EXHIBIT 1.1
3,900,000 Shares of Common Stock
BORON, XxXXXX & ASSOCIATES, INC.
UNDERWRITING AGREEMENT
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[_____ __, 1998]
BEAR, XXXXXXX & CO. INC.,
XXXX XXXXXXXX XXXXXXX,
XXXXXXX XXXXX XXXXXX,
NATIONSBANC XXXXXXXXXX SECURITIES LLC,
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Dear Sirs:
Boron, XxXxxx & Associates, Inc., a corporation organized and existing
under the laws of Delaware (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of [3,900,000] shares (the
"Firm Shares") of its common stock, par value $.01 per share (the "Common
Stock"), of which [1,500,000] shares will be sold by the Company and [2,400,000]
shares will be sold by certain stockholders of the Company named in Schedule II
hereto (stockholders collectively, the "Selling Stockholders"). In addition,
for the sole purpose of covering over-allotments in connection with the sale of
the Firm Shares, at the option of the Underwriters, the Company also proposes to
sell to the Underwriters an aggregate of up to an additional 585,000
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shares (the "Additional Shares") of Common Stock. The Firm Shares and any
Additional Shares purchased by the Underwriters are referred to herein as the
"Shares." The Shares are more fully described in the Registration Statement
referred to below.
1. Representations and Warranties of the Company. The Company
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represents and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and may have filed an
amendment or amendments thereto, on Form S-1 (No. 333-[_____]), for the
registration of the Shares under the Securities Act of 1933, as amended (the
"Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of the Rules
and Regulations of the Commission under the Act (the "Regulations"), is herein
called the "Registration Statement" and the prospectus, in the form first filed
with the Commission pursuant to Rule 424(b) of the Regulations or filed as part
of the Registration Statement at the time of effectiveness if no Rule 424(b) or
Rule 434 filing is required, is herein called the "Prospectus". The term
"preliminary prospectus" as used herein means a preliminary prospectus included
in a Registration Statement prior to the time of effectiveness of the
Registration Statement. If the Company files a registration statement to
register a portion of the Shares and relies on Rule 462(b) of the Regulations
for such registration statement to become effective upon filing with the
Commission (the "Rule 462 Registration Statement"), then any reference to the
"Registration Statement" shall be deemed to include the Rule 462 Registration
Statement, as amended from time to time.
(b) At the time of the effectiveness of the Registration
Statement or the effectiveness of any post-effective amendment to the
Registration Statement, when the Prospectus is first filed with the Commission
pursuant to Rule 424(b) or Rule 434 of the Regulations, when any supplement to
or amendment of the Prospectus is filed with the Commission and at the Closing
Date and the Additional Closing Date, if any, (as hereinafter respectively
defined), the Registration Statement and the Prospectus and any amendments
thereof and supplements thereto complied or will comply in all material respects
with the applicable provisions of the Act and the Regulations and does not or
will not contain an untrue statement of a material fact and does not or will not
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein (i) in the case of the Registration
Statement, not misleading and (ii) in the case of the Prospectus, in light of
the circumstances under which they were made, not misleading. When
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any related preliminary prospectus was first filed with the Commission (whether
filed as part of the registration statement for the registration of the Shares
or any amendment thereto or pursuant to Rule 424(a) of the Regulations) and when
any amendment thereof or supplement thereto was first filed with the Commission,
such preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and did not contain an untrue statement of a material fact and
did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein in light of the circumstances
under which they were made not misleading. No representation and warranty is
made in this subsection (b), however, with respect to any information contained
in or omitted from the Registration Statement or the Prospectus or any related
preliminary prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through you as herein stated
expressly for use in connection with the preparation thereof. If Rule 434 is
used, the Company will comply with the requirements of Rule 434.
(c) Xxxxxx Xxxxxxxx LLP and X.X. Xxxxxx & co. LLP, have
certified certain financial statements and supporting schedules included in the
Registration Statement, each are independent public accountants as required by
the Act and the Regulations.
(d) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
set forth in the Registration Statement and the Prospectus, there has been no
material adverse change or any development involving a prospective material
adverse change in the business, prospects, properties, operations, condition
(financial or other) or results of operations of the Company, whether or not
arising from transactions in the ordinary course of business, and since the date
of the latest balance sheet presented in the Registration Statement and the
Prospectus, except in the ordinary course of business, the Company has not
incurred nor undertaken any liabilities or obligations, direct or contingent,
which are material to the Company, except for liabilities or obligations which
are reflected in the Registration Statement and the Prospectus.
(e) This Agreement and the transactions contemplated herein
have been duly and validly authorized by the Company and this Agreement has been
duly and validly executed and delivered by the Company.
(f) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) conflict with or result in a breach of any of the terms and
provisions of,
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or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company
pursuant to, any material agreement, instrument, franchise, license or permit to
which the Company is a party or by which it or its properties or assets may be
bound or (ii) violate or conflict with any provision of the certificate of
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incorporation or by-laws of the Company or any judgment, decree, order, statute,
rule or regulation of any court or any public, governmental or regulatory agency
or body having jurisdiction over the Company or any of its properties or assets.
No consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its properties or
assets is required for the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby, including the
issuance, sale and delivery of the Shares to be issued, sold and delivered by
the Company hereunder, except the registration under the Act of the Shares and
such consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state or other
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters.
(g) All of the outstanding shares of Common Stock have been
duly and validly authorized and issued, fully paid and nonassessable and were
not issued and are not now in violation of or subject to any preemptive rights
under the Delaware General Corporation Law. The Shares to be sold by the
Company, when issued, delivered and sold against payment therefor in accordance
with this Agreement, will be duly and validly issued, fully paid and
nonassessable, and will not have been issued in violation of or be subject to
any preemptive rights. The Company had, at [__________, 1998], an authorized and
outstanding capitalization as set forth in the Registration Statement and the
Prospectus. The Common Stock, the Firm Shares and the Additional Shares conform
to the descriptions thereof contained in the Registration Statement and the
Prospectus.
