prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement
to the Prospectus or (B) prepare and file with the Commission an
appropriate filing under the Exchange Act which shall be
incorporated by reference in the Prospectus, so that 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 the law.
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(vi) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in
any event not later than 15 months after the effective date of the
Registration Statement, an earnings statement (which need not be
audited) in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules
and Regulations and will advise you in writing when such statement
has been so made available.
(vii) The Company will, for a period of five years from the
Closing Date, deliver to the Representatives copies of annual
reports and copies of all other documents, reports and information
furnished by the Company to its shareholders or filed with any
securities exchange pursuant to the requirements of such exchange
or with the Commission pursuant to the Act or the Exchange Act.
The Company will deliver to the Representatives similar reports
with respect to significant subsidiaries, as that term is defined
in the Rules and Regulations, which are not consolidated in the
Company's financial statements.
(viii) No offering, sale, short sale or other disposition
of any shares of Common Stock of the Company or other securities
convertible into or exchangeable or exercisable for shares of
Common Stock or derivative of Common Stock (or agreement for such)
will be made for a period of 180 days after the date of this
Agreement, directly or indirectly, by the Company otherwise than
hereunder or with the prior written consent of Alex. Xxxxx & Sons
Incorporated, except that the Company may, without such consent,
(A) issue shares upon the exercise of options outstanding on the
date of this Agreement issued pursuant to its 1995 Stock Option
Plan, (B) issue shares of Common Stock upon the exercise of stock
options and purchase rights granted after the date hereof under
the 1995 Stock Option Plan and the 1996 Employee Stock Purchase
Plan and (C) issue shares of Common Stock in respect of the
Company's acquisition of the stock or assets of another entity so
long as the shares so issued by the Company may not be resold
until 180 days after the date of this Agreement. The Company shall
not file with the Commission any registration statements
(including without limitation any registration statements on Form
S-8 or any successor form) with respect to any stock option, stock
purchase, restricted stock or other similar plans until at least
90 days following the date of this Agreement.
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(ix) The Company will use its best efforts to have its
Common Stock authorized for inclusion on the Nasdaq National
Market.
(x) The Company has caused each officer and director and
specific shareholders of the Company to furnish to you, on or
prior to the date of this Agreement, a letter or letters, in form
and substance satisfactory to the Underwriters, pursuant to which
each such person shall agree not to offer, sell, sell short or
otherwise dispose of any shares of Common Stock of the Company or
other capital stock of the Company, or any other securities
convertible, exchangeable or exercisable for Common Stock or
derivative of Common Stock owned by such person or request the
registration for the offer or sale of any of the foregoing (or as
to which such person has the right to direct the disposition of)
for a period of 180 days after the date of this Agreement,
directly or indirectly, except with the prior written consent of
Alex. Xxxxx & Sons Incorporated ("Lockup Agreements").
(xi) The Company shall apply the net proceeds of its sale
of the Shares as set forth in the Prospectus and shall file such
reports with the Commission with respect to the sale of the Shares
and the application of the proceeds therefrom as may be required
in accordance with Rule 463 under the Act.
(xii) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in
such a manner as would require the Company to register as an
investment company under the 1940 Act.
(xiii) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company,
a registrar for the Common Stock.
(xiv) The Company will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization
or manipulation of the price of any securities of the Company.
(b) Each of the Selling Shareholders covenants and
agrees with the several Underwriters that:
(i) No offering, sale, short sale or other disposition
of any shares of Common Stock of the Company or other capital
stock of the Company or other securities convertible,
exchangeable or exercisable for Common Stock or derivative of
Common Stock owned by the Selling Shareholder or request the
registration for the
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offer or sale of any of the foregoing (or as to which the
Selling Shareholder has the right to direct the disposition
of) will be made for a period of 180 days after the date of
this Agreement, directly or indirectly, by such Selling
Shareholder otherwise than hereunder or with the prior
written consent of Alex.
Xxxxx & Sons Incorporated.
(ii) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Tax
Equity and Fiscal Responsibility Act of 1982 and the Interest
and Dividend Tax Compliance Act of 1983 with respect to the
transactions herein contemplated, each of the Selling
Shareholders agrees to deliver to you prior to or at the
Closing Date a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in
lieu thereof).
