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[FORM OF UNDERWRITING AGREEMENT]
NETWORK SOLUTIONS, INC.
7,730,000 Shares of Common Stock
Underwriting Agreement
, 2000
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxxxx & Xxxxx LLC
PaineWebber Incorporated
FleetBoston Xxxxxxxxx Xxxxxxxx
Prudential Securities Incorporated
As Representatives of the several Underwriters
listed in Schedule I hereto
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Network Solutions, Inc., a Delaware corporation (the "Company")
proposes to issue and sell 1,000,000 shares (the "Company Shares") of Common
Stock, par value $.001 per share (the "Common Stock"), of the Company, SAIC
Venture Capital Corporation, a Nevada corporation ("SAIC VCC") and a wholly
owned subsidiary of Science Applications International Corporation, a Delaware
corporation ("SAIC" and, together with SAIC VCC, the "SAIC Entities"), proposes
to sell 6,700,000 shares of Common Stock (the "SAIC Shares"), and certain other
stockholders of the Company named in Schedule II hereto (the "Management
Stockholders" and, together with SAIC VCC, the "Selling Stockholders") propose
to sell an aggregate of 30,000 shares of Common Stock (the "Management
Stockholder Shares" and, together with the SAIC Shares, the "Selling
Stockholder Shares") as set forth in Schedule II hereto, to the several
Underwriters listed in Schedule I hereto (the "Underwriters"), for whom you are
acting as representatives (the "Representatives"). The Company Shares and the
Selling Stockholder Shares are herein referred to as the "Underwritten Shares".
In addition, for the sole purpose of covering over-allotments in connection
with the sale of the Underwritten Shares, the Company proposes to issue and
sell to the Underwriters, at the option of the Underwriters, up to an
additional 1,159,500 shares
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(the "Option Shares") of Common Stock. The Underwritten Shares and the Option
Shares are herein referred to as the "Shares."
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form S-3, including a prospectus, relating to the Shares. The
registration statement as amended at the time when it became or shall become
effective, including information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act, is referred to in this Agreement as the "Registration
Statement," and the prospectus in the form first used to confirm sales of
Shares is referred to in this Agreement as the "Prospectus." If the Company has
filed an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such
Rule 462 Registration Statement. Any reference in this Agreement to the
Registration Statement, 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 Securities Act, as of the effective
date of the Registration Statement or the date of such preliminary prospectus
or the Prospectus, as the case may be, and any reference to "amend,"
"amendment" or "supplement" with respect to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after such date under the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") that are deemed to be incorporated by
reference therein.
1. The Company agrees to issue and sell the Company Shares and each of
the Selling Stockholders agrees, severally and not jointly, to sell the Selling
Stockholder Shares to the several Underwriters as hereinafter provided, and
each Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to
purchase, severally and not jointly, from each of the Company and each of the
Selling Stockholders at a purchase price per share of $ (the "Purchase Price")
the number of Underwritten Shares (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying the aggregate number of
Underwritten Shares to be sold by the Company and by each of the Selling
Stockholders as set forth opposite their respective names under the heading
"Number of Underwritten Shares" in Schedule II hereto by a fraction, the
numerator of which is the aggregate number of Underwritten 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 Underwritten Shares to be purchased by all the Underwriters from the
Company and all the Selling Stockholders hereunder.
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In addition, the Company agrees to issue and sell the Option Shares to
the several Underwriters as hereinafter provided, and the Underwriters, upon
the basis of the representations and warranties herein contained, but subject
to the conditions hereinafter stated, shall have the option to purchase,
severally and not jointly, from the Company at the Purchase Price that portion
of the number of Option 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 Option Shares by a fraction, the
numerator of which is the maximum number of Option 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 Option Shares which all of the Underwriters are entitled to purchase
hereunder, for the sole purpose of covering over-allotments (if any) in the
sale of Underwritten Shares by the several Underwriters.
The Underwriters may exercise the option to purchase the Option Shares
at any time (but not more than once) on or before the thirtieth day following
the date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option Shares as
to which the option is being exercised and the date and time when the Option
Shares are to be delivered and paid for, which may be the same date and time as
the Closing Date (as hereinafter defined) but shall not be earlier than the
Closing Date nor later than the tenth full Business Day (as hereinafter
defined) after the date of such notice (unless such time and date are postponed
in accordance with the provisions of Section 9 hereof). Any such notice shall
be given at least two Business Days prior to the date and time of delivery
specified therein.
On December 21, 1999, the Company approved a 2-for-1 stock split of
the shares of Common Stock, to be effected in the form of a stock dividend on
shares of Common Stock outstanding on a date after the Closing Date as
determined by a duly appointed committee of the Board of Directors of the
Company (the "Record Date"). The stock dividend will be distributed to
stockholders a date after the Record Date as determined by a duly appointed
committee of the Board of Directors of the Company (the "Distribution Date").
In the event the Additional Closing Date (as defined below) is after the Record
Date, the Company shall issue to each Underwriter on the Additional Closing
Date the number of Option Shares to be purchased by such Underwriter as
determined above together with a "due xxxx" for an equal number of shares of
Common Stock to be issued by the Company on or after the Distribution Date in
exchange for such "due xxxx."
2. The Company and the Selling Stockholders understand that the
Underwriters intend (i) to make a public offering of the Shares as soon after
(A) the Registration Statement has become effective and (B) the parties hereto
have executed and delivered this Agreement as in the judgment of the
Representatives is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
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3. Payment for the Shares shall be made by wire transfer in
immediately available funds to the accounts specified by the Company, in the
case of the Company Shares, to accounts specified by SAIC VCC in the case of
the SAIC Shares and to accounts specified by the Attorneys-in-Fact, in the case
of the Management Stockholder Shares, to the Representatives on , 2000,
or at such other time on the same or such other date, not later than the fifth
Business Day thereafter, as the Representatives, the Company, SAIC VCC and the
Attorneys-in-Fact may agree upon in writing, or to an account specified to the
Representatives by the Company, in the case of the Option Shares, on the date
and time specified by the Representatives in the written notice of the
Underwriters' election to purchase such Option Shares. The time and date of
such payment for the Underwritten Shares is referred to herein as the "Closing
Date," and the time and date for such payment for the Option Shares, if other
than the Closing Date, are herein referred to as the "Additional Closing Date."
As used herein, the term "Business Day" means any day other than a day on which
banks are permitted or required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than
two full Business Days prior to the Closing Date or the Additional Closing
Date, as the case may be, with any transfer taxes payable in connection with
the transfer to the Underwriters of the Company Shares and the Option Shares
duly paid by the Company and any transfer taxes payable in connection with the
transfer to the Underwriters of the Selling Stockholder Shares duly paid by the
Selling Stockholders. The certificates for the Shares will be made available
for inspection and packaging by the Representatives at the office of X.X.
