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EXHIBIT 1.1
4,830,000 SHARES OF COMMON STOCK
THE TRIZETTO GROUP, INC.
UNDERWRITING AGREEMENT
, 1999
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, LUFKIN & XXXXXXXX
XXXXX, XXXXXXXX & XXXX, INC.
WIT CAPITAL CORPORATION
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
The TriZetto Group, Inc., a corporation organized and existing under the
laws of Delaware (the "COMPANY") and Xxxxxxx X. Xxxxxxx (the "SELLING
STOCKHOLDER"), propose, subject to the terms and conditions stated herein, to
sell to the several underwriters named in SCHEDULE I hereto (the "UNDERWRITERS")
an aggregate of 4,200,000 shares (the "FIRM SHARES") of its common stock, par
value $.001 per share (the "COMMON STOCK") and, for the sole purpose of covering
over-allotments in connection with the sale of the Firm Shares, at the option of
the Underwriters, up to an additional 630,000 shares (the "ADDITIONAL SHARES")
of Common Stock. Of the Firm Shares, 3,850,000 are being offered by the Company
and 350,000 are being offered by the Selling Stockholder. All of the Additional
Shares are being offered by the Company. The Firm Shares and any Additional
Shares purchased by the Underwriters are referred to herein as the "SHARES". The
Shares are more fully described in the Registration Statement referred to below.
As part of the offering contemplated by this Agreement, Bear, Xxxxxxx &
Co. Inc. ("BEAR Xxxxxxx") has agreed to reserve out of the Shares set forth
opposite its name on SCHEDULE I to this Agreement, up to shares, for
sale to the Company's employees, officers, directors and others with whom it has
business relationships (collectively, "PARTICIPANTS"), as set forth in the
Prospectus under the heading "Underwriting" (the "DIRECTED SHARE PROGRAM"). The
Shares to be sold by Bear Xxxxxxx pursuant to the Directed Share Program (the
"DIRECTED SHARES") will be sold by Bear Xxxxxxx pursuant to this Agreement at
the public offering price. Any Directed Shares not
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orally confirmed for purchase by any Participants by the end of the first
business day after the date on which this Agreement is executed will be offered
to the public by Bear Xxxxxxx as set forth in the Prospectus.
1. Representations and Warranties of the Company and the Selling
Stockholder.
A. The Company, each of its subsidiaries and the Selling Stockholder,
jointly and severally, represent and warrant to, and agree with, each of the
Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement, and has filed an amendment or
amendments thereto, on Form S-1 (No. 333-84533), for the registration of the
Shares under the Securities Act of 1933, as amended (the "ACT"). Such
registration statement, including the prospectus, financial statements and
schedules, exhibits and all other documents filed as a part thereof, as amended
at the time of effectiveness of the registration statement, including any
information deemed to be a part thereof as of the time of effectiveness pursuant
to paragraph (b) of Rule 430A or Rule 434 of the Rules and Regulations of the
Commission under the Act (the "REGULATIONS"), is herein called the "REGISTRATION
STATEMENT" and the prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) or Rule 434 filing is
required, is herein called the "PROSPECTUS". The term "PRELIMINARY PROSPECTUS"
as used herein means a preliminary prospectus as described in Rule 430 of the
Regulations.
(b) At the time of the effectiveness of the Registration Statement or
any 462(b) Registration Statement or the effectiveness of any post-effective
amendment to the Registration Statement, when the Prospectus is first filed with
the Commission pursuant to Rule 424(b) or Rule 434 of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the Commission and at
the Closing Date and the Additional Closing Date, if any (as hereinafter
respectively defined), the Registration Statement, any 462(b) Registration
Statement and the Prospectus and any amendments thereof and supplements thereto
complied or will comply in all material respects with the applicable provisions
of the Act and the Regulations and does not or will not contain an untrue
statement of a material fact and does not or will not omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein (i) in the case of the Registration Statement, not misleading and (ii)
in the case of the Prospectus, in light of the circumstances under which they
were made, not misleading. When any related preliminary prospectus was first
filed with the Commission (whether filed as part of the registration statement
for the registration of the Shares or any amendment thereto or pursuant to Rule
424(a) of the Regulations) and when any amendment thereof or supplement thereto
was first filed with the Commission, such preliminary prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Act and the Regulations and did
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not contain an untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein in light of the circumstances under which they were made not
misleading. No representation and warranty is made in this subsection (b),
however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related preliminary prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through you as herein stated expressly for use in connection
with the preparation thereof. If Rule 434 is used, the Company will comply with
the requirements of Rule 434.
(c) PricewaterhouseCoopers LLP, who have certified the financial
statements and supporting schedules included in the Registration Statement, are
independent public accountants as required by the Act and the Regulations.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth in
the Registration Statement and the Prospectus, there has been no material
adverse change or any development which has a reasonable likelihood of resulting
in a prospective material adverse change in the business, prospects, properties,
operations, condition (financial or other) or results of operations of the
Company and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business (a "MATERIAL ADVERSE EFFECT"),
and since the date of the latest balance sheet presented in the Registration
Statement and the Prospectus, neither the Company nor any of its subsidiaries
has incurred or undertaken any liabilities or obligations, direct or contingent,
which are material to the Company and its subsidiaries taken as a whole, except
for liabilities or obligations which are reflected in the Registration Statement
and the Prospectus.
(e) This Agreement and the transactions contemplated herein have been
duly and validly authorized by the Company and this Agreement has been duly and
validly executed and delivered by the Company and constitutes the valid and
binding agreement of the Company, enforceable against it in accordance with its
terms.
(f) The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust,
agreement, instrument, franchise, license or permit to which the Company or any
of its subsidiaries is a party or by which any of such corporations or their
respective properties or assets may be bound and which is material to the
business of the Company or its subsidiaries or (ii) violate or conflict with any
provision of the certificate of incorporation, bylaws or other organizational
documents of the Company or any of its subsidiaries or any judgment, decree,
order,
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statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties, assets or businesses. No
consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their respective properties, assets or businesses is required for the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, including the issuance, sale and delivery of
the Shares to be issued, sold and delivered by the Company hereunder, except (A)
the registration under the Act of the Shares, (B) such consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses and
permits as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters and (C)
those which have been duly obtained at or prior to the Closing Date.
(g) All of the outstanding shares of Common Stock (including the
Shares to be sold by the Selling Stockholder hereunder) are duly and validly
authorized and issued, fully paid and nonassessable, were issued in compliance
with all applicable laws (including, without limitation, federal and state
securities laws) and were not issued and are not now in violation of or subject
to any preemptive rights. The Shares, when issued, delivered and sold in
accordance with this Agreement, will be duly and validly issued and outstanding,
fully paid and nonassessable, and will not have been issued in violation of or
be subject to any preemptive rights. The Company has an authorized and
outstanding capitalization as set forth in the Registration Statement and the
Prospectus. The Common Stock, the Firm Shares and the Additional Shares conform
to the descriptions thereof contained in the Registration Statement and the
Prospectus. Except as disclosed in or specifically contemplated by the
Prospectus, the Company has no outstanding options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's stock
option and other stock plans or arrangements, and the options or other rights
granted and exercised thereunder, set forth in the Prospectus accurately and
fairly presents in all material respects the information required to be shown
with respect to such plans, arrangements, options and rights. No further
approval or authority of the stockholders or the Board of Directors of the
Company will be required for the issuance and sale of the Shares to be sold by
the Company to the Underwriters as contemplated herein.
(h) Each of the Company and its subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. Each of the Company and its subsidiaries is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which the character or location of its properties (owned, leased or licensed) or
the nature or conduct of its business makes such qualification necessary, except
for those failures to be so qualified or in good standing which will not in the
aggregate have a Material Adverse Effect. Each
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of the Company and its subsidiaries has all requisite power and authority, and
all necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public, regulatory or
governmental agencies and bodies, to own, lease and operate its properties and
conduct its business as now being conducted and as described in the Registration
Statement and the Prospectus, and no such consent, approval, authorization,
order, registration, qualification, license or permit contains a materially
burdensome restriction which is required to be disclosed under the Act or the
Regulations and which is not adequately disclosed in the Registration Statement
and the Prospectus; and, to the knowledge of the Company, no proceeding has been
instituted in any jurisdiction revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or qualification. Other than
its ownership of all of the outstanding capital stock of each of Xxxxxxx &
Associates, Inc., a Colorado corporation, Xxxxxxxx Enterprises, Inc., a
California corporation and Creative Business Solutions, Inc., a Texas
corporation, the Company does not own or control, either directly or indirectly,
any corporation, partnership, limited liability company, association or other
entity.
