EXHIBIT 1
2,700,000 Shares
BRIGHT HORIZONS, INC.
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
----------------------
_______________, 1997
BT Alex. Xxxxx Incorporated
EVEREN Securities, Inc.
As Representatives of the
Several Underwriters
c/o BT Alex. Xxxxx Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Bright Horizons , Inc., a Delaware corporation (the "Company"), and certain
shareholders and warrant holders of the Company (the "Selling Shareholders")
propose to sell to the several underwriters (the "Underwriters") named in
Schedule I hereto for whom you are acting as representatives (the
"Representatives") (a) an aggregate of 2,420,719 shares of the Company's Common
Stock, $.01 par value (the "Firm Shares"), of which 1,350,000 shares will be
sold by the Company and 1,070,719 shares will be sold by the Selling
Shareholders and (b) warrants to purchase an aggregate of 279,281 shares of
Common Stock (the "Firm Warrants") all of which will be sold by the Selling
Shareholders. The Company proposes to sell to the Underwriters 279,281 shares
of its authorized but unissued Common Stock (the "Warrant Shares") upon exercise
by the Underwriters of the Firm Warrants. The respective amounts of the Firm
Shares to be so purchased by the several Underwriters are set forth opposite
their names in Schedule I hereto, and the respective amounts of Firm Shares and
Firm Warrants to be sold by the Selling Shareholders are set forth opposite
their names in Schedule II hereto. The Company and the Selling Shareholders are
sometimes referred to herein collectively as the "Sellers." The Selling
Shareholders also propose to sell at the Underwriters' option an aggregate of up
to 405,000 additional shares of the Company's Common Stock (the "Option Shares")
as set forth below.
-2-
As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares and
Warrant Shares set forth opposite their respective names in Schedule I, plus
their pro rata portion of the Option Shares if you elect to exercise the over-
allotment option in whole or in part for the accounts of the several
Underwriters. The Firm Shares, Firm Warrants and, to the extent the
aforementioned option is exercised, the Option Shares are herein collectively
called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the Company, The Operating
------------------------------------------------------------
Subsidiary and the Selling Shareholders.
---------------------------------------
(a) The Company and Bright Horizons Children's Centers, Inc. (the
"Operating Subsidiary"), jointly and severally, represent and warrant to
each of the Underwriters as follows:
(i) A registration statement on Form S-1 (File No. 333-14981) with
respect to the Shares has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and the Rules and Regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder and
has been filed with the Commission. Copies of such registration statement,
including any amendments thereto, the preliminary prospectuses (meeting the
requirements of the Rules and Regulations) contained therein and the
exhibits, financial statements and schedules, as finally amended and
revised, have heretofore been delivered by the Company to you and, to the
extent applicable, were identical to the electronically transmitted copies
thereof filed with the Commission pursuant to the Commission's Electronic
Data Gathering, Analysis and Retrieval System ("XXXXX"), except to the
extent permitted by Regulation S-T. Such registration statement, together
with any registration statement filed by the Company pursuant to Rule
462(b) of the Act, herein referred to as the "Registration Statement,"
which shall be deemed to include all information omitted therefrom in
reliance upon Rule 430A and contained in the Prospectus referred to below,
has been declared effective by the Commission under the Act and no post-
effective amendment to the Registration Statement has been filed as of the
date of this Agreement. "Prospectus" means (a) the form of prospectus first
filed by the Company with the Commission pursuant to Rule 424(b) or 430A or
(b) the last preliminary prospectus included in the Registration Statement
filed prior to the time it becomes effective or filed pursuant to Rule
424(a) under the Act that is delivered by the Company to the Underwriters
for delivery to purchasers of the Shares, together with the term sheet or
abbreviated term sheet filed with the Commission pursuant to Rule 424(b)(7)
under the Act. Each preliminary prospectus included in the Registration
Statement prior to the time it becomes effective is herein referred to as a
"Preliminary Prospectus." Any reference herein to the Registration
-3-
Statement, any Preliminary Prospectus or to the Prospectus shall be deemed
to refer to and include any supplements or amendments thereto, filed with
the Commission after the date of filing the Prospectus under Rule 424(b) or
Rule 430A, and prior to the termination of the offering of the Shares by
the Underwriters. For purposes of this Agreement, all references to the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement to any of the foregoing, shall be deemed to include
the respective copies thereof filed with the Commission pursuant to XXXXX.
(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct
its business as described in the Registration Statement. Each of the
subsidiaries of the Company as listed in Exhibit A hereto (collectively,
the "Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement. The Subsidiaries are the only subsidiaries, direct or indirect,
of the Company. The Company and each of the Subsidiaries are duly
qualified to transact business in all jurisdictions in which the conduct of
their business requires such qualification, except where the failure to be
so qualified would not result in any material adverse change in the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and the
Subsidiaries taken as a whole. The outstanding shares of capital stock of
each of the Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable and are owned by the Company or another
Subsidiary free and clear of all liens, encumbrances and equities and
claims; and no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in the Subsidiaries are
outstanding.
(iii) The outstanding shares of Common Stock of the Company, including
all shares to be sold by the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and non-assessable; the
portion of the Shares to be issued and sold by the Company have been duly
authorized and when issued and paid for as contemplated herein will be
validly issued, fully paid and non-assessable; and no preemptive rights of
stockholders exist with respect to any of the Shares or the issue and sale
thereof. The Warrant Shares have been duly authorized and, when issued,
delivered and paid for in accordance with this Agreement and Warrant
Agreement[s], [each] dated as of ________ __, 199_, between the Company and
__________ (the "Warrant Agreements"), will be duly authorized, validly
issued, fully paid and non-assessable. No preemptive or other rights to
subscribe for or purchase exist with respect to the issuance and sale of
Warrant Shares on exercise of the Firm Warrants. Neither the filing of the
Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights, other than those
which have been waived or satisfied, for or relating to the registration of
any shares of Common Stock. No further approval or authority of the
shareholders or the Board of Directors of the Company will be required
-4-
for the transfer and sale of the Shares to be sold by the Selling
Shareholders, or the transfer and sale of the Firm Warrants by the Selling
Shareholders, or the issuance and sale of the Shares to be sold by the
Company directly or on exercise of Firm Warrants as contemplated herein.
(iv) The information set forth under the caption "Capitalization" in
the Prospectus is true and correct. All of the Shares conform, or at the
Closing Date (as hereinafter defined) will conform, to the description
thereof contained in the Registration Statement. The Warrant Shares, at the
Closing Date, will conform to the description of the Common Stock contained
in the Registration Statement. The form of certificates for the Shares
conforms to the corporate law of the jurisdiction of the Company's
incorporation.
(v) The Commission has not issued an order preventing or suspending
the use of any Prospectus relating to the proposed offering of the Shares
nor, to the Company's knowledge, instituted proceedings for that purpose.
The Registration Statement contains, and the Prospectus and any amendments
or supplements thereto will contain, all statements which are required to
be stated therein by, and will conform to, the requirements of the Act and
the Rules and Regulations. The Registration Statement and any amendment
thereto do not contain, and as of the Effective Date will not contain, any
untrue statement of a material fact and do not omit, and as of the
Effective Date will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
The Prospectus and any amendments and supplements thereto do not contain,
and as of the Closing Date or the Option Closing Date (as hereinafter
defined), as the case may be, will not contain, any untrue statement of
material fact; and do not omit, and as of the Closing Date or the Option
Closing Date, as the case may be, will not omit, to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from the Registration
Statement or the Prospectus, or any such amendment or supplement, in
reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of any Underwriter through the Representatives,
specifically for use in the preparation thereof.
(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth in the
Registration Statement, present fairly the financial position and the
results of operations and cash flows of the Company and the consolidated
Subsidiaries, at the indicated dates and for the indicated periods. Such
financial statements and related schedules have been prepared in accordance
with generally accepted principles of accounting, consistently applied
throughout the periods involved, except as disclosed therein, and all
adjustments necessary for a fair presentation of results for such periods
have been made. The summary financial and statistical data included in the
Registration Statement present fairly the information shown therein and
such data have been compiled on a basis consistent with the financial
statements presented therein and the books and records of
-5-
the Company. The pro forma financial statements and other pro forma
financial information included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements, have been properly compiled on the pro
forma bases described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein.
