EXHIBIT 1.1
The Advisory Board Company
[ ] Shares a/
Common Stock
($.01 par value)
Underwriting Agreement
New York, New York
[ ], 2001
Credit Suisse First Boston Corporation
Deutsche Banc Alex. Xxxxx Inc.
UBS Warburg LLC
Xxxxxxx Xxxxx & Company, L.L.C.
As Representatives of the several Underwriters,
c/o Credit Suisse First Boston
AT&T Corporate Center
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Xxxxx X. Xxxxxxx (the "Selling Stockholder") proposes to sell to
the several underwriters named in Schedule I hereto (the "Underwriters"), for
whom you are acting as representatives (the "Representatives"), an aggregate of
[ ] shares of Common Stock, $.01 par value (the "Common Stock," being
hereinafter called the "Underwritten Securities") of The Advisory Board Company,
a Delaware corporation (the "Company"). The Selling Stockholder also proposes to
grant to the Underwriters options to purchase up to an aggregate of [ ]
additional shares of Common Stock to cover over-allotments (the "Option
Securities"); the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities").
----------------
a/ Plus an option to purchase from the Selling Stockholder up to [ ]
additional Securities to cover over-allotments.
2
To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used in this Underwriting
Agreement shall mean you, as Underwriters, and the terms Representatives and
Underwriters shall mean either the singular or plural as the context requires.
The use of the neuter in this Underwriting Agreement shall include the feminine
and masculine wherever appropriate. Certain terms used in this Underwriting
Agreement are defined in Section 17 hereof.
As part of the offering contemplated by this Agreement, Deutsche
Banc Alex. Xxxxx Inc. ("Deutsche Banc") has agreed to reserve out of the
Securities set forth opposite its name on the Schedule I to this Agreement, up
to [ ] shares, for sale to certain employees and directors of the Company,
and their friends and family members (collectively, "Participants"), as set
forth in the Prospectus under the heading "Underwriting" (the "Directed Share
Program"). The Securities to be sold by Deutsche Banc pursuant to the Directed
Share Program (the "Directed Shares") will be sold by Deutsche Banc pursuant to
this Agreement at the public offering price. Any Directed Shares not orally
confirmed for purchase by any Participants by the end of the business day on
which this Agreement is executed will be offered to the public by Deutsche Banc
as set forth in the Prospectus.
1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with,
each Underwriter as set forth below in this Section 1(i).
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a Registration Statement (file
number 333-68146) on Form S-1, including the related preliminary
prospectus, for registration under the Act of the offering and sale of
the Securities. The Company may have filed one or more amendments
thereto, including the related preliminary prospectus, each of which has
previously been furnished to you. The Company will next file with the
Commission either (1) prior to the Effective Date of such Registration
Statement, a further amendment to such Registration Statement (including
the form of final prospectus) or (2) after the Effective Date of such
Registration Statement, a final prospectus in accordance with Rules 430A
and 424(b). In the case of clause (2), the Company has included in such
Registration Statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in the Registration Statement and
the Prospectus. As filed, such amendment and form of final prospectus,
or such final prospectus, shall contain all Rule 430A Information,
together with all other such required information, and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectus) as
the Company has advised you, prior to the Execution Time, will be
included or made therein.
3
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein) and on any
date on which Option Securities are purchased, if such date is not the
Closing Date (a "settlement date"), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act and the rules thereunder; on the Effective Date,
the Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein not misleading; and, on the Effective Date, the Prospectus, if
not filed pursuant to Rule 424(b), will not, and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date and any
settlement date, the Prospectus (and any supplement thereto) will not,
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement, or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in the
Underwriting Agreement or in writing to the Company by or on behalf of
any Underwriter through the Representatives specifically for inclusion
in the Registration Statement or the Prospectus (or any supplement
thereto).
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business
as described in the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure
to be so qualified would not reasonably be expected to result in a
material adverse effect on the financial condition, prospects or results
of operations of the Company.
(d) The Company's authorized, issued and outstanding equity
capitalization is as set forth in the Prospectus; the capital stock of
the Company conforms in all material respects to the description thereof
contained in the Prospectus; the outstanding shares of Common Stock
(including the outstanding shares of Common Stock being sold pursuant to
this Underwriting Agreement by the Selling Stockholder) have been duly
authorized and validly issued and are fully paid and nonassessable; the
Securities being sold by the Selling Stockholder have been approved for
trading on the Nasdaq National Market subject to official notice of
issuance; the certificates for the Securities are in valid and
sufficient form; the holders of outstanding shares of capital stock of
the Company are not
4
entitled to preemptive or other rights to subscribe for the Securities;
and, except as set forth in the Prospectus, no options, warrants or
other rights to purchase from the Company, agreements or other
obligations of the Company to issue, or rights to convert any
obligations of the Company into or exchange any securities of the
Company for, shares of capital stock of or ownership interests in the
Company are outstanding;
(e) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not described
or filed as required; and the statements in the Prospectus under the
heading "Certain United States Income Tax Considerations for Non-United
States Holders" fairly summarize the matters therein described.
(f) This Underwriting Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and
binding obligation of the Company enforceable in accordance with its
terms.