(i) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which the Company or any of its subsidiaries is a
party or to which any property of the Company or any of its subsidiaries is
subject or which is pending or, to the knowledge of the Company, contemplated
against the Company or any of its subsidiaries which might result in any
Material Adverse Effect or which is required to be disclosed in the Registration
Statement and the Prospectus. There are no statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration Statement that are
not described or filed as required.
(j) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which constitutes or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Shares.
(k) The consolidated financial statements, including the notes
thereto, and supporting schedules included in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the Company and
its subsidiaries as of the dates indicated and the results of its operations for
the periods specified; except as otherwise stated in the Registration Statement,
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis; and the supporting
schedules included in the Registration Statement, if any, present fairly the
information required to be stated therein. Pro forma financial information
included in the Prospectus has been prepared in accordance with the applicable
requirements of Rules 11-01 and 11-02 of Regulation S-X under the Act, and the
necessary pro forma adjustments have been properly applied to the historical
amounts in the compilation of such information, and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable and the
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adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein. Except as included in the Registration
Statement, no other financial statements or schedules are required by Form S-1
to be included in the Registration Statement.
(l) Except as described in the Prospectus, no holder of securities of
the Company has any rights to the registration of securities of the Company
because of the filing of the Registration Statement or otherwise in connection
with the sale of the Shares contemplated hereby. All holders of any such rights
to the registration of securities of the Company have duly and validly waived
all such rights in writing prior to the date hereof.
(m) None of the Company or any of its subsidiaries is, and upon
consummation of the transactions contemplated hereby none of such entities will
be, subject to registration as an "investment company" under the Investment
Company Act of 1940, as amended.
(n) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain 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.
(o) None of the Company or its subsidiaries is in violation or
default of any provision of its certificate of incorporation or bylaws, or other
organizational documents, and is not in breach of or default with respect to any
provision of any agreement, judgment, decree, order, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which it is
a party or by which it or any of its properties are bound except as would not
reasonably be expected to result in a Material Adverse Effect; and there does
not exist any state of facts which constitutes an event of default on the part
of the Company or its subsidiaries as defined in such documents or which, with
notice or lapse of time or both, would constitute such an event of default
except as would not reasonably be expected to be result in a Material Adverse
Effect.
(p) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement which have not been described or filed as required. The
contracts so described in the Prospectus are in full force and effect on the
date hereof and neither the Company nor its subsidiaries nor, to the Company's
knowledge, any other party is in breach of or
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default under any of such contracts except as would not be reasonably expected
to result in a Material Adverse Effect.
(q) Each of the Company and its subsidiaries has good and marketable
title to all the properties and assets reflected as owned by them in the
financial statements hereinabove described (or elsewhere in the Prospectus),
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
(i) those, if any, reflected in such financial statements, or (ii) those which
are not material in amount and do not adversely affect in any material respect
the use made and proposed to be made of such property by the Company and its
subsidiaries. Each of the Company and its subsidiaries holds its leased
properties under valid and binding leases, with such exceptions as are not
materially significant in relation to the business of the Company. Except as
disclosed in the Prospectus, the Company and its subsidiaries own or lease all
such properties as are necessary to its operations as now conducted or as
currently proposed to be conducted.
(r) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, except as disclosed or specifically
contemplated therein: (i) neither the Company nor its subsidiaries has incurred
any material liabilities or obligations, indirect, direct or contingent, or
entered into any material agreement or other transaction which is not in the
ordinary course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; (iii) neither the Company nor its
subsidiaries has sustained any material loss or interference with its business
or properties from fire, flood, windstorm, accident or other calamity, whether
or not covered by insurance; (iv) neither the Company nor its subsidiaries has
paid or declared any dividends or other distributions with respect to its
capital stock and neither the Company nor its subsidiaries is in default in the
payment of principal or interest on any outstanding debt obligations; and (v)
there has not been any change in the capital stock (other than upon the sale of
the Common Stock hereunder and upon the exercise of options or warrants
described in the Registration Statement) or indebtedness material to the
Company.
(s) Except as disclosed in the Prospectus, the Company has or can
acquire on commercially reasonable terms sufficient trademarks, trade names,
patent rights, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), licenses, approvals and governmental authorizations to conduct
its business as now conducted and as presently proposed to be conducted; and the
Company has no knowledge of any material infringement by it of trademark, trade
name rights, patent rights, copyrights, licenses, trade secret or other similar
rights of others and, to the Company's knowledge, there is no claim being made
against the Company regarding trademark, trade name, patent, copyright, license,
trade secret or other infringement which would reasonably be expected to have a
Material Adverse Effect, nor is the Company aware of any reasonable grounds for
the same.
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(t) Each of the Company and its subsidiaries has filed all federal,
state, and local income tax returns or extensions therefor which have been
required to be filed and has paid or accrued all taxes required to be paid and
any other assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except, in all cases, for any such tax,
assessment, fine or penalty that is being contested in good faith (and except in
any case in which the failure to so file or pay would not have a Material
Adverse Effect). The Company has no knowledge of any tax deficiency which has
been or might be asserted or threatened against the Company which would
reasonably be expected to result in a Material Adverse Effect.
(u) The Company has not distributed and will not distribute prior to
the Closing Date any offering material in connection with the offering and sale
of the Shares other than the Prospectus, the Registration Statement and the
other materials permitted by the Act.
(v) The Company and its subsidiaries maintain insurance of the types
and in the amounts generally deemed adequate for their respective businesses and
all other risks customarily insured against, all of which insurance is in full
force and effect. None of the Company nor its subsidiaries has been refused any
insurance coverage sought or applied for; and the Company has no reason to
believe that it and its subsidiaries will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a
cost that would not result in a Material Adverse Effect.
(w) Neither the Company, any of its subsidiaries nor, to the
Company's knowledge, any of its employees or agents has at any time during the
last five years (i) made any unlawful contribution to any candidate for foreign
office, or failed to disclose fully any contribution in violation of law or (ii)
made any payment to any federal or state governmental officer or official, or
other person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States of any
jurisdiction thereof.
(x) No labor disturbance by the employees of the Company or any of
its subsidiaries exists or, to the knowledge of the Company, is imminent; and
the Company is not aware of any existing or threatened labor disturbance by the
employees of any of its principal suppliers, vendors or original equipment
manufacturers, that would reasonably be expected to result in a Material Adverse
Effect. No collective bargaining agreement exists with any of the Company's or
its subsidiaries' employees and, to the Company's knowledge, no such agreement
is imminent.
(y) The Common Stock has been approved for quotation on Nasdaq/NMS,
subject to official notice of issuance.
(z) Except as set forth in the Registration Statement and Prospectus,
(i) the Company is in compliance with all rules, laws and regulations relating
to the use, treatment, storage and disposal of toxic substances and protection
of health or
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the environment ("ENVIRONMENTAL LAWS") which are applicable to its business,
(ii) the Company has received no notice from any governmental authority or third
party of an asserted claim under Environmental Laws, which claim is required to
be disclosed in the Registration Statement and the Prospectus, (iii) the Company
will not be required to make future material capital expenditures to comply with
Environmental Laws, (iv) no property which is owned, leased or occupied by the
Company has been designated as a Superfund site pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. Section 9601, et seq.) ("CERCLA"), or otherwise designated as a
contaminated site under applicable state or local law except in each case as
would not reasonably be expected to have a Material Adverse Effect, (v) the
Company has not disposed of any "hazardous substances" as defined by CERCLA on
any property which is or was owned, leased or occupied by the Company; (vi) the
Company has not disposed or arranged for disposal of any "hazardous substances"
as defined by CERCLA on any third party property except as would not reasonably
be expected to have a Material Adverse Effect; and (viii) the Company has not
agreed to assume, undertake or provide indemnification for any liability of any
other person under any Environmental Law, including any obligation for cleanup
or remedial action.