(vii) Price Waterhouse LLP, who have certified certain of the
financial statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the Act and
the Rules and Regulations.
(viii) There is no action, suit, claim or proceeding pending or, to
the knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise which
would reasonably be expected to result in any material adverse change in
the earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and of the
Subsidiaries taken as a whole or to prevent the consummation of the
transactions contemplated hereby, except as set forth in the Registration
Statement.
(ix) Except for properties and assets disposed of in the ordinary
course of business, the Company and the Subsidiaries have good and
marketable title to all of the properties and assets reflected in the
financial statements (or as described in the Registration Statement)
hereinabove described, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such financial statements
(or as described in the Registration Statement) or which are not material
in amount. The Company and the Subsidiaries occupy their leased properties
under valid and binding leases conforming in all material respects to the
description thereof set forth in the Registration Statement.
(x) The Company and the Subsidiaries have filed all Federal, State,
local and foreign income tax returns which have been required to be filed
and have paid all taxes indicated by said returns and all assessments
received by them or any of them to the extent that such taxes have become
due and are not being contested in good faith. All tax liabilities have
been adequately provided for in the financial statements of the Company.
(xi) Since the respective dates as of which information is given in
the Registration Statement, as it may be amended or supplemented, there has
not been any material adverse change or any development involving a
prospective material adverse change in or affecting the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise), or prospects of the Company and its Subsidiaries taken as a
whole, whether or not occurring in the ordinary course of business, and
there has not been any material transaction entered into or any material
transaction that is probable of being entered into by the Company or the
Subsidiaries,
-6-
other than transactions in the ordinary course of business and changes and
transactions described in the Registration Statement, as it may be amended
or supplemented. The Company and the Subsidiaries have no material
contingent obligations which are not disclosed in the Company's financial
statements which are included in the Registration Statement.
(xii) Neither the Company nor any of the Subsidiaries is or with the
giving of notice or lapse of time or both, will be, in violation of or in
default under its Charter or By-Laws or under any agreement, lease,
contract, indenture or other instrument or obligation to which it is a
party or by which it, or any of its properties, is bound and which default
is of material significance in respect of the condition, financial or
otherwise of the Company and its Subsidiaries taken as a whole or the
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the Subsidiaries
taken as a whole. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the fulfillment of
the terms hereof will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any Subsidiary is a party, or of the Charter or By-
laws of the Company or any order, rule or regulation applicable to the
Company or any Subsidiary of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
Furthermore, this Agreement has been duly authorized, executed and
delivered by and constitutes a valid, legal and binding agreement of the
Company enforceable against the Company in accordance with its terms.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions
herein contemplated (except such additional steps as may be required by the
Commission, the National Association of Securities Dealers, Inc. (the
"NASD") or such additional steps as may be necessary to qualify the Shares
for public offering by the Underwriters under state securities or Blue Sky
laws) has been obtained or made and is in full force and effect.
(xiv) The Company and each of the Subsidiaries owns or possesses
licenses or other rights to use all patents, patent applications,
trademarks, trademark applications, service marks, service xxxx
applications, trade names, copyrights, trade secrets and know how or other
information (collectively, "Intellectual Property") described in the
Prospectus as owned by or used by the Company or the Subsidiaries or which
is necessary to the conduct of its business as now conducted by the Company
or the Subsidiaries as described in the Prospectus. The Company is not
aware of any infringement of or conflict with the rights or claims of
others with respect to any of the products or Intellectual Property of the
Company or the Subsidiaries which could reasonably be expected to have a
material adverse effect on the business or financial condition of the
Company or the Subsidiaries. The Company is not aware of any
-7-
infringement of any of the Intellectual Property rights of the Company or
the Subsidiaries by any third party which could reasonably be expected to
have a material adverse effect on the business or financial condition of
the Company or the Subsidiaries.
(xv) The Company and each of the Subsidiaries is conducting its
business in compliance with all the laws, rules and regulations of the
jurisdictions in which they are conducting business, except where the
failure to so comply would not have, individually or in the aggregate, a
material adverse effect on the business or financial condition of the
Company or the Subsidiaries. Without limiting the foregoing, the Company
and each of the Subsidiaries holds and is operating in compliance with all
licenses, authorizations, consents, approvals, certificates and permits
(individually, a "Permit") from any regulatory body or administrative
agency or other governmental body having jurisdiction including, without
limitation, those Federal, state and local child care laws that are
applicable to the operations of the Company or the Subsidiaries as now
conducted or proposed to be conducted as described in the Prospectus, all
of which Permits are current, except where the failure to so hold or comply
with any Permit would not have, individually or in the aggregate, a
material adverse effect on the business or financial condition of the
Company or the Subsidiaries. The Company is not aware, nor has it received
any notice of, any pending or threatened proceedings, or any circumstances
which could lead them to believe that any such proceedings are imminent,
relating to the revocation or modification of any such Permit or Approval
which, singly or in the aggregate, could reasonably be expected to have a
material adverse effect on the business or financial condition of the
Company or the Subsidiaries.
(xvi) Neither the Company, nor to the Company's best knowledge, any
of its affiliates, has taken or may take, directly or indirectly, any
action designed to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the
sale or resale of the Shares.
(xvii) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act
of 1940 (the "1940 Act") and the rules and regulations of the Commission
thereunder.
(xviii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
-8-
(xix) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
industries.
(xx) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
(xxi) The Firm Warrants may be transferred to the several
Underwriters pursuant to this Agreement, and the Underwriters, upon receipt
of the Firm Warrants being so transferred to them, may exercise the Firm
Warrants receiving 279,281 Warrant Shares upon exercise of the Firm
Warrants in accordance with their items, including payment to the Company
by the Underwriters of an amount equal to $________ per Warrant Share (the
"Warrant Exercise Price").
(b) Each of the Selling Shareholders, severally and not jointly,
represents and warrants as follows:
(i) Such Selling Shareholder is the sole lawful owner of the Shares
to be sold by such Selling Shareholder pursuant to this Agreement and at
the Closing Date and the Option Closing Date, as the case may be, will be
the sole lawful owner of the Firm Shares (and Firm Warrants, where
applicable) and the Option Shares to be sold by such Selling Shareholder,
free and clear of any liens, encumbrances, equities and claims, and full
right, power and authority to effect the sale and delivery of such Firm
Shares (and Firm Warrants, where applicable) and Option Shares; and upon
the delivery of, against payment for, such Firm Shares (and Firm Warrants,
where applicable) and Option Shares pursuant to this Agreement, the
Underwriters will acquire good and marketable title thereto, free and clear
of any liens, encumbrances, equities and claims.
(ii) Such Selling Shareholder has full right, power and authority to
execute and deliver this Agreement the Power of Attorney appointing Xxxxx
X. Xxxxx and Xxxxxxxxx X. Xxxxxx, or either one of them, as such Selling
Shareholder's attorney-in-fact to the extent set forth therein with regard
to the transactions contemplated hereby, by the Registration Statement and
by the Custody Agreement referred to below (the "Power of
-9-
Attorney"), and Custody Agreement and to perform its obligations under such
agreements. This Agreement, the Power of Attorney and the Custody Agreement
have been duly authorized, executed and delivered by such Selling
Shareholder and each such agreement is a valid and binding agreement of
such Selling Shareholder enforceable in accordance with its terms. The
execution and delivery of this Agreement, the Power of Attorney and the
Custody Agreement and the consummation by such Selling Shareholder of the
transactions herein and therein contemplated and the fulfillment by such
Selling Shareholder of the terms hereof and thereof will not require any
consent, approval, authorization, or other order of any court, regulatory
body, administrative agency or other governmental body (except as may be
required under the Act, state securities laws or Blue Sky laws) and will
not result in a breach of any of the terms and provisions of, or constitute
a default under, organizational documents of such Selling Shareholder, if
not an individual, or any material indenture, mortgage, deed of trust or
other agreement or instrument to which such Selling Shareholder is a party,
or of any order, rule or regulation applicable to such Selling Shareholder
of any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction.
(iii) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which has constituted,
or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of the Common Stock of the
Company and, other than as permitted by the Act, such Selling Shareholder
will not distribute any prospectus or other offering material in connection
with the offering of the Shares.