Xxxxxx Securities Inc. set forth above not later than 1:00 P.M., New York City
time, on the Business Day prior to the Closing Date or the Additional Closing
Date, as the case may be.
4. (A) The Company represents and warrants to each of the
Underwriters, the SAIC Entities and the Management Stockholders that:
(a) each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act, 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, that this representation and warranty shall not
apply to any statements in, or omissions from, the Registration Statement
or the Prospectus made in reliance
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upon and in conformity with information furnished to the Company in
writing by or on behalf of the Underwriters expressly for use therein;
(b) the Registration Statement and Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) comply, or will comply, as the case may be, in all
material respects with the Securities Act 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 date of the Prospectus and any amendment
or supplement thereto, 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, and the Prospectus, as
amended or supplemented, if applicable, at the Closing Date or Additional
Closing Date, as the case may be, will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, except that the foregoing representations and
warranties shall not apply to statements or omissions in the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by or on behalf of the
Underwriters through the Representatives expressly for use therein;
(c) 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
Securities Act or the Exchange Act, as applicable, and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; any
further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act,
and will not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(d) the financial statements, and the related notes thereto, included
or incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company as of the
dates indicated and the results of its operations and changes in cash
flows for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis, and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly the
information required to be stated therein;
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(e) 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 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, business, prospects, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Change"), otherwise
than as set forth or contemplated in the Prospectus; and except as set
forth or contemplated in the Prospectus, neither the Company nor any of
its subsidiaries has entered into any transaction or agreement (whether or
not in the ordinary course of business) material to the Company and its
subsidiaries, taken as a whole;
(f) 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, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the general affairs,
business, prospects, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect");
(g) each of the Company's subsidiaries has been duly incorporated and
is validly existing as a corporation under the laws of its jurisdiction of
incorporation, 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 jurisdiction in
which it owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so
qualified or in good standing would not have a Material Adverse Effect;
and all the outstanding shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued, are fully-paid and
non-assessable, and are owned by the Company, directly or indirectly, free
and clear of all liens, encumbrances, security interests and claims;
(h) this Agreement has been duly authorized, executed and delivered by
the Company;
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(i) the Company has an authorized capitalization as set forth in the
Prospectus and such authorized capital stock conforms as to legal matters
to the description thereof set forth in the Prospectus, and all of the
outstanding shares of capital stock of the Company (including the Shares)
have been duly authorized and validly issued, are fully paid and
non-assessable and are not subject to any pre-emptive or similar rights;
and, except as described in or expressly contemplated by the Prospectus,
there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or other
equity interest in the Company, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of any
capital stock of the Company, any such convertible or exchangeable
securities or any such rights, warrants or options;
(j) the Company Shares and Option Shares have been duly authorized,
and, when issued and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be duly issued and will
be fully paid and non-assessable and will conform to the description
thereof in the Prospectus; and the issuance of the Company Shares and
Option Shares is not subject to any preemptive or similar rights;
(k) neither the Company nor any of its subsidiaries is, and with the
giving of notice or lapse of time or both would be, in violation of or in
default under its certificate of incorporation (the "Certificate of
Incorporation") or by-laws (the "By-Laws") or any indenture, mortgage,
deed of trust, loan agreement or other agreement (including, without
limitation, the Cooperative Agreement between the Department of Commerce,
as successor to the National Science Foundation and the Company dated as
of January 1, 1993, as amended to date (the "Cooperative Agreement")) or
instrument to which any of the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any of their
respective properties is bound, except for violations and defaults which
individually and in the aggregate are not material to the Company and its
subsidiaries, taken as a whole; the issuance and sale of the Company
Shares and Option Shares and the performance by the Company of its
obligations under this Agreement and the consummation of the transactions
contemplated herein will not conflict with or result in a breach 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 any such action result in any violation of the provisions of the
Certificate of Incorporation or the By-Laws of the Company or any
applicable law or statute or any order, rule or regulation of any court or
gov-
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ernmental agency or body having jurisdiction over the Company, its
subsidiaries or any of their respective properties; no consent, approval,
authorization, order, license, registration or qualification of or with
any such court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by this
Agreement, except such consents, approvals, authorizations, orders,
licenses, registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or blue sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters;
(l) other than as set forth in the Prospectus, there are no legal or
governmental investigations, actions, suits or proceedings pending or, to
the knowledge of the Company, threatened against or affecting the Company
or any of its subsidiaries or any of their respective properties or to
which the Company is or may be a party or to which any property of the
Company or any of its subsidiaries is or may be subject which, if
determined adversely to the Company or any of its subsidiaries, could
individually or in the aggregate have, or reasonably be expected to have,
a Material Adverse Effect, and, to the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others; and there are no statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(m) no relationship, direct or indirect, exists between or among the
Company and its subsidiaries, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of
its subsidiaries, on the other hand, which is required by the Securities
Act to be described in the Registration Statement and the Prospectus which
is not so described;
(n) except as set forth in the Prospectus, no person has the right to
require the Company to register any securities for offering and sale under
the Securities Act by reason of the filing of the Registration Statement
with the Commission or, to the knowledge of the Company, the sale of the
Selling Stockholder Shares by the Selling Stockholders pursuant hereto;
(o) 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 of 1940, as amended (the "Investment Company Act");
(p) PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), who have
certified certain financial statements of the Company, are independent
public accountants as required by the Securities Act;
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(q) the Company and its subsidiaries, or SAIC on the Company's behalf,
have filed all federal, state, local and foreign tax returns which have
been required to be filed and has paid all taxes shown thereon and all
assessments received by them or either of them to the extent that such
taxes have become due and are not being contested in good faith; and,
except as disclosed in the Registration Statement and the Prospectus, no
tax deficiency has been determined adversely to the Company which has had,
nor does the Company have any knowledge of any tax deficiency, which if
determined adversely to the Company might have, a Material Adverse Effect;
(r) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Common Stock;
(s) the unissued Shares issuable upon the exercise of options (the
"Options") to be exercised by certain of the Management Stockholders (the
"Optionholders") have been duly and validly authorized and reserved for
issuance, and at the time of delivery to the Underwriters with respect to
such Shares, such Shares will be issued and delivered in accordance with
the provisions of the applicable stock option agreements between the
Company and such Selling Stockholders pursuant to which such Options were
granted (the "Option Agreements") and will be duly and validly issued,
fully paid and non-assessable and will conform to the description thereof
in the Prospectus;
(t) the Options were duly authorized and issued pursuant to the Option
Agreements and constitute valid and binding obligations of the Company,
and the Optionholders are entitled to the benefits provided by the Option
Agreements; the Option Agreements were duly authorized, executed and
delivered and constitute valid and binding instruments enforceable in
accordance with their terms subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Options and the Option Agreements conform to the
descriptions thereof in the Prospectus;
(u) the statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources which are believed by the Company to be reliable;
(v) except as set forth in the Prospectus, each of the Company and its
subsidiaries owns or possesses the patents, patent rights, licenses,
inventions, trademarks, service marks, trade names, copyrights and
know-how, including trade se-
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crets and other unpatented and/or unpatentable proprietary or confidential
information, databases, computer applications, programs and other software
and other intellectual property (collectively, the "Intellectual
Property"), reasonably necessary to carry on the business conducted by it,
except to the extent that the failure to own or possess such Intellectual
Property would not have a Material Adverse Effect, and, except as
described in the Registration Statement and the Prospectus, the Company
has no knowledge of infringement of or conflict with asserted rights of
others with respect to any Intellectual Property, except for notices the
content of which if accurate would not have a Material Adverse Effect;
(w) there are no existing or, to the knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which are likely to have a Material Adverse Effect;
(x) the Company carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its business and
the value of its properties and as is customary for companies engaged in
similar businesses in similar industries;
(y) the Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct
its businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance
with Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate, have
a Material Adverse Effect; and
(z) each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
that is maintained, administered or contributed to by the Company or any
of its affiliates for employees or former employees of the Company and its
affiliates has been maintained in material compliance with its terms and
the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue
Code of 1986, as amended ("Code"). No prohibited transaction, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred
with respect to any such plan excluding transactions effected pursuant to
a statutory or administrative exemption. For each such plan which is
subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, no "accumulated
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funding deficiency," as defined in Section 412 of the Code, has been
incurred, whether or not waived, and the fair market value of the assets
of each such plan (excluding for these purposes accrued but unpaid
contributions) exceed the present value of all benefits accrued under such
plan determined using reasonable actuarial assumptions.