(g) The Company is not an "investment company" required to be
registered under the Investment Company Act of 1940, as amended.
(h) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required to be obtained by
the Company in connection with the transactions contemplated herein,
except such as have been obtained under the Act, the filing of the
Prospectus pursuant to Rule 424(b) and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus.
(i) Neither the sale of the Securities by the Selling
Stockholder nor the fulfillment by the Company and the Selling
Stockholder of the terms hereof will conflict with, result in a breach
or violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to, (i) the charter or
by-laws of the Company; (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree
applicable to the Company of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its properties (excluding for
purposes of this paragraph (i) federal and state securities laws and
regulations).
5
(j) Except as set forth in the Prospectus, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
(k) The consolidated historical financial statements and
schedules of the Company included in the Prospectus and the Registration
Statement present fairly in all material respects the financial
condition, results of operations and cash flows of the Company as of the
dates and for the periods indicated, comply as to form in all material
respects with the applicable accounting requirements of the Act and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved
(except as otherwise noted therein). The selected financial data,
including the data under the column "June 30, 2001, Pro Forma", set
forth under the caption "Selected Financial Data" in the Prospectus and
Registration Statement fairly present, on the basis stated in the
Prospectus and the Registration Statement, the information included
therein.
(l) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or its property is pending or, to the best knowledge of the
Company, threatened that (i) could reasonably be expected to have a
material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii)
could reasonably be expected to have a material adverse effect on the
financial condition, prospects or results of operations of the Company,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(m) The Company owns or leases all such properties as are
necessary for the conduct of its operations as presently conducted.
(n) The Company is not in violation or default of (i) any
provision of its charter or bylaws, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement
or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree of
any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
any of its properties, as applicable, which violation or default could
reasonably be expected to have a material adverse effect on the
financial condition, prospects or results of operations of the Company.
6
(o) To the best of the Company's knowledge, Xxxxxx Xxxxxxxx LLP,
who have certified certain financial statements of the Company and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(p) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof except in any case in which the failure so to file would not
reasonably be expected to have a material adverse effect on the
financial condition, prospects or results of operations of the Company,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto) and has paid all taxes required to
be paid by it as shown on such returns and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is
due and payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or as would not reasonably be
expected to have a material adverse effect on the financial condition,
prospects or results of operations of the Company, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(q) No labor problem or dispute with the employees of the
Company exists or is threatened or imminent, and the Company is not
aware of any existing or imminent labor disturbance by the employees of
any of its principal suppliers, contractors or customers, that could
reasonably be expected to have a material adverse effect on the
financial condition, prospects or results of operations of the Company,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(r) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the business in which it is engaged; all
policies of insurance insuring the Company or its business, assets,
employees, officers and directors are in full force and effect; the
Company is in compliance with the terms of such policies and instruments
in all material respects; and there are no material claims by the
Company under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights
clause; the Company has not been refused any insurance coverage sought
or applied for; and the Company has no reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a
7
cost that would not reasonably be expected to have a material adverse
effect on the financial condition, prospects or results of operations of
the Company, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(s) The Company possesses all licenses, certificates, permits
and other authorizations issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct its business, and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, could reasonably be expected
to have a material adverse effect on the financial condition, prospects
or results of operations of the Company, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement thereto).
(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 authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(u) The Company has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(v) The Company has fulfilled its obligations, if any, under the
minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee
Retirement Income Security Act of 1974 ("ERISA") and the regulations and
published interpretations thereunder with respect to each "plan" (as
defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company are eligible to
participate and each such plan is in compliance with the presently
applicable provisions of ERISA and such regulations and published
interpretations, except for any failure to fulfill any such obligations,
or failure to comply, that singly or in the aggregate would not
reasonably be expected to have a material adverse effect on the
financial condition, prospects or results of operations of the Company.
The Company has not
8
incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA, except for any such
liability that would not reasonably be expected to result in a material
adverse effect on the financial condition, prospects or results of
operations of the Company.
(w) Except as set forth in or contemplated by the Registration
Statement and the Prospectus (exclusive of any amendment or supplement
thereto), subsequent to the respective dates as of which such
information is given in the Registration Statement and the Prospectus
(exclusive of any amendment or supplement thereto), (i) the Company has
not incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business,
that is material to the Company, nor is any such transaction probable of
being entered into such that it is required to be disclosed in the
Prospectus and (ii) there has not been any change in the capital stock,
or material increase in the short-term debt or long-term debt, of the
Company, or any material adverse change, or any development having or
which may reasonably be expected to have a material adverse change, in
the financial condition, prospects or results of operations of the
Company, whether or not arising from transactions in the ordinary course
of business.
(x) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other than those
obtained, is required in connection with the offering of the Directed
Shares in any jurisdiction where the Directed Shares are being offered.
(y) The Company has not offered, or caused Deutsche Banc or any
of their respective affiliates to offer, Directed Shares to any person
pursuant to the Directed Share Program with specific intent to
unlawfully influence (i) a customer or supplier of the Company to alter
the customer's or supplier's level or type of business with the Company,
or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
(z) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like
payment.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities
9
shall be deemed a representation and warranty by the Company, as to matters
covered thereby, to each Underwriter.