(iv) The sale of the Firm Shares (and Firm Warrants, where
applicable) and the Option Shares by such Selling Shareholder pursuant
hereto is not prompted by any information concerning the Company or any of
the Subsidiaries which is not set forth in the Registration Statement. The
information pertaining to such Selling Shareholder under the caption
"Selling Stockholders" in the Prospectus is complete and accurate in all
material respects.
(c) Each of the Selling Shareholders listed on Schedule IV hereto (the
"Management Selling Shareholders"), severally and not jointly, represent
and warrant that without having undertaken to determine independently the
accuracy or completeness of either the representations and warranties of
the Company contained herein or the information contained in the
Registration Statement, such Selling Shareholder has no reason to believe
that the representations and warranties of the Company contained in this
Section 1 are not true and correct, is familiar with the Registration
Statement and has no knowledge of any material fact, condition or
information not disclosed in the Registration Statement which has adversely
affected or may adversely affect the business of the Company or any of the
Subsidiaries.
-10-
2. Purchase, Sale and Delivery of the Firm Shares and firm warrants.
----------------------------------------------------------------
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, (i) the
Company agrees to issue and sell to the Underwriters 1,350,000 Firm Shares,
(ii) the Selling Shareholders agree, severally and not jointly, to sell to
the Underwriters in the respective amounts set forth in Schedule II hereto,
an aggregate of 1,070,719 Firm Shares and 279,281 Firm Warrants and (iii)
the Company agrees to issue and sell to the Underwriters 279,281 Warrant
Shares upon exercise of the Firm Warrants. The Underwriters agree,
severally and not jointly, to purchase from the Company and the Selling
Shareholders, respectively, the number of Firm Shares and Firm Warrants set
forth opposite the name of each Underwriter in Schedule I hereof, subject
to adjustments in accordance with Section 9 hereof. The purchase price per
Firm Share to be paid by the several Underwriters to the Company and to the
Selling Shareholders, respectively, shall be $____ per share. The purchase
price per Firm Warrant (each Firm Warrant representing the right to
purchase one Common Share) shall be the price stated in the preceding
sentence less the Warrant Exercise Price. The number of Firm Shares (and
Firm Warrants, where applicable) to be purchased by each Underwriter from
each Seller shall be as nearly as practicable in the same proportion to the
total number of Firm Shares (and Firm Warrants, where applicable) being
sold by each Seller as the number of Firm Shares (and Firm Warrants, where
applicable) being purchased by each Underwriter bears to the total number
of Firm Shares and Firm Warrants to be sold hereunder. The obligations of
the Company and of each of the Selling Shareholders shall be several and
not joint.
(b) Certificates in negotiable form for the total number of the
Shares, including instruments representing the Firm Warrants, to be sold
hereunder by the Selling Shareholders have been placed in custody with
Norwest Bank Minnesota, N.A., as custodian (the "Custodian") pursuant to a
Custody Agreement (the "Custody Agreement") executed by each Selling
Shareholder for delivery of all Firm Shares (and Firm Warrants, where
applicable) and any Option Shares to be sold hereunder by the Selling
Shareholders. Each of the Selling Shareholders agrees that the Firm Shares
(and Firm Warrants, where applicable) and any Option Shares represented by
the certificates held in custody for such Selling Shareholder under such
Selling Shareholder's Custody Agreement are subject to the interests of the
Underwriters hereunder, that the arrangements made by such Selling
Shareholder for such custody are to that extent irrevocable, and that the
obligations of such Selling Shareholders hereunder shall not be terminable
by any act or deed of such Selling Shareholders (or by any other person,
firm or corporation including the Company, the Custodian or the
Underwriters) or by operation of law (including the death of an individual
Selling Shareholder or the dissolution of a corporate Selling Shareholder)
or by the occurrence of any other event or events, except as set forth in
such Selling Shareholder's Custody Agreement. If any such event should
occur prior to the delivery to the Underwriters of the Firm Shares (and
Firm Warrants, where applicable) or the Option Shares hereunder,
certificates for the Firm Shares (and Firm Warrants, where applicable) or
the Options Shares, as the case may be, shall be delivered by the Custodian
in accordance with the terms and conditions of this
-11-
Agreement as if such event has not occurred. The Custodian is authorized to
receive and acknowledge receipt of the proceeds of sale of the Shares held
by it against delivery of such Shares.
(c) Payment for the Firm Shares and Firm Warrants to be sold hereunder
is to be made by wire transfer of same-day funds (i) with respect to Firm
Shares to (A) an account designated by the Company for such purpose for the
Shares to be sold by it and (B) to an account designated by Norwest Bank
Minnesota, N.A., as Custodian for such purpose for the Firm Shares to be
sold by the Selling Shareholders and (ii) with respect to the Firm Warrants
and the Warrant Shares, to an account designated by Norwest Bank Minnesota,
N.A., as Custodian for such purpose for the Firm Warrants to be sold by the
Selling Shareholders and to an account designated by the Company for such
purpose for the aggregate Warrant Exercise Price, in each case against
delivery of certificates therefor (including certificates for the Warrant
Shares) to the Representatives for the several accounts of the
Underwriters. Such payment and delivery are to be made at the offices of BT
Alex. Xxxxx Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx,
at 10:00 a.m., Baltimore time, on the third business day after the date of
this Agreement or at such other time and date not later than five business
days thereafter as you and the Company shall agree upon, such time and date
being herein referred to as the "Closing Date." (As used herein, "business
day" means a day on which the New York Stock Exchange is open for trading
and on which banks in New York are open for business and not permitted by
law or executive order to be closed.) The certificates for the Firm Shares
(and the Warrant Shares) will be delivered in such denominations and in
such registrations as the Representatives requests in writing not later
than the second full business day prior to the Closing Date, and will be
made available for inspection by the Representatives at least one business
day prior to the Closing Date.
(d) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth,
the Selling Shareholders listed on Schedule III hereby grant an option to
the several Underwriters to purchase the Option Shares at the price per
share as set forth in the first paragraph of this Section 2. The maximum
number of Option Shares to be sold by the Selling Shareholders is set forth
opposite their respective names on Schedule III hereto. The option granted
hereby may be exercised in whole or in part by giving written notice (i) at
any time before the Closing Date and (ii) only once thereafter within 30
days after the date of this Agreement, by you, as Representatives of the
several Underwriters, to the Attorney-in-Fact and the Custodian setting
forth the number of Option Shares as to which the several Underwriters are
exercising the option, the names and denominations in which the Option
Shares are to be registered and the time and date at which such
certificates are to be delivered. If the option granted hereby is exercised
in part, the respective number of Option Shares to be sold by each of the
Selling Shareholders listed in Schedule III hereto shall be determined on a
pro rata basis in accordance with the percentages set forth opposite their
names on Schedule II hereto, adjusted by you in such manner as to avoid
fractional shares. The time and date at which certificates for Option
Shares are to be delivered shall be determined by the Representatives but
shall not be earlier than three
-12-
nor later than 10 full business days after the exercise of such option, nor
in any event prior to the Closing Date (such time and date being herein
referred to as the "Option Closing Date"). If the date of exercise of the
option is three or more days before the Closing Date, the notice of
exercise shall set the Closing Date as the Option Closing Date. The number
of Option Shares to be purchased by each Underwriter shall be in the same
proportion to the total number of Option Shares being purchased as the
number of Firm Shares and Firm Warrants being purchased by such Underwriter
bears to the total number of Firm Shares and Firm Warrants, adjusted by you
in such manner as to avoid fractional shares. The option with respect to
the Option Shares granted hereunder may be exercised only to cover over-
allotments in the sale of the Firm Shares and Firm Warrants by the
Underwriters. You, as Representatives of the several Underwriters, may
cancel such option at any time prior to its expiration by giving written
notice of such cancellation to the Attorney-in-Fact. To the extent, if any,
that the option is exercised, payment for the Option Shares shall be made
on the Option Closing Date by wire transfer of same-day funds to an account
designated by Norwest Bank Minnesota, N.A., as Custodian" for such purpose
for the Option Shares to be sold by the Selling Shareholders against
delivery of certificates therefor at the offices of BT Alex. Xxxxx
Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
(e) If on the Closing Date or Option Closing Date, as the case may
be, any Selling Shareholder fails to sell the Firm Shares (and Firm
Warrant, where applicable) or Option Shares which such Selling Shareholder
has agreed to sell on such date as set forth in Schedule III hereto, the
------------
Company agrees that it will sell or arrange for the sale of that number of
shares of Common Stock to the Underwriters which represents Firm Shares
(and Firm Warrants) or the Option Shares which such Selling Shareholder has
failed to so sell, as set forth in Schedule III hereto, or such lesser
------------
number as may be requested by the Representatives.