(h) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware. The Company is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to be so qualified
or in good standing which will not in the aggregate have a material adverse
effect on the Company. The Company has all requisite corporate power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies, to own, lease and operate its
properties and conduct its business as now being conducted and as described in
the Registration Statement and the Prospectus (subject to any qualifications as
may be set forth therein), and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and the
Prospectus.
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(i) Except as described in the Registration Statement and
the Prospectus, there is no litigation or governmental proceeding to which the
Company is a party or to which any property of the Company is subject or which
is pending or, to the knowledge of the Company, threatened against the Company
which might result in any material adverse change or any development involving a
material adverse change in the business, prospects, properties, operations,
condition (financial or other) or, results of operations of the Company or which
is required to be disclosed in the Registration Statement and the Prospectus.
(j) The Company has not taken and will not take, directly
or indirectly, any action designed to cause or result in, or which constitutes
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Shares.
(k) The financial statements, including the notes thereto,
and supporting schedules included in the Registration Statement and the
Prospectus present fairly the financial position of the Company as of the dates
indicated and the results of its operations for the periods specified; except as
otherwise stated in the Registration Statement, said financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein.
(l) Except as described in the Registration Statement and
the Prospectus, no holder of securities of the Company has any rights to the
registration of securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the Shares
contemplated hereby.
(m) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940, as amended.
(n) The Shares have been approved for [listing] on the
Nasdaq National Market, subject to official notice of issuance.
(o) There is no document or contract 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 which is not described or
filed as required.
(p) Any real property and buildings held under lease by the
Company are held by it under valid, subsisting and enforceable leases with such
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exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company.
(q) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes.
(r) The Company is, and the services provided by the
Company are, in material compliance with all current statutes, rules,
regulations, standards and guidelines applicable to the Company.
(s) Except as disclosed in the Registration Statement and
the Prospectus, the Company owns or has adequate licenses or other rights to use
any trademarks, trade names, service marks, service names, copyrights, and other
proprietary intellectual property rights necessary to conduct the business of
the Company in the manner presently conducted and proposed to be conducted,
without any conflict with the rights of others, except where the failure to own
or possess such licenses or other rights would not have a material adverse
effect on the Company.
(t) The Company 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 authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(u) The Company has filed all necessary federal and state
income and franchise tax returns required to be filed through the date hereof
and has paid all taxes when due, except where the failure to file or pay such
taxes, in the aggregate, could not reasonably be expected to have a material
adverse effect on the Company and there is no tax deficiency that has been, or
to the knowledge of the Company might be, asserted against the Company, or its
properties or assets, that would have a material adverse effect on the Company's
condition (financial or other) or the results of operations of the Company.
(v) The Company has received all required approvals of any
federal or state governmental department or agency, including those of the Food
and Drug Administration, to conduct "fulfillment" functions at its leased
warehouse in Norfolk, Virginia.
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(w) Any "forward-looking statement" within the meaning of
the federal securities laws contained in the Registration Statement and the
Prospectus is based on reasonable assumptions and made in good faith.
2. Representations and Warranties of the Selling Stockholders.
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Each of the Selling Stockholders severally and not jointly represents and
warrants to, and agrees with, the Underwriters that:
(a) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement, the
Power of Attorney and the Custodian Agreement herein referred to, and for the
sale and delivery of the Shares to be sold by such Selling Stockholder hereunder
have been obtained; and such Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custodian
Agreement and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Stockholder hereunder.
(b) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement, the Power of Attorney and the Custodian Agreement
and the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to which
such Selling Stockholder is a party or by which such Selling Stockholder is
bound, or to which any of the property or assets of such Selling Stockholder is
subject, nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of such Selling Stockholder if such
Selling Stockholder is a corporation, the Partnership Agreement of such Selling
Stockholder if such Selling Stockholder is a partnership or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such Selling
Stockholder.
(c) Immediately prior to the Closing Date (as defined in Section 3
hereof) such Selling Stockholder will have, good and valid title to the Shares
to be sold by such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims, except those created by this Agreement, the
Power of Attorney and the Custodian Agreement; and, upon delivery of such Shares
and payment therefor in accordance with this Agreement, the Underwriters will
have acquired from the Selling Stockholders good and valid title to such Shares,
free and clear of all liens, encumbrances, equities or claims.
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(d) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action designed to cause or result in, or which constitutes
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Shares.
(e) To the extent that any statements or omissions made in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity with
written information furnished to the Company by such Selling Stockholder
expressly for use therein, such statements contained in the preliminary
prospectus and the Registration Statement in reliance thereon did, and such
statements contained in the Prospectus and any further amendments or supplements
to the Registration Statement and the Prospectus in reliance thereon, when they
become effective or are filed with the Commission, as the case may be, will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(f) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated, such Selling
Stockholder will deliver to you prior to or at the Additional Closing Date (as
hereinafter defined) 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).