(iii) Such Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in, or
that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of
any securities of the Company.
5. Costs and Expenses.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Sellers under this
Agreement, including, without limiting the generality of the
foregoing, the following: accounting fees of the Company; the fees
and disbursements of counsel for the Company and the Selling
Shareholders; the cost of printing and delivering to, or as
requested by, the Underwriters copies of the Registration
Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Underwriters' Selling Memorandum, the Underwriters'
Invitation Letter, the Listing Application, the Custodian
Agreement and related Power of Attorney, the Blue Sky Survey and
any supplements or amendments thereto; the filing fees of the
Commission; the filing fees and expenses (including legal fees and
disbursements) incident to securing any required review by the
NASD of the terms of the sale of the Shares; the Listing Fee of
the Nasdaq National Market; and the expenses, including the fees
and disbursements of counsel for the Underwriters, incurred in
connection with the qualification of the Shares under state
securities or Blue Sky laws. To the extent, if at all, that any of
the Selling Shareholders engage special legal counsel to represent
them in connection with this offering, the fees
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and expenses of such counsel shall be borne by such Selling
Shareholders. Any transfer taxes imposed on the sale of the Shares
to the several Underwriters will be paid by the Sellers pro rata.
The Sellers shall not, however, be required to pay for any of the
Underwriters expenses (other than those related to qualification
under NASD regulation and state securities or Blue Sky laws)
except that, if this Agreement shall not be consummated because
the conditions in Section 6 hereof are not satisfied, or because
this Agreement is terminated by the Representatives pursuant to
Section 11 hereof, or by reason of any failure, refusal or
inability on the part of the Company or the Selling Shareholders
to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on their part
to be performed, unless such failure to satisfy said condition or
to comply with said terms be due to the default or omission of any
Underwriter, then the Company shall reimburse the several
Underwriters for reasonable out-of-pocket expenses, including fees
and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Shares
or in contemplation of performing their obligations hereunder; but
the Company and the Selling Shareholders shall not in any event be
liable to any of the several Underwriters for damages on account
of loss of anticipated profits from the sale by them of the
Shares.
6. Conditions to Obligations of the Underwriters.
The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on
the Option Closing Date are subject to the accuracy, as of the
Closing Date or the Option Closing Date, as the case may be, of
the representations and warranties of the Company and the Selling
Shareholders contained herein, and to the performance by the
Company and the Selling Shareholders of their covenants and
obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all
filings required by Rule 424 and Rule 430A of the Rules and
Regulations shall have been made, and any request of the
Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed to
the Representatives and complied with to their reasonable
satisfaction. No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have
been issued and no proceedings for that purpose shall have been
taken or, to the knowledge of the Company or the Selling
Shareholders, shall be contemplated by the Commission and no
injunction,
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restraining order, or order of any nature by a federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion
of Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional Corporation,
counsel for the Company and the Selling Shareholders, dated the
Closing Date or the Option Closing Date, as the case may be,
addressed to the Underwriters (and stating that it may be relied
upon by counsel to the Underwriters) to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of
the State of Delaware, with corporate power and authority to
own or lease its properties and conduct its business as
described in the Registration Statement; and the Company is
duly qualified to transact business in each of the
jurisdictions listed on Schedule III attached hereto based
solely upon certificates from the respective Secretary of
State in such jurisdictions.
(ii) The Company has authorized and outstanding capital
stock as set forth under the caption "Capitalization" in the
Prospectus other than changes resulting from the exercise of
options outstanding as of the date of the Prospectus and
described therein; the authorized shares of the Company's
Common Stock have been duly authorized; the outstanding
shares of the Company's Common Stock, including the Option
Shares to be sold by the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and
non-assessable; all of the Shares conform, in all material
respects, to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock --
Common Stock"; the certificates for the Shares, assuming they
are in the form filed with the Commission, are in due and
proper form; the shares of Common Stock, including the Option
Shares, if any, to be sold by the Company pursuant to this
Agreement have been duly authorized and will be validly
issued, fully paid and non-assessable when issued and paid
for as contemplated by this Agreement; and no preemptive
rights of shareholders exist pursuant to the Company's
charter or by-laws or any agreement to which the Company is a
party with respect to any of the Shares or the issue or sale
thereof.