3. Offering by the Underwriters.
----------------------------
It is understood that the several Underwriters are to make a public
offering of the Firm Shares and Warrant Shares as soon as the
Representatives deem it advisable to do so. The Firm Shares and Warrant
Shares are to be initially offered to the public at the initial public
offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased
pursuant to Section 2 hereof, the Underwriters will offer the Option Shares
to the public on the foregoing terms.
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with
a Master Agreement Among Underwriters entered into by you and the several
other Underwriters.
4. Covenants of the Company and the Selling Shareholders.
-----------------------------------------------------
(a) The Company covenants and agrees with the several Underwriters
that:
-13-
(i) The Company will (A) prepare and timely file with the Commission
under Rule 424(b) of the Rules and Regulations a Prospectus in a form approved
by the Representatives containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Rules and Regulations, and (B) not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not in
compliance with the Rules and Regulations. To the extent applicable, the copies
of the Registration Statement and each amendment thereto (including all exhibits
filed therewith), any Preliminary Prospectus or Prospectus (in each case, as
amended or supplemented) furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(ii) The Company will advise the Representatives promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have become
effective, (B) of receipt of any comments from the Commission, (C) of any
request of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, and (D) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose. The Company will use its best efforts to prevent
the issuance of any such stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in endeavoring
to qualify the Shares for sale under the securities laws of such jurisdictions
as the Representatives may reasonably have designated in writing and will make
such applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to file
such a consent. The Company will, from time to time, prepare and file such
statements, reports, and other documents, as are or may be required to continue
such qualifications in effect for so long a period as the Representatives may
reasonably request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representative, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or before
the Closing Date, three signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith,
-14-
and will deliver to the Representatives such number of copies of the
Registration Statement (including such number of copies of the exhibits filed
therewith that may reasonably be requested), and of all amendments thereto, as
the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules and Regulations,
and the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and
regulations of the Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and the Prospectus.
If during the period in which a prospectus is required by law to be delivered by
an Underwriter or dealer, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus to comply with any law, the
Company promptly will prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with the law.
(vi) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earning statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.
(vii) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives copies of annual reports and copies of all
other documents, reports and information furnished by the Company to its
stockholders or filed with any securities exchange pursuant to the requirements
of such exchange or with the Commission pursuant to the Act or Section 13 of the
Securities Exchange Act of 1934, as amended. The Company will deliver to the
Representatives similar reports with respect to significant subsidiaries, as
that term is defined in the Rules and Regulations, which are not consolidated in
the Company's financial statements. To the extent applicable, such reports or
documents shall be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(viii) No offering, sale, short sale or other disposition of any shares
of Common Stock of the Company or other securities convertible into or
exchangeable or exercisable for shares of Common Stock or derivative of Common
Stock (or agreement for such) will be made for a period of 180 days after the
date of this Agreement, directly or indirectly, by the Company otherwise than
hereunder or with the prior written consent of
-15-
BT Alex. Xxxxx Incorporated, except that the Company may, without such consent,
(A) issue shares upon exercise of options outstanding on the date of this
Agreement issued pursuant to the Company's 1987 Stock Option and Incentive Plan,
1996 Equity Incentive Plan and 1997 Equity Incentive Plan and (B) grant options,
offer to sell and sell shares of its Common Stock to its employees and directors
pursuant to the plans listed in clause (A).
(ix) The Company will use its best efforts to list, subject to notice
of issuance, the Shares on The Nasdaq Stock Market.
(x) The Company has caused each officer and director and certain
specified shareholders of the Company to furnish to you, on or prior to the date
of this agreement, a letter or letters, in form and substance satisfactory to
the Underwriters, pursuant to which each such person shall agree not to: (A)
offer to sell, contract to sell, transfer or otherwise dispose of, directly or
indirectly, any shares of Common Stock, any options, rights or warrants to
purchase any shares of Common Stock (including any stock appreciation right, or
similar right with an exercise or conversion privilege at a price related to, or
derived from, the market price of the Common Stock) or any securities
convertible into or exchangeable for shares of Common Stock owned directly by
such person or with respect to which such person has the power of disposition
(including, without limitation, shares of Common Stock which such person may be
deemed to beneficially own in accordance with the rules and regulations
promulgated under the Exchange Act); or (B) engage in any hedging transactions
with respect to the Common Stock that may have an impact on the market price of
the Common Stock for a period beginning on the date of such letters and expiring
180 days following the date the Registration Statement is declared effective by
the Commission (the "Lockup Period"), directly or indirectly ("Lockup
------------- ------
Agreements"); provided, however, such officers, directors and specified
---------- -------- -------
shareholders shall be permitted to make the following transfers: (i) transfers
of Common Stock made by gift, provided the donee thereof agrees in writing to be
--------
bound by the terms hereof; (ii) transfers to the transferor's affiliates, as
such term is defined in Rule 405 promulgated under the Securities Act, provided
that each transferee agrees in writing to be bound by the terms hereof; (iii)
transfers made with the prior written consent of BT Alex. Xxxxx Incorporated;
and (iv) transfers pursuant to the Registration Statement.
(xi) The Company shall apply the net proceeds of its sale of the Shares
as set forth in the Prospectus and shall file such reports with the Commission
with respect to the sale of the Shares and the application of the proceeds
therefrom as may be required in accordance with Rule 463 under the Act.
(xii) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Shares in such a manner as would
require the Company or any of the Subsidiaries to register as an investment
company under the 1940 Act.
(xiii) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar for the Common
-16-
Stock.
(xiv) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.
(xv) The Company will not register any shares of Common Stock under the
Act, including any shares of Common Stock on Form S-8, for a period of 90 days
from the date hereof.
(b) Each of the Selling Shareholders, severally and not jointly,
covenants and agrees with the several Underwriters that:
(i) Such Selling Shareholder will not: (A) offer to sell, contract to
sell, transfer or otherwise dispose of, directly or indirectly, any shares of
Common Stock, any options, rights or warrants to purchase any shares of Common
Stock (including any stock appreciation right, or similar right with an exercise
or conversion privilege at a price related to, or derived from, the market price
of the Common Stock) or any securities convertible into or exchangeable for
shares of Common Stock owned directly by such person or with respect to which
such person has the power of disposition (including, without limitation, shares
of Common Stock which such person may be deemed to beneficially own in
accordance with the rules and regulations promulgated under the Exchange Act);
or (B) engage in any hedging transactions with respect to the Common Stock that
may have an impact on the market price of the Common Stock for a period
beginning on the date of such letters and expiring 180 days following the date
the Registration Statement is declared effective by the Commission (the "Lockup
------
Period"), directly or indirectly ("Lockup Agreements"); provided, however, such
------ ----------------- -------- -------
officers, directors and specified shareholders shall be permitted to make the
following transfers: (i) transfers of Common Stock made by gift, provided the
--------
donee thereof agrees in writing to be bound by the terms hereof; (ii) transfers
to the transferor's affiliates, as such term is defined in Rule 405 promulgated
under the Securities Act, provided that each transferee agrees in writing to be
--------
bound by the terms hereof; (iii) transfers made with the prior written consent
of BT Alex. Xxxxx Incorporated; and (iv) transfers pursuant to the Registration
Statement.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 and the Interest and Dividend Tax Compliance Act of 1983 with
respect to the transactions herein contemplated, each of the Selling
Shareholders agrees to deliver to you prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
-17-
(iii) Such Selling Shareholder will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
5. Costs and Expenses.
------------------
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Sellers under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company and of a
single counsel for the Selling Shareholders; the cost of printing and delivering
to, or as requested by, the Underwriters copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, this Agreement, the Agreement Among
Underwriters, the Underwriters' Selling Memorandum, the Underwriters'
Questionnaire, the Underwriters' Invitation Letter, the Listing Application, the
Blue Sky Survey and any supplements or amendments thereto; the filing fees of
the Commission; the filing fees and expenses (including reasonable fees and
disbursements of counsel to the Underwriters) incident to securing any required
review by the National Association of Securities Dealers, Inc. (the "NASD") of
the terms of the sale of the Shares; the Listing Fee of the Nasdaq Stock Market;
and the expenses, including the reasonable fees and disbursements of counsel for
the Underwriters, incurred in connection with the qualification of the Shares
under state securities or Blue Sky laws. Any transfer taxes imposed on the sale
of the Shares to the several Underwriters will be paid by the Sellers pro rata.