(ii) The Selling Stockholder represents and warrants to, and
agrees with, each Underwriter that:
(a) This Agreement has been duly executed and delivered by the
Selling Stockholder and constitutes a valid and binding obligation of
the Selling Stockholder enforceable in accordance with its terms.
(b) The Selling Stockholder is the lawful owner of the
Securities to be sold by the Selling Stockholder under this Underwriting
Agreement and upon sale and delivery of, and payment for, such
Securities, as provided herein, the Selling Stockholder will convey to
the Underwriters title to the Securities, free and clear of any adverse
claims whatsoever.
(c) The Selling Stockholder has not taken, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required to be obtained or made by the
Selling Stockholder for the consummation by the Selling Stockholder of
the transactions contemplated herein, except such as may have been
obtained under the Act, the filing of the Prospectus pursuant to Rule
424(b) and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and in
the Prospectus and such other approvals as have been obtained.
(e) Neither the sale of Securities to the Underwriters by the
Selling Stockholder nor the fulfillment of the terms hereof by the
Selling Stockholder will conflict with, result in a breach or violation
of, or constitute a default under any law or the terms of any indenture
or other agreement or instrument to which the Selling Stockholder is a
party or bound, or any judgment, order or decree applicable to the
Selling Stockholder of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Selling Stockholder.
10
(f) Except as set forth in the Prospectus, no options, warrants
or other rights to purchase from the Selling Stockholder, or agreements
or other obligations of the Selling Stockholder to issue shares of
capital stock of or ownership interests in the Company are outstanding.
(g) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Selling Stockholder
and any person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder's fee or other
like payment.
(h) The Selling Stockholder has not offered, or caused Deutsche
Banc or any of its respective affiliates to offer, Directed Shares to
any person pursuant to the Directed Share Program with specific intent
to unlawfully influence (i) a customer or supplier of the Company to
alter the customer's or supplier's level or type of business with the
Company, or (ii) a trade journalist or publication to write or publish
favorable information about the Company or its products.
Any certificate signed by the Selling Stockholder and delivered
to the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Selling Stockholder, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties set forth herein, the
Selling Stockholder agrees to sell to the Underwriters the number of
Underwritten Securities set forth opposite the name of the Selling Stockholder
in Schedule II hereto, and each Underwriter agrees, severally and not jointly,
to purchase from the Selling Stockholder, at a purchase price of $[ ] per
share, the number of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties set forth herein, the Selling Stockholder hereby
grants an option to the several Underwriters to purchase, severally and not
jointly, up to an aggregate of [ ] Option Securities at the same
purchase price of $[ ] per share as the Underwriters shall pay for the
Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the Underwriters.
Said option may be exercised in whole or in part at any time (but not more than
once) on or before the 30th day after the date of the Prospectus upon written or
telegraphic notice by Credit Suisse First Boston Corporation ("CSFB") and
Deutsche Banc to the Company and the Selling Stockholder setting forth the
number of shares of the Option Securities as to which the several Underwriters
are exercising the option and
11
the settlement date. The number of Option Securities to be purchased by each
Underwriter shall be the same percentage of the total number of shares of the
Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the Business Day
prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
[ , 2001], or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement among the Representatives, the
Selling Stockholder and the Company or as provided in Section 9 hereof (such
date and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price of the
Securities being sold by the Selling Stockholder to or upon the order of the
Selling Stockholder by wire transfer payable in same-day funds to the accounts
specified by the Selling Stockholder. Delivery of the Underwritten Securities
and the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
The Selling Stockholder will pay all applicable state transfer
taxes, if any, involved in the transfer to the several Underwriters of the
Securities to be purchased by them from the Selling Stockholder, and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised
after the Business Day prior to the Closing Date, the Selling Stockholder will
deliver the Option Securities (at the expense of the Company) to the
Representatives, through The Depository Trust Company, on the date specified by
the Representatives (which shall be within three Business Days after exercise of
said option) certificates for the Option Securities in such name and
denomination as the Representatives shall have requested for the respective
accounts of the several Underwriters, against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Selling Stockholder by wire transfer payable in same-day
funds to the accounts specified by the Selling Stockholder. If settlement for
the Option Securities occurs after the Closing Date, the Company and the Selling
Stockholder will deliver to the Representatives on the settlement date for the
Option Securities, and the obligation of the Underwriters to purchase the Option
Securities shall be conditioned upon receipt of, supplemental
12
opinions, certificates and letters confirming as of such date the opinions,
certificates and letters delivered on the Closing Date pursuant to Section 6
hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission, or transmitted by a means reasonably calculated to
result in filing with the Commission, pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (1) when
the Registration Statement, if not effective at the Execution Time, and
any amendment thereto, shall have become effective; (2) when the
Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission;
(3) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective; (4) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional
information; (5) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose; and (6)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
13
(b) If, at any time prior to the expiration of twelve months
from the date hereof when a prospectus relating to the Securities is
required to be delivered under the Act in connection with the offering
of the Securities, any event occurs as a result of which the Prospectus
as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the
rules thereunder, the Company promptly will (1) notify the
Representatives of any such event; (2) prepare and file with the
Commission, subject to the second sentence of paragraph (i)(a) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance; and (3) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of the Preliminary Prospectus and
the Prospectus and any supplement thereto as the Representatives may
reasonably request.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may reasonably designate, will
maintain such qualifications in effect so long as required for the
distribution of the Securities; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where
it is not now so qualified or to take any action that would subject it
to service of process in suits, other than those arising out of the
offering or sale of the Securities, in any jurisdiction where it is not
now so subject.
