1
SAPIENT CORPORATION
COMMON STOCK
($.01 PAR VALUE PER SHARE)
-------------------------------------------
UNDERWRITING AGREEMENT
Draft of March 30, 1998
Xxxxxxx, Xxxxx & Co.
Deutsche Xxxxxx Xxxxxxxx Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Sapient Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 400,000 shares and, at the election of the Underwriters, up to 253,125
additional shares of Common Stock, $.01 par value per share ("Stock") of the
Company, and the stockholders of the Company named in Schedule II hereto (the
"Selling Stockholders") propose, subject to the terms and conditions stated
herein, to sell to the Underwriters an aggregate of 1,287,500 shares. The
aggregate of 1,687,500 shares to be sold by the Company and the Selling
Stockholders is herein called the "Firm Shares" and the aggregate of 253,125
additional shares to be sold by the Company is herein called the "Optional
Shares". The Firm Shares and the Optional Shares that the Underwriters elect to
purchase pursuant to Section 2 hereof are herein collectively called the
"Shares".
1. (a) The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-47889) (the
"Initial Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement including any pre-effective
amendment thereto and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the
2
prospectus contained therein, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became (or will become) effective upon filing, no
other document with respect to the Initial Registration Statement
(including any pre-effective amendment thereto) or document
incorporated therein has heretofore been filed with the Commission
(other than certain ancillary documents, copies of which have been
provided to you and prospectuses filed pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Act, each in the form
heretofore delivered to the Representatives); and no stop order
suspending the effectiveness of the Initial Registration Statement
(including any pre-effective amendment thereto), any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any,
has been issued and no proceeding for that purpose has been initiated
or, to the knowledge of the Company, threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement
(including any pre-effective amendment thereto) or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act, is hereinafter called a "Preliminary
Prospectus"); the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective or the
Rule 462(b) Registration Statement, if any, at the time it became or
hereafter becomes effective, each as amended at the time such part of
the registration statement became effective, are hereinafter
collectively called the "Registration Statement"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus" and any reference herein to
any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any documents
filed after the date of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement;
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein or
by a Selling Stockholder expressly for use in the preparation of the
answers therein to Item 7 of Form S-3;
2
3
(iii) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Sachs & Co. expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein or by a Selling
Stockholder expressly for use in the preparation of the answers therein
to Item 7 of Form S-3;
(v) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock (other than as a result of the exercise of stock options
outstanding as of such dates) or long-term debt of the Company or any
of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus;
(vi) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and
3
4
do not materially interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries;
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation;
(viii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description of the Stock
contained in the Prospectus; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except
for directors' qualifying shares) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims;
(ix) The unissued Shares to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued and fully paid and non-assessable and
will conform in all material respects to the description of the Stock
contained in the Prospectus;
(x) The issue and sale of the Shares to be sold by the Company
and the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries
is subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issue and sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except the registration
under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters or under the rules
of the National Association of Securities Dealers, Inc.;
(xi) Neither the Company nor any of its subsidiaries (a) is in
violation of its Certificate of Incorporation or By-laws, or (b) other
than any defaults that singly or in the aggregate will not have a
material adverse effect on the financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, is in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound;
4
5
(xii) The statements set forth in the Prospectus under the caption
"Underwriting" insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate descriptions
of such terms and provisions in all material respects;
(xiii) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate reasonably be expected to have a material adverse effect on
the current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries;
and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(xiv) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xv) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(xvi) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xvii) The Company and its subsidiaries have sufficient interests in
all patents, trademarks, service marks, trade names, copyrights, trade
secrets, information, proprietary rights and processes ("Intellectual
Property") necessary for their business as now conducted and as
proposed to be conducted without, to the knowledge of the Company, any
conflict with or infringement of the interests of others and have taken
reasonable steps to secure from third parties interests in such
Intellectual Property as is necessary for their business as described
in the Prospectus; neither the Company nor any of its subsidiaries is
aware of outstanding options, licenses or agreements of any kind
relating to the Intellectual Property, except as set forth in the
written agreements pursuant to which the Company provides its services
to its clients and except such as would not have a material adverse
effect on the financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, and neither the Company
nor its subsidiaries is a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property of any other
person or entity; none of the technology employed by the Company or its
subsidiaries has been obtained or is being used by the Company or its
subsidiaries in violation of any contractual or fiduciary obligation
binding on the Company, its subsidiaries or any of their respective
directors or executive officers or, to the Company's knowledge, any of
their respective employees or consultants or otherwise in violation of
the rights of any person; none of the Company, its subsidiaries and, to
the Company's knowledge, any of its employees has received any written
or, to the Company's knowledge, oral communications alleging that the
Company or any of its subsidiaries has violated or, by conducting its
business as proposed, would violate any of the Intellectual Property of
any other person or entity; neither the execution nor delivery of this
Agreement, nor the operation of the Company's business by the employees
of the Company or its subsidiaries, nor the conduct of the Company's
business as proposed, will, to the Company's knowledge, result in a
breach or violation of the terms, conditions or provisions of, or
constitute a default under, any material contract, covenant or
instrument under which any of such employees is now obligated; and the
Company and its subsidiaries have taken and will maintain
5
6
reasonable measures to prevent the unauthorized dissemination or
publication of its confidential information or the confidential
information of third parties in its possession; and
(xviii) The Company has filed all reports it has been required to
file under the Exchange Act; such reports when filed conformed in all
material respects to the requirements of the Exchange Act; and none of
such reports contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein to make
the statements therein, in light of the circumstances under which they
were made, not misleading.