The Company agrees to pay all costs and expenses of the Underwriters, including
the fees and disbursements of counsel for the Underwriters, incident to the
offer and sale of directed shares of the Common Stock by the Underwriters to
employees and persons having business relationships with the Company and its
Subsidiaries. The Sellers shall not, however, be required to pay for any of the
Underwriters' expenses (other than those related to qualification under NASD
regulation and State securities or Blue Sky laws) except that, if this Agreement
shall not be consummated because the conditions in Section 6 hereof are not
satisfied, or because this Agreement is terminated by the Representatives
pursuant to Section 11 hereof, or by reason of any failure, refusal or inability
on the part of the Company or the Selling Shareholders to perform any
undertaking or satisfy any condition of this Agreement or to comply with any of
the terms hereof on their part to be performed, unless such failure to satisfy
said condition or to comply with said terms be due to the default or omission of
any Underwriter, then the Company shall reimburse the several Underwriters for
reasonable out-of-pocket expenses, including fees and disbursements of counsel,
reasonably incurred in connection with investigating, marketing and proposing to
market the Shares or in contemplation of performing their obligations hereunder;
but the Company and the Selling Shareholders shall not in any event be liable to
any of the several Underwriters for damages on account of loss of anticipated
profits from the sale by them of the Shares.
-18-
6. Conditions to Obligations of the Underwriters.
---------------------------------------------
The several obligations of the Underwriters to purchase the Firm Shares
and the Warrant Shares on the Closing Date and the Option Shares, if any, on the
Option Closing Date are subject to the accuracy, as of the Closing Date or the
Option Closing Date, as the case may be, of the representations and warranties
of the Company and the Selling Shareholders contained herein, and to the
performance by the Company and the Selling Shareholders of their covenants and
obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments thereto
shall have become effective and any and all filings required by Rule 424 and
Rule 430A of the Rules and Regulations shall have been made, and any request of
the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company or the Selling Shareholders, shall be
contemplated by the Commission and no injunction, restraining order, or order of
any nature by a Federal or State court of competent jurisdiction shall have been
issued as of the Closing Date of Option Closing Date, as the case may be, which
would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Ropes & Xxxx, counsel
for the Company and the Selling Shareholders listed on Schedule V hereto, dated
the Closing Date or the Option Closing Date, as the case may be, addressed to
the Underwriters (and stating that it may be relied upon by counsel to the
Underwriters) in the form attached hereto as Exhibit B.
(c) The Representatives shall have received in the Closing Date or the
Option Closing Date, as the case may be, the opinions of counsel to each of the
Selling Shareholders listed on Schedule VI hereto, dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriters (and
stating that such opinion may be relied upon by counsel to the Underwriters) to
the effect that:
(i) The Underwriting Agreement has been duly authorized, executed and
delivered and delivered by such Selling Shareholder (through their duly
authorized attorney-in-fact).
(ii) The Power of Attorney and Custody Agreement have been duly
authorized, executed and delivered by such Selling Shareholder and are the valid
and binding agreements of such Selling Shareholder enforceable in accordance
with their terms, except to the extent enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting
-19-
the enforcement of creditor's rights generally and by the effect of general
principles of equity, regardless of whether enforceability is considered in a
proceeding in equity or at law; the Custodian has been duly and validly
authorized pursuant to the Custody Agreement to act as the custodian of the
Shares to be sold by such Selling Shareholder; and, pursuant to the Power of
Attorney, such Selling Shareholder has authorized its attorney-in-fact to carry
out the transactions contemplated by this Agreement on its behalf and to deliver
the Shares being sold by it pursuant to this Agreement.
(iii) Immediately prior to the Closing Date, such Selling Shareholder
was the sole registered owner of the Shares to be sold by such Selling
Shareholder; such Selling Shareholder has full legal right, power and authority,
and any approval required by law (other than any approval required by the
applicable state securities and blue sky laws) to sell, assign, transfer and
deliver the Shares to be sold by him, her or it in the manner provided herein,
in the Power of Attorney and in the Custody Agreement.
(iv) Each Underwriter that is a "bona fide purchaser" within the
meaning of Article 8 of the Uniform Commercial Code (the "Code") will acquire,
upon payment for the Shares being sold by such Selling Shareholder, its interest
in such Shares free of any adverse claim, as defined in the Code.
(v) Following the purchase of the Firm Warrants pursuant to this
Agreement by the Underwriters, the Firm Warrants will be immediately exercisable
by the Underwriters by payment of the aggregate Warrant Exercise Price.
(d) The Representatives shall have received from Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, counsel for the Underwriters, an opinion dated the Closing Date
or the Option Closing Date, as the case may be, in form and substance reasonably
satisfactory to the Representatives. In rendering such opinion Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP may rely as to all matters governed other than by the laws of the
Commonwealth of Massachusetts or Federal laws on the opinion of counsel referred
to in Paragraph (c) of this Section 6. In addition to the matters set forth
above, such opinions shall also include a statement to the effect that nothing
has come to the attention of such counsel which leads them to believe that (i)
the Registration Statement, or any amendment thereto, as of the time it became
effective under the Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the Act) as of the Closing Date
or the Option Closing Date, as the case may be, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant to the
Rules and Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact, necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading (except
that such counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement Xxxxx, Xxxxxxx
& Xxxxxxxxx, LLP, may state that their
-20-
belief is based upon the procedures set forth therein, but is without
independent check and verification.
(e) The Representatives shall have received at or prior to the Closing
Date from Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP a memorandum or summary, in form and
substance reasonably satisfactory to the Representatives, with respect to the
qualification for offering and sale by the Underwriters of the Shares under the
State securities or Blue Sky laws of such jurisdictions as the Representatives
may reasonably have designated to the Company.
(f) You shall have received, on each of the date hereof, the Closing
Date and the Option Closing Date, as the case may be, a letter dated the date
hereof, the Closing Date or the Option Closing Date, as the case may be, in form
and substance reasonably satisfactory to you, of Price Waterhouse LLP confirming
that they are independent public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and stating that in
their opinion the financial statements and schedules examined by them and
included in the Registration Statement comply in form in all material respects
with the applicable accounting requirements of the Act and the related published
Rules and Regulations; and containing such other statements and information as
is ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial and statistical
information contained in the Registration Statement and Prospectus.
(g) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Company executed by the Chief Executive Officer and the Chief Financial Officer
of the Company, in their capacity as officers of the Company, to the effect
that, as of the Closing Date or the Option Closing Date, as the case may be,
each of them severally represents as follows:
(i) The Registration Statement has become effective under the Act and
no stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the Closing Date or the Option
Closing Date, as the case may be, with the same force and effect as if made on
and as of the Closing Date or the Option Closing Date, as the case may be,
except for representations and warranties made as of a specific date, which were
true and correct as of such date;
(iii) All filings required to have been made pursuant to Rules 424 or
430A under the Act have been made;
(iv) He or she has carefully examined the Registration Statement and
the Prospectus and, in his or her opinion, as of the effective date of the
Registration
-21-
Statement, the statements contained in the Registration Statement
were true and correct, and such Registration Statement and Prospectus did not
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and since the effective
date of the Registration Statement, no event has occurred which should have been
set forth in a supplement to or an amendment of the Prospectus which has not
been so set forth in such supplement or amendment;
(v) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, there has not been any material adverse
change or any development involving a prospective material adverse change in or
affecting the condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole or the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and the Subsidiaries taken as a whole, whether or not arising in the
ordinary course of business; and
(vi) The Company has performed and/or complied with all of its
agreements and covenants required to be performed or complied with under this
Underwriting Agreement as of or prior to the Closing Date or the Option Closing
Date, as the case may be.