(B) Each of the SAIC Entities severally represents and warrants to
each of the Underwriters, the Company and the Management Stockholders that:
(a) SAIC has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware;
(b) SAIC VCC has been duly incorporated and is validly existing
as a corporation under the laws of the State of Nevada; and all the
outstanding shares of capital stock of SAIC VCC have been duly authorized
and validly issued, are fully-paid and non-assessable, and are owned by
SAIC, directly or indirectly, free and clear of all liens, encumbrances,
security interests and claims;
(c) SAIC VCC has good and marketable title to all the Shares to
be sold by SAIC VCC hereunder, in each case free and clear of all liens,
encumbrances, equities, security interests and claims whatsoever, with
full right and authority to deliver the same hereunder, and upon the
delivery of and payment for such Shares hereunder, the several
Underwriters will receive good and marketable title thereto, free and
clear of all liens, encumbrances, equities, security interests or claims
whatsoever;
(d) neither of the SAIC Entities has taken nor will it take,
directly or indirectly, any action which is designed to, or that might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Common Stock;
(e) neither of the SAIC Entities has actual knowledge that the
representations and warranties of the Company contained in Section 4(A) of
this Agreement are not true and correct, each of the SAIC Entities is
familiar with the Registration Statement, and neither of the SAIC Entities
has knowledge of any material fact, condition or information not disclosed
in the Registration Statement which has had or may have a Material Adverse
Effect; the sale of the Shares by SAIC VCC pursuant to this Agreement is
not prompted by any information concerning the Company which is not set
forth in the Registration Statement; and the information pertaining to the
SAIC Entities under the caption "Selling Stockholders" in the Prospectus
is complete and accurate in all material respects;
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(f) the Registration Statement and the Prospectus (as amended or
supplemented) comply, or will comply, as the case may be, in all material
respects with the Securities Act and do not and will not, as of the
applicable effective date of the Registration Statement and any amendment
thereto and as of the date of the Prospectus and any amendment or
supplement thereto, 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, and the Prospectus, as
amended or supplemented, if applicable, at the Closing Date or Additional
Closing Date, as the case may be, will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, except that the foregoing representations and
warranties shall not apply to statements or omissions in the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by or on behalf of the
Underwriters through the Representatives expressly for use therein;
(g) this Agreement has been duly authorized, executed and
delivered by the SAIC Entities; and
(h) the sale of the Shares by SAIC VCC hereunder, the compliance
by the SAIC Entities with all of the provisions of this Agreement and the
consummation of the transactions contemplated herein will not conflict
with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under (in each case material to SAIC and its
subsidiaries, considered as a whole), any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
either SAIC Entity is a party or by which either SAIC Entity is bound or
to which any of the property or assets of either SAIC Entity is subject,
nor will such action result in any violation of the provisions of the
certificate of incorporation or by-laws of either SAIC Entity, nor will
such action result in any violation (in each case material to SAIC and its
subsidiaries, considered as a whole) of any applicable statute or any
applicable order, rule or regulation of any court or governmental agency
or body having jurisdiction over either SAIC Entity or any of its
properties; no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the sale of the Shares by SAIC VCC or the consummation by the
SAIC Entities of the transactions contemplated by this Agreement, except
such consents, approvals, authorizations, orders, licenses, registrations
or qualifications as have been obtained or made under the Securities Act
or the Exchange Act and as may be required under state securities or blue
sky laws in connection with the purchase and distribution of the Shares by
the Underwriters; each of the SAIC Entities has full right, power and
authority to enter into this Agreement and to sell, assign, transfer and
deliver the Shares to be
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sold by it; each agreement between the Company and SAIC referred to in the
Prospectus has been duly executed and delivered by SAIC and constitutes a
valid and binding obligation of SAIC enforceable against SAIC in
accordance with its terms.