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(iii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no
outstanding securities of the Company convertible or
exchangeable into any shares of capital stock of the Company
and there are no outstanding options or warrants obligating
the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into any shares of
such stock; and except as described in the Prospectus, to the
knowledge of such counsel, no holder of any securities of the
Company or any other person has the right, contractual or
otherwise, which has not been satisfied or effectively
waived, to require registration under the Act of any shares
of Common Stock or other securities of the Company.
(iv) We have been advised by the Commission that the
Registration Statement has become effective under the Act
and, to the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are
pending or threatened under the Act.
(v) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in all
material respects with the requirements of the Act and the
applicable Rules and Regulations thereunder (except that such
counsel need express no opinion as to the financial
statements, schedules and other financial or statistical
information included therein).
(vi) The statements under the captions "Risk Factors --
Shares Eligible for Future Sale; Registration Rights," "Risk
Factors -- Certain Anti-Takeover Provisions Affecting
Stockholders," "Management -- Stock Plans," "Management --
Executive Incentive Program," "Management -- Limitation of
Liability; Indemnification of Directors and Officers,"
"Certain Transactions -- Certain Stock Transactions,"
"Description of Capital Stock" and "Shares Eligible for
Future Sale" in the Prospectus, insofar as such statements
constitute a summary of documents referred to therein or
matters of law, fairly and correctly summarize and present in
all material respects the information called for with respect
to such documents and matters.
(vii) Such counsel does not know of any contracts or
documents required to be filed as exhibits to the
Registration Statement or described in the Registration
Statement or the Prospectus which are not so filed or
described as required, and such contracts and documents
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as are summarized in the Registration Statement or the
Prospectus are fairly summarized in all material
respects.
(viii) Such counsel knows of no material legal or
governmental proceedings pending or threatened against the
Company except as set forth in the Prospectus.
(ix) The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated do
not conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under, the
Certificate of Incorporation or Bylaws of the Company, or any
agreement or instrument listed as an Exhibit to the
Registration Statement.
(x) This Agreement has been duly authorized,
executed and delivered by the Company.
(xi) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body is necessary in
connection with the execution and delivery of this Agreement
and the consummation of the transactions herein contemplated
(other than as may be required by the NASD or as required by
state securities and Blue Sky laws, as to which such counsel
need express no opinion) except such as have been obtained or
made, specifying the same.
(xii) The Company is not, and will not become, as a
result of the consummation of the transactions contemplated
by this Agreement, and application of the net proceeds
therefrom as described in the Prospectus, required to
register as an investment company under the 1940 Act.
(xiii) Each of this Agreement, the Custodian Agreement
and the related Power of Attorney has been duly authorized,
executed and delivered by or on behalf of each of the Selling
Shareholders.
(xiv) Each Selling Shareholder has full legal right,
power and authority, and any approval required by law (other
than as required by state securities and Blue Sky laws, as to
which such counsel need express no opinion), to sell, assign,
transfer and deliver the portion of the Option Shares to be
sold by such Selling Shareholder under this Agreement.
(xv) The Custodian Agreement and the Power of
Attorney executed and delivered by each Selling
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Shareholder are valid, binding and irrevocable instruments
legally sufficient for the purposes intended.
(xvi) The Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code)
have acquired good and marketable title to the Option Shares
being sold by each Selling Shareholder on the Option Closing
Date, free and clear of all liens, encumbrances and security
interests.