(h) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate of each Selling
Shareholder, through its attorney-in-fact, to the effect that, as of the Closing
Date or the Option Closing Date, as the case may be, each such Selling
Shareholder shall represent as follows:
(i) All of the representations and warranties of such Selling
Shareholder contained in this Underwriting Agreement are true and correct on and
as of the date hereof and on and as of the Closing Date or the Option Closing
Date, as the case may be, with the same force and effect as if made on and as of
the Closing Date or the Option Closing Date, as the case may be, except for
representations and warranties made as of a specific date, which were true and
correct as of such date; and
(ii) Such Selling Shareholder has performed and/or complied with all of
such Selling Shareholder's agreements and covenants required to be performed or
complied with under this Underwriting Agreement as of or prior to the Closing
Date or the Option Closing Date, as the case may be.
(i) The Company and the Selling Shareholders shall have furnished to
the Representatives such additional certificates and documents confirming the
representations and warranties, covenants and conditions contained herein and
related matters as the Representatives may reasonably have requested.
(j) The Firm Shares and Warrant Shares and Option Shares if any, have
been approved for designation upon notice of issuance on The Nasdaq Stock
Market.
-22-
(k) The Lockup Agreements described in Section 4(a)(x) are in full force
and effect.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects reasonably satisfactory to the Representatives and to Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company and the Selling Shareholders of such
termination in writing or by telegram at or prior to the Closing Date or the
Option Closing Date, as the case may be.
In such event, the Selling Shareholders, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
7. Conditions to the Obligations of the Sellers.
--------------------------------------------
The obligations of the Sellers to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. Indemnification.
---------------
(a) The Company, the Operating Subsidiary and the Management Selling
Shareholders, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act, against any losses, claims, damages or liabilities to which
such Underwriter or any such controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse each Underwriter and
each such controlling person upon demand for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending any such loss, claim, damage or liability,
action or proceeding or in responding to a subpoena or governmental inquiry
related to the offering of the Shares, whether or not such Underwriter or
controlling person is a party to any action or proceeding; provided, however,
that the Company, the Operating Subsidiary and the Management
-23-
Selling Shareholders will not be liable in any such case to the extent that any
such loss, claim, damage or liability (or actions or proceeding in respect
thereof) arises out of or is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives specifically for use in the
preparation thereof and; provided, further, that the indemnity agreement
provided in this Section 8(a) with respect to any such Preliminary Prospectus
shall not inure to the benefit of any Underwriter on account of any losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arising from the sale of Shares to any person by that Underwriter based upon any
untrue statement or alleged untrue statement or omission or alleged omission, if
a copy of the Prospectus in which such untrue statement or alleged untrue
statement or omission or alleged omission was corrected had not been sent or
given to such person within the time required by the Act and the Rules and
Regulations, unless such failure is the result of noncompliance by the Company
with Section 4(iv) hereof. In no event, however, shall the liability of any
Management Selling Shareholder for indemnification under this Section 8(a)
exceed the proceeds received by such Management Selling Shareholder from the
Underwriters in the offering; provided, that the foregoing limitation shall not
apply to the extent such claim for indemnification arises out of a breach of
such Management Selling Shareholder's representations in Section 1(b)(i) hereof.
Notwithstanding anything to the contrary in this paragraph 8(a), each
Underwriter and each person who controls such Underwriter agrees not to assert
its rights to indemnity against any Management Selling Shareholder for losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
unless and until (i) such Underwriter or controlling person has requested
indemnification and reimbursement from the Company and the Operating Subsidiary
for such losses, claims, damages or liabilities (including any legal or other
expenses reasonably incurred) and (ii) the Company or the Operating Subsidiary
does not within 60 days of such request (A) agree to so indemnify such
Underwriter or controlling person and (B) reimburse in full such Underwriter or
controlling person for any such losses, damages or liabilities (including legal
and other expenses) incurred. This indemnity agreement will be in addition to
any liability which the Company, the Operating Subsidiary or the Management
Selling Shareholders may otherwise have.
(b) The Selling Shareholders agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act, against any losses, claims, damages or liabilities to which
such Underwriter or any such controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse each Underwriter and
each such controlling person upon demand for any legal or other expenses
reasonably incurred by
-24-
such Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding or in
responding to a subpoena or governmental inquiry related to the offering of the
Shares, whether or not such Underwriter or controlling person is a party to any
action or proceeding; provided, however, that the Selling Shareholders will not
-------- -------
be liable in any such case to the extent that any such loss, claim, damage or
liability (or actions or proceedings in respect thereof) arises out of or is
based upon an untrue statement or alleged untrue statement, or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof; provided,
further, that the indemnity agreement provided in this Section 8(b) with respect
to any such Preliminary Prospectus shall not incur to the benefit of any
Underwriter on account of asserting any losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) arising from the sale of Shares
to any person by that Underwriter based upon any untrue statement or alleged
untrue statement or omission or alleged omission, if a copy of the Prospectus in
which such untrue statement or alleged untrue statement or omission or alleged
omission was corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure is the
result of noncompliance by the Company with Section 4(iv) hereof and; provided,
--------
further, that each Selling Shareholder will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such Selling Shareholder specifically for use in the
preparation thereof. In no event, however, shall the liability of any Selling
Shareholder for indemnification under this Section 8(b) exceed the proceeds
received by such Selling Shareholder from the Underwriters in the offering;
provided, that the foregoing limitation shall not apply to the extent such claim
--------
for indemnification arises out of a breach of such Selling Shareholder's
representations in Section 1(b)(i) hereof. This indemnity agreement will be in
addition to any liability which the Selling Shareholders may otherwise have.
(c) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, and the Operating Subsidiary, the Selling
Shareholders, and each person, if any, who controls the Company, the Operating
Subsidiary or the Selling Shareholders within the meaning of the Act, against
any losses, claims, damages or liabilities to which the Company or any such
director, officer, the Operating Subsidiary, Selling Shareholder or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
-25-
statements therein not misleading in the light of the circumstances under which
they were made; and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, the Operating Subsidiary,
Selling Shareholder or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that each Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through the Representatives specifically for use
in the preparation thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
8(a), (b) or (c) shall be available to any party who shall fail to promptly give
notice as provided in this Section 8(d) if the party to whom notice was not
promptly given was unaware of the proceeding to which such notice would have
related and was materially prejudiced by the failure to give such notice, but
the failure to give such notice shall not relieve the indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of the provisions of Section 8(a),
(b) or (c). In case any such proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party and shall pay as incurred the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel at its own expense.
Notwithstanding the foregoing, the indemnifying party shall pay as incurred the
fees and expenses of the counsel retained by the indemnified party in the event
(i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by you in the case
of parties indemnified pursuant to Sections 8(a) and (b) and by the Company, the
Operating Subsidiary and the Selling Shareholders in the case of parties
indemnified pursuant to Section 8(c). The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment
-26-
for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement or
judgment. In addition, the indemnifying party will not, without the prior
written consent of the indemnified party, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action or proceeding
of which indemnification may be sought hereunder (whether or not any indemnified
party is an actual or potential party to such claim, action or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action
or proceeding.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company, the
Operating Subsidiary and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, or if the indemnified party failed to give the notice required
under Section 8(d) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Shareholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholders bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Operating Subsidiary or the Selling Shareholders on the one hand or
the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Operating Subsidiary, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 8(f) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this Section 8(e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages
-27-
or liabilities (or actions or proceedings in respect thereof) referred to above
in this Section 8(e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter, (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation, and (iii) no Selling Shareholder shall be required to
contribute any amount in excess of the proceeds received by such Selling
Shareholder from the Underwriters in the offering. The Underwriters' obligations
in this Section 8(e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(g) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
(h) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, a Selling Shareholder, to the Company or the Operating Subsidiary,