(C) Each of the Management Stockholders severally represents and
warrants to each of the Underwriters that:
(a) all consents, approvals, authorizations and orders necessary
for the execution and delivery by such Management Stockholder of this
Agreement and the Power of Attorney (the "Power of Attorney") and the
Custody Agreement (the "Custody Agreement") hereinafter referred to, and
for the sale and delivery of the Shares to be sold by such Management
Stockholder hereunder, have been obtained; and such Management 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 Management Stockholder
hereunder; and this Agreement, the Power of Attorney and the Custody
Agreement have each been duly, executed and delivered by such Management
Stockholder;
(b) the sale of the Shares to be sold by such Management
Stockholder hereunder and the compliance by such Management 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 or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Management
Stockholder is a party or by which such Management Stockholder is bound or
to which any of the property or assets of such Management Stockholder is
subject, nor will such action result in any violation of any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over such Management Stockholder or the property of
such Management Stockholder;
(c) such Management Stockholder has good and valid title to the
Shares to be sold at the Closing Date by such Management Stockholder
hereunder (other than the Shares to be issued upon exercise of Options),
free and clear of all liens, encumbrances, equities or adverse claims;
such Management Stockholder will have, immediately prior to the Closing
Date, assuming due issuance of any Shares to be issued upon exercise of
Options, good and valid title to the Shares to be sold at the Closing Date
by such Management Stockholder, free and clear of all liens, encumbrances,
equities or adverse claims; and, upon delivery of the certificates
representing such Shares and payment therefor pursuant hereto, good and
valid title to such
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Shares, free and clear of all liens, encumbrances, equities, security
interests or claims, will pass to the several Underwriters;
(d) such Management Stockholder has not taken nor will such
Management Stockholder take, directly or indirectly, any action which is
designed to, or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock;
(e) the information pertaining to such Management Stockholder
under the caption "Selling Stockholders" in the Prospectus is complete and
accurate in all material respects;
(f) when the Registration Statement becomes effective and at all
times subsequent thereto through the latest of the Closing Date, the
Additional Closing Date or the termination of the offering of the Shares,
such parts of the Registration Statement and Prospectus, and any
supplements or amendments thereto, as they relate to such Management
Stockholder 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; and
(g) the lock-up letter previously delivered to the Underwriters
by such Management Stockholder is in full force and effect on the date of
this Agreement.
(D) Xxxxxx X. Xxxxxxxxxxxx (the "Senior Management Stockholder")
represents and warrants to each of the Underwriters that such Senior Management
Stockholder has no reason to believe that the representations and warranties of
the Company contained in Section 4(A) of this Agreement are not true and
correct in all material respects.
Each of the Management Stockholders severally represents and warrants
to each of the Underwriters that certificates in negotiable form representing
all of the Shares to be sold by such Management Stockholders hereunder, other
than any such Shares to be issued upon the exercise of Options, have been, and
each of the Management Stockholders who is selling Shares upon the exercise of
Options to each of the Underwriters represents and warrants that duly completed
and executed irrevocable Option exercise notices, in the forms specified by the
relevant Option Agreement, with respect to all of the Shares to be sold by such
Management Stockholder to each of the Underwriters hereunder have been, placed
in custody under a Custody Agreement relating to such Shares, in the form
heretofore furnished to you, duly executed and delivered by such Management
Stockholder to the Company, as custodian (the "Custodian"), and that such
Management Stockholder has duly executed and delivered Powers of Attorney, in
the form heretofore furnished to you, appointing the person or persons
indicated in such Power of Attorney, and each of them, as
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such Management Stockholder's Attorneys-in-Fact (the "Attorneys-in-Fact" or any
one of them the "Attorney-in Fact") with authority to execute and deliver this
Agreement on behalf of such Management Stockholder, to determine the purchase
price to be paid by the Underwriters to the Management Stockholders as provided
herein, to authorize the delivery of the Shares to be sold by such Management
Stockholder hereunder, to effect (if applicable) the exercise of the Options to
be exercised with respect to the Shares to be sold by such Management
Stockholder hereunder and otherwise to act on behalf of such Management
Stockholder in connection with the transactions contemplated by this Agreement
and the Custody Agreement.
Each of the Management Stockholders specifically agrees that the
Shares represented by the certificates or the irrevocable Option exercise
notice, in either case held in custody for such Management Stockholder under
the Custody Agreement, are subject to the interests of the Underwriters
hereunder, and that the arrangements made by such Management Stockholder for
such custody, and the appointment by such Management Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable.
Each of the Management Stockholders specifically agrees that the obligations of
such Management Stockholder hereunder shall not be terminated by operation of
law, whether by the death or incapacity of any individual Management
Stockholder, or, in the case of an estate or trust, by the death or incapacity
of any executor or trustee or the termination of such estate or trust, or in
the case of a partnership or corporation, by the dissolution of such
partnership or corporation, or by the occurrence of any other event. If any
individual Management Stockholder or any such executor or trustee should die or
become incapacitated, or if any such estate or trust should be terminated, or
if any such partnership or corporation should be dissolved, or if any other
such event should occur, before the delivery of the Shares by it hereunder,
certificates representing such Shares shall be delivered by or on behalf of
such Management Stockholder in accordance with their terms and conditions of
this Agreement and the Custody Agreement, and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if
such death, incapacity, termination, dissolution or other event had not
occurred, regardless of whether or not the Custodian, the Attorneys-in-Fact, or
any of them, shall have received notice of such death, incapacity, termination,
dissolution or other event.
5. (A) The Company covenants and agrees with each of the several
Underwriters as follows:
(a) to use its best efforts to cause the Registration Statement to
become effective at the earliest possible time and, if required, to file
the final Prospectus with the Commission within the time periods specified
by Rule 424(b) and Rule 430A under the Securities Act and to file promptly
all reports and any definitive proxy or information statements required to
be filed by the Company with the Commission pur-
16
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suant 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; and to furnish copies of the Prospectus to the Underwriters in New
York City prior to 10:00 a.m., New York City time, on the Business Day
next succeeding the date of this Agreement in such quantities as the
Representatives may reasonably request;
(b) to deliver, at the expense of the Company, to the Representatives
seven signed copies of the Registration Statement (as originally filed)
and each amendment thereto, in each case including exhibits and documents
incorporated by reference therein, and to each other Underwriter a
conformed copy of the Registration Statement (as originally filed) and
each amendment thereto, in each case without exhibits but including the
documents incorporated by reference therein and, during the period in
which a prospectus is required by law to be delivered by an Underwriter or
a dealer, to each of the Underwriters as many copies of the Prospectus
(including all amendments and supplements thereto) and documents
incorporated by reference therein as the Representatives may reasonably
request for the purposes contemplated by the Securities Act;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the
Registration Statement becomes effective, to furnish to the
Representatives a copy of the proposed amendment or supplement for review
and not to file any such proposed amendment or supplement to which the
Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm such advice
in writing (i) when the Registration Statement has become effective, (ii)
when any amendment to the Registration Statement has been filed or becomes
effective, (iii) when any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof, (iv) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for any additional information, (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose, (vi) of the occurrence of any event, within
the period referenced in paragraph (e) below, 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
when the Prospectus is delivered to a purchaser, not misleading, and (vii)
of the receipt by the Company of any notification with respect to any
suspen-
17
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sion of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its best efforts to prevent the issuance of any such
stop order, or of any order preventing or suspending the use of any
preliminary prospectus or the Prospectus, or of any order suspending any
such qualification of the shares, or notification of any such order
thereof and, if issued, to obtain as soon as possible the withdrawal
thereof;