(aa) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the executive
officers or directors of the Company or any of the members of the families of
any of them of the sort required to be disclosed in the Registration Statement
and Prospectus, except as disclosed therein. No relationship, direct or
indirect, exists between or among the Company or any of its subsidiaries on the
one hand, and the directors, officers, stockholders of the Company or its
subsidiaries, customers or suppliers of the Company or its subsidiaries, on the
other hand, which is required to be described in the Prospectus which is not so
described.
(bb) The Company has not offered, or caused the Underwriters to
offer, Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company or its subsidiaries to alter the customer's or supplier's level or type
of business with the Company or its subsidiaries, or (ii) a trade journalist or
publication to write or publish favorable information about the Company or its
business.
(cc) Each of the Company and its subsidiaries 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 or any of its subsidiaries would have any
liability; none the Company or its subsidiaries has 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 (the
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"CODE"), including the regulations and published interpretations thereunder;
each "pension plan" for which the Company or any of its subsidiaries 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;
and each "pension plan" for which the Company, any of its subsidiaries or any of
their affiliates has any liability or with respect to which the Company, any of
its subsidiaries or any of their affiliates is a disqualified person (as defined
in the Code) or party-in-interest (as defined in ERISA) has not been a party to
any "prohibited transaction" (as defined in ERISA and the Code), except for such
noncompliance, reportable events, liabilities, or failures to qualify that would
not have a Material Adverse Effect.
(dd) Except as otherwise disclosed in the Prospectus, the information
technology of the Company and its subsidiaries, is, and at the Closing Date,
will be Year 2000 Compliant. "YEAR 2000 Compliant" means, with respect to the
information technology (as defined below) of the Company and its subsidiaries,
the information technology is designed to be used prior to, during, and after
the calendar Year 2000 A.D., and the information technology used during each
such time period will accurately receive, provide and process date/time data
(including, but not limited to, calculating, comparing and sequencing) from,
into and between the twentieth and twenty-first centuries, including the years
1999 and 2000, and leap year calculations and will not malfunction, cease to
function, or provide invalid or incorrect results as a result of date/time data,
to the extent that other information technology, used in combination with the
information technology being acquired, properly exchanges date/time data with
it. For purposes of this agreement, "INFORMATION TECHNOLOGY" refers to all
computer software, computer firmware, computer hardware (whether general or
specific purpose), and other similar or related items of automated,
computerized, and/or software system(s) that are used or relied on by the
Company and its subsidiaries in the conduct of their respective businesses.
(ee) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, and
none of the Company, or any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect, except as described in the Prospectus.
B. Representations and Warranties of the Selling Stockholder. The
Selling Stockholder represents, warrants and covenants to each Underwriter as
follows:
(a) This Agreement has been duly authorized, executed and delivered
by or on behalf of the Selling Stockholder and is a valid and binding agreement
of the Selling Stockholder, enforceable against the Selling Stockholder in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable
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law and except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(b) The Custody Agreement and Power of Attorney (the "CUSTODY
AGREEMENT AND POWER OF ATTORNEY") signed by (i) the Selling Stockholder, (ii)
U.S. Stock Transfer Corporation, as custodian (in such capacity, the
"CUSTODIAN") and (iii) Xxxxxxx X. Xxxxxxxx as the Selling Stockholder's
attorney-in-fact (in such capacity, the "ATTORNEY-IN-FACT"), to the extent set
forth therein relating to the transactions contemplated hereby and by the
Prospectus, has been duly authorized, executed and delivered by the Selling
Stockholder and is a valid and binding agreement of the Selling Stockholder,
enforceable against him in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles. The Selling
Stockholder agrees that the Shares to be sold by the Selling Stockholder on
deposit with the Custodian are subject to the interests of the Underwriters,
that the arrangements made for such custody are to that extent irrevocable, and
that the obligations of the Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement or in the Custody Agreement and
Power of Attorney, by any act of the Selling Stockholder, by operation of law,
by death or incapacity of such Selling Stockholder or by the occurrence of any
other event. If the Selling Stockholder should die or become incapacitated, or
if any other event should occur, before the delivery of the Shares to be sold by
the Selling Stockholder hereunder, the documents evidencing the Shares to be
sold by the Selling Stockholder then on deposit with the Custodian shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such death, incapacity or other event had not occurred,
regardless of whether or not the Custodian shall have received notice thereof.
(c) The Selling Stockholder is the lawful owner of the Shares to be
sold by the Selling Stockholder hereunder and upon sale and delivery of, and
payment for, such Shares, as provided herein, the Selling Stockholder will
convey to the Underwriters good and marketable title to such Shares, free and
clear of all liens, encumbrances, equities, claims and security interests
whatsoever.
(d) The Selling Stockholder has, and on the Closing Date and the
Additional Closing Date (as defined below) will have, good and valid title to
all of the Shares which may be sold by the Selling Stockholder pursuant to this
Agreement on such date and the legal right and power, and all authorizations and
approvals required by law and under its charter or by-laws, partnership
agreement, trust agreement or other organizational documents, if applicable, to
enter into this Agreement and the Custody Agreement and Power of Attorney, to
sell, transfer and deliver all of the Shares which may be sold by the Selling
Stockholder pursuant to this Agreement and to comply with its other obligations
hereunder and thereunder.
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(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Selling
Stockholder of the transactions contemplated herein, except such as may have
been obtained under the Act and such as may be required under the state
securities laws or the blue sky laws or any jurisdiction in connection with the
purchase and distribution of the Shares by the Underwriters and such other
approvals as have been obtained.
(f) Neither the sale of the Shares being sold by the Selling
Stockholder nor the consummation of any other of the transactions herein
contemplated by the Selling Stockholder or the fulfillment of the terms hereof
by the Selling Stockholder will conflict with, result in a breach or violation
of, or constitute a default under any law or the terms of any indenture or other
agreement or instrument to which the Selling Stockholder is party or bound, any
judgment, order or decree applicable to the Selling Stockholder or any court or
regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over the Selling Stockholder.
(g) The Selling Stockholder does not have any registration or other
similar rights to have any equity or debt securities registered for sale by the
Company under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as are described in the
Prospectus under "Shares Eligible for Future Sale".
(h) The Selling Stockholder does not have, or has waived prior to the
date hereof, any preemptive right, co-sale right or right of first refusal or
other similar right to purchase any of the Shares that are to be sold by the
Company to the Underwriters pursuant to this Agreement; and the Selling
Stockholder does not own any warrants, options or similar rights to acquire, and
does not have any right or arrangement to acquire, any capital stock, right,
warrants, options or other securities from the Company, other than those
described in the Registration Statement and the Prospectus.
(i) All information furnished by or on behalf of the Selling
Stockholder in writing expressly for use in the Registration Statement and
Prospectus is, and on the Closing Date and the Additional Closing Date (as
defined below) will be, true, correct, and complete in all material respects,
and does not, and on the Closing Date and the Additional Closing Date will not,
contain any untrue statement of a material fact or omit to state any material
fact necessary to make such information not misleading. To the extent such
information appears in the Prospectus, the Selling Stockholder confirms as
accurate the number of Shares set forth opposite such Selling Stockholder's name
and the related footnote in the Prospectus under the caption "Principal and
Selling Stockholders" (both prior to and after giving effect to the sale of the
Shares).
(j) The Selling Stockholder has not taken and will not take, directly
or indirectly, any action designed to or that might be reasonably expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
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(k) The Selling Stockholder has not distributed and will not
distribute, prior to the later of the Additional Closing Date (as defined below)
and the completion of the Underwriters' distribution of the Shares, any offering
material in connection with the offering and sale of the Shares by the Selling
Stockholder other than a preliminary prospectus, the Prospectus or the
Registration Statement.