the directors or officers of, or any person controlling, the Company or the
Operating Subsidiary, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
9. Default by Underwriters.
-----------------------
If on the Closing Date or the Option Closing Date, as the case may be,
any Underwriter shall fail to purchase and pay for the portion of the Shares
which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company or a Selling
Shareholder), you, as Representatives of the Underwriters, shall use your
reasonable efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the
-28-
Company and the Selling Shareholders such amounts as may be agreed upon and upon
the terms set forth herein, the Firm Shares and Warrant Shares or Option Shares,
as the case may be, which the defaulting Underwriter or Underwriters failed to
purchase. If during such 36 hours you, as such Representative, shall not have
procured such other Underwriters, or any others, to purchase the Firm Shares and
Warrant Shares or Option Shares and Option Warrants, as the case may be, agreed
to be purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares and Warrant Shares or Option Shares, as the
case may be, covered hereby, the other Underwriters shall be obligated,
severally, in proportion to the respective numbers of Firm Shares and Warrant
Shares or Option Shares, as the case may be, which they are obligated to
purchase hereunder, to purchase the Firm Shares and Warrant Shares or Option
Shares, as the case may be, which such defaulting Underwriter or Underwriters
failed to purchase, or (b) if the aggregate number of shares of Firm Shares and
Warrant Shares or Option Shares, as the case may be, with respect to which such
default shall occur exceeds 10% of the Firm Shares and Warrant Shares or Option
Shares, as the case may be, covered hereby, the Company and the Selling
Shareholders or you as the Representatives of the Underwriters will have the
right, by written notice given within the next 36-hour period to the parties to
this Agreement, to terminate this Agreement without liability on the part of the
non-defaulting Underwriters or of the Company or of the Selling Shareholders
except to the extent provided in Section 8 hereof. In the event of a default by
any Underwriter or Underwriters, as set forth in this Section 9, the Closing
Date or Option Closing Date, as the case may be, may be postponed for such
period, not exceeding seven days, as you, as Representatives, may determine in
order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. Notices.
-------
All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, telecopied or telegraphed and
confirmed as follows: if to the Underwriters, to BT Alex. Xxxxx Incorporated,
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xx. Xxxx X.
Xxxxxxx; with a copy to BT Alex. Xxxxx Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000. Attention: General Counsel; if to the Company, the
Operating Subsidiary or the Selling Shareholders, to Bright Horizons, Inc., Xxx
Xxxxxxx Xxxxxx, Xxxxxxxx 000, Xxxxxxxxx, XX 00000. Attention Mr. Xxxxx Xxxxx;
with a copy to Ropes & Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000.
Attention: Xxxxxx X. Xxxx, Esq.
11. Termination.
-----------
This Agreement may be terminated by you by notice to the Company as
follows:
-29-
(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters, or (ii) 11:30 a.m. on
the first business day following the date of this Agreement;
(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and its Subsidiaries taken as
a whole or the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, (ii) any outbreak or escalation of hostilities or declaration of
war or national emergency or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make it
impracticable to market the Shares or to enforce contracts for the sale of the
Shares, or (iii) suspension of trading in securities generally on the New York
Stock Exchange or the American Stock Exchange or limitation on prices (other
than limitations on hours or numbers of days of trading) for securities on
either such Exchange, (iv) the enactment, publication, decree or other
promulgation of any statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects or
may materially and adversely affect the business or operations of the Company,
(v) declaration of a banking moratorium by United States or New York State
authorities, (vi) the suspension of trading of the Company's common stock by the
Commission on The Nasdaq Stock Market or (vii) the taking of any action by any
Federal, state or local governmental body or agency in respect of its monetary
or fiscal affairs which in your reasonable opinion has a material adverse effect
on the securities markets in the United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the Company and
to the Attorney-in-Fact for the Selling Shareholders listed on Schedule III
hereto, as to any obligation of the Underwriters to purchase the Option Shares,
upon the occurrence at any time prior to the Option Closing Date of any of the
events described in subparagraph (b) above or as provided in Sections 6 and 9 of
this Agreement.
12. Successors.
----------
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. No
-30-
purchaser of any of the Shares from any Underwriter shall be deemed a successor
or assign merely because of such purchase.
13. Information Provided by Underwriters.
------------------------------------
The Company, the Selling Shareholders and the Underwriters acknowledge and
agree that the only information furnished or to be furnished by any Underwriter
to the Company for inclusion in any Prospectus or the Registration Statement
consists of the information set forth in the last paragraph on the front cover
page (insofar as such information relates to the Underwriters), information
provided in connection with Item 502(d) of Regulation S-K under the Act and the
information under the caption "Underwriting" in the Prospectus.
14. Information Provided by Underwriters.
------------------------------------
The Company, the Selling Shareholders and the Underwriters acknowledge and
agree that the only information furnished by any Selling Shareholder (other than
the Management Selling Shareholders) to the Company for inclusion in any
Prospectus or the Registration Statement consists of the information set forth
in the caption "Principal and Selling Stockholders."
15. Miscellaneous.
-------------
The reimbursement, indemnification and contribution agreements contained in
this Agreement and the representations, warranties and covenants in this
Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for the Shares under
this Agreement; the other covenants of the Company and the Selling Shareholders
in this Agreement shall remain in full force and effect regardless of (a) any
investigation made by or on behalf of any Underwriter or controlling person, and
(b) delivery of any payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Maryland.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders, the
Company, the Operating Subsidiary and the several Underwriters in accordance
with its terms.
-31-
It is understood that your acceptance of this letter on behalf of each of
the Underwriters is pursuant to the authority set forth in a form of Agreement
Among Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-32-
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Shareholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
BRIGHT HORIZONS, INC.
By:
----------------------------------------------
Xxxxx X. Xxxxx, Chief Executive Officer
BRIGHT HORIZONS CHILDREN'S CENTER, INC.
By:
----------------------------------------------
[Name, Title]
Selling Shareholders listed on Schedule II
By:
----------------------------------------------
Attorney-in-Fact
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
BT ALEX. XXXXX INCORPORATED
EVEREN SECURITIES, INC. As Representatives of the several Underwriters listed on
Schedule I
By: BT Alex. Xxxxx Incorporated
By:
-----------------------------------
Authorized Officer
SCHEDULE I
Schedule of Underwriters
Number of Firm Shares Number of Firm Warrants
Underwriter to be Purchased to be Purchased
----------- --------------- ---------------
-------- --------
Total
-------- --------
SCHEDULE II
Schedule of Selling Shareholders
Number of Firm Shares Number of Firm Warrants
Selling Shareholder to be Sold to be Sold
------------------- ---------- ----------
-------- --------
Total
-------- --------
SCHEDULE III
Schedule of Option Shares
Maximum Number Percentage of
Option Shares Total Number of
Name of Seller to be Sold Option Shares
-------------- ---------- -------------
-------- --------
Total 100%
-------- --------
SCHEDULE IV
Schedule of Management Selling Shareholders
Name of Seller
--------------
Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
SCHEDULE V
Schedule of Selling Shareholders represented by
Ropes & Xxxx
SCHEDULE VI
Schedule of Selling Shareholder Opinions
EXHIBIT A
Subsidiaries
Bright Horizons Children's Centers, Inc.
GreenTree Childcare Services, Inc.
Xxxxx Associates, Inc.
EXHIBIT B
Ropes & Xxxx Underwriting Opinion
(i) Each of the Company, the Operating Subsidiary and GreenTree Child
Care Services, Inc. ("GreenTree") is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct
its business as described in the Prospectus; Xxxxx Associates, Inc.
("Xxxxx") has been duly organized and is validly existing as a corporation
in good standing under the laws of the State of California, with corporate
power and authority to own and lease its properties and conduct its
business as described in the Registration Statement. The Company is duly
qualified to conduct business in [list jurisdictions]; the Operating
Subsidiary is duly qualified to conduct business in [list jurisdictions];
GreenTree is duly qualified to conduct business in [list jurisdictions] and
Xxxxx is duly qualified to conduct business in [list jurisdictions].
(ii) The Company has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Prospectus, except for
issuances or forfeitures subsequent to the date of the information provided
in such caption, if any, pursuant to the Company's 1997 Equity Incentive
Plan; the Shares and the other shares of Common Stock issued and
outstanding on the Closing Date, including the Shares and the Option Shares
and Option Warrants, if any, to be sold by the Selling Stockholders, have
been duly authorized and validly issued and are fully paid and
nonassessable; the shares of Common Stock to be sold by the Company
pursuant to the this Agreement have been duly authorized and will be
validly issued, fully paid and non-assessable when issued and paid for as
contemplated by this Agreement; the Warrant Shares have been duly
authorized and will be validly issued, fully paid and non-assessable when
issued and paid for as contemplated by this Agreement; the outstanding
shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued and are fully paid and nonassessable and are
owned by the Company; and, to such counsel's knowledge, the outstanding
shares of capital stock of each of the Subsidiaries are owned free and
clear of all liens, encumbrances and equities and claims, and no options,
warrants or other rights to purchase, agreements or other obligations to
issue or other rights to convert any obligations into shares of capital
stock or of ownership interests in the Subsidiaries are outstanding.