(e) if, during such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall
occur as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriters and to the dealers (whose names and addresses
the Representatives will furnish to the Company) to which Shares may have
been sold by the Representatives on behalf of the Underwriters and to any
other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so that
the Prospectus will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under the
securities or blue sky laws of such jurisdictions as the Representatives
shall reasonably request and to continue such qualification in effect so
long as reasonably required for distribution of the Shares; provided that
the Company shall not be required to file a general consent to service of
process in any jurisdiction;
(g) to make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter
of the Company occurring after the effective date of the Registration
Statement, which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Commission promulgated thereunder;
(h) during a period of five years commencing with the date hereof, to
furnish to the Representatives copies of all reports or other
communications (financial or other) furnished to holders of the Shares,
and copies of any reports and financial statements furnished to or filed
with the Commission;
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(i) for a period of 90 days after the date of the initial public
offering of the Shares (the "Lock-Up Period") not to, (i) directly or
indirectly, offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any shares of Common Stock or any
securities of the Company which are substantially similar to the Common
Stock, including but not limited to any securities convertible into or
exercisable or exchangeable for, or that represent the right to receive,
Common Stock or any such substantially similar securities or (ii) enter
into any swap, option, future, forward or other agreement that transfers,
in whole or in part, any of the economic consequences of ownership of the
Common Stock or any such substantially similar securities, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise
without the prior written consent of the Representatives, other than (i)
the Option Shares to be sold hereunder, (ii) any options granted or shares
of Common Stock of the Company issued upon the exercise of options granted
or to be granted under the Company's 1996 Stock Incentive Plan, the
Company's 1997 Employee Stock Purchase Plan or any 401(k) plan
administered by SAIC or by the Company during the Lock-Up Period, (iii)
shares of Common Stock issued by the Company as consideration for the
acquisition of a business similar or complementary to that of the Company;
provided, any acquiror of such shares of Common Stock shall agree to be
bound by this Section 5(A)(i) or identical restrictions on transfer of
such shares for the duration of the Lock-Up Period or (iv) as otherwise
set forth in the Prospectus;
(j) to use the net proceeds received by the Company from the sale of
the Shares by the Company pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds";
(k) to list for quotation the Shares on the National Market System of
the Nasdaq Stock Market, Inc. (the "Nasdaq National Market"); and
(l) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid
all costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all
costs and expenses (i) incident to the preparation, registration,
transfer, execution, issuance and delivery of the Shares, (ii) incident to
the preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements thereto)
(but not after nine (9) months after the date hereof), (iii) incurred in
connection with the registration or qualification of the Shares under the
laws of such jurisdictions as the Representatives
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may designate (including fees of counsel for the Underwriters and its
disbursements), (iv) in connection with the listing of the Shares on the
Nasdaq National Market, (v) related to the filing with, and clearance of
the offering by, the National Association of Securities Dealers, Inc.,
(vi) in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, any blue sky memoranda
and the furnishing to the Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing and shipping,
as herein provided, (vii) any expenses incurred by the Company in
connection with a "road show" presentation to potential investors, (viii)
the cost of preparing stock certificates and (ix) the cost and charges of
any transfer agent and any registrar.
(B) Each of the SAIC Entities covenants and agrees with the several
Underwriters that, for a period of 90 days after the date of the initial public
offering of the Shares not to, (i) offer, pledge, announce the intention to
sell, sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of any shares of Common Stock or any
securities of the Company which are substantially similar to the Common Stock,
including but not limited to any securities convertible into or exercisable or
exchangeable for, or that represent the right to receive, Common Stock or any
such substantially similar securities or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Common Stock or any such substantially similar securities,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise or (iii) make any demand for or exercise any right with respect to
the registration of any shares of Common Stock or any such substantially
similar securities without the prior written consent of the Representatives, in
each case other than the Shares to be sold by SAIC VCC hereunder.
(C) Each of the Management Stockholders covenants and agrees with each
of the several Underwriters to deliver to the Representatives prior to or at
the Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by the
Treasury Department regulations in lieu thereof) in order to facilitate the
Underwriters' documentation of their compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated.
6. The several obligations of the Underwriters hereunder to purchase
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, are subject to the performance by the Company, each of the SAIC Entities
and each of the Management Stockholders of their respective obligations
hereunder and to the following additional conditions:
20
-20-
(a) the Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act,
such post-effective amendment shall have become effective) not later than
5:00 P.M., New York City time, on the date hereof; and no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment shall be in effect, and no proceedings for such
purpose shall be pending before or threatened by the Commission; 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 Securities Act and in accordance with
Section 5(a) hereof; and all requests for additional information shall
have been complied with to the satisfaction of the Representatives;
(b) the representations and warranties of the Company, the SAIC
Entities and the Management Stockholders contained herein are true and
correct on and as of the Closing Date or the Additional Closing Date, as
the case may be, as if made on the Closing Date or the Additional Closing
Date, as the case may be, and each of the Company, the SAIC Entities and
the Management Stockholders shall have complied with all agreements and
all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date or the Additional Closing Date, as the case may
be;
(c) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date or the Additional Closing Date, as the case may
be, there shall not have occurred any downgrading, nor shall any notice
have been given of (i) any downgrading, (ii) any intended or potential
downgrading or (iii) any review or possible change that does not indicate
an improvement, in the rating accorded any securities of or guaranteed by
the Company by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(d) since the respective dates as of which information is given in the
Prospectus, there shall not have been any change in the capital stock or
long-term debt of the Company or any Material Adverse Change, or any
development involving a prospective Material Adverse Change otherwise than
as set forth or contemplated in the Prospectus, the effect of which in the
judgment of the Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares on the
Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus; and the Company
has not 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 in-
21
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surance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus;
(e) the Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, (1) a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company,
satisfactory to the Representatives, to the effect set forth in
subsections (a) through (c) (with respect to the respective
representations, warranties, agreements and conditions of the Company) of
this Section 6 and to the further effect that there has not occurred any
Material Adverse Change, or any development involving a prospective
Material Adverse Change from that set forth or contemplated in the
Registration Statement and (2) a certificate from each of the SAIC
Entities and the Management Stockholders, satisfactory to the
Representatives to the effect set forth in subsection (b) of this Section
6 (with respect to the respective representations, warranties, agreements
and conditions of the SAIC Entities and the Management Stockholders, as
the case may be);
(f) Pillsbury, Madison & Sutro LLP, counsel for the Company, the SAIC
Entities and the Management Stockholders, shall have furnished to the
Representatives their written opinion, dated the Closing Date or the
Additional Closing Date, as the case may be, in form and substance
satisfactory to the Representatives, to the effect that:
(i) each of the Company and SAIC has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation; the Company is duly
qualified as a foreign corporation and in good standing in each state
of the United States of America in which its ownership or leasing of
property requires such qualification (except where the failure to be
so qualified would not have a Material Adverse Effect) and has full
corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement; SAIC
VCC has been duly incorporated or organized and is validly existing as