(l) Without limiting the generality of the representations and
warranties of the Selling Stockholder set forth in paragraph 1.A above, the
Selling Stockholder is familiar with the Registration Statement and the
Prospectus and has no knowledge of any material fact, condition or information
not disclosed in the Registration Statement or the Prospectus which has had or
may result in a Material Adverse Effect on the condition, financial or
otherwise, or on the earnings, business, operation or prospects, whether or not
arising from transactions in the ordinary course of business of the Company and
its subsidiaries, considered as one entity, and is not prompted to sell the
Shares to be sold by the Selling Stockholder by any information concerning the
Company which is not set forth in the Registration Statement and the Prospectus.
(m) The representations and warranties of the Selling Stockholder in
the Custody Agreement and Power of Attorney are, and on the Closing Date will
be, true and correct.
Any certificate signed by or on behalf of the Selling Stockholder and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Selling Stockholder to each
Underwriter as to the matters covered thereby.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, (i) the Company agrees to issue and sell to the Underwriters an aggregate
of 3,850,000 Firm Shares and (ii) the Selling Stockholder agrees to sell to the
several Underwriters an aggregate of 350,000 Firm Shares. On the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Underwriters,
severally and not jointly, agree to purchase from the Company and the Selling
Stockholder, at a purchase price per share of $_______, the number of Firm
Shares set forth opposite the respective names of the Underwriters in SCHEDULE I
hereto plus any additional number of Shares which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of Xxxxxx, Xxxx & Xxxxxxxx LLP,
Jamboree Center, 0 Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000-0000, or at such other
place as shall be agreed upon by Bear Xxxxxxx and the Company, at 10:00 A.M. on
the third or fourth business day (as permitted under Rule 15c6-1 under the
Exchange Act) (unless postponed in accordance with the provisions of Section 9
hereof) following the date of
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the effectiveness of the Registration Statement (or, if the Company has elected
to rely upon Rule 430A of the Regulations, the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) after the determination of
the initial public offering price of the Shares), or such other time not later
than ten business days after such date as shall be agreed upon by Bear Xxxxxxx
and the Company (such time and date of payment and delivery being herein called
the "CLOSING DATE"). Payment shall be made to the Company with respect to the
Shares sold by it and to the Custodian with respect to the Shares sold by the
Selling Stockholder by wire transfer in same day funds, against delivery to you
for the respective accounts of the Underwriters of certificates for the Shares
to be purchased by them. The Selling Stockholder hereby agrees that (i) it will
pay all stock transfer taxes, stamp duties and other similar taxes, if any,
payable upon the sale or delivery of the Shares to be sold by such Selling
Stockholder to the several Underwriters, or otherwise in connection with the
performance of such Selling Stockholder's obligations hereunder and (ii) the
Custodian is authorized to deduct for such payment any such amounts from the
proceeds to the Selling Stockholder hereunder and to hold such amounts for the
account of the Selling Stockholder with the Custodian under the Custody
Agreement and Power of Attorney. Certificates for the Firm Shares shall be
registered in such name or names and in such authorized denominations as you may
request in writing at least two full business days prior to the Closing Date.
The Company will permit you to examine and package such certificates for
delivery at least one full business day prior to the Closing Date. If you so
elect, delivery of the Firm Shares purchased from the Company may be made by
credit through full fast transfer to the accounts at The Depository Trust
Company designated by you.
(c) In addition, the Company hereby grants to the Underwriters the
option to purchase up to 630,000 Additional Shares at the same purchase price
per share to be paid by the Underwriters to the Company for the Firm Shares as
set forth in this Section 2, for the sole purpose of covering over-allotments in
the sale of Firm Shares by the Underwriters. This option may be exercised from
time to time and at any time, in whole or in part, on or before the thirtieth
day following the date of the Prospectus, by written notice by you to the
Company. Such notice shall set forth the aggregate number of Additional Shares
as to which the option is being exercised and the date and time, as reasonably
determined by you, when the Additional Shares are to be delivered (such date and
time being herein sometimes referred to as the "ADDITIONAL CLOSING DATE");
provided, however, that, unless otherwise agreed to by Bear Xxxxxxx and the
Company, the Additional Closing Date shall not be earlier than the Closing Date
or earlier than the second full business day after the date on which the option
shall have been exercised nor later than the eighth full business day after the
date on which the option shall have been exercised (unless such time and date
are postponed in accordance with the provisions of Section 9 hereof).
Certificates for the Additional Shares shall be registered in such name or names
and in such authorized denominations as you may request in writing at least two
full business days prior to the Additional Closing Date. The Company will permit
you to examine and package such certificates for delivery at least one full
business day prior to the Additional Closing Date. If you so elect, delivery of
any Additional Shares purchased
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from the Company may be made by credit through full fast transfer to the
accounts at The Depository Trust Company designated by you.
The number of Additional Shares to be sold to each Underwriter shall be
the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in SCHEDULE I hereto (or such number increased as set forth
in Section 9 hereof) bears to 3,850,000, subject, however, to such adjustments
to eliminate any fractional shares as you in your sole discretion shall make.
Payment for the Additional Shares shall be made by wire transfer in
same day funds at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, Jamboree Center, 0
Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000-0000, or such other location as may be
mutually acceptable, upon delivery of the certificates for the Additional Shares
to you for the respective accounts of the Underwriters.
3. Offering. Upon the Company's authorization of the release of the
Firm Shares, the Underwriters propose to offer the Shares for sale to the public
upon the terms set forth in the Prospectus.
4. Covenants of the Company; Covenants of the Selling Stockholders.
A. The Company covenants and agrees with the Underwriters that:
(a) If the Registration Statement has not yet been declared
effective the Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
possible, and if Rule 430A is used or the filing of the Prospectus is otherwise
required under Rule 424(b) or Rule 434, the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) or Rule
434 within the prescribed time period and will provide evidence satisfactory to
you of such timely filing. If the Company elects to rely on Rule 434, the
Company will prepare and file a term sheet that complies with the requirements
of Rule 434.
The Company will notify you immediately (and, if requested by
you, will confirm such notice in writing) (i) when the Registration Statement
and any amendments thereto become effective, (ii) of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information, (iii) of the mailing or the
delivery to the Commission for filing of any amendment of or supplement to the
Registration Statement or the Prospectus, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or of the initiation, or the threatening,
of any proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in
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any jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b) or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement to
which you shall reasonably object in writing after being timely furnished in
advance a copy thereof.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would, in the judgment
of the Underwriters or the Company, include an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary at any
time to amend or supplement the Prospectus or Registration Statement to comply
with the Act or the Regulations, the Company will notify you promptly and
prepare and file with the Commission an appropriate amendment or supplement (in
form and substance satisfactory to you) which will correct such statement or
omission and will use its best efforts to have any amendment to the Registration
Statement declared effective as soon as possible.
(c) The Company will promptly deliver to you four signed copies of
the Registration Statement, including exhibits and all amendments thereto, and
the Company will promptly deliver to each of the Underwriters such number of
copies of any preliminary prospectus, the Prospectus, the Registration
Statement, and all amendments of and supplements to such documents, if any, as
you may reasonably request.
(d) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.
(e) The Company will make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to you as soon as
practicable, but not later than 45 days after the end of its fiscal quarter in
which the first anniversary date of the effective date of the Registration
Statement occurs, an earnings statement (in form complying with the provisions
of Rule 158 of the Regulations)
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covering a period of at least twelve consecutive months beginning after the
effective date of the Registration Statement.