(b) Each of the Selling Stockholders severally represents and warrants to,
and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Stockholder of this
Agreement and the Power of Attorney and the Custody Agreement
hereinafter referred to, and for the sale and delivery of the Shares to
be sold by such Selling Stockholder hereunder, have been obtained; and
such Selling Stockholder has full right, power and authority to enter
into this Agreement, the Power-of-Attorney and the Custody Agreement
and to sell, assign, transfer and deliver the Shares to be sold by such
Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder
with all of the provisions of this Agreement, the Power of Attorney and
the Custody Agreement and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or
to which any of the property or assets of such Selling Stockholder is
subject, nor will such action result in any violation of the provisions
of or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder;
(iii) Such Selling Stockholder has (except in the case of any
Shares which are to be acquired upon exercise of an option pursuant to
a Notice of Exercise delivered under the Custody Agreement), and
immediately prior to the First Time of Delivery (as defined in Section
4 hereof) such Selling Stockholder will have, good and valid title to
the Shares to be sold by such Selling Stockholder hereunder, free and
clear of all liens, encumbrances, equities or claims; and, upon
delivery of such Shares and payment therefor pursuant hereto, good and
valid title to such Shares, free and clear of all liens, encumbrances,
equities or claims, will pass to each of the several Underwriters that
has purchased such shares in good faith and without notice of any lien,
encumbrance, equity or law or any other adverse claim within the
meaning of the Uniform Commercial Code ;
(iv) In the case of any Shares which are to be acquired upon
exercise of an option pursuant to a Notice of Exercise delivered under
the Custody Agreement, such Selling Stockholder holds such option
agreement which is in full force and effect enforceable against the
Company and exercisable for such shares to be sold pursuant to this
Agreement.
(v) During the period beginning from the date hereof and
continuing to and including the date 90 days, and in the case of
Messrs. Xxxxxxxxx and Xxxxx and the J. Xxxxxx Xxxxx Gift Trust of 1995
only, 180 days, after the date of the Prospectus, not to offer, sell
contract to sell or otherwise dispose of, except as provided hereunder,
any securities of the Company that are substantially similar to the
Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities, without
your prior written consent;
(vi) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or
6
7
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares;
(vii) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, any
amendment or supplement thereto or any document incorporated by
reference therein are made in reliance upon and in conformity with
written information furnished to the Company by such Selling
Stockholder expressly for use therein, such Preliminary Prospectus and
the Registration Statement did, and the Prospectus and any further
amendments or supplements to the Registration Statement and the
Prospectus and any document incorporated by reference therein, when
they become effective or are filed with the Commission, as the case may
be, will conform in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading;
(viii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(ix) Certificates in negotiable form representing all of the
Shares to be sold by such Selling Stockholder hereunder and/or option
agreements and notices of exercise have been placed in custody under a
Custody Agreement, in the form heretofore furnished to you (the
"Custody Agreement"), duly executed and delivered by such Selling
Stockholder to the Company, as custodian (the "Custodian"), and such
Selling Stockholder has duly executed and delivered a Power of
Attorney, in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in Schedule II hereto, and
each of them, as such Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this
Agreement on behalf of such Selling Stockholder, to determine the
purchase price to be paid by the Underwriters to the Selling
Stockholders as provided in Section 2 hereof, to authorize the delivery
of the Shares to be sold by such Selling Stockholder hereunder and
otherwise to act on behalf of such Selling Stockholder in connection
with the transactions contemplated by this Agreement and the Custody
Agreement; and
(x) The Shares represented by the certificates and/or option
agreements held in custody for such Selling Stockholder under the
Custody Agreement are subject to the interests of the Underwriters
hereunder; the arrangements made by such Selling Stockholder for such
custody, and the appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent
irrevocable; the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death or
incapacity of any individual Selling Stockholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee
or the termination of such estate or trust, or by the occurrence of any
other event; if any individual Selling Stockholder or any such executor
or trustee should die or become incapacitated, or if any such estate or
trust should be terminated, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates representing
the Shares shall be delivered by or on behalf of the Selling
Stockholders in accordance with the terms and conditions of this
Agreement and of the Custody Agreements; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid
as if such death, incapacity, termination, or other event had not
occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
7
8
2. Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Stockholders agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from each of the Company and the Selling Stockholders,