a corporation under the laws of the State of Nevada; and all of the
outstanding shares of capital stock of SAIC VCC have been duly and
validly authorized and issued, are fully paid and non-assessable, and
are owned directly or indirectly by SAIC, free and clear of all liens,
encumbrances, equities or claims;
(ii) each of the Company's subsidiaries has been duly
incorporated or organized and is validly existing as a corporation
under the laws of its jurisdiction of incorporation or organization
with full corporate power and authority Registration Statement to own
its properties and conduct its business as described in the
Registration Statement and has been duly qualified as
22
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a foreign corporation for the transaction of business and is in good
standing in each state of the United States of America in which the
ownership or leasing of property requires such qualification (except
other than where the failure to be so qualified would not have a
Material Adverse Effect); and all of the outstanding shares of capital
stock of each subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(iii) the authorized capital stock of the Company consists of
10,000,000 shares of Preferred Stock, par value $.001 per share, of
which there are no outstanding shares and 210,000,000 shares of Common
Stock, of which there are outstanding shares (including the Company
Shares and the Option Shares, if any, issued pursuant to the terms of
the Agreement); proper corporate proceedings have been taken validly
to authorized such authorized capital stock; all of the outstanding
shares of such capital stock (including the Company Shares and the
Option Shares, if any, issued pursuant to the terms of this Agreement)
have been duly and validly issued and are fully paid and
nonassessable; and no preemptive rights of, or rights of refusal in
favor of, stockholders exist with respect to the Shares, or the issue
and sale thereof, and no restrictions on transfer or voting exist with
respect to the Shares in each case pursuant to the Certificate of
Incorporation or Bylaws of the Company or under law and, to the
knowledge of such counsel, there are no contractual preemptive rights
that have not been waived, rights of first refusal or rights of
co-sale which exist with respect to the issue and sale of the Shares
and there are no contractual restrictions on transfer or voting which
exist with respect to the Shares;
(iv) the Registration Statement has become effective under
the Securities Act and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement
or suspending or preventing the use of the Prospectus is in effect and
no proceedings for that purpose have been instituted or are pending or
contemplated by the Commission;
(v) the Registration Statement and the Prospectus (except as
to the financial statements and 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 Securities Act and with the rules and regulations of the
Commission thereunder;
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(vi) such counsel have no reason to believe that the
Registration Statement (except as to the financial statements and
schedules and other financial data contained therein, as to which such
counsel need not express any opinion or belief) at the Effective Date
contained any 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 the Prospectus (except as
to the financial statements and schedules and other financial data
contained therein, as to which such counsel need not express any
opinion or belief), as of its date or at the Closing Date or the
Additional Closing Date, as the case may be, contained or contains any
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(vii) the information required to be set forth in the
Registration Statement in answer to Items 9, 10 (insofar as it relates
to such counsel), 11 (insofar as it relates to legal proceedings or
security ownership of beneficial owners and management) and 15 of Form
S-3 is to the best of such counsel's knowledge accurately and
adequately set forth therein in all material respects or no response
is required with respect to such Items, and the description of the
stock option plan and the options granted and which may be granted
thereunder set forth in the Prospectus accurately and fairly presents
the information required to be shown with respect to said plans and
options to the extent required by the Securities Act and the rules and
regulations of the Commission thereunder;
(viii) the documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made by the
Company prior to the Closing Date or the Additional Closing Date, as
the case may be (except as to the financial statements and schedules
and other financial data contained therein, as to which such counsel
need not express any 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 Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and they have no reason to believe that any of
such documents, when such documents became effective or were so filed,
as the case may be, contained, in the case of a registration statement
which became effective under the Securities Act, 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, in the case of other documents which were filed under
the Exchange Act with the Commission, an
24
-24-
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such documents
were so filed, not misleading;
(ix) such counsel do not know of any franchises, contracts,
leases, documents or legal or governmental proceedings, pending or
threatened, which in the opinion of such counsel are of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement,
which are not described and filed as required;
(x) the Underwriting Agreement has been duly authorized,
executed and delivered on or behalf of by the Company, the SAIC
Entities and the Management Stockholders;
(xi) a Power of Attorney and a Custody Agreement have been
duly authorized, executed and delivered by each Management Stockholder
and constitute valid and binding agreements of each Management
Stockholder in accordance with their terms; the Attorneys-in-Fact have
been duly authorized by the Management Stockholders to execute and
deliver on their behalf this Agreement and any other document
necessary or desirable in connection with the transactions
contemplated hereby and to deliver the Shares to be sold by the
Management Stockholders and receive payment therefor pursuant hereto;
(xii) each of the intercompany agreements referred to in the
Prospectus has been duly authorized, executed and delivered by the
Company and SAIC;
(xiii) the execution, delivery and performance by the
Company, the SAIC Entities and the Management Stockholders of the
Underwriting Agreement, the sale by the Selling Stockholders of the
Underwritten Shares and the issuance and sale by the Company of the
Company Shares and the Option Shares, each as contemplated by the
Underwriting Agreement, have been duly authorized on the part of the
Company, each of the SAIC Entities and each of the Management
Stockholders and will not conflict with, or result in a breach of, the
Certificate of Incorporation or Bylaws of the Company or either SAIC
Entity or any agreement (including, without limitation, the
Cooperative Agreement) or instrument known to such counsel to which
the Company, either SAIC Entity or any Management Stockholder is a
party or any applicable law or regulation, or so far as is known to
such counsel, any order, writ, in-
25
-25-
junction or decree, or any jurisdiction, court or governmental
instrumentality;
(xiv) all holders of securities of the Company having rights
to the registration of shares of Common Stock, or other securities,
because of the filing of the Registration Statement by the Company
have waived such rights or such rights have expired by reason of lapse
of time following notification of the Company's intent to file the
Registration Statement;
(xv) no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
of the transactions contemplated in the Underwriting Agreement, except
such as have been obtained under the Securities Act and such as may be
required under state securities or blue sky laws in connection with
the purchase and distribution of the Shares by the Underwriters;
(xvi) each Selling Stockholder is the sole registered owner
of the Shares to be sold by such Selling Stockholder under the
Underwriting Agreement; SAIC VCC has full corporate power, right and
authority to sell the Shares sold by it; and
(xvii) good and marketable title to the Shares sold by each
Selling Stockholder under the Underwriting Agreement, free and clear
of all liens, encumbrances, equities, security interests and claims,
has been transferred to the Underwriters, who have severally purchased
such Shares under the Underwriting Agreement, assuming for the purpose
of this opinion that the Underwriters purchased the same in good faith
without notice of any adverse claims.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and the States of New York, Delaware and California, to the extent such
counsel deems proper and to the extent specified in such opinion, if at
all, upon an opinion or opinions (in form and substance reasonably
satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to the Underwriters' counsel, familiar with the applicable
laws; (B) as to matters of fact, to the extent such counsel deems proper,
on certificates of responsible officers of the Company and certificates or
other written statements of officials of jurisdictions having custody of
documents respecting the corporate existence or good standing of the
Company. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel upon which they relied is in form
satisfactory to such counsel and, in such counsel's opinion, the
Underwriters
26
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and they are justified in relying thereon. With respect to the matters to
be covered in subparagraph (vi) above counsel may state their opinion and
belief is based upon their participation in the preparation of the
Registration Statement and the Prospectus and any amendment or supplement
thereto (other than the documents incorporated by reference therein) and
review and discussion of the contents thereof (including the documents
incorporated by reference therein) but is without independent check or
verification except as specified.