(f) During the period of 180 days from the date of the Prospectus,
the Company will not, without your prior written consent, issue, sell, offer or
agree to sell, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, any Common Stock (or any securities convertible into,
exercisable for or exchangeable for Common Stock), and the Company will obtain
the written undertaking, the form of which shall be subject to the approval of
Bear Xxxxxxx, of each of its officers and directors and such of its stockholders
as have been heretofore designated by you and listed on SCHEDULE II attached
hereto not to engage in any similar transactions on their own behalf. The
foregoing sentence shall not apply to (A) the Shares to be sold hereunder, (B)
the issuance by the Company of shares of Common Stock upon the exercise of
options or warrants or the conversion of a security outstanding on the date
hereof which is described in the Prospectus, (C) the grant of options or share
purchase rights by the Company pursuant to the option and employee stock
purchase plans described in the Registration Statement and Prospectus, provided,
such options are not exercisable for 180 days after the date of the Prospectus,
or if such options are exercisable within such period, such options are subject
to lockup provisions substantially the same as those set forth in this Section
4(f) or (D) the issuance of shares of Common Stock in acquisition, strategic
partner or investment transactions approved by the Company's Board of Directors,
provided such shares are subject to lockup provisions substantially similar to
those set forth in this Section 4(f) and so long as such shares are not
transferable until the expiration of such lockup, which expiration shall not
occur until 180 days after the date of the Prospectus. During the period of 180
days from the date of the Prospectus, the Company shall enforce all, and shall
not materially amend any, provisions of all outstanding option agreements (and
any new option agreement entered into during such period) in order to ensure
that no holder of options to purchase capital stock of the Company may sell or
otherwise dispose of the stock acquired upon exercise of any such option without
the prior written consent of Bear Xxxxxxx. The Company acknowledges that the
intent of the foregoing sentence is to restrict, pursuant to the terms of such
option agreements, the ability of option holders to dispose of shares of stock
acquired upon exercise of such options in the same manner as if such persons had
executed written undertakings provided for in the first sentence of this
paragraph.
(g) During a period of three years from the effective date of the
Registration Statement, the Company will furnish or make available to you copies
of (i) all reports to its stockholders; and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange.
(h) The Company will apply the proceeds from the sale of the Shares
as set forth under "Use of Proceeds" in the Prospectus.
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(i) The Company will use its best efforts to cause the Shares to be
listed for inclusion in the National Association of Securities Dealers Automated
Quotation National Market System ("NASDAQ/NMS")
(j) The Company will comply with Rule 463 of the Regulations.
(k) The Company shall cause to be prepared and delivered, at its
expense, within one business day from the effective date of this Agreement, to
the Underwriters an "electronic Prospectus" to be used by the Underwriters in
connection with the offering and sale of the Shares. As used herein, the term
"electronic Prospectus" means a form of Prospectus, and any amendment or
supplement thereto, that meets each of the following conditions: (i) it shall be
encoded in an electronic format, satisfactory to Bear Xxxxxxx, that may be
transmitted electronically by Bear Xxxxxxx and the other Underwriters to
offerees and purchasers of the Shares for at least during the period when the
Prospectus is required to be delivered under the Act or the Exchange Act (the
"PROSPECTUS DELIVERY PERIOD"); (ii) it shall disclose the same information as
the paper Prospectus and Prospectus filed pursuant to XXXXX, except to the
extent that graphic and image material cannot be disseminated electronically, in
which case such graphic and image material shall be replaced in the electronic
Prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be in or
convertible into a paper format or an electronic format, satisfactory to Bear
Xxxxxxx, that will allow investors to store and have continuously ready access
to the Prospectus at any future time, without charge to investors (other than
any fee charged for subscription to the system as a whole and for on-line time).
Such electronic Prospectus may consist of a Rule 434 preliminary prospectus,
together with the applicable term sheet, provided that it otherwise satisfies
the format and conditions described in the immediately preceding sentence. The
Company hereby confirms that it has included or will include in the Prospectus
filed pursuant to XXXXX or otherwise with the Commission and in the Registration
Statement at the time it was declared effective an undertaking that, upon
receipt of a request by an investor or his or her representative within the
Prospectus Delivery Period, the Company shall transmit or cause to be
transmitted promptly, without charge, a paper copy of the Prospectus.
(l) In connection with the Directed Share Program, the Company will
ensure that the Shares sold pursuant thereto will be restricted to the extent
required by the NASD or its rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. Bear Xxxxxxx will notify the
Company in writing prior to the Closing Date as to which Participants will need
to be so restricted. At the written request of Bear Xxxxxxx, the Company will
direct the transfer agent to place stop transfer restrictions upon such
securities for such period of time.
(m) The Company shall pay all reasonable fees and disbursements of
counsel incurred by the Underwriters in connection with the Directed
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Share Program and stamp duties, similar taxes or duties or other taxes, if any,
incurred by the Underwriters in connection with the Directed Share Program.
B. Covenants of the Selling Stockholder. The Selling Stockholder
covenants and agrees with each Underwriter:
(a) To deliver to the Representatives prior to the Closing Date a
properly completed and executed United States Treasury Department Form W-8 (if
the Selling Stockholder is a non-United States Person) or Form W-9 (if the
Selling Stockholder is a United States Person).
(b) If, at any time prior to the date on which the distribution of
the Shares as contemplated herein and in the Prospectus has been completed, as
determined by the Representatives, such Selling Stockholder has knowledge of the
occurrence of any event as a result of which the Prospectus or the Registration
Statement, in each case as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, such Selling Stockholder will promptly notify the Company
and the Representatives.
(c) to cooperate to the extent necessary to cause the Registration
Statement or any post-effective amendment thereto to become effective at the
earliest possible time and to do and perform all things to be done and performed
under this Agreement prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Shares pursuant to this Agreement.
(d) pay or to cause to be paid all transfer taxes with respect to
the Shares to be sold by the Selling Stockholder.
(e) to promptly notify the Company and the Representatives if, at
any time prior to the date on which the distribution of the Shares as
contemplated herein and in the Prospectus has been completed, as determined by
the Representatives, the Selling Stockholder has knowledge of the occurrence of
any event as a result of which the Prospectus or the Registration Statement, in
each case as then amended or supplemented, would include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
5. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits thereto), any preliminary prospectus, the Prospectus and any amendments
or supplements thereto (including, without limitation, fees and expenses of the
Company's accountants and counsel), the
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underwriting documents (including this Agreement and the Agreement Among
Underwriters and the Master Selling Agreement) and all other documents related
to the public offering of the Shares (including those supplied to the
Underwriters in quantities as hereinabove stated), (ii) the issuance, transfer
and delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iii) the qualification of the Shares under state or
foreign securities or Blue Sky laws, including the costs of printing and mailing
a preliminary and final "Blue Sky Survey" and the fees of counsel for the
Underwriters and such counsel's disbursements in relation thereto, (iv)
quotation of the Shares on Nasdaq/NMS, (v) filing fees of the Commission and the
National Association of Securities Dealers, Inc.; (vi) the cost of printing
certificates representing the Shares; (vii) the cost and charges of any transfer
agent or registrar; (viii) fees of the Custodian and other fees and expenses
related to the offering of the Shares by the Selling Stockholder, other than any
of the Selling Stockholder's legal fees and expenses and any taxes payable by or
on behalf of the Selling Stockholder in connection with the sale of Shares
hereunder.
6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6 "CLOSING DATE" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Xxxxxx, Xxxx & Xxxxxxxx LLP
("UNDERWRITERS' COUNSEL") pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company of its obligations hereunder, and to
the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M., New York City time, on the date of this Agreement, or at such
later time and date as shall have been consented to in writing by you; if the
Company shall have elected to rely upon Rule 430A or Rule 434 of the
Regulations, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 4(a) hereof; and, at or prior to the
Closing Date no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the Commission.
(b) All the representations and warranties of the Selling
Stockholder contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date.
(c) At the Closing Date you shall have received the opinion of
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, a Professional corporation, counsel for the
Company, dated the Closing Date addressed to the Underwriters and in form and
substance satisfactory to Underwriters' Counsel, to the effect that:
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(i) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. Each of the
Company and its subsidiaries is duly qualified and in good standing as
a foreign corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which will not in
the aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole. Each of the Company and its subsidiaries
has all requisite corporate authority to own, lease and license its
respective properties and conduct its business as now being conducted
and as described in the Registration Statement and the Prospectus. All
of the issued and outstanding capital stock of each subsidiary of the
Company has been duly and validly issued and is fully paid and
nonassessable and were not issued in violation of preemptive rights
and, is owned directly or indirectly by the Company, free and clear of
any lien, encumbrance, claim, security interest, restriction on
transfer, stockholders' agreement, voting trust or other defect of
title whatsoever. Except as disclosed in or specifically contemplated
by the Prospectus, to the knowledge of such counsel, the Company has no
outstanding options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible
securities or obligations. The description of the Company's stock
option, employee stock purchase and other stock plans or arrangements,
and the options or other rights granted and exercised thereunder, set
forth in the Prospectus fairly presents the information required to be
shown with respect to such plans, arrangements, options and rights and
is accurate in all material respects.