In rendering such opinion, Xxxxxxxx, Xxxxxxx & Xxxxxxx, A
Professional Corporation, may rely as to matters governed by the
laws of states other than the Commonwealth of Massachusetts, the
Delaware General Corporation Law or federal laws on local counsel
in such jurisdictions and as to the matters set forth in
subparagraphs (xiii), (xiv) and (xv) on opinions of other counsel
representing the respective Selling Shareholders, provided that in
each case Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional Corporation,
shall state that they believe that they and the Underwriters are
justified in relying on the opinions of such other counsel. In
addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the
Act (but after giving effect to any modifications incorporated
therein pursuant to Rule 430A under the Act) and as of the Closing
Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to Rule
424(b) and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they are
made, not misleading (except that such counsel need express no
view as to financial statements, schedules and other financial and
statistical information included therein). With respect to such
statement, Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional
Corporation, may state that their belief is based upon the
procedures set forth therein, but is without independent check and
verification.
(c) The Representatives shall have received from Xxxx and
Xxxx, counsel for the Underwriters, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, substantially
to the effect specified in subparagraphs (ii), (iii), (iv) and
(xi) of paragraph (b) of
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this Section 6, and that the Company is a duly organized and
validly existing corporation under the laws of the State of
Delaware. In rendering such opinion, Xxxx and Xxxx may rely as to
all matters governed other than by the laws of the Commonwealth of
Massachusetts, the Delaware General Corporation Law or federal
laws, and as to matters relating to the Selling Shareholders, on
the opinion of counsel referred to in paragraph (b) of this
Section 6. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing
has come to the attention of such counsel which leads them to
believe that (i) the Registration Statement, or any amendment
thereto, as of the time it became effective under the Act (but
after giving effect to any modifications incorporated therein
pursuant to Rule 430A under the Act), as of the Closing Date or
the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date,
as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact, necessary in order to
make the statements therein, in the light of the circumstances
under which they are made, not misleading (except that such
counsel need express no view as to financial statements, schedules
and other financial information included therein). With respect to
such statement, Xxxx and Xxxx may state that their belief is based
upon the procedures set forth therein, but is without independent
check and verification.
(d) The Representatives shall have received at or prior to
the Closing Date from Xxxx and Xxxx a memorandum or summary, in
form and substance satisfactory to the Representatives, with
respect to the qualification for offering and sale by the
Underwriters of the Shares under the state securities or Blue Sky
laws of such jurisdictions as the Representatives may reasonably
have designated to the Company.
(e) You shall have received, on each of the date hereof, the
Closing Date and the Option Closing Date, as the case may be, a
letter dated the date hereof, the Closing Date or the Option
Closing Date, as the case may be, in form and substance
satisfactory to you, of each of Coopers & Xxxxxxx L.L.C. and
Xxxxxx Xxxxxxxx LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating that in
their opinion the financial statements and schedules examined by
them and included in the Registration Statement comply in form in
all material
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respects with the applicable accounting requirements of the Act
and the related published Rules and Regulations; and containing
such other statements and information as is ordinarily included in
accountants' "comfort letters" to Underwriters with respect to the
financial statements and certain financial and statistical
information contained in the Registration Statement and
Prospectus.
(f) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a certificate
or certificates of the President and Chief Executive Officer and
the Vice President, Finance and Chief Financial Officer of the
Company to the effect that, as of the Closing Date or the Option
Closing Date, as the case may be, each of them severally
represents as follows:
(i) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Registrations Statement has been issued, and no
proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission.
(ii) He does not know of any litigation instituted or
threatened against the Company of a character required to be
disclosed in the Registration Statement which is not so
disclosed; he does not know of any material contract required
to be filed as an exhibit to the Registration Statement which
is not so filed; and the representations and warranties of
the Company contained in Section 1 hereof are true and
correct as of the Closing Date or the Option Closing Date, as
the case may be.
(iii) All filings required to have been made pursuant to
Rules 424 or 430A under the Act have been made.
(iv) He has carefully examined the Registration
Statement and the Prospectus and, in his opinion, as of the
effective date of the Registration Statement, the statements
contained in the Registration Statement were true and correct
in all material respects, and such Registration Statement and
Prospectus did not omit to state a material fact required to
be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading, and since the effective
date of the Registration Statement, no event has occurred
which should have been set forth in a supplement to or an
amendment of the Prospectus which has not been so set forth
in such supplement or amendment.