(iii) The Shares conform to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock;" the
certificates for the Shares, assuming they are in the form filed with the
Commission, are in due and proper form; and no preemptive rights of
stockholders exist with respect to any of the Shares or the issue or sale
thereof.
(iv) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
(v) The execution and delivery of the Underwriting Agreement and
the consummation of the transactions contemplated therein do not and will
not (i) conflict with or violate the Certificate of Incorporation or By-
Laws of the Company, (ii) breach or result in a default under any agreement
or instrument known to such counsel or (iii) violate any applicable law or
regulation, or, to our knowledge, any order, writ, injunction or decree, of
any jurisdiction, court or governmental instrumentality binding upon the
Company or any of its properties, except that such counsel need not express
an opinion as to state securities or blue sky laws and in this paragraph as
to compliance with the antifraud provisions of federal and state securities
laws.
(vi) No approval, consent, order, authorization, designation,
declaration or filing of any regulatory, administrative or governmental
entity are required to permit the Company to issue and sell the Shares
except such as may be required under state securities or blue sky laws, as
to which such counsel need not express an opinion, and except for such as
have been obtained under the Act.
(vii) Except as described in or contemplated by the Prospectus, to
the knowledge of such counsel, there are no outstanding securities of the
Company convertible or exchangeable into or evidencing the right to
purchase or subscribe for any shares of capital stock of the Company and
there are no outstanding or authorized options, warrants or rights of any
character obligating the Company to issue any shares of its capital stock
or any securities convertible or exchangeable into or evidencing the right
to purchase or subscribe for any shares of such stock; and except as
described in the Prospectus, to the knowledge of such counsel, no holder of
any securities of the Company or any other person has the right,
contractual or otherwise, which has not been satisfied or effectively
waived, to cause the Company to sell or otherwise issue to him, or to
permit him to underwrite the sale of, any of the Shares or the right to
have any Common Shares or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of the
Registration Statement, to require registration under the Act of any shares
of Common Stock or other securities of the Company.
(viii) The Company is not, and will not become, as a result of the
consummation of the transactions contemplated by the Underwriting Agreement
and the application of the net proceeds therefrom as described in the
Prospectus, an "investment company" as defined in Section 3(a) of the
Investment Company Act of 1940, as amended.
(ix) The statements under the captions "Business - Sponsorship
Models," "Business - Regulation," "Description of Capital Stock" and
"Shares Eligible for Future Sale" in the Prospectus, insofar as such
statements constitute a summary of
documents referred to therein or matters of law, fairly summarize in all
material respects the information called for with respect to such documents
and matters; and such counsel does not know of any Federal or state laws,
rules or regulations relating to the services provided by the Company in
the jurisdictions in which the Company or any Subsidiaries conduct their
business which are required to be described in the Registration Statement
or the Prospectus that are not described as required.
(x) The Underwriting Agreement has been duly authorized, executed
and delivered by each of the Selling Shareholders (through their duly
authorized attorney-in-fact).
(xi) The Power of Attorney and Custody Agreement have been duly
authorized, executed and delivered by each of the Selling Shareholders and
are the valid and binding agreements of such Selling Shareholder
enforceable in accordance with their terms, except to the extent
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
affecting the enforcement of creditor's rights generally and by the effect
of general principles of equity, regardless of whether enforceability is
considered in a proceeding in equity or at law; the Custody Agreement and
the Power of Attorney have been duly authorized and executed by each of the
Selling Shareholders and each such agreement is a valid and binding
agreement of such Selling Shareholder enforceable in accordance with its
terms; the Custodian has been duly and validly authorized pursuant to the
Custody Agreement to act as the custodian of the Shares to be sold by each
Selling Shareholder; and, pursuant to the Power of Attorney, each Selling
Shareholder has authorized its attorney-in-fact to carry out the
transactions contemplated in the Underwriting Agreement on its behalf, and
to deliver the Shares being sold by it pursuant to the Underwriting
Agreement.
(xii) Immediately prior to the Closing Date, each Selling Shareholder
was the sole registered owner of the Shares to be sold by such Selling
Shareholder; each Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than any approval
required by the applicable state securities and blue sky laws) to sell,
assign, transfer and deliver the Shares to be sold by him, her or it in the
manner provided herein in the Power of Attorney and in the Custody
Agreement.
(xiii) Each Underwriter that is a "bona fide purchaser" within the
meaning of Article 8 of the Uniform Commercial Code (the "Code") will
acquire, upon payment for the Shares being sold by the Selling
Shareholders, its interest in such Shares free of any adverse claim, as
defined in the Code.
(xiv) Following the purchase of the Warrants pursuant to this
Agreement by the Underwriters, the Warrants will be immediately exercisable
by the
Underwriters by payment of the Warrant Exercise Price being received upon
exercise.
(xv) Such counsel has not been advised, and based on (i) a review of
the Company's files which have been provided to them, (ii) inquiry of
senior management of the Company and (iii) a review of the published rules
and regulations relating to child care, such counsel has no reason to
believe that the Company or any of its Subsidiaries does not hold all
Permits from any regulatory body or administrative agency or other
governmental body having jurisdiction that are applicable to the operations
of the Company or its Subsidiaries as now conducted or proposed to be
conducted as described in the Prospectus, all of which Permits are current,
except where the failure to so hold or comply with any Permit would not
have, singly or in the aggregate, a material adverse effect on the business
or financial condition of the Company or its Subsidiaries. To the knowledge
of such counsel, there are no proceedings, pending or threatened, relating
to the revocation or modification of any such Permit which, singly or in
the aggregate if the subject of an unfavorable decision, ruling or finding,
could have a material adverse effect on the business or financial condition
of the Company or its Subsidiaries.
In rendering such opinion Ropes & Xxxx may rely as to matters governed
by the laws of states other than the Commonwealth of Massachusetts or
Federal laws on local counsel in such jurisdictions and as to the matters
set forth in subparagraphs (x), (xi) and (xii) on opinions of other counsel
representing the respective Selling Shareholders, provided that in each
case Ropes & Xxxx shall state that they believe that they and the
Underwriters are justified in relying on such other counsel. In addition to
the matters set forth above, such opinion shall also include statements to
the effect that (i) the Registration Statement became effective on
________, 1997; (ii) that such counsel does not know of the issuance of any
stop order suspending the effectiveness of the Registration Statement by
the Commission or of any proceeding or threat of proceeding for that
purpose under the Act; and (iii) that in the course of the preparation by
the Company of the Registration Statement and the Prospectus, such counsel
has participated in discussions with your representatives, representatives
of the Selling Shareholders and representatives of the Company and its
independent accountants, in which the business and affairs of the Company
and the contents of the Registration Statement and the Prospectus were
discussed; and that on the basis of information that such counsel has
gained in the course of its representation of the Company in connection
with its preparation of the Registration Statement and the Prospectus and
its participation in the discussions referred to above, the Registration
Statement, as of the time it became effective under the Act (but after
giving effect to changes incorporated pursuant to Rule 430A under the Act),
and the Prospectus, as of its date, complied as to form in all material
respects with the requirements of the Act and the published rules and
regulations of the Commission thereunder, and such counsel does not know of
any legal or
governmental proceeding, pending or threatened, to which the Company or any
of the Subsidiaries is or may become a party or to which any of their
property is subject required to be described in the Prospectus which is not
so described in the Prospectus, nor of any contract or other document of a
character required to be described in the Prospectus or to be filed as an
exhibit to the Registration Statement which is not so described or filed,
and such contracts and documents as are summarized in the Registration
Statement or the Prospectus are fairly summarized in all material respects.
Further, based on such information and participation, such counsel has no
reason to believe that the Registration Statement, as of the time it became
effective under the Act (but after giving effect to changes incorporated
pursuant to Rule 430A under the Act), contained an untrue statement of
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus at the Closing Date included or includes any untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Such counsel need not express an opinion as to the financial statements,
including the notes and schedules thereto, or any other financial or
accounting information set forth or referred to in the Registration
Statement or the Prospectus. With respect to such statement, Ropes & Xxxx
may state that their belief is based upon the procedures set forth therein,
but is without independent check and verification.