The opinion of Pillsbury, Madison & Sutro LLP described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein;
(g) on the date hereof and the effective date of the most recently
filed post-effective amendment filed on or subsequent to the date hereof
to the Registration Statement and also on the Closing Date or Additional
Closing Date, as the case may be, PricewaterhouseCoopers shall have
furnished to you letters, dated the respective dates of delivery thereof,
in form and substance satisfactory to you, containing statements and
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in
the Registration Statement and the Prospectus;
(h) the Representatives shall have received on and as of the Closing
Date or Additional Closing Date, as the case may be, an opinion of Xxxxxx
Xxxxxx & Xxxxxxx, counsel to the Underwriters, with respect to the due
authorization and valid issuance of the Shares, the Registration
Statement, the Prospectus and other related matters as the Representatives
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;
(i) the Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for listing on
the Nasdaq National Market, subject to official notice of issuance;
(j) on or prior to the Closing Date or Additional Closing Date, as the
case may be, the Company, the SAIC Entities and the Management
Stockholders shall have furnished to the Representatives such further
certificates and documents as the Representatives shall reasonably
request; and
27
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(k) the lock-up agreements of each of the Company's executive officers
and directors, delivered to you on or before the date hereof, shall be in
full force and effect on the Closing Date or Additional Closing Date, as
the case may be.
7. Each of the Company, the SAIC Entities and the Senior Management
Stockholder agrees, jointly and severally, to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, the legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Underwriter furnished
to the Company in writing by such Underwriter through the Representatives
expressly for use therein; provided, however, that (i) the aggregate
obligations of the SAIC Entities under the foregoing indemnity shall not exceed
the net proceeds received by SAIC VCC from the sale of the SAIC Shares (which
net proceeds shall not include the Underwriters' discount) and (ii) the
obligations of the Senior Management Stockholder under the foregoing indemnity
shall not exceed the net proceeds received by the Senior Management Stockholder
from the sale of Shares sold by the Senior Management Stockholder hereunder
(which net proceeds shall not include the Underwriters' discount and, in the
event the Senior Management Stockholder sells Shares upon the exercise of
Options, shall not include the amount remitted to the Company to effect the
exercise thereof); and provided, further, that the foregoing indemnity shall
not inure to the benefit of any Underwriter from whom the person asserting such
losses, claims, damages, liabilities and judgments purchased Shares, or any
person controlling such Underwriter, if a copy of the Prospectus (including any
amendment or supplement thereto) was not sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (including any amendment or
supplement thereto) would have cured the defect giving rise to such losses,
claims, damages, liabilities or judgments, unless such failure to deliver a
copy of the Prospectus was a result of the failure of the Company to provide as
many copies of such Prospectus as such Underwriter may reasonably request in a
timely manner.
Each of Xxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxx (together, the "Other
Management Stockholders") agrees, severally and not jointly, to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the mean-
28
-28-
ing of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Company, the SAIC
Entities and the Senior Management Stockholder to each Underwriter, but only
with reference to information furnished to the Company in writing by or on
behalf of such Other Management Stockholder expressly for use in the
Registration Statement, the Prospectus, any amendment and supplement thereto,
or any preliminary prospectus; provided, however, that the obligations of each
of the Other Management Stockholders under the foregoing indemnity shall not
exceed the net proceeds received by such Other Management Stockholder from the
sale of Shares sold by such Other Management Stockholder hereunder (which net
proceeds shall not include the Underwriters' discount and, in the case of an
Other Management Stockholder who sells Shares upon the exercise of Options,
shall not include the amount remitted to the Company to effect the exercise
thereof).
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person who controls the Company within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act,
each of the SAIC Entities and each of the Management Stockholders to the same
extent as the foregoing indemnities from the Company, the SAIC Entities and the
Management Stockholders to each Underwriter, but only with reference to
information furnished to the Company in writing by or on behalf of the
Underwriters through the Representatives expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to the
preceding paragraphs of this Section 7, such person (the "Indemnified Person")
shall promptly notify the person or persons against whom such indemnity may be
sought (each an "Indemnifying Person") in writing, and such Indemnifying
Persons, upon request of the Indemnified Person, shall retain counsel
reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others the Indemnifying Persons may designate in such proceeding
and shall pay the fees and expenses of such counsel related to such proceeding.
In any such proceeding, any Indemnified Person shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person and not the Indemnifying Persons unless (i)
the Indemnifying Persons and the Indemnified Person shall have mutually agreed
to the contrary, (ii) the Indemnifying Persons has failed within a reasonable
time to retain counsel reasonably satisfactory to the Indemnified Person or
(iii) the named parties in any such proceeding (including any impleaded
parties) include both an Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood that
no Indemnifying Person shall, in connection with any proceeding or related
proceeding
29
-29-
in the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Indemnified Persons,
and that all such fees and expenses shall be reimbursed as they are incurred.
Any such separate firm for the Underwriters and such control persons of
Underwriters shall be designated in writing by X.X. Xxxxxx Securities Inc. and
any such separate firm for the Company, its directors, its officers who sign
the Registration Statement and such control persons of the Company shall be
designated in writing by the Company, any such separate firm for the SAIC
Entities shall be designated in writing by SAIC and any such separate firm for
the Management Stockholders shall be designated in writing by the
Attorney-in-Fact. No Indemnifying Person shall be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, each Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
an Indemnifying Person to reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by the second and third sentences of this
paragraph, such Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not
have reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement. No Indemnifying Person shall, without the prior
written consent of the Indemnified Person, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject
matter of such proceeding.