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(v) Since the respective dates as of which information
is given in the Registration Statement and Prospectus, there
has not been any material adverse change or any development
involving a prospective material adverse change in or
affecting the condition (financial or otherwise) of the
Company or the earnings, business, management, properties,
assets, operations or condition (financial or otherwise) of
the Company, whether or not arising in the ordinary course of
business.
(g) The Company and, in the case of any Option Closing, the
Selling Shareholders shall have furnished to the Representatives
such further certificates and documents confirming the
representations and warranties, covenants and conditions contained
herein and related matters as the Representatives may reasonably
have requested.
(h) The Firm Shares and Option Shares, if any, shall have
been approved for designation upon notice of issuance on the
Nasdaq National Market.
(i) The Lockup Agreements described in Section 4(a)(x) shall
be in full force and effect.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof
only if they are in all material respects satisfactory to the
Representatives and to Xxxx and Xxxx, counsel for the
Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, the obligations of the
Underwriters hereunder may be terminated by the Representatives by
notifying the Company and the Selling Shareholders of such
termination in writing or by telegram at or prior to the Closing
Date or the Option Closing Date, as the case may be. In such
event, the Selling Shareholders, the Company and the Underwriters
shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 8 hereof).
7. Conditions to the Obligations of the Sellers.
The obligations of the Sellers to sell and deliver the
portion of the Shares required to be delivered as and when
specified in this Agreement are subject to the conditions that at
the Closing Date or the Option Closing Date, as the case may be,
no stop order suspending the effectiveness of the Registration
Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
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8. Indemnification.
(a) The Company and the Selling Shareholders, jointly and
severally, agree to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the
meaning of the Act, against any losses, claims, damages or
liabilities to which such Underwriter or any such controlling
person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, in the light of the
circumstances under which they were made; and will reimburse each
Underwriter and each such controlling person upon demand for any
legal or other expenses reasonably incurred by such Underwriter
and each such controlling person in connection with investigating
or defending any such loss, claim, damage, liability, action or
proceeding or in responding to a subpoena or governmental inquiry
related to the offering of the Shares, whether or not such
Underwriter or controlling person is a party to any such action or
proceeding; provided, however, that the Company and the Selling
Shareholders 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 an untrue statement or alleged untrue statement, or
omission or alleged omission, made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof;
and provided further, that the indemnification agreement contained
in this Section 8(a) with respect to any Preliminary Prospectus,
or the Prospectus after it has been amended or supplemented, shall
not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting such
loss, claim, damage or liability shall have purchased Shares that
are the subject thereof if, after copies thereof have been
delivered by the Company to such Underwriter, such Underwriter
shall have failed to send or give a copy of the final Prospectus
or the Prospectus as then amended or supplemented, as the case may
be, to such person at or prior to the confirmation of said sale of
such Shares to such person, and if such loss, claim, damage or
liability would not have arisen but for such failure. In no event,
however, shall the liability of any Selling Shareholder for
indemnification under this
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Section 8(a) exceed the proceeds received by such Selling
Shareholder from the Underwriters in the offering. This indemnity
agreement will be in addition to any liability which the Company
or the Selling Shareholders may otherwise have.