(f) The Company will not, without the prior written consent of
CSFB and Deutsche Banc, for a period of 180 days following the Execution
Time, offer, sell, contract to sell, announce any intention to sell,
pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Securities Act of
14
1933 relating to any shares of Common Stock or other rights convertible
into or exchangeable or exercisable for any shares of Common Stock,
enter into a transaction which would have the same effect, or enter into
any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of Common Stock,
whether any such aforementioned transaction is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise, or
publicly disclose the intention to make any such offer, sale, pledge or
disposition, or to enter into any such transaction, swap, hedge or other
arrangement; provided, however, that the Company may file one or more
registration statements on Form S-8 and may issue and sell Common Stock
or make any awards pursuant to any employee stock option plan, stock
ownership plan or dividend reinvestment plan of the Company in effect at
the Execution Time and the Company may issue Common Stock issuable upon
the conversion of securities or the exercise of warrants outstanding at
the Execution Time and the Company may issue shares of Common Stock or
securities convertible into, or exercisable or exchangeable for, shares
of Common Stock in connection with an acquisition of or merger with
another corporation or the acquisition of assets or properties thereof,
provided, that the holders of any such securities shall be subject to
the transfer restrictions set forth in Section 5(ii)(a) hereof.
(g) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating to
the following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), the Preliminary Prospectus,
the Prospectus, and each amendment or supplement to any of them; (ii)
the printing (or reproduction) and delivery (including postage and air
freight charges) of such copies of the Registration Statement, the
Preliminary Prospectus, the Prospectus, and all amendments or
supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the sale of the Securities by the
Selling Stockholder; (iv) the printing (or reproduction) and delivery of
this Underwriting Agreement and any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (v) the registration of
the Securities under the Exchange Act and the listing of the Securities
on the Nasdaq National Market; (vi) any registration or qualification of
the
15
Securities for offer and sale under the securities or blue sky laws of
the several states (including filing fees and the reasonable fees and
expenses of counsel for the Underwriters relating to such registration
and qualification); (vii) any filings required to be made with the
National Association of Securities Dealers, Inc. (including filing
fees); (viii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of
the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company and the Selling
Stockholder; and (x) all other costs and expenses incident to the
performance by the Company and the Selling Stockholder of their
obligations under the Underwriting Agreement.
(i) In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent
required by the National Association of Securities Dealers, Inc. (the
"NASD") or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. Deutsche Banc will notify
the Company as to which Participants will need to be so restricted. The
Company will direct the transfer restrictions upon such period of time.
(j) The Company will comply with all applicable securities and
other applicable laws, rules and regulations in each jurisdiction in
which the Directed Shares are offered in connection with the Directed
Share Program.
(ii) The Selling Stockholder agrees with the several
Underwriters that:
(a) The Selling Stockholder will not, without the prior written
consent of CSFB and Deutsche Banc, offer, sell, contract to sell,
announce any intention to sell, pledge or otherwise dispose of, directly
or indirectly, or file (or participate in the filing of) with the
Commission a registration statement under the Securities act of 1933
relating to any shares of Common Stock or securities or other rights
convertible into or exchangeable or exercisable for any shares of Common
Stock, enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers, in whole
or in part, any of the economic consequences of ownership of Common
Stock, whether any such aforementioned transaction is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise,
or publicly disclose the intention to make any such offer, sale, pledge
or disposition, or to enter into any such transaction, swap, hedge or
other arrangement for a period of 180 days after the date of this
Underwriting Agreement, other than sales, transfers or other
distributions in transactions
16
that are not required to be registered under the Act, including
charitable contributions, gifts and sales to third parties, provided
that the transferee agrees to be bound by a restriction on further
transfers substantially similar to the restriction set forth in this
Section 5(ii)(a).
(b) The Selling Stockholder will not take any action designed to
or which has constituted or which might reasonably be expected to cause
or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(c) The Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities by an underwriter or
dealer may be required under the Act, of any change in information in
the Registration Statement or the Prospectus relating to the Selling
Stockholder.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholder contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Stockholder made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholder of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to a
later time, the Registration Statement will become effective not later
than (i) 6:00 PM New York City time on the date of determination of the
public offering price, if such determination occurred at or prior to
3:00 PM New York City time on such date or (ii) 9:30 AM on the Business
Day following the day on which the public offering price was determined,
if such determination occurred after 3:00 PM New York City time on such
date; if filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such
supplement, will be filed, or transmitted by a means reasonably
calculated to result in filing with the Commission, in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened by the Commission.