(ii) The authorized capital stock of the Company (including the
Common Stock) conforms to the description thereof set forth in the
Registration Statement and the Prospectus. All of the outstanding
shares of Common Stock are duly and validly authorized and issued, are
fully paid and nonassessable and were not issued in violation of or
subject to any preemptive rights. The Shares to be delivered on the
Closing Date have been duly and validly authorized and, when delivered
by the Company in accordance with this Agreement, will be duly and
validly issued, fully paid and nonassessable and, to the knowledge of
such counsel, will not have been issued in violation of or subject to
any preemptive rights. The Common Stock, the Firm Shares and the
Additional Shares conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus. No
further approval or authority of the stockholders or the Board of
Directors of the Company will be required for the issuance and the sale
of the Shares to be sold by the Company as contemplated herein.
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(iii) The Common Stock currently outstanding is listed, and the
Shares to be sold under this Agreement to the Underwriters are duly
authorized for quotation, on Nasdaq/NMS.
(iv) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(v) There is no litigation or governmental or other action,
suit, proceeding or investigation before any court or before or by any
public, regulatory or governmental agency or body pending or to such
counsel's knowledge, threatened against, or involving the properties or
business of, the Company or any of its subsidiaries, which is of a
character required to be disclosed in the Registration Statement and
the Prospectus which has not been properly disclosed therein.
(vi) The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated hereby by the
Company do not and will not (A) conflict with or result in a breach of
any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, any material agreement, instrument,
franchise, license or permit known to such counsel to which the Company
or any of its subsidiaries is a party or by which any of such
corporations or their respective properties or assets may be bound or
(B) violate or conflict with any provision of the certificate of
incorporation or bylaws of the Company or any of its subsidiaries, or,
to the best knowledge of such counsel, any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their respective properties or assets. No
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective
properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, except for (1) such as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters (as to which such
counsel need express no opinion), (2) such as have been made or
obtained under the Act and (3) the clearance of the offering by the
NASD.
(vii) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial or statistical data
included or incorporated by reference therein, as to which no opinion
need be rendered) comply as to form in all material respects with the
requirements of the Act and the Regulations.
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(viii) The Registration Statement is effective under the Act,
and, to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereof has been issued and no proceedings therefor have been
initiated or threatened by the Commission and all filings required by
Rule 424(b) of the Regulations have been made.
(ix) The Company is not in violation or default of any provision
of its articles of incorporation or bylaws, or other organizational
documents, and to the best of such counsel's knowledge, is not in
breach of or default with respect to any provision of any agreement,
judgment, decree, order, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which it is a party
or by which it or any of its properties are bound except as would not
be material to the Company's and its subsidiaries business, results of
operations or financial condition taken as a whole; and to the best of
such counsel's knowledge, there does not exist any state of facts which
constitutes an event of default on the part of the Company as defined
in such documents or which, with notice or lapse of time or both, would
constitute such an event of default except as would not be material to
the Company and its subsidiaries' business, results of operations or
financial condition, taken as a whole.
(x) To the knowledge of such counsel, there are no contracts or
other documents required to be described in the Registration Statement
or to be filed as exhibits to the Registration Statement or by the
Regulations which have not been accurately described in all material
respects or filed as required. Except as otherwise disclosed in the
Prospectus, the contracts so described therein are in full force and
effect on the date hereof; and, neither the Company nor, to the best of
such counsel's knowledge, any other party is in breach of or default
under any of such contracts except as would not be material to the
Company and its subsidiaries' business, results of operations or
financial condition, taken as a whole.
(xi) Such counsel has no knowledge of any material infringement
by it of trademark, trade name rights, patent rights, copyrights,
licenses, trade secret or other similar rights of others, and to such
counsel's knowledge, there is no claim pending or threatened against
the Company regarding trademark, trade name, patent, copyright,
license, trade secret or other infringement which could have a material
adverse effect on the condition (financial or otherwise), business,
results of operations or prospects of the Company and its subsidiaries,
taken as a whole, nor is such counsel aware of any reasonable grounds
for any such claim.
(xii) To such counsel's knowledge, there are no outstanding
loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the
Company to or for the
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benefit of any of the officers or directors of the Company or any of
the members of the families of any of them, which is required to be
disclosed in the Registration Statement or the Prospectus, except as
disclosed therein.
(xiii) The statements (i) under the captions in the
Prospectus and (ii) in Items 14 and 15 of Part II of the Registration
Statement, insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings.
(xiv) The form of certificate used to evidence the Shares is in
due and proper form and complies in all material respects with all
applicable statutory requirements under the laws of the State of
Delaware.
(xv) the Company has duly authorized and reserved a number of
shares of Common Stock for issuance upon the exercise of options under
the Company's Stock Option Plan which is not less than the number of
options issuable under such plan, as of the Closing Date.
(xiv) No stockholder of the Company or any other person has any
preemptive right of first refusal or other similar right to subscribe
for or purchase securities of the Company which would apply to the
Shares or continue in effect following the Closing (i) arising by
operation of the certificate of incorporation or bylaws of the Company
or the general corporation law of the State of Delaware or (ii) arising
from any contract or agreement filed as an exhibit to the Registration
Statement (including without limitation any transaction document
entered into in connection with any of the Company's Preferred Stock
financings) or otherwise known to such counsel, except for such rights
as have been validly and duly waived prior to the date hereof.
(xv) In addition, such opinion shall also contain a statement
that such counsel has participated in conferences with officers and
representatives of the Company, representatives of the independent
public accountants for the Company and the Underwriters at which the
contents and the Prospectus and related matters were discussed and,
although such counsel has not verified the accuracy or completeness of
each statement contained in the Registration Statement or Prospectus,
no facts have come to the attention of such counsel which would lead
such counsel to believe that either the Registration Statement at the
time it became effective (including the information deemed to be part
of the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b) or Rule 434, if applicable), or any amendment thereof made
prior to the Closing Date as of the date of such amendment, contained
an untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus as of its date (or any
amendment thereof or supplement thereto made prior to the
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Closing Date as of the date of such amendment or supplement) and as of
the Closing Date contained or contains an untrue statement of a
material fact or omitted or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading
(it being understood that such counsel need express no belief or
opinion with respect to the financial statements and schedules and
other financial or statistical data included or incorporated by
reference therein).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company and its subsidiaries, provided that copies of any
such statements or certificates shall be delivered to Underwriters' Counsel. The
opinion of such counsel for the Company shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and, in their opinion, you
and they are justified in relying thereon.
(d) At the Closing Date you shall have received the opinion of
[ ], counsel for the Selling Stockholder, dated the Closing
Date addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) The Selling Stockholder has full legal right, power and
authority, and any approval required by law (other than any approval
imposed by the applicable state securities and Blue Sky laws), to sell,
assign, transfer and deliver the Shares to be sold by the Selling
Stockholder in the manner provided in this Agreement.
(ii) The Selling Stockholder has good and clear title to the
certificates for the Shares to be sold by such Selling Stockholder, and
upon delivery thereof pursuant hereto and payment therefor, good and
clear title will pass to the Underwriters, severally, free of all
restrictions on transfer, liens, encumbrances, security interests and
claims whatsoever.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Selling Stockholder.
(iv) The Custody Agreement and Power of Attorney appointing U.S.
Stock Transfer Corporation as the Custodian and Xx. Xxxxxxx X. Xxxxxxxx
as
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the Selling Stockholder's Attorney-in-Fact, to the extent set forth
therein with regard to the transactions contemplated hereby and by the
Registration Statement, has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder and is the valid
and binding instrument of such Selling Stockholder enforceable in
accordance with its terms, and pursuant to such power of attorney, each
Selling Stockholder has authorized such attorney-in-fact, to execute
and deliver on such Selling Stockholder's behalf this Agreement and any
other document necessary or desirable in connection with the
transactions contemplated hereby and to delivery the Shares to be sold
by such Selling Stockholder pursuant to this Agreement.