(b) Each Underwriter severally and not jointly will indemnify
and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement, the Selling
Shareholders and each person, if any, who controls the Company or
the Selling Shareholders within the meaning of the Act, against
any losses, claims, damages or liabilities to which the Company or
any such director, officer, Selling Shareholder or controlling
person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse any
legal or other expenses reasonably incurred by the Company or any
such director, officer, Selling Shareholder or controlling person
in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however,
that each Underwriter will be liable in each case to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in
the Registration Statement, any Preliminary Prospectus, the
Prospectus or such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by
or through the Representatives specifically for use in the
preparation thereof. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to this Section 8, such
person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section
8(a) or (b) shall be available to any party who shall fail to give
notice as provided in this Section 8(c) if the party to whom
notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by
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the failure to give such notice, but the failure to give such
notice shall not relieve the indemnifying party or parties from
any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of the provisions of
Section 8(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory
to such indemnified party and shall pay as incurred the fees and
disbursements of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to
retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred the fees
and expenses of the counsel retained by the indemnified party in
the event (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel, (ii)
the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would
be inappropriate due to a conflict of interest between them, or
(iii) the indemnifying party shall have failed to assume the
defense and employ counsel acceptable to the indemnified party
within a reasonable period of time after notice of commencement of
the action. It is understood that the indemnifying party shall
not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified
parties. Such firm shall be designated in writing by you in the
case of parties indemnified pursuant to Section 8(a) and by the
Company and the Selling Shareholders in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall
not be liable for any settlement of any proceeding effected
without its written consent but, if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. In
addition, the indemnifying party will not, without the prior
written consent of the indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened
claim, action or proceeding of which indemnification may be sought
hereunder (whether or not any indemnified party is an actual or
potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional
release of
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each indemnified party from all liability arising out of such
claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative
fault of the Company and the Selling Shareholders on the one hand
and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by
the Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company or the Selling Shareholders on the one hand or the
Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contributions
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 above
in this Section 8(d). The amount paid or payable by an indemnified
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party as a result of the losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) referred to above
in this Section 8(d) shall be deemed to include 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(d), (i) no
Underwriter shall be required to contribute any amount in excess
of the underwriting discounts and commissions applicable to the
Shares purchased by such Underwriter, (ii) 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, and (iii) no
Selling Shareholder shall be required to contribute any amount in
excess of the proceeds received by such Selling Shareholder from
the Underwriters in the offering. The Underwriters' obligations in
this Section 8(d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be
sought under this Section 8 hereby consents to the jurisdiction of
any court having jurisdiction over any other contributing party,
agrees that process issuing from such court may be served upon him
or it by any other contributing party and consents to the service
of such process and agrees that any other contributing party may
join him or it as an additional defendant in any such proceeding
in which such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 8 shall be paid by the
indemnifying party to the indemnified party as such losses,
claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8
and the representations and warranties of the Company and the
Selling Shareholders set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, the Company, its directors or
officers or any persons controlling the Company, (ii) acceptance
of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter, or
to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in
this Section 8.
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9. Default by Underwriters.
If on the Closing Date or the Option Closing Date, as the
case may be, any Underwriter shall fail to purchase and pay for
the portion of the Shares which such Underwriter has agreed to
purchase and pay for on such date (otherwise than by reason of any
default on the part of the Company or a Selling Shareholder), you,
as Representatives of the Underwriters, shall use your reasonable
efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company
and the Selling Shareholders such amounts as may be agreed upon
and upon the terms set forth herein, the Firm Shares or Option
Shares, as the case may be, which the defaulting Underwriter or
Underwriters failed to purchase. If during such 36 hours you, as
such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option
Shares, as the case may be, agreed to be purchased by the
defaulting Underwriter or Underwriters, then (a) if the aggregate
number of shares with respect to which such default shall occur
does not exceed 10% of the Firm Shares or Option Shares, as the
case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of
Firm Shares or Option Shares, as the case may be, which they are
obligated to purchase hereunder, to purchase the Firm Shares or
Option Shares, as the case may be, which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the
aggregate number of shares of Firm Shares or Option Shares, as the
case may be, with respect to which such default shall occur
exceeds 10% of the Firm Shares or Option Shares, as the case may
be, covered hereby, the Company and the Selling Shareholders or
you as the Representatives of the Underwriters will have the
right, by written notice given within the next 36-hour period to
the parties to this Agreement, to terminate this Agreement without
liability on the part of the non-defaulting Underwriters or of the
Company or of the Selling Shareholders except to the extent
provided in Section 8 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 9, the
Closing Date or Option Closing Date, as the case may be, may be
postponed for such period, not exceeding seven days, as you, as
Representatives, may determine in order that the required changes
in the Registration Statement or in the Prospectus or in any other
documents or arrangements may be effected. The term "Underwriter"
includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
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10. Notices.