17
(b) The Company shall have caused Xxxxxx, Xxxx & Xxxxxxxx LLP,
counsel for the Company, to have furnished to the Representatives their opinion,
dated the Closing Date and addressed to the Representatives, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the General Corporation
Law of the State of Delaware, with corporate power and authority to own
or lease, as the case may be, and to operate its properties and conduct
its business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws
of the States of California and New York and the District of Columbia;
(ii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the shares of Common Stock underlying the Selling
Stockholder Options have been duly authorized; the outstanding shares of
Common Stock (including the Securities being sold under the Underwriting
Agreement by the Selling Stockholder) have been duly authorized and
validly issued and are fully paid and nonassessable; the holders of
outstanding Shares of Common Stock are not entitled to preemptive or
other rights to subscribe for the Securities;
(iii) such counsel has not been engaged by the Company to give
substantive attention to, or to represent it in connection with, any
pending or threatened action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving
the Company or its property of a character required to be disclosed in
the Registration Statement which is not adequately disclosed in the
Prospectus;
(iv) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made, or the Prospectus and any
supplements thereto have been transmitted by a means reasonably
calculated to result in filing with the Commission, in the manner and
within the time period required by Rule 424(b); to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued by the Commission and, to the best of such
counsel's knowledge, no proceedings for that purpose have been
instituted or threatened;
(v) this Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
18
(vi) the Company is not an "investment company" required to be
registered under the Investment Company Act of 1940, as amended;
(vii) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required to be obtained
or made by the Company under the laws of the United States of America in
connection with the sale of the Securities to the Underwriters in the
manner contemplated in this Underwriting Agreement, except such as have
been obtained under the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated in the Underwriting Agreement and in the Prospectus and
such other approvals (specified in such opinion) as have been obtained;
(viii) neither the sale of the Securities by the Selling
Stockholder, nor the fulfillment by the Company and the Selling
Stockholder of the terms of this Underwriting Agreement will conflict
with, result in a breach or violation of or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to, (a) the charter or by-laws of the Company, (b)
the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument identified to such counsel in a
certificate by the Company as being material to which the Company is a
party or bound or to which its property is subject, or (c) any statute,
law, rule, regulation, judgment, order or decree applicable to the
Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties (excluding for purposes of
this paragraph (viii) federal and state securities laws and
regulations); and
(ix) the statements under the captions "Description of Capital
Stock, Certificate of Incorporation and Bylaws" 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
summarize in all material respects the information called for with
respect to such documents and matters.
(x) insofar as the statements contained in the Prospectus under
the caption "Material United States Income Tax Considerations for
Non-United States Holders" purport to describe specific provisions of
the Internal Revenue Code, such descriptions are accurate summaries of
such provisions.
19
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent auditors of the Company and your
representatives and counsel at which the contents of the Registration Statement
and the Prospectus were discussed. Such counsel also may state that because the
purpose of their professional engagement was not to establish or confirm factual
matters and because the scope of their examination of the affairs of the Company
did not permit them to verify the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, they are
not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, except to the extent set forth in the last sentence
of this paragraph. Such counsel also shall state that, on the basis of the
foregoing, except for the financial statements and schedules and other financial
and statistical data included therein, as to which such counsel need express no
opinion or belief: (a) such counsel is of the opinion that the Registration
Statement at the time it became effective appeared on its face to comply as to
form in all material respects with the applicable requirements of the Act and
the rules thereunder; and (b) no facts have come to such counsel's attention
that lead such counsel to believe that (i) the Registration Statement at the
time it became effective 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, or (ii) the Prospectus as of the
date thereof and the Prospectus as supplemented to the date of such opinion
contained or contain an untrue statement of a material fact or omitted or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. On the basis of
the foregoing, no facts have come to such counsel's attention that lead such
counsel to believe that (i) there are any outstanding options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company, except as set forth in the
Prospectus or (ii) there is any franchise, contract or other document of a
character required to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as
required. Such counsel also shall state that, insofar as the statements
contained in the Prospectus under the caption "Material United States Income Tax
Considerations for Non-United States Holders" purport to describe specific
provisions of the Internal Revenue Code, such descriptions are accurate
summaries of such provisions.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials.
20
(c) The Selling Stockholder shall have caused Xxxxxx, Xxxxxx &
Xxxxxxxxx, counsel for the Selling Stockholder, to have furnished to the
Representatives their opinion dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) to the knowledge of such counsel, the Underwriting Agreement
has been duly executed and delivered by the Selling Stockholder;
(ii) to the knowledge of such counsel, the delivery by the
Selling Stockholder to the several Underwriters of certificates for the
Securities being sold under the Underwriting Agreement by such Selling
Stockholder against payment therefor as provided in the Underwriting
Agreement, will pass title to such Securities to the several
Underwriters, free and clear of all adverse claims whatsoever;
(iii) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body is
required for the sale of the Securities by the Selling Stockholder to
the Underwriters pursuant to the Underwriting Agreement, except such as
may have been obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Underwriters and such other
approvals as have been obtained; and
(iv) neither the sale of the Securities by the Selling
Stockholder to the Underwriters nor the fulfillment of the terms hereof
by the Selling Stockholder will conflict with, result in a breach or
violation of, or constitute a default under any law or the terms of any
indenture or other agreement or instrument known to such counsel and to
which the Selling Stockholder is a party or bound, or any judgment,
order or decree known to such counsel to be applicable to the Selling
Stockholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Selling
Stockholder.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of the Selling Stockholder and public
officials.