(v) The execution, delivery and performance of this Agreement by
the Selling Stockholder, compliance by the Selling Stockholder with all
the provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may be
required under the Act, state securities laws or Blue Sky laws or
except as such may have been obtained) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Selling Stockholder, if
applicable, or any material agreement, indenture or other instrument to
which the Selling Stockholder is a party or by which the Selling
Stockholder or property of the Selling Stockholder is bound, or violate
or conflict with any laws, administrative regulation or ruling or court
decree applicable to the Selling Stockholder or property of the Selling
Stockholder.
In rendering such opinion, such counsel may rely (x) as to
matters involving the application of laws other than the laws of the
United States and jurisdictions in which they are admitted, to the
extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' Counsel) of other counsel
reasonably acceptable to Underwriters' Counsel, familiar with the
applicable laws; (y) as to matters of fact, to the extent they deem
proper and is applicable, on certificates of officers of the Selling
Stockholder and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Selling
Stockholder, if applicable, provided that copies of any such statements
or certificates shall be delivered to Underwriters' Counsel. The
opinion of such counsel for the Company shall state that the opinion of
any such other counsel is in form satisfactory to such counsel and, in
their opinion, you and they are justified in relying thereon.
(e) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be satisfactory in
form and substance to you and to Underwriters' Counsel, and the Underwriters
shall have
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received from said Underwriters' Counsel a favorable opinion, dated as of the
Closing Date with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related matters as you
may reasonably require, and the Company shall have furnished to Underwriters'
Counsel such documents as they reasonably request for the purpose of enabling
them to pass upon such matters.
(f) At the Closing Date you shall have received a certificate of the
Company executed on its behalf by its Chief Executive Officer and Chief
Financial Officer, dated the Closing Date to the effect that (i) the condition
set forth in subsection (a) of this Section 6 has been satisfied, (ii) as of the
date hereof and as of the Closing Date the representations and warranties of the
Company set forth in Section 1 hereof are accurate, (iii) as of the Closing Date
the obligations of the Company to be performed hereunder on or prior thereto
have been duly performed and (iv) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, the
Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development involving a prospective
material adverse change, in the business prospects, properties, operations,
condition (financial or otherwise), or results of operations of the Company as
presently conducted or as proposed to be conducted and its subsidiaries taken as
a whole, except in each case as described in or contemplated by the Prospectus.
(g) At the time this Agreement is executed and at the Closing Date,
you shall have received a letter, from PricewaterhouseCoopers LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriters and in form
and substance satisfactory to you, to the effect that: (i) they are independent
certified public accountants with respect to the Company within the meaning of
the Act and the Regulations and stating that the answer to Item 10 of the
Registration Statement is correct insofar as it relates to them; (ii) stating
that, in their opinion, the financial statements and schedules of the Company
included in the Registration Statement and the Prospectus and covered by their
opinion therein comply as to form in all material respects with the applicable
accounting requirements of the Act and the applicable published rules and
regulations of the Commission thereunder; (iii) on the basis of procedures
consisting of a reading of the latest available unaudited interim consolidated
financial statements of the Company, and its subsidiaries, a reading of the
minutes of meetings and consents of the stockholders and boards of directors of
the Company and its subsidiaries and the committees of such boards subsequent to
[June 30, 1999], inquiries of officers and other employees of the Company and
its subsidiaries who have responsibility for financial and accounting matters of
the Company and its subsidiaries with respect to transactions and events
subsequent to [June 30, 1999] and other specified procedures and inquiries to a
date not more than five days prior to the date of such letter, nothing has come
to their attention that would cause them to believe that: (A) the unaudited
consolidated financial statements
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and schedules of the Company presented in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the applicable
accounting requirements of the Act and, if applicable, the Exchange Act and the
applicable published rules and regulations of the Commission thereunder or that
such unaudited consolidated financial statements are not fairly presented in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated financial
statements included in the Registration Statement and the Prospectus; (B) with
respect to the period subsequent to [June 30, 1999] there were, as of the date
of the most recent available monthly consolidated financial statements of the
Company and its subsidiaries, if any, and as of a specified date not more than
five days prior to the date of such letter, any changes in the capital stock or
long-term indebtedness of the Company or any decrease in the net current assets
or stockholders' equity of the Company, in each case as compared with the
amounts shown in the most recent balance sheet presented in the Registration
Statement and the Prospectus, except for changes or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur or
which are set forth in such letter or (C) that during the period from [July 1,
1999] to the date of the most recent available monthly consolidated financial
statements of the Company and its subsidiaries, if any, and to a specified date
not more than five days prior to the date of such letter, there was any
decrease, as compared with the corresponding period in the prior fiscal year, in
total revenues, or total or per share net income, except for decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur or
which are set forth in such letter; and (iv) stating that they have compared
specific dollar amounts, numbers of shares, percentages of revenues and
earnings, and other financial information pertaining to the Company and its
subsidiaries set forth in the Registration Statement and the Prospectus, which
have been specified by you prior to the date of this Agreement, to the extent
that such amounts, numbers, percentages, and information may be derived from the
general accounting and financial records of the Company and its subsidiaries or
from schedules furnished by the Company, and excluding any questions requiring
an interpretation by legal counsel, with the results obtained from the
application of specified readings, inquiries, and other appropriate procedures
specified by you set forth in such letter, and found them to be in agreement.
(h) Prior to the Closing Date the Company shall have furnished to
you such further information, certificates and documents as you may reasonably
request.
(i) You shall have received from each person who is a director or
officer of the Company or such stockholder as have been heretofore designated by
you and listed on SCHEDULE II hereto an agreement to the effect that such person
will not, directly or indirectly, without your prior written consent, issue,
sell, offer or agree to sell, grant any option for the sale of, pledge, make any
short sale or maintain any short position, establish or maintain a "put
equivalent position" (within the meaning of Rule 16a-1(h) under the Securities
Exchange Act of 1934, as amended), enter into any swap, derivative transaction
or other arrangement that transfers to another, in whole or in
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part, any of the economic consequences of ownership of the Common Stock (whether
any such transaction is to be settled by delivery of Common Stock, other
securities, cash or other consideration) or otherwise dispose of, any Common
Stock (or any securities convertible into, exercisable for or exchangeable for
Common Stock) or interest therein of the Company or of any of its subsidiaries
for a period of 180 days after the date of the Prospectus, except as may
otherwise be explicitly permitted by the terms of such agreement..
(j) At the Closing Date, the Shares shall have been approved for
quotation on Nasdaq/NMS.
(k) At the Closing Date you shall have received a written
certificate executed by Xxxxxxx X. Xxxxxxxx in his capacity as Attorney-in-Fact
on behalf of the Selling Stockholder, dated as of the Closing Date, to the
effect that (i) the representations, warranties and covenants of the Selling
Stockholder set forth in Section 1 of this Agreement are true and correct with
the same force and effect as though expressly made by the Selling Stockholder on
and as of the Closing Date and (ii) the Selling Stockholder has complied with
all the agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing, or by
telephone, telex or telegraph, confirmed in writing.