at a purchase price per share of $_______, the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Firm Shares to be sold by the Company and each of the
Selling Stockholders as set forth opposite their respective names in Schedule II
hereto by a fraction, the numerator of which is the aggregate number of Firm
Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
aggregate number of Firm Shares to be purchased by all of the Underwriters from
the Company and all of the Selling Stockholders hereunder and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares as to which
such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying such number of Optional
Shares by a fraction the numerator of which is the maximum number of Optional
Shares which such Underwriter is entitled to purchase as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters are entitled
to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 253,125 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Company and the Selling Stockholders shall be delivered by or on
behalf of the Company and the Selling Stockholders to Xxxxxxx, Sachs & Co.,
through the facilities of the Depository Trust Company, for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by certified or official bank check or checks, payable to the
order of the Company and the Custodian, as their interests may appear, in
federal (same day) funds. The Company will cause the certificates representing
the Shares to be made available for checking and packaging at least twenty-four
hours prior to the Time of Delivery (as defined below) with respect thereto at
the office of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(the "Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Shares, 9:30 a.m., New York time, on April __, 1998
or such other time and date as Xxxxxxx, Sachs & Co., the Company and the Selling
Stockholders may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., New York time, on the date specified by Xxxxxxx, Xxxxx & Co.
in the written notice given by Xxxxxxx, Sachs & Co. of the Underwriters'
election to purchase such Optional Shares, or such other time and date as
Xxxxxxx, Xxxxx & Co., and the Company may agree upon in writing. Such time and
date for delivery of the Firm Shares is herein called the "First Time of
Delivery", such time
8
9
and date for delivery of the Optional Shares, if not the First Time of Delivery,
is herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(k) hereof, will be delivered at the offices of Xxxx and
Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Closing Location"),
and the Shares will be delivered at the Designated Office, all at such Time of
Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New York
time, on the New York Business Day next preceding such Time of Delivery or such
earlier time as agreed upon by counsel for the Underwriters and the Company, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day following
the execution and delivery of this Agreement, or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the Act; to
make no further amendment or any supplement to the Registration
Statement or Prospectus which shall be disapproved by you promptly
after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish you with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares; to advise you,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or prospectus, of the suspension
of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus in New York City
in such quantities as you may from time to time reasonably request,
and, if the delivery of a prospectus is required at any time prior to
the expiration of nine months after the time of issue of the Prospectus
in connection with the offering or sale of the Shares and
9
10
if at such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference
in the Prospectus in order to comply with the Act or the Exchange Act,
to notify you and upon your request to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as you may reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with
sales of any of the Shares at any time nine months or more after the
time of issue of the Prospectus, upon your request but at the expense
of such Underwriter, to prepare and deliver to such Underwriter as many
copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) Except as necessary to satisfy the Company's obligations under
Article VIII of the Stock Purchase Agreement dated as of December 4,
1997 among the Company and certain individuals named therein and
executed in connection with the Company's acquisition of the
outstanding stock of EXOR Technologies, Inc., during the period
beginning from the date hereof and continuing to and including the date
90 days after the date of the Prospectus, not to offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder, any
securities of the Company that are substantially similar to the Shares,
including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Stock or
any such substantially similar securities (other than pursuant to stock
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement,
or pursuant to other obligations described in the Prospectus), without
your prior written consent;
(f) To furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries certified by independent
public accountants);
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to stockholders,
and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished
to its stockholders generally or to the Commission), provided, however,
that this clause shall not obligate the Company to disclose information
that in its sole judgment it considers confidential;
(h) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
10
11
(i) To use its best efforts to list for quotation the Shares on the
Nasdaq National Market; and
(j) If the Company elects to rely upon Rule 462(b), to file a Rule
462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement, and at the time of filing either to pay to the Commission