(d) The Representatives shall have received from Cravath, Swaine
& Xxxxx, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the issuance
and sale of the Securities, the Registration Statement, the Prospectus (together
with any supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company and the Selling Stockholder shall have
21
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board and the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus, any supplements
to the Prospectus and this Underwriting Agreement and that:
(i) the representations and warranties of the Company in this
Underwriting Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at
or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge, threatened;
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there
has been no material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto); and
(iv) the Company has obtained Directors' and Officers' insurance
in an amount equal to or greater than $10 million.
(f) The Selling Stockholder shall have furnished to the
Representatives a certificate, signed by the Selling Stockholder, dated the
Closing Date, to the effect that (i) the signer of such certificate has
carefully examined the Registration Statement, the Prospectus, any supplement to
the Prospectus and this Underwriting Agreement, (ii) the representations and
warranties of the Selling Stockholder in this Underwriting Agreement are true
and correct in all material respects on and as of the Closing Date to the same
effect as if made on the Closing Date and (iii) the Selling Stockholder has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date.
22
(g) The Company shall have caused Xxxxxx Xxxxxxxx LLP to have
furnished to the Representatives, at the Execution Time and at the Closing Date,
letters, dated respectively as of the Execution Time and as of the Closing Date,
in form and substance satisfactory to the Representatives, confirming that they
are independent accountants within the meaning of the Act and the applicable
published rules and regulations thereunder, and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and pro forma financial statements
included in the Registration Statement and the Prospectus and reported
on by them comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations;
(ii) on the basis of carrying out certain specified procedures
(but not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and any
committees of the Company; and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters of
the Company as to transactions and events subsequent to [ ], 2001,
nothing came to their attention which caused them to believe that:
(1) with respect to the period subsequent to[ ], 2001,
there were any changes, at a specified date not more than three
days prior to the date of the letter, in the long-term debt of
the Company or capital stock of the Company or decreases in the
stockholder's equity of the Company as compared with the amounts
shown on the [ ], 2001, consolidated balance sheet included
in the Registration Statement and the Prospectus, or for the
period from July 1, 1998 to such specified date there were any
decreases, as compared with the corresponding period in the
preceding fiscal quarter, in net revenues or income before income
taxes or in total or per share amounts of net income, income from
operations and interest income of the Company, except in all
instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless said
explanation is not deemed necessary by the Representatives; and
(2) the information included in the Registration Statement
and Prospectus in response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial Information)
and Item 402 (Executive Compensation)
23
is not in conformity with the applicable disclosure requirements
of Regulation S-K; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the Registration
Statement and the Prospectus, including the information set forth under
the captions "Prospectus Summary", "Risk Factors", "Capitalization",
"Selected Financial Data", "Management's Discussion and Analysis of
Results of Financial Condition and Results of Operation", "Business" and
"Description of Capital Stock, Certificates of Incorporation and Bylaws"
in the Prospectus, agrees with the accounting records of the Company,
excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (g) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the financial
condition or results of operations of the Company, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto) the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto).
(i) The Securities shall have been listed and admitted and
authorized for trading on the Nasdaq National Market, and satisfactory evidence
of such actions shall have been provided to the Representatives.
(j) On or prior to the Execution Time, the National Association
of Securities Dealers, Inc. shall have approved the Underwriters' participation
in the distribution of the Securities to be sold by the Selling Stockholder.
24
(k) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A hereto from
each person listed on Schedule III hereto.
(l) Prior to the Closing Date, the Company and the Selling
Stockholder shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may reasonably
request.
(m) The Representatives shall be reasonably satisfied with the
terms of all stockholders agreements and other agreements between the Company
and its stockholders that (i) have not been received by or made available to the
Representatives prior to the Execution Time, (ii) are entered into after the
Execution Time or (iii) are amended after the Execution Time.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Underwriting Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Underwriting Agreement shall not be in all material
respects reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters, this Underwriting Agreement and all
obligations of the Underwriters under this Underwriting Agreement, or, in the
case of any condition to the purchase of Option Securities on a settlement date
which is after the Closing Date, the obligations of the several Underwriters to
purchase the relevant Option Securities, may be canceled by the Representatives
at any time at or prior to the Closing Date or such settlement date, as
applicable. Notice of such cancelation shall be given to the Company and the
Selling Stockholder in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 shall be
delivered at the offices of Cravath, Swaine & Xxxxx, counsel for the
Underwriters, at Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10(i) hereof or because of any
refusal, inability or failure on the part of the Company or the Selling
Stockholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through CSFB and/or Deutsche Banc on demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities.