(g) Certificates in negotiable form representing the shares of
Convertible Participating Preferred Stock of the Company which, upon
consummation of the transactions contemplated hereby and by the Prospectus, will
convert into all of the Shares to be sold by such Selling Stockholder hereunder
have been placed in custody under a Custodian Agreement, in the form heretofore
furnished to you (the "Custodian Agreement"), duly executed and delivered by
such Selling Stockholder to the Company, as custodian (the "Custodian"), and
such Selling Stockholder has duly executed and delivered a Power of Attorney, in
the form heretofore furnished to you (the "Power of Attorney"), appointing the
persons indicated in Schedule II hereto, and each of them, as such Selling
Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute and deliver this Agreement on behalf of such Selling Stockholder, to
determine the purchase price to be paid by the Underwriters to the Selling
Stockholders as provided in Section 3 hereof, to authorize the delivery of the
Shares to be sold by such Selling Stockholder hereunder and otherwise to act on
behalf of such Selling Stockholder in connection with the transactions
contemplated by this Agreement and the Custodian Agreement.
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(h) The Shares represented by the certificates held in custody for
such Selling Stockholder under the Custodian Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by such Selling
Stockholder for such custody, and the appointment by such Selling Stockholder of
the Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable;
the obligations of the Selling Stockholders hereunder shall not be terminated by
operation of law, whether by the death or incapacity of any individual Selling
Stockholder or, in the case of an estate or trust, by the death or incapacity of
any executor or trustee or the termination of such estate or trust, or in the
case of a partnership or corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event; if any individual Selling
Stockholder or any such executor or trustee should die or become incapacitated,
or if any such estate or trust should be terminated, or if any such partnership
or corporation should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates representing the
Shares shall be delivered by or on behalf of the Selling Stockholders in
accordance with the terms and conditions of this Agreement and of the Custodian
Agreement; and actions taken by the Attorneys-in-Fact pursuant to the Powers of
Attorney shall be as valid as if such death, incapacity, termination,
dissolution or other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of
such death, incapacity, termination, dissolution or other event.
3. Purchase, Sale and Delivery of the Shares.
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(a) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company and the Selling Stockholders agree to
sell to the Underwriters and the Underwriters, severally and not jointly, agree
to purchase from the Company and the Selling Stockholders, at a purchase price
per share of $[_______], the number of Firm Shares set forth opposite the
respective names of the Underwriters in Schedule I hereto plus any additional
number of Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof. You represent and warrant that
you have been authorized by each of the other Underwriters to enter into this
Agreement on its behalf and to act for it in the manner herein provided.
(b) Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the office of Bear, Xxxxxxx & Co.
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as shall
be agreed upon by you and the Company, at 10:00 A.M. on the third or fourth
business day (as permitted under Rule 15c6-1 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) (unless postponed in accordance with
the
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provisions of Section 10 hereof) following the date of the effectiveness of the
Registration Statement (or, if the Company has elected to rely upon Rule 430A of
the Regulations, the third or fourth business day (as permitted under Rule
15c6-1 under the Exchange Act) after the determination of the initial public
offering price of the Shares), or such other time not later than ten business
days after such date as shall be agreed upon by you and the Company (such time
and date of payment and delivery being herein called the "Closing Date").
Payment shall be made to the Company by wire transfer in same day funds, against
delivery to you for the respective accounts of the Underwriters of certificates
for the Shares to be purchased by them. Certificates for the Shares shall be
registered in such name or names and in such authorized denominations as you may
request in writing at least two full business days prior to the Closing Date.
The Company will permit you to examine and package such certificates for
delivery at least one full business day prior to the Closing Date.
(c) In addition, subject to the terms and conditions set forth
herein, the Company hereby grants to the Underwriters the option to purchase up
to [585,000] Additional Shares and, all at the same purchase price per share to
be paid by the Underwriters to the Company and the Selling Stockholders for the
Firm Shares as set forth in this Section 3, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. These options
may be exercised at any time, in whole or in part, on or before the thirtieth
day following the date of the Prospectus, by written notice by you to the
Company. Such notice shall set forth the aggregate number of Additional Shares
as to which the option is being exercised and the date and time, as reasonably
determined by you, when the Additional Shares are to be delivered (such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
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the Closing Date or earlier than the second full business day after the date on
which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 10 hereof). Certificates for the Additional Shares shall be registered
in such name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will permit you to examine and package such certificates for
delivery at least one full business day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall
be the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 10 hereof) bears to [___________], subject, however, to such
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adjustments to eliminate any fractional shares as you in your sole discretion
shall make.
Payment for the Additional Shares shall be made to the Company by wire
transfer in same day funds at the offices of Bear, Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional Shares to you
for the respective accounts of the Underwriters.
4. Offering. The Company has been advised by you that, upon your
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authorization of the release of the Firm Shares, the Underwriters propose to
offer the Shares for sale to the public upon the terms set forth in the
Prospectus.
5. Covenants of the Company. The Company covenants and agrees with
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the Underwriters that:
(a) If the Registration Statement has not yet been declared
effective the Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
possible, and if Rule 430A is used or the filing of the Prospectus is otherwise
required under Rule 424(b) or Rule 434, the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) or Rule
434 within the prescribed time period and will provide evidence satisfactory to
you of such timely filing. If the Company elects to rely on Rule 434, the
Company will prepare and file a term sheet that complies with the requirements
of Rule 434.
The Company will notify you promptly (and, if requested by you, will
confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any post-
effective amendment thereto or of the initiation, or the threatening, of any
proceedings therefor, (v) of the receipt of any comments regarding the
Registration Statement or any post-effective amendment from the Commission, and
(vi) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for that purpose. If the
Commission shall propose or enter a stop order at any time, the Company will
make every reasonable effort to prevent the issuance of any such stop order and,
if issued, to obtain the lifting of such order as soon as possible. The Company
will not file any amendment to the
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Registration Statement or any amendment of or supplement to the Prospectus
(including the prospectus required to be filed pursuant to Rule 424(b)or Rule
434) after the effective date of the Registration Statement that differs from
the prospectus on file at the time of the effectiveness of the Registration
Statement to which you shall reasonably object in writing after being timely
furnished in advance a copy thereof.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would, in the judgment
of the Company include an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement to comply with the Act or
the Regulations, the Company will notify you promptly and prepare and file with
the Commission an appropriate amendment or supplement which will correct such
statement or omission and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to you four signed copies of
the Registration Statement, including exhibits and all amendments thereto, and
the Company will promptly deliver to each of the Underwriters such number of
copies of any preliminary prospectus, the Prospectus, the Registration
Statement, and all amendments of and supplements to such documents, if any, as
you may reasonably request.