the filing fee for the Rule 462(b) Registration Statement or to give
irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company and each of the Selling Stockholders covenant and agree
with one another and with the several Underwriters that (a) the Company will pay
or cause to be paid the following: (i) the fees, disbursements and expenses of
the Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the Blue
Sky Memorandum, closing documents (including any compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (iv) all fees and expenses in connection with listing the
Shares on the Nasdaq National Market; (v) the filing fees incident to, and the
fees and disbursements of counsel for the Underwriters in connection with,
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Shares; (vi) the cost of preparing stock
certificates; (vii) the cost and charges of any transfer agent or registrar; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section 6; (b) each Selling Stockholder will pay or cause to be paid all costs
and expenses incident to the performance of such Selling Stockholder's
obligations hereunder which are not otherwise specifically provided for in this
Section 6, including, to the extent requested by the Company, (i) any fees and
expenses of counsel for such Selling Stockholder, (ii) such Selling
Stockholder's pro rata share of the fees and expenses of the Attorneys-in-Fact
and the Custodian, and (iii) all expenses and taxes incident to the sale and
delivery of the Shares to be sold by such Selling Stockholder to the
Underwriters hereunder; and (c) Xxxxx X. Xxxxxxxxx, J. Xxxxxx Xxxxx and the J.
Xxxxxx Xxxxx Gift Trust of 1995 shall reimburse the Company for a pro rata
portion of the fees and expenses referred to in (a) above based on the ratio of
the number of shares sold by each such Selling Stockholder to the total number
of shares sold in the offering. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
stock transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and with respect to the First Time of Delivery only, of the Selling
Stockholders herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company and the Selling Stockholders shall have performed
all of its and their obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the
11
12
Act and in accordance with Section 5(a) hereof; if the Company has
elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m., Washington, D.C.
time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Ropes & Xxxx, counsel for the Underwriters, shall have furnished
to you such opinion or opinions, dated such Time of Delivery, with
respect to the matters covered in paragraphs (i), (ii), (vii), (x) and
(xii) of subsection (c) below as well as such other related matters as
you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Xxxx and Xxxx LLP, counsel for the Company, shall have furnished
to you their written opinion, dated such Time of Delivery, in
substantially the form previously delivered to your counsel, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company (including the Shares being delivered at
such Time of Delivery) have been duly and validly authorized and
issued and are fully paid and non-assessable; and the Shares
conform to the description of the Stock contained in the
Prospectus;
(iii) Each United States subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation; and all of the issued shares of capital stock of
each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and are directly or
indirectly owned of record and, to such counsel's knowledge,
beneficially by the Company, free and clear to such counsel's
knowledge of all liens, encumbrances, equities or claims (such
counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
opinions and certificates and shall provide to you copies of such
opinions and certificates);
(iv) The real property under lease by the Company at Xxx
Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx is held by the Company
under a valid, subsisting and enforceable lease (except to the
extent that the rights and remedies created thereby may be
limited by applicable bankruptcy, insolvency, reorganization and
similar laws affecting rights and remedies of creditors and that
the remedy of specific enforcement is subject to the discretion
of the courts) with such exceptions as to enforceability as are
not material and do not materially interfere with the use made
and proposed to be made of such property and buildings by the
Company and its subsidiaries (in giving the opinion in this
clause, such counsel may rely in respect to matters of fact upon
certificates of officers of the Company or
12
13
its subsidiaries, provided that such counsel shall state that
they believe that both you and they are justified in relying upon
such certificates);
(v) To such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would
individually or in the aggregate reasonably be expected to have
a material adverse effect on the current or future consolidated
financial position stockholders' equity or results of operations
of the Company and its subsidiaries; and, to such counsel's
knowledge, no such proceedings are threatened by governmental
authorities or threatened by others which would individually or
in the aggregate reasonably be expected to have a material
adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the
Company and its subsidiaries;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The issue and sale of the Shares being delivered at
such Time of Delivery to be sold by the Company and the
compliance by the Company with all of the provisions of this
Agreement and the consummation by the Company of the transactions
herein contemplated do not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument filed by the Company
with the Commission to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will
such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any
order specifically applicable to the Company or its U.S.