All communications hereunder shall be in writing and,
except as otherwise provided herein, will be mailed,
delivered, telecopied or telegraphed and confirmed as
follows: if to the Underwriters, to Alex. Xxxxx & Sons
Incorporated, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, Attention: R. Xxxxxxx Xxxxxxx, Jr., with a copy to
Alex. Xxxxx & Sons Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: General Counsel; and
if to the Company or the Selling Shareholders, to:
GeoTel Communications Corporation
00 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
11. Termination.
This Agreement may be terminated by you by notice to the
Sellers as follows:
(a) at any time prior to the earlier of (i) the time
the Shares are released by you for sale by notice to the
Underwriters, or (ii) 11:30 a.m. on the first business day
following the date of this Agreement;
(b) at any time prior to the Closing Date 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 any development
involving a prospective material adverse change in or affecting
the condition (financial or otherwise) of the Company or the
earnings, business, management, properties, assets, operations or
condition (financial or otherwise) of the Company, whether or not
arising in the ordinary course of business, (ii) any outbreak or
escalation of hostilities or declaration of war or national
emergency or other national or international calamity or crisis or
change in economic or political conditions in the United States if
the effect of such outbreak, escalation, declaration, emergency,
calamity, crisis or change on the financial markets of the United
States would, in your reasonable judgment, make it impracticable
to market the Shares or to enforce contracts for the sale of the
Shares, (iii) suspension of trading in securities generally on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market or limitation on prices (other than limitations on
hours or numbers of days of trading) for securities on any such
exchange or market, (iv) the enactment, publication, decree or
other promulgation of any statute, regulation, rule or
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order of any court or other governmental authority which in your
opinion materially and adversely affects or may materially and
adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by United States or New York
State authorities, (vi) the suspension of trading of the Company's
Common Stock by the Commission on the Nasdaq National Market, or
(vii) the taking of any action by any governmental body or agency
in respect of its monetary or fiscal affairs which in your
reasonable opinion has a material adverse effect on the securities
markets in the United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. Successors.
This Agreement has been and is made solely for the benefit of
the Underwriters, the Company and the Selling Shareholders and
their respective successors, executors, administrators, heirs and
assigns, and the officers, directors and controlling persons
referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign merely because
of such purchase.
13. Information Provided by Underwriters.
The Company, the Selling Shareholders and the Underwriters
acknowledge and agree that the only information furnished or to be
furnished by any Underwriter to the Company for inclusion in any
Preliminary Prospectus, Prospectus or the Registration Statement
consists of the information set forth in the last paragraph on the
front cover page (insofar as such information relates to the
Underwriters), legends required by Item 502(d) of Regulation S-K
under the Act and the information under the caption "Underwriting"
in the Prospectus.
14. Miscellaneous.
The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full
force and effect regardless of (a) any termination of this
Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers, and (c) delivery of and
payment for the Shares under this Agreement.
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This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
If the foregoing letter is in accordance with your understanding
of our agreement, please sign and return to us the enclosed duplicates
hereof, whereupon it will become a binding agreement among the Selling
Shareholders, the Company and the several Underwriters in accordance
with its terms.
Any person executing and delivering this Agreement as
Attorney-in-Fact for a Selling Shareholder represents by so doing that
he has been duly appointed as Attorney-in-Fact by such Selling
Shareholder pursuant to a validly existing and binding Power of
Attorney which authorizes such Attorney-in-Fact to take such action.
Very truly yours,
GEOTEL COMMUNICATIONS CORPORATION
By____________________________
Xxxx X. Xxxxxxxxx, President
SELLING SHAREHOLDERS LISTED ON SCHEDULE II
By_____________________________
___________, Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ALEX. XXXXX & SONS INCORPORATED
XXXXXXX, XXXXXX & XXXXXXXXX, L.L.C.
As Representatives of the several
Underwriters listed on Schedule I
By: Alex. Xxxxx & Sons Incorporated
By: ______________________________
Authorized Officer
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SCHEDULE I
Schedule Of Underwriters
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
Alex. Xxxxx & Sons Incorporated
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C.
----------
Total
==========
35
SCHEDULE II
Schedule of Option Shares
Maximum Number Percentage of
of Option Shares Total Number of
Name of Seller to be Sold Option Shares
-------------- ---------------- ---------------
------- ---
Total 100%
======= ===
36
SCHEDULE III
Foreign Qualifications