(d) The Company will endeavor in good faith, in cooperation with you,
at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.
(e) The Company will make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to you as soon as
practicable, but not later than 45 days after the end of its fiscal quarter in
which the first anniversary date of the effective date of the Registration
Statement occurs, an earning statement (in form complying with the provisions of
Rule 158 of the Regulations) covering a period of at least twelve consecutive
months beginning after the effective date of the Registration Statement.
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(f) During the period of 180 days from the date of the Prospectus,
the Company will not, without your prior written consent, issue, sell, offer or
agree to sell, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, any Common Stock (or any securities convertible into,
exercisable for or exchangeable for Common Stock), other than (i) the Company's
sale of Shares hereunder, (ii) the Company's issuance of Common Stock upon the
exercise of presently outstanding stock options, (iii) grants of stock options
and other awards pursuant to the Company's 1996 Stock Option and Grant Plan (and
issuances of Common Stock upon the exercise of such awards), (iv) sales of
shares of Common Stock pursuant to the 1997 Employee Stock Purchase Plan and (v)
shares to be issued in connection with Company acquisitions, if any. In
addition, the Company will obtain the undertaking of each of its officers and
directors and such of its stockholders as have been heretofore designated by you
and listed on Schedule III attached hereto not to issue, sell, offer or agree to
sell, grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any Common Stock (or any securities convertible into, exercisable
for or exchangeable for Common Stock), without your prior written consent during
the period of 180 days from the date of the Prospectus, other than (i) the sale
of Shares by the Selling Stockholders hereunder, (ii) pursuant to a bona fide
gift, (iii) by will or the laws of descent and distribution or (iv) to the
Company.
(g) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of (i) all
reports to its stockholders; and (ii) all reports, financial statements and
proxy or information statements filed by the Company with the Commission or any
national securities exchange.
(h) The Company will apply the proceeds from the sale of the Shares
as set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will use its best efforts to cause the Shares to be
approved for listing on the Nasdaq National Market.
(j) The Company will file with the Commission such reports on Form SR
as may be required pursuant to Rule 463 of the Regulations.
(k) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
15
6. Payment of Expenses. Whether or not the transactions
-------------------
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company hereunder, including those in
connection with (i) preparing, printing, duplicating, filing and mailing the
Registration Statement, as originally filed and all amendments thereof
(including all exhibits thereto), any preliminary prospectus, the Prospectus and
any amendments or supplements thereto (including, without limitation, fees and
expenses of the Company's accountants and counsel), the underwriting documents
(including this Agreement) and all other documents related to the public
offering of the Shares (including those supplied to the Underwriters in
quantities as hereinabove stated), (ii) the issuance, transfer and delivery of
the Shares to the Underwriters, (iii) the qualification of the Shares under
state or foreign securities or Blue Sky laws, including the costs of printing
and mailing a preliminary and final "Blue Sky Survey" and the fees of counsel
for the Underwriters and such counsel's disbursements in relation thereto, (iv)
quotation of the Shares on the Nasdaq National Market, (v) filing fees of the
Commission and the National Association of Securities Dealers, Inc., (vi) the
cost of printing certificates representing the Shares and (vii) the cost and
charges of any transfer agent or registrar. Any transfer or other taxes imposed
in connection with the sale of the Shares to the Underwriters will be borne by
the Company and the Selling Stockholders pro rata. To the extent, if at all,
that any of the Selling Stockholders engage special legal counsel to represent
them in connection with this offering, the fees and expenses of such counsel
shall be borne by such Selling Stockholders.
7. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company and the Selling Stockholders herein contained, as of
the date hereof and as of the Closing Date (for purposes of this Section 7
"Closing Date" shall refer to the Closing Date for the Firm Shares and any
Additional Closing Date, if different, for the Additional Shares), to the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective
not later than 5:30 P.M., New York time, on the date of this Agreement, or at
such later time and date as shall have been consented to in writing by you; if
the Company shall have elected to rely upon Rule 430A or Rule 434 of the
Regulations, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 5(a) hereof; if the Company has
elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; and, at or
16
prior to the Closing Date no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof shall have been
issued and no proceedings therefor shall have been initiated or threatened by
the Commission.
(b) At the Closing Date you shall have received the opinion of
Xxxxxxx, Procter & Xxxx LLP, counsel for the Company and the Selling
Stockholders, dated the Closing Date, addressed to the Underwriters and in form
and substance satisfactory to Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
("Underwriters' Counsel"), 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. The Company has all requisite corporate authority to own, lease
and license its properties as described in the Registration Statement and
the Prospectus.
(ii) The Company has an authorized capital stock as set
forth in the Registration Statement and the Prospectus. All of the
outstanding shares of Common Stock are duly and validly authorized and
issued, are fully paid and nonassessable and were not issued in violation
of or subject to any preemptive rights. The Shares to be delivered on the
Closing Date have been duly and validly authorized and, when delivered by
the Company in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable and will not have been issued in
violation of or subject to any preemptive rights under the Delaware General
Corporation Law. The statements set forth in the Registration Statement
regarding the Company's capital stock under the caption "Description of
Capital Stock", insofar as they purport to constitute a summary of such
capital stock, are complete and accurate.