subsidiaries, or any statute, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its U.S. subsidiaries or
any of their respective properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the
Act of the Shares, and such consents, approvals, authorizations,
orders, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters or under the
rules of the National Association of Securities Dealers, Inc.;
(ix) The statements set forth in the Prospectus under the
caption "Underwriting," insofar as they purport to describe the
provisions of the laws and documents referred to therein, are
accurate descriptions of such terms and provisions in all
material respects;
(x) The Company is not an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act;
(xi) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the
financial statements and related schedules and other financial
data contained
13
14
therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with
the requirements of the Exchange Act, and the rules and
regulations of the Commission thereunder; although they do not
assume any responsibility for the accuracy, completeness or
fairness of any such documents, no facts have come to their
attention that have caused them to believe that, when such
documents became effective or were so filed, as the case may be,
such documents or any further amendment thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data
contained therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
that, as of such Time of Delivery, any such document or any
further amendment thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related
schedules and other financial data contained therein, as to
which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or
that, in the case of other documents which were filed under the
Exchange Act with the Commission, as of such Time of Delivery,
any such document or any further amendment thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data
contained therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and
(xii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company
prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data
contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations
thereunder; although they do not assume any responsibility for
the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, no
facts have come to their attention that have caused them to
believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data
contained therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
that, as of its date, the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related
schedules and other financial data contained therein, as to
which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or
that, as of such Time of Delivery, either the Registration
Statement or the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and
14
15
related schedules and other financial data contained therein, as
to which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
they do not know of any amendment to the Registration Statement
required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus or required to be described in the Registration
Statement or the Prospectus which are not filed or incorporated
by reference or described as required;
(d) Xxxx and Xxxx LLP, as special counsel for each of the Selling
Stockholders, shall have furnished to you their written opinion with
respect to each of the Selling Stockholders, dated the First Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) A Power-of-Attorney and a Custody Agreement have been
duly executed and delivered by such Selling Stockholder and
constitute valid and binding agreements of such Selling
Stockholder in accordance with their terms;
(ii) This Agreement has been duly executed and delivered
by or on behalf of such Selling Stockholder; and the sale of the
Shares to be sold by such Selling Stockholder hereunder and the
compliance by such Selling Stockholder with all of the provisions
of this Agreement, the Power-of-Attorney and the Custody
Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach
or violation of any terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel
to which such Selling Stockholder is a party or by which such
Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject, nor will such
action result in any violation of the provisions of or any order
specifically applicable to a Selling Stockholder, statute, rule
or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over such Selling Stockholder
or the property of such Selling Stockholder;
(iii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement
in connection with the Shares to be sold by such Selling
Stockholder hereunder, except such as have been obtained under
the Act and such as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of
such Shares by the Underwriters;
(iv) Immediately prior to the First Time of Delivery,
based solely on an examination of the Company's stock record
books, such Selling Stockholder was the sole record holder of the
Shares to be sold by such Selling Stockholder under this
Agreement, free and clear of all liens, encumbrances, equities or
claims, and full right, power and authority to sell, assign,
transfer and deliver the Shares to be sold by such Selling
Stockholder hereunder; and
(v) Upon the Underwriters obtaining control of the Stock
to be sold by the Selling Stockholders and assuming the
Underwriters purchased such Stock for value and without notice of
any adverse claim to such Stock within the meaning of Section
8-102 of the Uniform Commercial Code as in effect in The
Commonwealth of Massachusetts, the Underwriters will
15
16
have acquired all rights of the Selling Stockholders in such
Stock free of any adverse claim, any lien in favor of the Company
and any restrictions on transfer imposed by the Company.