7. Indemnification.
(a) The Company, each of its subsidiaries and the Selling
Stockholder, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact
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contained in the registration statement for the registration of the Shares, as
originally filed or any amendment thereof, or any related preliminary prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the Company, its subsidiaries
and the Selling Stockholder will not be liable in any such case to the extent,
but only to the extent, that any such loss, liability, claim, damage or expense
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through you expressly for use therein, and (ii) the failure of
any Participant to pay for and accept delivery of the shares which, by the end
of the day following the date of this Agreement, were subject to a properly
confirmed agreement to purchase; or (iii) the Directed Share Program, provided
however, that the Selling Stockholder shall not be liable with respect to
subparagraph (iii) of this paragraph. This indemnity agreement will be in
addition to any liability which the Company, its subsidiaries and/or the Selling
Stockholder may otherwise have including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to indemnify
and hold harmless the Company, its subsidiaries, the Selling Stockholder, each
of the directors of the Company, each of the officers of the Company who shall
have signed the Registration Statement, and each other person, if any, who
controls the Company or any of its subsidiaries within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), jointly or several, to which they or any of them
may become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein; provided,
however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares purchased
by such Underwriter hereunder. This indemnity will be in addition to any
liability which any Underwriter may otherwise have including under this
Agreement. The Company, its subsidiaries and the Selling Stockholder acknowledge
that
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the statements set forth in the last paragraph of the cover page and in the
______ paragraph[s] under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of any
Underwriter expressly for use in the registration statement relating to the
Shares as originally filed or in any amendment thereof, any related preliminary
prospectus or the Prospectus or in any amendment thereof or supplement thereto,
as the case may be.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. Anything in
this subsection to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
(d) Without limiting the generality of the foregoing, the Selling
Stockholder agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), against any and all losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but not limited to attorneys' fees
and any and all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims,
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damages or expenses (or actions in respect thereof) arise out of or are based
upon a breach of any of the representations or warranties of the Selling
Stockholder set forth in Section 1.B hereof.
8. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, each of its subsidiaries,
the Selling Stockholder and the Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company and its subsidiaries any contribution received by the Company or its
subsidiaries from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company, any of its subsidiaries and one or more of the
Underwriters may be subject, in such proportions as is appropriate to reflect
the relative benefits received by the Company and its subsidiaries, the Selling
Stockholder and the Underwriters, from the offering of the Shares or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 7 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and its subsidiaries, the Selling Stockholder and the Underwriters
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and its
subsidiaries, the Selling Stockholder and the Underwriters shall be deemed to be
in the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company or the Selling Stockholder and (y) the underwriting discounts and
commissions received by the Underwriters, respectively, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company and/or its subsidiaries, the Selling Stockholder, and of the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and its subsidiaries, the Selling Stockholder or the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, the Selling
Stockholder and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 8 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.
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Notwithstanding the provisions of this Section 8, (i) in no case shall
any Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder, and (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. Notwithstanding
the provisions of this Section 8 and the preceding sentence, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the
same rights to contribution as such Underwriter, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of this Section 8.
The liability of the Selling Stockholder under the indemnity and
reimbursement agreements contained in the provisions of Sections 7, 8 and 17
hereof shall be limited to an amount equal to (i) the gross proceeds of the
Shares sold by the Selling Stockholder to the Underwriters, less (ii) the
underwriting discounts and commissions with respect to such Shares sold by the
Selling Stockholder.
Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties, notify each party or parties from whom contribution may be sought, but
the omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 8 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
provided, however, that such consent was not unreasonably withheld.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions which
the numbers of Firm Shares set forth opposite their respective names in SCHEDULE
I hereto bear to the aggregate number of Firm Shares set forth opposite the
names of the non-defaulting Underwriters.
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(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within 5 calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company or the Selling Stockholder with respect
thereto (except in each case as provided in Section 5, 7(a) and 8 hereof) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(c) In the event that the Firm Shares or Additional Shares to which
the default relates are to be purchased by the non-defaulting Underwriters, or
are to be purchased by another party or parties as aforesaid, you or the Company
shall have the right to postpone the Closing Date or Additional Closing Date, as
the case may be for a period, not exceeding five business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "UNDERWRITER" as used in this
Agreement shall include any party substituted under this Section 9 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Additional Shares.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters, the Company, its
subsidiaries and the Selling Stockholder contained in this Agreement, including
the agreements contained in Section 5, the indemnity agreements contained in
Section 7 and the contribution agreements contained in Section 8, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof or by or on
behalf of the Company, any of its officers and directors or any controlling
person thereof or by or on behalf of the Selling Stockholder, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
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11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later of when
(i) you and the Company shall have received notification of the effectiveness of
the Registration Statement or (ii) the execution of this Agreement. If either
the initial public offering price or the purchase price per Share has not been
agreed upon prior to 5:00 P.M., New York City time, on the fifth full business
day after the Registration Statement shall have become effective, this Agreement
shall thereupon terminate without liability to the Company or the Underwriters
except as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you or by you
notifying the Company. Notwithstanding the foregoing, the provisions of this
Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all times be in full
force and effect.
(b) You shall have the right to terminate this Agreement at any
time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (A) any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, the market for the Company's securities or securities
in general; or (B) if trading on the New York or American Stock Exchanges or the
Nasdaq/NMS shall have been suspended, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York or American Stock Exchanges or the Nasdaq/NMS by
such entities or by order of the Commission or any other governmental authority
having jurisdiction; or (C) if a banking moratorium has been declared by a state
or federal authority or if any new restriction materially adversely affecting
the distribution of the Firm Shares or the Additional Shares, as the case may
be, shall have become effective; or (D) (i) if the United States becomes engaged
in hostilities or there is an escalation of hostilities involving the United
States or there is a declaration of a national emergency or war by the United
States or (ii) if there shall have been such change in political, financial or
economic conditions if the effect of any such event in (i) or (ii) as in your
judgment makes it impracticable or inadvisable to proceed with the offering,
sale and delivery of the Firm Shares or the Additional Shares, as the case may
be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be
by telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the Underwriters in connection herewith.
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12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and , if sent to any
Underwriter, shall be mailed, delivered, or telexed or faxed and confirmed in
writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000, Attention: Syndicate Department, with a copy to Xxxxxx, Xxxx &
Xxxxxxxx LLP, Attention: Xxxxxxx X. Xxxxx, 000 X. Xxxxx Xxxxxx, Xxx Xxxxxxx, XX
00000; if sent to the Company, shall be mailed, delivered, or telegraphed and
confirmed in writing to the Company, 000 Xxx Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx
Xxxxx, XX 00000, Attention: Chief Executive Officer, with a copy to Xxxxxxxxx
Xxxxx Xxxxxxx & Xxxxx, Attention: X.X. Xxxxxx, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx Xxxxx, XX 00000; and if sent to the Selling Stockholder, shall be
mailed, delivered, or faxed and confirmed in writing to Xxxxxxx X. Xxxxxxx ,
with a copy to .
13. Parties. This Agreement shall insure solely to the benefit of, and
shall be binding upon, the Underwriters, the Selling Stockholder and the Company
and the controlling persons, directors, officers, employees and agents referred
to in Section 7 and 8, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Shares from any of the Underwriters.
14. Failure of the Selling Stockholder to Sell and Deliver Common
Shares. If the Selling Stockholder shall fail to sell and deliver to the
Underwriters the Shares to be sold and delivered by the Selling Stockholders at
the Closing Date pursuant to this Agreement, the Company hereby agrees to sell
and deliver to the Underwriters that number of Shares equal to the number of
Shares not sold and delivered by the Selling Stockholder, in which case the
Underwriters shall have the right, by written notice from the Representatives to
the Company and the Selling Stockholder, to postpone the Closing Date for a
period of not more than seven (7) days in order that the required changes, if
any, to the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original and all of which together shall constitute one and
the same instrument.
17. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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If the foregoing correctly sets forth the understanding between you,
the Company, the Selling Stockholder and each of the other entities set forth
below, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
THE TRIZETTO GROUP, INC.
By
----------------------------------------
XXXXXXX & ASSOCIATES, INC.
By
----------------------------------------
XXXXXXXX ENTERPRISES, INC.
By
----------------------------------------
CREATIVE BUSINESS SOLUTIONS, INC.
By
----------------------------------------
SELLING STOCKHOLDER
Xxxxxxx X. Xxxxxxx
By
----------------------------------------
Xxxxxxx X. Xxxxxxxx, as Attorney-in-Fact
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
XXXXX, XXXXXXXX & XXXX, INC.
WIT CAPITAL CORPORATION
By
-------------------------------------
On behalf of themselves and the other
Underwriters named in SCHEDULE I hereto.
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SCHEDULE I
NUMBER OF FIRM
NAME OF UNDERWRITER SHARES TO BE PURCHASED
------------------- ----------------------
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Wit Capital Corporation
---------
Total............................................. 4,200,000
=========
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SCHEDULE II
[Names of stockholders subject to the lock-up provision]
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