(iii) This Agreement has been duly and validly authorized
executed and delivered by the Company.
(iv) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby by
the Company do not and will not (A) conflict with or result in a breach of
any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, any
agreement, instrument, franchise, license or permit filed as an exhibit to
the Registration Statement to which the Company is a party or by which it
or its properties or assets may be bound or
17
(B) violate or conflict with any provision of the certificate of
incorporation or by-laws of the Company or, to the best knowledge of such
counsel, any judgment, decree, order, statute, rule or regulation of any
Delaware, Massachusetts or United States federal court or any Delaware,
Massachusetts or United States federal governmental or regulatory agency or
body having jurisdiction over the Company or any of its properties or
assets. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any Delaware, Massachusetts or
United States federal court or any public, governmental, or regulatory
agency or body having jurisdiction over the Company or any of its
properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, except for (1) such as may be required under state or
other securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters (as to which such counsel
need express no opinion) and (2) such as have been made or obtained under
the Act.
(v) The Registration Statement (including the Rule
462(b) Registration Statement, if any) and the Prospectus and any
amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial data included or incorporated
by reference therein, as to which no opinion need be rendered) comply as to
form in all material respects with the requirements of the Act and the
Regulations.
(vi) The Registration Statement (including the Rule
462(b) Registration Statement, if any) is effective under the Act, and, to
the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement, the Rule 462(b) Registration
Statement, if any, or any post-effective amendment thereof has been issued
and, to such counsel's knowledge, no proceedings therefor have been
initiated or threatened by the Commission and all filings required by Rule
424(b) of the Regulations have been made.
(vii) To the best of such counsels' knowledge, any
instrument, document, lease, license, contract or other agreement
(collectively, "Documents") required to be described or referred to in the
Registration Statement or the Prospectus has been properly described or
referred to therein and any Document required to be filed as an exhibit to
the Registration Statement has been filed as an exhibit thereto.
(viii) A Power of Attorney and a Custodian Agreement have
been duly and validly authorized, executed and delivered by each Selling
Stockholder and constitute valid and binding agreements of such Selling
Stockholder in accordance with their terms.
18
(ix) This Agreement has been duly and validly
authorized, executed and delivered by or on behalf of each Selling
Stockholder; and the sale of the Shares to be sold by each Selling
Stockholder hereunder and the compliance by such Selling Stockholder with
all of the provisions of this Agreement, the Power of Attorney and the
Custodian Agreement and the consummation of the transactions contemplated
herein will not result in any violation of the provisions of the
Certificate of Incorporation or By-laws of such Selling Stockholder if such
Selling Stockholder is a corporation, the Partnership Agreement of such
Selling Stockholder if such Selling Stockholder is a partnership or any
order, rule or regulation known to such counsel of any Delaware,
Massachusetts or United States federal court or governmental agency or body
having jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
(x) No consent, approval, authorization or order of any
Delaware, Massachusetts or United States court or governmental agency or
body is required for the consummation of the transactions contemplated by
this Agreement in connection with the Shares to be sold by each Selling
Stockholder hereunder, except such as have been obtained under the Act and
such as may be required under state or other securities or Blue Sky laws in
connection with the purchase and distribution of such Shares by the
Underwriters.
(xi) Upon payment and delivery in accordance with this
Agreement, good and valid title to the Shares being sold by each Selling
Stockholder free and clear of all liens, encumbrances, equities or claims,
will have been transferred to each of the several Underwriters who
purchased such Shares in good faith and without notice of any such liens,
encumbrances, equities, claims or other adverse claims within the meaning
of the Uniform Commercial Code.
In addition, such opinion shall also contain a statement in such
counsels' customary form that such counsel has participated in conferences with
officers and representatives of the Company, representatives of the independent
public accountants for the Company and the Underwriters at which the contents
and the Prospectus and related matters were discussed and, no facts have come to
the attention of such counsel which would lead such counsel to believe that
either the Registration Statement at the time it became effective (including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434, if applicable), the Rule
462(b) Registration Statement, if any, or any amendment thereof made prior to
the Closing Date as of the date of such Rule 462(b) Registration Statement or
amendment, contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of its date (or any
amendment thereof
19
or supplement thereto made prior to the Closing Date as of the date of such
amendment or supplement) and as of the Closing Date contained or contains an
untrue statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no belief or opinion with
respect to the financial statements and schedules and other financial,
statistical or accounting data included or incorporated by reference therein).
In rendering such opinion, such counsel may rely as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws. The opinion of such counsel for the Company
and the Selling Stockholders shall state that the opinion of any such other
counsel is in form satisfactory to such counsel and, in their opinion, you and
they are justified in relying thereon.
(c) At the Closing Date you shall have received the opinion of
LePore, Zimmerer, XxXxxx & Xxxxxx, counsel for the Company, dated the Closing
Date addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) The Company is duly qualified and in good standing
as a foreign corporation in New Jersey, Virginia and each other
jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which will not in the aggregate have a material adverse
effect on the Company.
(ii) The Company has all requisite corporate authority
to own, lease and license its properties and conduct its business as now
being conducted and as described in the Registration Statement and the
Prospectus.
(iii) To the best of such counsel's knowledge, there is
no litigation or governmental or other action, suit, proceeding or
investigation before any court or before or by any public, regulatory or
governmental agency or body pending or threatened against, or involving the
properties or business of, the Company, which is of a character required to
be disclosed in the Registration Statement and the Prospectus which has not
been properly disclosed therein.