In rendering such opinion in paragraph (iv), such counsel may rely upon a
certificate of such Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on, the Shares sold by
such Selling Stockholder, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such certificate;
(e) Xxxxxxx Xxxxxxx Xxxx, general counsel to the Company, shall have
furnished to you her written opinion, dated such Time of Delivery, in
substantially the form previously delivered to your counsel, to the
effect that:
(i) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each of The Commonwealth of
Massachusetts and the states of California, New Jersey, Georgia,
Illinois, and Maine, which, are the only jurisdictions in which
the Company maintains a permanent office;
(ii) To such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would,
individually or in the aggregate, reasonably be expected to
have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries; and,
to such counsel's knowledge, no such proceedings are threatened
by governmental authorities or threatened by others which would,
individually or in the aggregate, reasonably be expected to
have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries; and
(iii) The issue and sale of the Shares being delivered at
such Time of Delivery to be sold by the Company and the
compliance by the Company with all of the provisions of this
Agreement and the consummation by the Company of the
transactions herein contemplated do not conflict with or result
in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to
such counsel to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject;
(f) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., New York time, on the effective date
of any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of
Delivery, KPMG Peat Marwick LLP shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex I
hereto; shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex II hereto;
16
17
(g) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus, and (ii) since the
respective dates as of which information is given in the Prospectus
there shall not have been any change in the capital stock (other than
as a result of the exercise of stock options outstanding as of such
dates) or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in Clause
(i) or (ii), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such
Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on the Nasdaq
National Market; (ii) a suspension or material limitation in trading in
the Company's securities on the Nasdaq National Market; (iii) a general
moratorium on commercial banking activities declared by either Federal
or New York or Massachusetts state authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this Clause (iv) in the judgment
of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered
at such Time of Delivery on the terms and in the manner contemplated in
the Prospectus;
(i) The Shares at such Time of Delivery shall have been duly listed
for quotation on the Nasdaq National Market; and
(j) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each of the stockholders listed on
Schedule III hereto, substantially to the effect set forth in
Subsection 1(b)(iv) hereof in form and substance satisfactory to you;
(k) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement; and
(l) The Company shall have furnished or caused to be furnished to
you at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder
to be performed at or prior to such Time of Delivery, and as to such
other matters as you may reasonably request, and the Company shall have
furnished or caused to be furnished certificates as to the matters set
forth in subsections (a) and (f) of this Section.
(m) The Selling Stockholders shall have furnished or caused to be
furnished to you at the First Time of Delivery certificates of the
Selling Stockholders satisfactory to you as to the accuracy of the
representations and warranties of the Selling Stockholders herein at
and as of the First Time of Delivery, as to the performance by the
Selling Stockholders of all of their respective obligations hereunder
to be performed at or prior to the First Time of Delivery, and as to
such other matters as you may reasonably request.
17
18
8. (a) The Company and each of the Selling Stockholders, jointly and
severally, will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, any amendment or supplement thereto or any document incorporated by
reference therein, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company and the
Selling Stockholders shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, any
such amendment or supplement or any document incorporated by reference therein
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx, Sachs & Co. expressly for use
therein; provided, further, however, that each of the Selling Stockholders other
than Xxxxx X. Xxxxxxxxx and J. Xxxxxx Xxxxx shall not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus, any such amendment or supplement or any document incorporated
by reference therein in reliance upon and in conformity with information
furnished to the Company by any person other than such Selling Stockholder; and
provided, further, however, that the liability of each Selling Stockholder
pursuant to this Subsection 8(a) shall not exceed the product of the number of
Shares sold by such Selling Stockholder and the initial public offering price of
the Shares as set forth in the Prospectus other than J. Xxxxxx Xxxxx whose
liability pursuant to this Subsection 8(a) shall not exceed the product of the
number of Shares sold by him and the J. Xxxxxx Xxxxx Gift Trust of 1995 and the
initial public offering price of the Shares as set forth in the Prospectus.
(b) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment 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 such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein; and will reimburse the Company and each Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or such Selling Stockholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
18
19
(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 the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholders on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Stockholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company and the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Selling
Stockholders on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, each of the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this
19
20
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) 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 which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and (ii) the liability of each Selling Stockholder
pursuant to this Subsection 8(d) shall not exceed the difference between the
product of the number of Shares sold by such Selling Stockholder and the
initial public offering price of the Shares as set forth in the Prospectus and
the amount of any indemnification payments made by such Selling Stockholder
pursuant to Subsection 8(a), as the case may be, other than J. Xxxxxx Xxxxx
whose liability pursuant to this Subsection 8(d) shall not exceed the
difference between the product of the number of Shares sold by both him and the
J. Xxxxxx Xxxxx Gift Trust of 1995 and the initial public offering price of
the Shares as set forth in the Prospectus and the amount of any indemnification
payments made by such Selling Stockholders pursuant to Subsection 8(a). 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. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and the Selling Stockholders under this
Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company and the Selling Stockholders shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company and the
Selling Stockholders that you have so arranged for the purchase of such Shares,
or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone a Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
20
21
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholders, except for the expenses
to be borne by the Company and the Selling Stockholders and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company will
reimburse the Underwriters through you for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company and the Selling
Stockholders shall then be under no further liability to any Underwriter in
respect of the Shares not so delivered except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Sachs & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
21
22
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Xxxxx &
Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for such Selling Stockholder at its
address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by you on request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company, any Selling Stockholder or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us seven counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the Company
and each of the Selling Stockholders. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholders for examination, upon
request, but without warranty on your part as to the authority of the signers
thereof.