If the indemnification provided for in the first four paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable
by such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, the SAIC Entities and the Management
Stockholders on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, the SAIC Entities and the Management
Stockholders on the one hand and the Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Com-
30
-30-
pany, the SAIC Entities and the Management Stockholders on the one hand and the
Underwriters on the other hand shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Company , the SAIC Entities and the Management Stockholders and
the total underwriting discounts and the commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate public offering price of the Shares. The
relative fault of the Company, the SAIC Entities and the Management
Stockholders on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company, the SAIC
Entities and the Management Stockholders or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the SAIC Entities, the Management Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
SAIC Entities, the Management Stockholders or the Underwriters were treated as
one entity for such purposes) or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, (i) in no
event shall an Underwriter be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, (ii)
in no event shall the SAIC Entities be required to contribute any amount in
excess of the amount by which the net proceeds received by SAIC VCC through the
sale of its shares to the Underwriters (which net proceeds shall not include
the Underwriters' discount) exceeds the amount of any damages that the SAIC
Entities have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and (iii) in no event
shall a Management Stockholder be required to contribute any amount in excess
of the amount by which the net proceeds received by it through the sale of its
shares to the Underwriters exceeds the amount of any damages that such
Management Stockholder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission (which net
proceeds shall not include the Underwriters' discount and which net proceeds,
in the case of a Management Stockholder who sell Shares upon the exercise of
Options, shall
31
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not include the amount remitted to the Company to effect the exercise thereof).
No person guilty of fraudulent misrepresentation (within the meaning of Section
ll(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective number of Shares set forth opposite their names in Schedule I
hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company, the SAIC Entities and
the Management Stockholders set forth in this Agreement shall remain operative
and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter or by or on behalf of the Company, its
officers or directors or any other person controlling the Company, the SAIC
Entities and the Management Stockholders and (iii) acceptance of and payment
for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice
given to the Company and the Selling Stockholders, if after the execution and
delivery of this Agreement and prior to the Closing Date (or, in the case of
the Option Shares, to the Company prior to the Additional Closing Date) (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange or the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade, (ii) trading of any securities of or guaranteed by the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Representatives, is material and adverse and which, in the judgment of the
Representatives, makes it impracticable to market the Shares being delivered at
the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of
32
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the Registration Statement (or, if applicable, any post-effective amendment) by
the Commission.
If on the Closing Date or the Additional Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the
Representatives may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to Section 1 be increased pursuant to this
Section 9 by an amount in excess of one-ninth of such number of Shares without
the written consent of such Underwriter. If on the Closing Date or the
Additional Closing Date, as the case may be, any Underwriter or Underwriters
shall fail or refuse to purchase Shares which it or they have agreed to
purchase hereunder on such date, and the aggregate number of Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Shares to be purchased on such date, and arrangements satisfactory to
the Representatives, the Company, the SAIC Entities and the Management
Stockholders for the purchase of such Shares are not made within 36 hours after
such default, this Agreement (or the obligations of the several Underwriters to
purchase the Option Shares, as the case may be, failing such arrangements
satisfactory to the Representatives and the Company) shall terminate without
liability on the part of any non-defaulting Underwriter, the Company, the SAIC
Entities or the Management Stockholders. In any such case either you, the
Company, the SAIC Entities or the Management Stockholders shall have the right
to postpone the Closing Date (or, in the case of the Option Shares, either you,
the Company or the Company shall have the right to postpone the Additional
Closing Date), but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus
or in any other documents or arrangements may be effected. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company, the SAIC
Entities or the Management Stockholders to comply with the terms or to fulfill
any of the conditions of this Agreement, or if for any reason any of the
Company, the SAIC Entities or the Management Stockholders shall be unable to
perform its obligations under this Agreement or any condition of the
Underwriters' obligations cannot be fulfilled, the Company, the SAIC Entities
33
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and the Management Stockholders agree to reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and expenses of
its counsel) reasonably incurred by the Underwriter in connection with this
Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon
the Company, the SAIC Entities, the Management Stockholders and the
Underwriters any controlling persons referred to herein and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person, firm or corporation
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. No purchaser of Shares from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by X.X. Xxxxxx Securities Inc. alone on behalf of
the Underwriters, and any such action taken by the Representatives jointly or
by X.X. Xxxxxx Securities Inc. alone shall be binding upon the Underwriters.
All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (telefax: 212-648-5705), Attention: Syndicate Department, copy to
Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (telefax:
212-269-5420), Attention: Xxxxxx X. Xxxxxxxxx, Esq. Notices to the Company
shall be given to it at its office, 000 Xxxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, (telefax: 000-000-0000), Attention: Chief Executive Officer. Notices
to the SAIC Entities shall be given to it at its office, 00000 Xxxxxx Xxxxx
Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 (telefax: 619-535-7992), Attention: General
Counsel. Notices to the Management Stockholders shall be given to the
Attorneys-in-Fact, c/o the Company, 000 Xxxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, (telefax: 703-742-9626), Attention: Chief Executive Officer. Copies of
notices to any of the Company or the Selling Stockholders should be given to
Pillsbury Madison & Sutro LLP, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx
00000 (telefax: 650-233-4545), Attention: Xxxxx X. del Xxxxx, Esq.
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PROVISIONS THEREOF.
34
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If the foregoing is in accordance with your understanding, please sign
and return five counterparts hereof.
Very truly yours,
NETWORK SOLUTIONS, INC.
By:
------------------------------------
Name:
Title:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
By:
------------------------------------
Name:
Title:
SAIC VENTURE CAPITAL
CORPORATION
By:
------------------------------------
Name:
Title:
MANAGEMENT STOCKHOLDERS
By:
------------------------------------
Name:
Title: Attorney-in-Fact
35
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As Attorney-in-Fact acting on behalf of each of
the Management Stockholders named in Schedule II
to this Agreement.
Accepted: , 2000
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXXXX & XXXXX LLC
PAINEWEBBER INCORPORATED
FLEETBOSTON XXXXXXXXX XXXXXXXX
PRUDENTIAL SECURITIES INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters listed
in Schedule I hereto.
By: X.X. XXXXXX SECURITIES INC.
By:
--------------------------------
Name:
Title:
36
SCHEDULE I
Number of
Underwritten Shares
Underwriter To Be Purchased
----------- -------------------
X.X. Xxxxxx Securities Inc.................
Xxxxxx Xxxxxxx & Co. Incorporated..........
Xxxxxxxxx & Xxxxx LLC......................
PaineWebber Incorporated...................
FleetBoston Xxxxxxxxx Xxxxxxxx, Inc........
Prudential Securities Incorporated......... ---------
Total 7,730,000
=========
37
SCHEDULE II
Number of
Underwritten
Selling Stockholders Shares
-------------------- ------------
SAIC Venture Capital Corporation............ 6,700,000
Xxxxx X. Xxxxxx............................. 12,300
Xxxxxx X. Xxxxxxxxxxxx...................... 10,000
Xxxxxxxx X. Xxxxx........................... 7,700
---------
Total 6,730,000
=========