20
(iv) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby by
the Company do not and will not violate or conflict with, to the best of
such counsel's knowledge, any judgment, decree, order, statute, rule or
regulation of any New Jersey court or any governmental or regulatory agency
or body having jurisdiction over the Company or any of its properties or
assets. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any New Jersey court or any
public, governmental, or regulatory agency or body having jurisdiction over
the Company or any of its properties or assets is required for the
execution, delivery and performance of this Agreement or the consummation
of the transactions contemplated hereby, except for (1) such as may be
required under New Jersey state or other securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no opinion) and (2)
such as have been made or obtained under the Act.
In rendering such opinion, such counsel may rely as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws. The opinion of such counsel for the Company
shall state that the opinion of any such other counsel is in form satisfactory
to such counsel and, in their opinion, you and they are justified in relying
thereon.
(d) All documents provided to satisfy the conditions contained
herein shall be satisfactory in form and substance to you and to Underwriters'
Counsel, and the Underwriters shall have received from said Underwriters'
Counsel a favorable opinion, dated as of the Closing Date with respect to the
issuance and sale of the Shares, the Registration Statement and the Prospectus
and such other related matters as you may reasonably require, and the Company
shall have furnished to Underwriters' Counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(e) At the Closing Date you shall have received a certificate of
the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date to the effect that (i) the conditions set forth in subsection
(a) of this Section 7 have been satisfied, (ii) as of the date hereof and as of
the Closing Date the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date the obligations of
the Company to be performed hereunder on or prior thereto have been duly
performed and (iv) subsequent to the respective dates as of which information is
given in the Registration Statement and the
21
Prospectus, the Company has not sustained any material loss or interference with
its businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any material adverse
change, or any development involving a material adverse change, in the business,
properties, operations, condition (financial or otherwise), or results of
operations of the Company, except in each case as described in or contemplated
by the Registration Statement and the Prospectus.
(f) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter, from each of Xxxxxx Xxxxxxxx LLP and
X.X. Xxxxxx & Co. LLP, independent public accountants for the Company, dated,
respectively, as of the date of this Agreement and as of the Closing Date
addressed to the Underwriters and substantially in the form heretofore approved
by you.
(g) Prior to the Closing Date the Company and the Selling
Stockholders shall have furnished to you such further information, certificates
and documents as you may reasonably request.
(h) You shall have received from each person who is a director
or officer of the Company or such stockholders as have been heretofore
designated by you and listed on Schedule II hereto an agreement to the effect
that such person will not, directly or indirectly, without your prior written
consent, offer, sell, offer or agree to sell, grant any option to purchase or
otherwise dispose (or announce any offer, sale, grant of an option to purchase
or other disposition) of any shares of Common Stock (or any securities
convertible into, exercisable for or exchangeable or exercisable for shares of
Common Stock) for a period of 180 days after the date of the Prospectus, other
than (i) the sale of Additional Shares by the Selling Stockholders hereunder,
(ii) pursuant to a bona fide gift, (iii) by will or the laws of descent and
distribution or (iv) to the Company.
(i) At the Closing Date, the Shares shall have been approved for
[listing] on the Nasdaq National Market, subject to official notice of issuance.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 7 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
canceled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
canceled by you at, or at any time prior to, the Additional Closing Date. Notice
of such cancellation shall be given to the Company in writing, or by telex or
telegraph or confirmed by letter via overnight mail.
22
8. Indemnification.
---------------
(a) The Company agrees and each of the Selling Stockholders
severally and not jointly agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any and all
losses, liabilities, claims, damages and expenses as incurred (including but
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim, and any and all amounts paid in settlement of any
claim or litigation), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
-------- -------
the Company will not be liable in any such case to the extent but only to the
extent that any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
you expressly for use therein; and provided, further, that each Selling
-------- -------
Stockholder will be liable in any such case to the extent but only to the extent
that any such loss, liability, claim, damage or expense arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Selling
Stockholder expressly for use therein. In no case shall any Selling Stockholder
be liable or responsible for any amount in excess of the gross proceeds received
by such Selling Stockholder with respect to the Shares sold by such Selling
Stockholder. The indemnity contained in this subsection (a) with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, liabilities, claims, damages and
expenses purchased the Shares which are the subject thereof (or to the benefit
of any person controlling such Underwriter) if at or prior to the written
confirmation of the sale of such Shares a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
preliminary prospectus was corrected in the Prospectus (or the prospectus as
amended or supplemented). This indemnity agreement will be in addition to any
liability which the Company or the Selling Stockholders may otherwise have
including under this Agreement.
23
(b) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company, the Selling Stockholders, each of the
directors of the Company, each of the officers of the Company who shall have
signed the Registration Statement, and each other person, if any, who controls
the Company or the Selling Stockholders within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, against any losses, liabilities,
claims, damages and expenses as incurred (including but not limited to
attorneys' fees and any and all expenses incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim, and any
and all amounts paid in settlement of any claim or litigation), jointly or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Shares, as originally filed
or any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
you expressly for use therein; provided, however, that in no case shall any
-------- -------
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which any
Underwriter may otherwise have including under this Agreement. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page of the Prospectus, the legend concerning passive market making on the
second page of the Prospectus, the number of Shares to be purchased by each
Underwriter appearing in the Prospectus under the caption "Underwriting" and the
statements contained in the Prospectus in the third and seventh paragraphs under
the caption "Underwriting" constitute the only information furnished in writing
by or on behalf of any Underwriter expressly for use in the registration
statement relating to the Shares as originally filed or in any amendment
thereof, any related preliminary prospectus or the Prospectus or in any
amendment thereof or supplement thereto, as the case may be.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may
24
have under this Section 8), except that no indemnification provided for in this
Section 8 shall be available to any party who shall fail to give notice as
provided for in this subsection (c) if the party to whom notice was not given
was unaware of the action, suit, investigation inquiry or proceedings to which
the notice would have related and was prejudiced by the failure to give notice.