22
23
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
Sapient Corporation
By:
-------------------------------------
Name:
Title:
Xxxxx X. Xxxxxxxxx
J. Xxxxxx Xxxxx
Xxxxxxx X. Xxxxx and Xxxx X. Xxxxxx, as
trustees for the J. Xxxxxx Xxxxx
Gift Trust of 1995
Xxxxxxx X. Xxxxxxxx
Xxxxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx and Xxxxxxx Xxxxx, as
joint tenants
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
By:
-------------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf
of each of the Selling Stockholders
named in Schedule II to this
Agreement.
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
Deutsche Xxxxxx Xxxxxxxx Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
By:
---------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
24
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- ---------
Xxxxxxx, Xxxxx & Co.
Deutsche Xxxxxx Xxxxxxxx Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Total
25
SCHEDULE II
NUMBER OF
TOTAL NUMBER OF OPTIONAL SHARES
FIRM SHARES TO BE SOLD IF
TO BE SOLD MAXIMUM EXERCISED
---------- -----------------
The Company 400,000 253,125
The Selling Stockholder(s): (a)
Xxxxx X. Xxxxxxxxx 600,000
J. Xxxxxx Xxxxx 450,000
Xxxxxxx X. Xxxxx and Xxxx X. Xxxxxx,
as trustees for the J. Xxxxxx
Xxxxx Gift Trust of 1995 150,000
Xxxxxxx X. Xxxxxxxx 1,500
Xxxxxxxxxxx X. Xxxxx 40,000
Xxxxxxx X. Xxxxx and Xxxxxxx Xxxxx,
as joint tenants 10,000
Xxxxx X. Xxxxxxx 10,000
Xxxxxxx X. Xxxxx 20,000
Xxxxxxx X. Xxxxxx 6,000
--------- -------
Total 1,687,500 253,125
(a) The Selling Stockholders are represented by Xxxx and Xxxx LLP, 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 and have appointed each of Xxxxxxx Xxxxxxx
Xxxx and Xxxxx X. Xxxxxxx, as the Attorneys-in-Fact for such Selling
Stockholders.
26
SCHEDULE III
HOLDBACK AGREEMENTS
180 Day
-------
Xxxxx X. Xxxxxxxxx
J. Xxxxxx Xxxxx
Xxxxx X. Xxxxxxxxx Three-Year Qualified Annuity Trust - 1996
Xxxxx X. Xxxxxxxxx Eight-Year Qualified Annuity Trust - 1996
Xxxxx X. Xxxxxxxxx Three-Year Qualified Annuity Trust - 1997
J. Xxxxxx Xxxxx Eight-Year Qualified Annuity Trust - 1996
J. Xxxxxx Xxxxx Two-Year Qualified Annuity Trust - 1996
J. Xxxxxx Xxxxx Two-Year Qualified Annuity Trust - 1998
J. Xxxxxx Xxxxx Remainder Trust
J. Xxxxxx Xxxxx Irrevocable Trust
J. Xxxxxx Xxxxx Gift Trust of 1995
90 Day
------
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
R. Xxxxxxx Xxxxxxx
Xxxxxx X. Xxxxxxx, Xx.
Xxxxx X. Xxxxxx
Xxxx X. Xxxxxx
27
ANNEX I
Pursuant to Section 7(e) of the Underwriting Agreement, KPMG Peat
Marwick LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
and
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representatives of the Underwriters
(the "Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus; and on the basis of specified procedures
including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to
in paragraph (vi)(A)(i) below comply as to form in the related in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the
related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the four most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
four fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures
i
28
specified in such letter nothing came to their attention as a result of
the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the
disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus do not
comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and
the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited
condensed consolidated statements of income and
consolidated balance sheets included in the Prospectus, for
them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in
Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred
to in Clause (B) were not determined on a basis
substantially consistent with the basis for the audited
financial statements included or incorporated by reference
in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference
in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or
the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those
statements;
ii
29
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in
the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares
and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity
or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference) or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
iii