25
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or in the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) The Company agrees to indemnify and hold harmless Deutsche
Banc, its directors, officers, employees and agents and each person who controls
Deutsche Banc within the meaning of either the Act or the Exchange Act, against
any and all losses, claims, damages and liabilities to which it may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims
damages or liabilities (or actions in respect thereof) are (i) caused by the
failure of any Participant to pay for and accept delivery of the securities
which immediately following the Effective Date of the Registration Statement,
were subject to a properly confirmed agreement to purchase; or (ii) related to,
arising out of, or in connection with the Directed Share Program, provided that,
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of Deutsche Banc specifically for inclusion therein.
(c) The Selling Stockholder agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, each Underwriter,
26
the directors, officers, employees and agents of each Underwriter and each
person who controls the Company or any Underwriter within the meaning of either
the Act or the Exchange Act to the same extent as the foregoing indemnity from
the Company to each Underwriter, but only with reference to written information
furnished to the Company by or on behalf of the Selling Stockholder specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which the Selling
Stockholder may otherwise have.
(d) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act and the Selling
Stockholder, to the same extent as the foregoing indemnity to each Underwriter,
but only with reference to written information relating to such Underwriter
furnished to the Company by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company and the Selling
Stockholder acknowledge that the statements set forth in the last paragraph of
the table of contents regarding delivery of the Securities and, under the
heading "Underwriting", (i) the sentences related to concessions and allowances,
(ii) the paragraphs related to stabilization, syndicate covering transactions
and penalty bids and (iii) the paragraph relating to a prospectus in electronic
format in any Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in any Preliminary Prospectus or the Prospectus.
(e) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a), (b), (c) or (d) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a), (b), (c) or (d) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below and other than reasonable costs of investigation and preparation
for proceedings); provided, however, that such counsel shall be satisfactory to
the indemnified party. Notwithstanding the indemnifying
27
party's election to appoint counsel to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(f) The Company and each subsidiary of the Company, whether
direct or indirect, jointly and severally, agree to indemnify and hold harmless
Deutsche Banc and its affiliates and each person, if any, who controls Deutsche
Banc or its affiliates within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) (i) caused by any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to Participants in connection with the
Directed Share Program, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) caused by the failure of any Participant
to pay for and accept delivery of Directed Shares that the Participant has
agreed to purchase; or (iii) related to, arising out of, or in connection with
the Directed Share Program other than losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of Deutsche Banc.
(g) The liability of the Selling Stockholder under the Selling
Stockholder's representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 8
shall be limited to an amount equal to the initial public offering price of the
Securities sold by the Selling Stockholder to the Underwriters.
28
(h) In the event that the indemnity provided in paragraph (a),
(b), (c) or (d) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and the Selling
Stockholder and the Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending the same)
(collectively "Losses") to which the Company, the Selling Stockholder and one or
more of the Underwriters may be subject in such proportion as is appropriate to
reflect the relative fault of the Company, the Selling Stockholder and the
Underwriters in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations; provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. Relative
fault shall be determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company, the Selling Stockholder or the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company, the Selling
Stockholder and the Underwriters agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (h), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (h).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Underwriting Agreement, the remaining Underwriters shall be obligated severally
to take up and pay for (in the respective proportions which the amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate amount of Securities set forth opposite the names of all the remaining
Underwriters)
29
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule I hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Underwriting Agreement will terminate without liability to any
nondefaulting Underwriter, the Selling Stockholder or the Company. In the event
of a default by any Underwriter as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Underwriting Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company, the Selling Stockholder and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Underwriting Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the Nasdaq National Market, (ii) trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or National Market, (iii) a banking moratorium
shall have been declared either by Federal or New York State authorities, (iv)
there shall have occurred any major disruption in the settlement of securities
in the United States, (v) there shall have occurred any attack on the United
States, outbreak or escalation of hostilities, declaration by the United States
of America of a national emergency or war, act of terrorism in which the United
States is involved or other calamity or crisis the effect of which on financial
markets is such as to make it, in the sole judgment of the Representatives,
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Prospectus (exclusive of any supplement
thereto), (vi) except as disclosed in the Prospectus, 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 earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company taken as a whole, whether or not arising
in the ordinary course of business or (vii) except as disclosed in the
Prospectus, the enactment, publication, decree or other promulgation of any
statute, regulation, rule or order of any court or other governmental authority
which in the opinion of CSFB and Deutsche Banc materially and adversely affects
or may materially and adversely affect the business or operations of the
Company.
30
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of the Selling Stockholder and of the Underwriters set
forth in or made pursuant to this Underwriting Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter, the Selling Stockholder or the Company or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancelation of this Underwriting
Agreement.
12. Notices. All communications under this Underwriting Agreement
will be in writing and effective only on receipt, and, if sent to the
Representatives, will be mailed, delivered or telefaxed to the Credit Suisse
First Boston Corporation, Attention: Transactions Advisory Group (fax no.
000-000-0000) and confirmed to such Transactions Advisory Group, 00 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000; or, if sent to the Company or the Selling
Stockholder, will be mailed, delivered or telefaxed to (000) 000-0000 and
confirmed to it at The Watergate, 000 Xxx Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000, Attention: Legal Department.
13. Successors. This Underwriting Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Underwriting Agreement will be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
15. Counterparts. This Underwriting Agreement may be signed in
one or more counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same agreement.