In case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with
counsel satisfactory to such indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action, or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties and that
the use of separate counsel is necessary in order to protect the interests of
the indemnified party (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties but shall have a right to participate in such defense), in any of which
events such fees and expenses shall be borne by the indemnifying parties.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent; provided, however, that such consent was not
-------- -------
unreasonably withheld.
9. Contribution. In order to provide for contribution in
------------
circumstances in which the indemnification provided for in Section 8 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, each indemnifying
party shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted) as incurred to which an indemnified party may be subject, in such
proportions as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Shares or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 8 hereof,
in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the Selling
Stockholders on the one hand and the
25
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholders on the one hand and the Underwriters on
the other shall be deemed to be in the same proportion as (x) the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and the Selling Stockholders bear to
(y) the 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 Stockholders 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 Stockholders and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 9, (i) in no case shall any Under writer be required to contribute
an amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, (ii) in no case shall any Selling
Stockholder be required to contribute an amount in excess of the gross proceeds
received by such Selling Stockholder with respect to the Shares sold by such
Selling Stockholder and (iii) 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. Notwithstanding the provisions of this Section 9 and the
preceding sentence, 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 that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. For purposes of this Section 9, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as such
Underwriter, and each person, if any, who controls the Company or the Selling
Stockholders within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company and the Selling Stockholders, subject in each case
to clauses (i) and (ii) of this Section 9. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or
26
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 9 or
otherwise, except as otherwise specifically provided in Section 8(c). No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
-------- -------
withheld.
10. Default by an Underwriter.
-------------------------
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
do not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or the Additional Shares to which the
default relates shall be purchased by the non-defaulting Underwriters in
proportion to the respective proportions which the numbers of Firm Shares set
forth opposite their respective names in Schedule I hereto bear to the aggregate
number of Firm Shares set forth opposite the names of the non-defaulting
Underwriters.
(b) In the event that such default relates to more than 10% of
the Firm Shares or Additional Shares, as the case may be, or the Underwriters
fail to purchase the Firm Shares or Additional Shares as required by Section
10(a), you may in your discretion arrange for yourself or for another party or
parties (including any non-defaulting Underwriter or Underwriters who so agree)
to purchase such Firm Shares or Additional Shares, as the case may be, to which
such default relates on the terms contained herein. If within 24 hours after
such default by any Underwriter, you do not arrange for the purchase of the Firm
Shares or the Additional Shares, as the case may be, then the Company and the
Selling Stockholders shall be entitled to a further period of 24 hours within
which to arrange for another party or parties satisfactory to you to purchase
such Firm Shares or Additional Shares on such terms. In the event that within
two aforementioned 24-hour periods after such a default you do not arrange for
the purchase of the Firm Shares or Additional Shares, as the case may be, to
which such default relates as provided in this Section 10, this Agreement or, in
the case of a default with respect to the Additional Shares, the obligations of
the Underwriters to purchase and of the Company and of the Selling Stockholders
to sell the Additional Shares shall thereupon terminate, without liability on
the part of the Company or the Selling Stockholders with respect thereto (except
in each case as provided in Section 6, 8(a) and 9 hereof) or the Underwriters,
but nothing in this Agreement shall relieve a defaulting Underwriter or
Underwriters of its or their liability, if any, to the other Underwriters and
the Company and the Selling Stockholders for damages occasioned by its or their
default hereunder.
27
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company and the Selling Stockholders shall have the right to postpone
the Closing Date or Additional Closing Date, as the case may be, for a period,
not exceeding five business days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus or in
any other documents and arrangements, and the Company agrees to file promptly
any amendment or supplement to the Registration Statement or the Prospectus
which, in the reasonable opinion of Underwriters' Counsel, may thereby be made
necessary or advisable. The term "Underwriter" as used in this Agreement shall
include any party substituted under this Section 10 with like effect as if it
had originally been a party to this Agreement with respect to such Firm Shares
and Additional Shares.
11. Survival of Representations and Agreements. All representations
------------------------------------------
and warranties, covenants and agreements of the Underwriters, the Company and
the Selling Stockholders contained in this Agreement, including the agreements
contained in Section 6, the indemnity agreements contained in Section 8 and the
contribution agreements contained in Section 9, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person thereof or by or on behalf of the
Company, any of its officers and directors or any controlling person thereof, or
on behalf of the Selling Stockholders or any controlling person thereof, and
shall survive delivery of and payment for the Shares to and by the Underwriters.
The representations contained in Section 1 and 2 and the agreements contained in
Sections 6, 8, 9 and 12(d) hereof shall survive the termination of this
Agreement, including termination pursuant to Section 10 or 12 hereof.
12. Effective Date of Agreement; Termination.
----------------------------------------
(a) This Agreement shall become effective, upon the later of
when (i) the Commission shall have provided notification of the effectiveness of
the Registration Statement or (ii) the execution of this Agreement. If either
the initial public offering price or the purchase price per Share has not been
agreed upon prior to 5:00 P.M., New York time, on the fifth full business day
after the Registration Statement shall have become effective, this Agreement
shall thereupon terminate without liability to the Company or the Underwriters
except as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you or by you
notifying the Company and the Selling Stockholders. Notwithstanding the
foregoing, the provisions of this Section 12 and of Sections 1, 2, 6, 8 and 9
hereof shall at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement at
any time prior to the Closing Date or the obligations of the Underwriters to
purchase the
28
Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (A) any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, the market for the Company's securities or securities
in general; or (B) if trading on the New York or American Stock Exchanges shall
have been suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, on
the New York or American Stock Exchanges by the New York or American Stock
Exchanges or by order of the Commission or any other governmental authority
having jurisdiction; or (C) if a banking moratorium has been declared by a state
or federal authority or if any new restriction materially adversely affecting
the distribution of the Firm Shares or the Additional Shares, as the case may
be, shall have become effective; or (D) (i) if the United States becomes engaged
in hostilities or there is an escalation of hostilities involving the United
States or there is a declaration of a national emergency or war by the United
States or (ii) if there shall have been such change in political, financial or
economic conditions if the effect of any such event in (i) or (ii) as in your
judgment makes it impracticable or inadvisable to proceed with the offering,
sale and delivery of the Firm Shares or the Additional Shares, as the case may
be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 12
shall be by telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 12(a) hereof or (ii) Section 10(b) or 12(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company or the Selling Stockholders to perform any agreement herein or comply
with any provision hereof, the Company or the Selling Stockholders (pro rata to
the extent of their refusal, inability or failure to perform) will, subject to
demand by you, reimburse the Underwriters for all out-of-pocket expenses
(including the fees and expenses of their counsel), incurred by the Underwriters
in connection herewith.
12. Notices. All communications hereunder, except as may be otherwise
-------
specifically provided herein, shall be in writing and , if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and confirmed
in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Department [with a copy
to Xxxx X. Xxxxxxx, Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000]; if sent to the Company, shall be
mailed, delivered, or telegraphed and confirmed in writing to the Company, 00-00
Xxxxx 000 Xxxxx, Xxxx Xxxx, Xxx Xxxxxx 00000, Attention: Xxxxxxx X. XxXxxx,
with a copy to Xxxx X. XxXxxxxx, P.C.,
29
Xxxxxxx, Procter & Xxxx XXX, Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000;
if sent to the Selling Stockholders, shall be mailed, delivered or telegraphed
and confirmed in writing to TA Associates, Inc., 000 Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxxx Xxxxxxxx.
13. Parties. This Agreement shall insure solely to the benefit of,
-------
and shall be binding upon, the Underwriters, the Company, the Selling
Stockholders and the controlling persons, directors, officers, employees and
agents referred to in Section 8 and 9, and their respective personal
representatives, successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Shares from any of the Underwriters.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
30
If the foregoing correctly sets forth the understanding between you
and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
BORON, XxXXXX & ASSOCIATES, INC.
By: _________________________________
Name:
Title:
SELLING STOCKHOLDERS
By: _________________________________
Attorney-in-Fact
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
XXXX XXXXXXXX XXXXXXX
XXXXXXX XXXXX XXXXXX
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: _______________________________
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
31
SCHEDULE I
Number of Firm
Name of Underwriter Shares to be Purchased
------------------- ----------------------
Bear, Xxxxxxx & Co. Inc.
Xxxx Xxxxxxxx Xxxxxxx
Xxxxxxx Xxxxx Xxxxxx
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxx & Company
Credit Suisse First Boston Corporation
Xxxxxx Xxxx LLC
Xxxxxxx, Xxxxx & Co.
Xxxxxxxxx & Xxxxx LLC
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Securities LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Anglo-American Investor Services Corp.
Xxxxxxx Xxxxx & Company
Xxxxxxxx & Partners, X.X.
Xxxxxx, Xxxxxxx Inc.
Xxxxxx Xxxxxx Xxxxxxxx & Co., LLC
Pennsylvania Merchant Group Ltd.
The Xxxxxxxx-Xxxxxxxx Company, Inc.
Xxxxxx Xxxxxxx Incorporated
Vector Securities International, Inc.
Xxxxx Xxxxx Xxxxxx & Company
Total. . . . . . . . . .
32
SCHEDULE II
Selling Stockholders
--------------------
1) Advent VII L.P.
Attorneys-in-Fact: Xxxxxxx X. XxXxxx and Xxxxx X. Xxxxxx
2) Advent Atlantic and Pacific III L.P.
Attorneys-in-Fact: Xxxxxxx X. XxXxxx and Xxxxx X. Xxxxxx
3) TA Venture Investors Limited Partnership
Attorneys-in-Fact: Xxxxxxx X. XxXxxx and Xxxxx X. Xxxxxx
4) [Xxxxxxx X. Xxxxx]
33
SCHEDULE III
Stockholders Subject to the Lock-up Provision
TA Venture Investors Limited Partnership
Advent VII L.P.
Advent Atlantic and Pacific III L.P.
Xxxxxxxx X. Xxxxxx and Xxxxxxx Xxxxxxxx, as trustees, for:
Xxxxxxx X. Xxxxx Trust for Xxxxxxxxx Xxxxx
Xxxxxxx X. Xxxxx Trust for Xxxxx Xxxxx
Xxxxxxx X. Xxxxx Trust for Xxxxx Xxxxxxxx
Xxxxxxx X. Xxxxx Trust for Xxxxx Xxxxxxxx
Xxxxxxx X. Xxxxx Trust for Xxxxxxxxx Xxxxx
Xxxxxxx X. Xxxxx Trust for Xxxxx Xxxxx
Xxxxxxx X. Xxxxx Trust for Xxxxx Xxxxxxxx
Xxxxxxx X. Xxxxx Trust for Xxxxx Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxxxxxxxxx X. Xxxxxxx
Xxxxx Xxxxxxxxxxxxx
Xxxx X. Xxxxxx, XX
MLPFS FBO Xxxx X. Xxxxxx, XX XXXX
Xxxxxxx X. XxXxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. XxXxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxxxxx X. Xxxxx
Xxxxx X. Xxxxx
Xxxxx X. Xxxxxx
Park Street Investors, L.P.