16. Headings. The section headings used in this Underwriting
Agreement are for convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Underwriting Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and
31
regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Underwriting Agreement is executed and delivered by the parties hereto.
"Losses" shall have the meaning set forth in 8(f).
"Preliminary Prospectus" shall mean any preliminary prospectus
with respect to the offering of the Securities referred to in paragraph
1(i)(a) above and any preliminary prospectus with respect to the
offering of the Securities included in the Registration Statement at the
Effective Date that omits Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Securities
that is first filed pursuant to Rule 424(b) after the Execution Time or,
if no filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective) and,
in the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended or such Rule
462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Representatives" shall mean the addressees of this Underwriting
Agreement.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under
the Act.
32
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a)(i) hereof.
"Selling Stockholder" shall mean Xxxxx X. Xxxxxxx.
"Underwriting Agreement" shall mean this agreement relating to
the sale of the Securities by the Selling Stockholder to the
Underwriters.
"United States or Canadian Person" shall mean any person who is a
national or resident of the United States or Canada, any corporation,
partnership, or other entity created or organized in or under the laws
of the United States or Canada or of any political subdivision thereof,
or any estate or trust the income of which is subject to United States
or Canadian Federal income taxation, regardless of its source (other
than any non-United States or non-Canadian branch of any United States
or Canadian Person), and shall include any United States or Canadian
branch of a person other than a United States or Canadian Person.
"United States" shall mean the United States of America
(including the states thereof and the District of Columbia), its
territories, its possessions and other areas subject to its
jurisdiction.
33
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
The Advisory Board Company
By:
---------------------------------
Name:
Title:
---------------------------------
Xxxxx X. Xxxxxxx
34
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Credit Suisse First Boston Corporation
Deutsche Banc Alex. Xxxxx Inc.
UBS Warburg LLC
Xxxxxxx Xxxxx & Company, L.L.C.
By: Credit Suisse First Boston Corporation
By:
----------------------------
Name:
Title:
For themselves and the other
several Underwriters
named in Schedule I to the foregoing
Agreement.
SCHEDULE I
UNDERWRITERS NUMBER OF UNDERWRITTEN
------------ ----------------------
SECURITIES TO BE PURCHASED
--------------------------
Credit Suisse First Boston Corporation.................. [ ]
Deutsche Banc Alex. Xxxxx Inc........................... [ ]
UBS Warburg LLC......................................... [ ]
Xxxxxxx Xxxxx & Company, L.L.C.......................... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
[ ]............... [ ]
Total.................................... [ ]
============
SCHEDULE II
NUMBER OF UNDERWRITTEN MAXIMUM NUMBER OF OPTION
---------------------- ------------------------
SELLING STOCKHOLDER: SECURITIES TO BE SOLD SECURITIES TO BE SOLD
------------------- --------------------- ---------------------
Xxxxx X. Xxxxxxx
The Advisory Board Company
The Watergate
000 Xxx Xxxxxxxxx Xxxxxx,
X.X.
Xxxxxxxxxx, X.X. 00000
Fax [ ]......... [ ] [ ]
----------- -------------
Total ......... [ ] [ ]
=========== =============
SCHEDULE III
Persons Executing Letters
Pursuant to Section 6(l)
of the Underwriting Agreement
X'Xxxxx, X.
Xxxxxx, J.
[option holders]
EXHIBIT A
[LETTERHEAD OF OFFICER, DIRECTOR OR MAJOR STOCKHOLDER OF
CORPORATION]
The Advisory Board Company
Public Offering of Common Stock
[ ] , 2001
Credit Suisse First Boston Corporation
Deutsche Banc Alex. Xxxxx Inc.
UBS Warburg LLC
Xxxxxxx Xxxxx & Company, L.L.C.
As Representatives of the several Underwriters
c/o Credit Suisse First Boston
AT&T Corporate Center
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement among The Advisory Board Company, a Delaware
corporation (the "Company"), and each of you as representatives of a group of
Underwriters named therein, relating to an underwritten public offering of
Common Stock, $ par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into
the Underwriting Agreement, the undersigned will not, without the prior written
consent of Credit Suisse First Boston Corporation ("CSFB") and Deutsche Banc
Alex. Xxxxx Inc. ("Deutsche Banc"), offer, sell, contract to sell, announce any
intention to sell, pledge or otherwise dispose of, directly or indirectly, or
file (or participate in the filing of) with the Securities and Exchange
Commission a registration statement under the Securities Act of 1933 relating to
any shares of Common Stock or securities or other rights convertible into or
exchangeable or exercisable for any shares of Common Stock, enter into a
transaction which would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of Common Stock, whether any such aforementioned
transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or publicly disclose the intention to make any
such offer, sale,
pledge or disposition, or to enter into any such transaction, swap, hedge or
other arrangement, for a period of 180 days after the date of the Underwriting
Agreement, other than shares of Common Stock disposed of as bona fide gifts
approved by CSFB and Deutsche Banc.
If for any reason the Underwriting Agreement shall be terminated
prior to the Closing Date (as defined in the Underwriting Agreement), the
agreement set forth above shall likewise be terminated.
Yours very truly,
By:
Name:
Address:
