1
Exhibit 1.01
Dated May 21, 1998
INTUIT INC.
UNDERWRITING AGREEMENT
2
INTUIT INC.
COMMON STOCK
UNDERWRITING AGREEMENT
May 21, 1998
To:
DEUTSCHE XXXXXX XXXXXXXX INC.
and the other Underwriters
named in Schedule II hereto
c/o Deutsche Xxxxxx Xxxxxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Intuit Inc., a Delaware corporation (the "Company"), hereby
confirms its agreement with the several underwriters named in Schedule II
hereto (the "Underwriters"), for whom you have been duly authorized to act as
representatives (the one or more firms acting in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be references to
the Underwriters.
Section 1. Underwriting. Subject to the terms and conditions contained
herein:
(a) The Company proposes to issue and sell the number of shares of
common stock, $0.01 per share par value (the "Common Stock"), of the Company
(the "Firm Shares") identified in Schedule I hereto to the several
Underwriters. The Company also proposes to issue and sell to the several
Underwriters not more than the number of additional shares of Common Stock (the
"Option Shares" and, together with the Firm Shares, the "Shares") identified in
Schedule I hereto if requested by the Representatives as provided in Section
2(b) hereof.
(b) Upon your authorization of the release of the Firm Shares, the
Underwriters propose to make a public offering (the "Offering") of the Firm
Shares upon the terms set forth in the Prospectus (as defined below) as soon
after the Registration Statement (as defined below) and this Agreement have
become effective as in the Representatives' sole judgment is advisable. As used
in this Agreement, the term "Effective Date" shall mean each date that the
registration statement and any post-effective amendment or amendments thereto
became or become effective; the term "Original Registration Statement" means
the Registration Statement referred to in Section 5(a)(i) below, as amended at
the time when it was or is declared effective, including incorporated
documents, financial schedules and exhibits thereto, including any Rule 430A
Information (as defined below) deemed to be included therein at the Effective
Date as provided
3
by Rule 430A and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date (as defined below), also means such
registration statement as so amended; the term "Rule 430A Information" means
information permitted to be omitted from the Original Registration Statement
when it becomes effective pursuant to Rule 430A; the term "Rule 462(b)
Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Securities Act") (including the Registration Statement and any
Preliminary Prospectus (as defined below) or Prospectus incorporated therein at
the time such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule
462(b) Registration Statement; the term "Basic Prospectus" shall mean the
prospectus referred to in Section 5(a)(i) below contained in the Registration
Statement at the Effective Date including, in the case of a Rule 430A Offering
(as defined below), any Preliminary Prospectus; the term "Preliminary
Prospectus" means the preliminary prospectus supplement to the Basic Prospectus
used with respect to the Offering prior to the filing of the Prospectus; the
term "Prospectus" means:
(i) the prospectus supplement to the Basic Prospectus
with respect to the Offering first filed with the Commission pursuant to Rule
424(b) under the Securities Act on or after the date hereof, together with the
Basic Prospectus;
(ii) if, in the case of a Rule 430A Offering, no
prospectus supplement is required to be filed pursuant to Rule 424(b) under the
Securities Act, the form of final prospectus supplement to the Basic
Prospectus, including the Basic Prospectus, included in the Registration
Statement at the Effective Date; or
(iii) for purposes of the representations and warranties in
Section 5 hereof, if the prospectus is not in existence, the Basic Prospectus
and the most recent Preliminary Prospectus, if any.
"Rule 415", "Rule 424" and "Rule 430A" refer to such rules or regulations under
the Securities Act. Any reference herein to the Registration Statement, the
Basic Prospectus, 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 which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the Effective Date
of the Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Prospectus or the Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration Statement
or the issue date of the Basic Prospectus, any Preliminary Prospectus or the
Prospectus, as the case may be, deemed to be incorporated therein by reference.
A "Rule 430A Offering" means an offering of securities which is intended to
commence promptly after the effective date of a registration statement, with
the result that, pursuant to Rules 415 and 430A, all information (other than
-2-
4
Rule 430A Information) with respect to the securities so offered must be
included in such registration statement at the effective date thereof. A "Rule
415 Offering" means an offering of securities pursuant to Rule 415 which does
not commence promptly after the effective date of a registration statement,
with the result that only information required pursuant to Rule 415 need be
included in such registration statement at the effective date thereof with
respect to the securities so offered. Whether the offering of the Shares is a
Rule 430A Offering or a Rule 415 Offering shall be set forth in Schedule I
hereto.
Section 2. Purchase and Closing.
(a) On the basis of the representations, warranties, agreements
and covenants herein contained and subject to the terms and conditions herein
set forth, the Company agrees to issue and sell to each of the Underwriters,
and each of the Underwriters, severally and not jointly, agrees to purchase
from the Company, at the purchase price per Share set forth in Schedule I
hereto (the "Purchase Price"), the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule II hereto. Firm Shares shall be
registered by American Stock Transfer & Trust Company in the name of the
nominee of the Depository Trust Company ("DTC"), Cede & Co. ("Cede & Co."), and
credited to the accounts of such of its participants as the Representatives
shall request, upon notice to the Company at least 48 hours prior to the First
Closing Date (as defined below), with any transfer taxes payable in connection
with the transfer of the Firm Shares to the Underwriters duly paid, against
payment by or on behalf of the Underwriters to the account of the Company of
the aggregate Purchase Price therefor by wire transfer in immediately available
funds at the date, time and place as set forth on Schedule I hereto. Such time
and date of delivery against payment are herein referred to as the "First
Closing Date", and the implementation of all the actions described in this
Section 2(a) is herein referred to as the "First Closing".
(b) For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Shares as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Shares. The purchase price to
be paid for any Option Shares shall be the same as the Purchase Price for the
Firm Shares set forth above in paragraph (a) of this Section 2. The option
granted hereby may be exercised as to all or any part of the Option Shares from
time to time within thirty (30) days after the date of the Prospectus (or, if
such 30th day shall be a Saturday or Sunday or a holiday, on the next business
day thereafter when the New York Stock Exchange and the Nasdaq Stock Market's
National Market (the "Nasdaq National Market") is open for trading). The
Underwriters shall not be under any obligation to purchase any of the Option
Shares prior to the exercise of such option. The Representatives may from time
to time exercise the option granted hereby by giving notice in writing or by
telephone (confirmed in writing) to the Company setting forth the aggregate
number of Option Shares as to which the several Underwriters are then
exercising the option and the date and time for delivery or registry of and
payment for such Option Shares. Any such date of delivery or registry shall be
determined by the Representatives but shall not be earlier than two business
days or later than five business days after such exercise
-3-
5
of the option and, in any event, shall not be earlier than the First Closing
Date. The time and date set forth in such notice, or such other time or date
as the Representatives and the Company may agree upon or as the Representatives
may determine pursuant to Section 2(a) hereof, is herein called an "Option
Closing Date" with respect to such Option Shares, and the implementation of all
the actions described in this Section 2(b) is herein referred to as the "Option
Closing". As used in this Agreement, the term "Closing Date" means either the
First Closing Date or any Option Closing Date, as applicable, and the term
"Closing" means either the First Closing or any Option Closing, as applicable.
If the option is exercised as to all or any portion of the Option Shares, then
either one or more certificates in definitive form for such Option Shares shall
be delivered or, if such Option Shares are to be held through DTC, such Option
Shares shall be registered and credited, on the related Option Closing Date in
the same manner, and upon the same terms and conditions, set forth in paragraph
(a) of this Section 2, except that reference therein to the Firm Shares and the
First Closing Date shall be deemed, for purposes of this paragraph (b), to
refer to such Option Shares and Option Closing Date, respectively. Upon
exercise of the option as provided herein, the Company shall become obligated
to sell to each of the several Underwriters, and, on the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, each of the Underwriters
(severally and not jointly) shall become obligated to purchase from the
Company, the same percentage of the total number of the Option Shares as to
which the several Underwriters are then exercising the option as such
Underwriter is obligated to purchase of the aggregate number of Firm Shares, as
adjusted by the Representatives in such manner as they deem advisable to avoid
fractional shares.
(c) The Company hereby acknowledges that the payment of monies
pursuant to Section 2(a) or 2(b) hereof (a "Payment") by or on behalf of the
Underwriters of the aggregate Purchase Price for any Shares does not constitute
closing of a purchase and sale of the Shares. Only execution and delivery, by
facsimile or otherwise, of a receipt for Shares by the Underwriters indicates
completion of the closing of a purchase of the Shares from the Company.
Furthermore, in the event that the Underwriters make a Payment to the Company
prior to the completion of the Closing of a purchase of Shares, the Company
hereby acknowledges that until the Underwriters execute and deliver such
receipt for the Shares the Company will not be entitled to the Payment and
shall return the Payment to the Underwriters as soon as practicable (by wire
transfer of same-day funds) upon demand. In the event that the Closing of a
purchase of Shares is not completed and the Payment is not returned by the
Company to the Underwriters on the same day the Payment was received by the
Company, the Company agrees to pay to the Underwriters in respect of each day
the Payment is not returned by it, in same-day funds, interest on the amount of
such Payment in an amount representing the Underwriters' cost of financing as
reasonably determined by the Representatives with reference to relevant
then-current interest rates.
(d) It is understood that any of you, individually and not as one
of the Representatives, may (but shall not be obligated to) make Payment on
behalf of any Underwriter or Underwriters for any of the Shares to be purchased
by such Underwriter or Underwriters. No
-4-
6
such Payment shall relieve such Underwriter or Underwriters from any of its or
their obligations hereunder.
Section 3. Covenants of the Company. The Company covenants and agrees
with the several Underwriters that:
(a) The Company will:
(i) use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto, to become effective as promptly as possible. If required,
the Company will file the Prospectus and any amendment or supplement thereto
with the Commission in the manner and within the time period required by Rule
424(b) under the Securities Act. During any time when a prospectus relating to
the Shares is required to be delivered under the Securities Act, the Company
(x) will comply with all requirements imposed upon it by the Securities Act and
the rules and regulations of the Commission thereunder to the extent necessary
to permit the continuance of sales of or dealings in the Shares in accordance
with the provisions hereof and of the Prospectus, as then amended or
supplemented, and (y) will not file with the Commission the Basic Prospectus or
any amendment or supplement to such Basic Prospectus (including the Prospectus
or any Preliminary Prospectus), any amendment to the Registration Statement
(including the amendment referred to in the second sentence of Section 5(a)(i))
or any Rule 462(b) Registration Statement) unless the Representatives
previously have been advised of, and furnished with a copy within a reasonable
period of time prior to, the proposed filing and the Representatives shall have
given their consent to such filing, which consent shall not be unreasonably
withheld. The Company will prepare and file with the Commission, in accordance
with the rules and regulations of the Commission, promptly upon request by the
Representatives or counsel for the Underwriters, any amendments to the
Registration Statement or amendments or supplements to the Prospectus that may
be necessary or advisable in connection with the distribution of the Shares by
the several Underwriters. The Company will advise the Representatives,
promptly after receiving notice thereof, of the time when the Registration
Statement or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement hereto has been filed and will
provide evidence satisfactory to the Representatives of each such filing or
effectiveness.
(ii) without charge, provide (x) to the Representatives
and to counsel for the Underwriters, an executed and a conformed copy of the
Original Registration Statement and each amendment thereto or any Rule 462(b)
Registration Statement (in each case including exhibits thereto), (y) to each
other Underwriter, a conformed copy of the Original Registration Statement and
each amendment thereto or any Rule 462(b) Registration Statement (in each case
without exhibits thereto), and (z) so long as a prospectus relating to the
Shares is required to be delivered under the Securities Act, as many copies of
each Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto as the Representatives may reasonably request. Without limiting the
application of clause (z) of the preceding sentence, the Company, not later
than (I) 9:00 A.M., New York City time, on the business day following the date
of determination of the
-5-
7
public offering price, if such determination occurred at or prior to 12:00
noon, New York City time, on such date or (II) 6:00 P.M., New York City time,
on the business day following the date of determination of the public offering
price, if such determination occurred after 12:00 noon, New York City time, on
such date, will deliver to the Underwriters, without charge, as many copies of
the Prospectus and any amendment or supplement thereto as the Representatives
may reasonably request for purposes of confirming orders that are expected to
settle on the First Closing Date.
(iii) advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (w) the issuance by the Commission of
any stop order suspending the effectiveness of the Original Registration
Statement or any amendment thereto or any Rule 462(b) Registration Statement or
any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, (x) the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, (y) the
institution, threatening or contemplation of any proceeding for any purpose
identified in the preceding clause (w) or (x), or (z) any request made by the
Commission for amending the Original Registration Statement or any Rule 462(b)
Registration Statement, for amending or supplementing the Prospectus or for
additional information. The Company will use its best efforts to prevent the
issuance of any such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.
(b) The Company will use good faith efforts, with the cooperation
of the Representatives, to arrange for the qualification of the Shares for
offering and sale in each jurisdiction as the Representatives shall reasonably
designate including, but not limited to, pursuant to applicable state
securities ("Blue Sky") laws of certain states of the United States of America
or other U.S. jurisdictions, and the Company shall use its reasonable efforts
to maintain such qualifications in effect for so long as may reasonably be
necessary in order to complete the placement of the Shares; provided, however,
that, notwithstanding the foregoing, the Company shall not be obliged to file
any general consent to service of process or to qualify as a foreign
corporation or as a securities dealer in any jurisdiction or to subject itself
to taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.
(c) If, at any time prior to the final date when a prospectus
relating to the Shares is required to be delivered under the Securities Act,
any event occurs as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
if for any other reason it shall be necessary at any time to amend the
Registration Statement or amend or supplement the Prospectus to comply with the
Securities Act or the rules or regulations of the Commission thereunder or
applicable law, the Company will promptly notify the Representatives thereof
and will promptly, at its own expense, but subject to the second sentence of
Section 3(a)(i) hereof: (x) prepare and file with the Commission an amendment
to the Registration Statement or amendment or supplement to the Prospectus
which will correct such statement or omission or
-6-
8
effect such compliance; and (y) supply any amended Registration Statement or
amended or supplemented Prospectus to the Underwriters in such quantities as
the Underwriters may reasonably request.
(d) The Company will make generally available to the Company's
securityholders and to the Representatives as soon as practicable an earnings
statement that satisfies the provisions of Section 11(a) of the Securities Act,
including Rule 158 thereunder.
(e) The Company will apply the net proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
(f) The Company will not, and will not allow any majority-owned
subsidiary of the Company (each a "Subsidiary" and collectively the
"Subsidiaries") to, publicly announce any intention to, and will not itself,
and will not allow any Subsidiary to, without the prior written consent of
Deutsche Xxxxxx Xxxxxxxx Inc., on behalf of the Underwriters, (i) offer,
pledge, sell, offer to sell, contract to sell, sell any option or contract to
purchase, purchase any option to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into, or exercisable or
exchangeable for, Common Stock, 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 shares of Common Stock or securities convertible into, or
exercisable or exchangeable for, shares of Common Stock (whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of shares of Common Stock or such other securities, in cash or otherwise), for
a period beginning from the date hereof and continuing to and including the
date which is the number of days after the date hereof specified in Schedule I
hereto, except pursuant to this Agreement and other than with respect to (w)
shares of Common Stock to be issued upon the exercise of warrants to purchase
shares of Common Stock, or upon conversion or exchange of securities
convertible or exercisable or exchangeable into shares of Common Stock, in each
case, which are outstanding on the date hereof and disclosed in the Prospectus,
(x) shares of Common Stock (or any securities convertible into or exercisable
or exchangeable for shares of Common Stock) issued pursuant to any employee
benefit plans, qualified and non-qualified stock option plans or other employee
compensation plans which are disclosed in the Prospectus, (y) stock bonus or
restricted stock awards having an aggregate value, at the time of grant, not in
excess of $3 million (the "Excluded Bonus Shares"), and (z) shares of Common
Stock of the Company (or any securities convertible into or exercisable or
exchangeable for shares of Common Stock) as consideration or in connection with
future mergers or other acquisitions by the Company and/or in joint ventures,
strategic partnerships or other similar strategic relationships, provided, that
with respect to this clause (z), the aggregate value of the shares so issued,
and the shares issuable upon conversion, exercise or exchange of any such
securities so issued, shall not exceed $20 million.
(g) Neither the Company nor any of its affiliates, nor any person
acting on behalf of any of them will, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
-7-
9
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares or (ii) (x) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Shares or (y) pay or agree to pay
to any person any compensation for soliciting another to purchase any other
securities of the Company.
(h) The Company will obtain the agreements described in Section
7(f) hereof prior to the First Closing Date.
(i) If at any time during the period prior to the First Closing
Date, any rumor, publication or event relating to or affecting the Company
shall occur as a result of which in the Representatives' reasonable judgment
the market price of the Shares has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after notice
from the Representatives advising the Company to the effect set forth above,
forthwith prepare, consult with the Representatives concerning the substance
of, and disseminate a press release or other public statement reasonably
satisfactory to the Representatives, responding to or commenting on such rumor,
publication or event.
(j) If the Company elects to rely on Rule 462(b), the Company
shall both file the Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 promulgated under the Securities Act by the earlier of (i) 10:00 P.M. New
York City time on the date of this Agreement and (ii) the time confirmations
are sent or given, as specified by Rule 462(b)(2) under the Securities Act.
(k) The Company will use its best efforts to cause the Shares to
be duly included for quotation on the Nasdaq National Market prior to the First
Closing Date. The Company will use all reasonable efforts to ensure that the
Shares remain included for quotation on the Nasdaq National Market, or are
included for quotation on the New York Stock Exchange or the American Stock
Exchange, for a period of five years following the First Closing Date.
Section 4. Expenses.
The Company shall bear and pay all costs and expenses incurred
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 9 hereof, including: (i) the fees and expenses
of its counsel, accountants and any other experts or advisors retained by the
Company; (ii) fees and expenses incurred in connection with the registration of
the Shares under the Securities Act and the preparation and filing of the
Registration Statement, the Prospectus and all amendments and supplements
thereto; (iii) the printing and distribution of the Prospectus and any
Preliminary Prospectus and the printing and production of all other documents
connected with the Offering (including this Agreement and any other related
agreements); (iv) expenses related to the qualification of the Shares under the
state securities or Blue Sky laws, including filing fees and the fees and
disbursements of counsel
-8-
10
for the Underwriters in connection therewith and in connection with the
preparation of any Blue Sky memoranda; (v) the filing fees and expenses, if
any, incurred with respect to any filing with the National Association of
Securities Dealers, Inc., including the fees and disbursements of counsel for
the Underwriters in connection therewith; (vi) all expenses arising from the
quoting of the Shares on the Nasdaq National Market; (vii) all arrangements
relating to the preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Shares, including transfer agent's and registrar's
fees; (viii) the costs and expenses of travel, lodging and meals of the
Company's employees in connection with the "roadshow" and any other meetings
with prospective investors in the Shares (other than as shall have been
specifically approved by the Representatives to be paid for by the
Underwriters); and (ix) the costs and expenses of advertising relating to the
Offering (other than as shall have been specifically approved by the
Representatives to be paid for by the Underwriters). Subject to the provisions
of Section 10, the Underwriters agree to pay all costs and expenses incident to
the performance of their obligations under this Agreement not payable by the
Company pursuant to the preceding sentence, including, without limitation, all
costs associated with the "roadshow" (other than as set forth in clause (viii)
above) and the fees and disbursements of counsel to the Underwriters (other
than as set forth in clauses (iv) and (v) above).
Section 5. Representations And Warranties.
(a) As a condition of the obligation of the Underwriters to
underwrite and pay for the Shares, the Company represents and warrants to, and
agrees with, each of the several Underwriters as follows:
REGISTRATION STATEMENT AND PROSPECTUS
(i) If the Offering is a Rule 415 Offering (as
specified in Schedule I hereto), paragraph (x) below is applicable and, if the
Offering is a Rule 430A Offering (as so specified), paragraph (y) below is
applicable.
(x) The Company meets the requirements for
use of Form S-3 under the Securities Act and has filed with the Commission the
Original Registration Statement (the file number of which is set forth in
Schedule I hereto) on such Form, including a Basic Prospectus, for registration
under the Securities Act of the offering and sale of the Shares, one or more
amendments to such Registration Statement may have been so filed, and the
Company may have used a Preliminary Prospectus. Such Registration Statement,
as so amended, has become effective. The Offering is a Rule 415 Offering and,
although the Basic Prospectus may not include all the information with respect
to the Shares and the offering thereof required by the Securities Act and the
rules thereunder to be included in the Prospectus, the Basic Prospectus
includes all such information required by the Securities Act and the rules
thereunder to be included therein as of the Effective Date. After the
execution of this Agreement, the Company will file with the Commission pursuant
to Rules 415 and 424(b)(2) or (5) a final supplement to the form of prospectus
included in such Registration Statement relating to the Shares and the
-9-
11
offering thereof, with such information as is required or permitted by the
Securities Act and as has been provided to and approved by the Representatives
prior to the date hereof or, to the extent not completed at the date hereof,
containing only such specific additional information and other changes (beyond
that contained in the Basic Prospectus and any Preliminary Prospectus) as the
Company has advised you, prior to the date hereof, will be included or made
therein. The Company may also file a Rule 462(b) Registration Statement with
the Commission for the purpose of registering certain additional Shares, which
registration shall be effective upon filing with the Commission.
(y) The Company meets the requirements for
the use of Form S-3 under the Securities Act and has filed with the Commission
the Original Registration Statement (the file number of which is set forth in
Schedule I hereto) on such Form, including a Basic Prospectus, for registration
under the Securities Act of the offering and sale of the Shares, and one or
more amendments to such Registration Statement, including a Preliminary
Prospectus, may have been so filed. After the execution of this Agreement, the
Company will file with the Commission either (I) if such Registration
Statement, as it may have been amended, has been declared by the Commission to
be effective under the Securities Act, a final prospectus supplement to the
Basic Prospectus in the form most recently included in an amendment to such
Registration Statement (or, if no such amendment shall have been filed, in such
Registration Statement), with such changes or insertions as are required by
Rule 430A under the Securities Act or permitted by Rule 424(b) under the
Securities Act, and as have been provided to and approved by the
Representatives prior to the execution of this Agreement, or (II) if such
Registration Statement, as it may have been amended, has not been declared by
the Commission to be effective under the Securities Act, an amendment to such
Registration Statement, including the form of final prospectus supplement to
the Basic Prospectus, a copy of which amendment has been furnished to and
approved by the Representatives prior to the execution of this Agreement or, to
the extent not completed at the date hereof, containing only such specific
additional information and other changes (beyond that contained in the Basic
Prospectus and any Preliminary Prospectus) as the Company has advised you,
prior to the date hereof, will be included or made therein. The Company may
also file a Rule 462(b) Registration Statement with the Commission for the
purpose of registering certain additional Shares, which registration shall be
effective upon filing with the Commission.
(ii) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus. When any
Preliminary Prospectus was filed with the Commission, it (x) contained all
statements required to be stated therein in accordance with, and complied in
all material respects with the requirements of, the Securities Act and the
rules and regulations of the Commission thereunder and (y) did not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared effective,
it (I) contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material respects with
the requirements of, the Securities Act and the rules and
-10-
12
regulations of the Commission thereunder and (II) did not or will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading. When the Prospectus or any amendment or supplement to the
Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if the
Prospectus or such amendment or supplement is not required to be so filed, when
the Registration Statement or the amendment thereto containing the Prospectus
or such amendment or supplement to the Prospectus was or is declared effective)
and on the Closing Date, the Prospectus, as amended or supplemented at any such
time, (A) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Securities Act and the rules and
regulations of the Commission thereunder and (B) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (ii) do not apply to statements or omissions made
in any Preliminary Prospectus, the Registration Statement or any amendment
thereto or the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein.
(iii) If the Company has elected to rely on Rule
462(b) and the Rule 462(b) Registration Statement is not effective, (x) the
Company will file a Rule 462(b) Registration Statement in compliance with, and
that is effective upon filing pursuant to, Rule 462(b) and (y) the Company has
given irrevocable instructions for transmission of the applicable filing fee in
connection with the filing of the Rule 462(b) Registration Statement, in
compliance with Rule 111 under the Securities Act, or the Commission has
received payment of such filing fee.
(iv) The Company has not distributed and, prior to
the later of (x) any Closing Date and (y) the completion of the distribution of
the Shares, will not distribute any offering material in connection with the
Offering other than the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto.
(v) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus (x)
the Company and its subsidiaries, taken as a whole, have not incurred any
material liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (y) the Company
has not purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock;
and (z) there has not been any material change in the capital stock, short-term
or long-term debt of the Company and its subsidiaries, taken as a whole, except
in each case as described in or contemplated by the Prospectus.
-11-
13
THE SHARES
(vi) The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus. All of the issued
shares of capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, have been issued in compliance
with all applicable federal and state securities laws and were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or purchase such securities. The Shares have been duly authorized by all
necessary corporate action of the Company and, after payment therefor in
accordance herewith, will be validly issued, fully paid and nonassessable at
the Closing Date. No holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to subscribe for
any of the Shares, and no holder of securities of the Company has any right
which has not been fully exercised or waived to require the Company to register
the offer or sale of any securities owned by such holder under the Securities
Act in the Offering contemplated by this Agreement.
(vii) Except as disclosed in the Prospectus, there
are no outstanding (x) securities or obligations of the Company or any of its
Subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such Subsidiary, (y) warrants, rights or options to subscribe
for or purchase from the Company or any such Subsidiary any such capital stock
or any such convertible or exchangeable securities or obligations, except such
as may have been granted in the ordinary course and in ordinary amounts under
option plans and stock purchase plans or equity incentive plans disclosed in
the Prospectus after April 30, 1998 or the Excluded Bonus Shares, or (z)
obligations of the Company or any such Subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or obligations,
or any such warrants, rights or options, except pursuant to option plans, stock
purchase plans or equity incentive plans disclosed in the Prospectus or the
Excluded Bonus Shares.
(viii) Except for the shares of capital stock of
each of the Subsidiaries owned by the Company and such Subsidiaries, neither
the Company nor any such Subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any firm,
partnership, association or other entity, except as described in or
contemplated by the Prospectus and except for the Company's ownership of Class
A Common Stock in Venture Finance Software Corp., a Delaware corporation and
except as listed on Schedule III hereto.
LISTING
(ix) All of the Shares have been duly authorized
and accepted for quotation on the Nasdaq National Market, subject to official
notice of issuance.
MARKET MANIPULATION
-12-
14
(x) Neither the Company nor any of its
affiliates, nor any person acting on behalf of any of them has, directly or
indirectly, (A) taken any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares, or (B) since the filing of the
Original Registration Statement (I) sold, bid for, purchased, or paid anyone
any compensation for soliciting purchases of, the Shares or (II) paid or agreed
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.
CORPORATE POWER AND AUTHORITY
(xi) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the law of its
jurisdiction of incorporation with full power and authority to own, lease and
operate its properties and assets and conduct its business as described in the
Prospectus, is duly qualified to transact business and is in good standing in
each jurisdiction in which its ownership, leasing or operation of its
properties or assets or the conduct of its business requires such
qualification, except where the failure to be so qualified does not amount to a
material liability or disability to the Company and its Subsidiaries, taken as
a whole, and has full power and authority to execute and perform its
obligations under this Agreement; each Subsidiary of the Company is a
corporation duly incorporated and validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and is duly
qualified to transact business and is in good standing in each jurisdiction in
which its ownership, leasing or operation of its properties or assets or the
conduct of its business requires such qualification, except where the failure
to be so qualified does not amount to a material liability or disability to the
Company and its Subsidiaries, taken as a whole, and each has full power and
authority to own, lease and operate its properties and assets and conduct its
business as described in the Registration Statement and the Prospectus; all of
the issued and outstanding shares of capital stock of each of the Company's
Subsidiaries have been duly authorized and are fully paid and nonassessable
and, except for directors' qualifying shares or legally required nominee shares
and except as otherwise set forth in the Prospectus, are owned beneficially by
the Company free and clear of any security interests, liens, encumbrances,
equities or claims.
(xii) The execution and delivery of this Agreement
and the issuance and sale of the Shares have been duly authorized by all
necessary corporate action of the Company, and this Agreement has been duly
executed and delivered by the Company and is the valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except (x) as the enforceability thereof may be limited by bankruptcy,
insolvency, federal or state fraudulent conveyance or transfer laws, and
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles and (y) except
to the extent that rights to indemnity or contribution under this Agreement may
be limited by federal and state securities laws or the public policy underlying
such laws.
-13-
15
(xiii) The issuance, offering and sale of the Shares
to the Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the consummation
of the other transactions herein contemplated do not (x) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained or made or such as
may be required by the state securities or Blue Sky laws of the various states
of the United States of America or other U.S. jurisdictions in connection with
the offer and sale of the Shares by the Underwriters, or (y) conflict with or
result in a breach or violation of any of the terms and provisions of, or
constitute a default under: (I) any material indenture, mortgage, deed of
trust, lease 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
or any of their respective properties are bound; (II) the charter documents or
by-laws of the Company or any of its Subsidiaries; or (III) any statute or any
judgment, decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of its
Subsidiaries.
(xiv) The Company is not, and will conduct its
operations in a manner so that it continues not to be, an "investment company"
and, after giving effect to the Offering and the application of the proceeds
therefrom, will not be an "investment company", as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
TITLE, LICENSES AND CONSENTS
(xv) The Company and each of its Subsidiaries have
good and marketable title in fee simple to all items of real property and
marketable title to all personal property owned (if any) by each of them, in
each case free and clear of any security interests, liens, encumbrances,
equities, claims and other defects, except such as are disclosed in the
Prospectus or such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of such
property by the Company or such Subsidiary, and any real property and buildings
held under lease by the Company or any such Subsidiary are held under valid,
subsisting and enforceable leases, with such exceptions as are not material and
do not interfere with the use made or proposed to be made of such property and
buildings by the Company or such Subsidiary, in each case except as described
in or contemplated by the Prospectus.
(xvi) Except as disclosed in the Prospectus, the
Company and its subsidiaries own, possess or have the right to use, or can
acquire on reasonable terms, all material patents, patent applications,
trademarks, service marks, trade names, licenses, know-how, copyrights, trade
secrets and proprietary or other confidential information necessary to operate
the business now operated by them, and except as disclosed in the Prospectus,
neither the Company nor any such subsidiary has received any notice of
infringement of or conflict with asserted rights of any third party with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a materially
adverse effect on or constitute a materially adverse change in, or constitute a
development
-14-
16
involving a prospective materially adverse effect on or change in, the
condition (financial or otherwise), earnings, properties, business affairs or
business prospects, stockholders' equity, net worth or results of operations of
the Company or any of its Subsidiaries, taken as a whole, except as described
in or contemplated by the Prospectus.
(xvii) The Company and its Subsidiaries possess all
consents, licenses, certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a materially adverse effect on or constitute a materially adverse
change in, or constitute a development involving a prospective materially
adverse effect on or change in, the condition (financial or otherwise),
earnings, properties, business affairs or business prospects, net worth or
results of operations of the Company or any of its Subsidiaries, taken as a
whole, except as described in or contemplated by the Prospectus.
FINANCIAL STATEMENTS
(xviii) Ernst & Young LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated financial
statements and schedules included in the Registration Statement and the
Prospectus, are independent public accountants as required by the Securities
Act and the applicable rules and regulations thereunder.
(xix) The consolidated financial statements and
schedules of the Company and its consolidated subsidiaries included or
incorporated in the Registration Statement and the Prospectus were prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied throughout the periods involved (except as otherwise noted therein) and
they present fairly the financial condition of the Company as at the dates at
which they were prepared and the results of operations of the Company in
respect of the periods for which they were prepared; the assumptions used in
preparing the pro forma financial statements included and incorporated by
reference in the Registration Statement and the Prospectus provide a reasonable
basis for presenting the significant effects directly attributable to the
transactions or events described therein. The related pro forma adjustments as
of the date thereof give appropriate effect to those assumptions, and the pro
forma columns reflected therein reflect the proper application of those
adjustments to the corresponding historical financial statement amounts.
INTERNAL ACCOUNTING CONTROLS
(xx) The Company and each of its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (w) transactions are
-15-
17
executed in accordance with management's general or specific authorizations;
(x) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability; (y)
access to assets is permitted only in accordance with management's general or
specific authorization; and (z) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
LITIGATION
(xxi) No legal or governmental proceedings are
pending or, to the Company's knowledge threatened to which the Company or any
of its subsidiaries is a party or to which the property of the Company or any
of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not described therein; and no
statutes, regulations, contracts or other documents that are required to be
described or incorporated in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement are not described or
incorporated therein or filed as required.
DIVIDENDS AND DISTRIBUTIONS
(xxii) Except as disclosed in or contemplated by the
Prospectus or as restricted by applicable law, no Subsidiary of the Company is
currently prohibited, directly or indirectly, from paying any dividends to the
Company, making any other distribution on such Subsidiary's capital stock,
repaying to the Company any loans or advances to such Subsidiary from the
Company or transferring any of such Subsidiary's property or assets to the
Company or any other Subsidiary of the Company, and the Company is not
currently prohibited, directly or indirectly, from paying any dividends or
making any other distribution on its capital stock, in each case except as
described in or contemplated by the Prospectus.
TAXES
(xxiii) The Company has filed all foreign, federal,
state and local tax returns that are required to be filed by it or has
requested extensions thereof (except in any case in which the failure so to
file would not have a materially adverse effect on the Company and its
Subsidiaries, taken as a whole) and has paid all taxes required to be paid by
it and any other material assessment, fine or penalty levied against it, to the
extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as described in or contemplated by the Prospectus.
INSURANCE
(xxiv) The Company and each of its Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are
-16-
18
prudent and customary in the businesses in which they are engaged; neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for; and neither the Company nor any such Subsidiary has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
materially and adversely affect the condition (financial or otherwise),
earnings, properties, business affairs or business prospects, net worth or
results of operations of the Company or any of its Subsidiaries, taken as a
whole, except as described in or contemplated by the Prospectus.
PENSION AND LABOR
(xxv) The Company is in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined
in ERISA) for which the Company would have any material liability; the Company
has not incurred and does not expect to incur liability under (x) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension plan" or
(y) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.
(xxvi) No labor dispute with the employees of the
Company or any of its Subsidiaries exists or is threatened or imminent that
could have a materially adverse effect on or constitute a materially adverse
change in, or constitute a development involving a prospective materially
adverse effect on or change in, the condition (financial or otherwise),
properties, management, earnings, business affairs or business prospects, net
worth or results of operations of the Company or any of its Subsidiaries, taken
as a whole, except as described in or contemplated by the Prospectus.
ENVIRONMENTAL
(xxvii) Neither the Company nor any of its
Subsidiaries is in violation of any federal or state law or regulation relating
to occupational safety and health or to the storage, handling or transportation
of hazardous or toxic materials and the Company and its Subsidiaries have
received all permits, licenses or other approvals required of them under
applicable federal and state occupational safety and health and environmental
laws and regulations to conduct their respective businesses, and the Company
and each such Subsidiary is in compliance with all terms and conditions of any
such permit, license or approval, except for any such violation of law or
regulation, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals which would not, singly or
-17-
19
in the aggregate, have a materially adverse effect on or constitute a
materially adverse change in, or constitute a development involving a
prospective materially adverse effect on or change in, the condition (financial
or otherwise), earnings, properties, business affairs or business prospects,
net worth or results of operations of the Company or any of its Subsidiaries,
taken as a whole, except as described in or contemplated by the Prospectus.
OTHER AGREEMENTS
(xxviii) No default by the Company or any of its
Subsidiaries exists, and no event has occurred which, with notice or lapse of
time or both, would constitute a default in the due performance and observance
of any term, covenant or condition of any indenture, mortgage, deed of trust,
lease 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 or
any of their respective properties is bound, where such default could have a
material adverse effect on the condition (financial or otherwise), properties,
management, earnings, business affairs or business prospectus, net worth or
results of operations of the Company or any of its Subsidiaries, taken as a
whole, or the ability of the Company to perform its obligations under this
Agreement.
ABSENCE OF MATERIALLY ADVERSE CHANGE
(xxix) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus,
neither the Company nor any of its Subsidiaries has sustained any material loss
or interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
and there has been no materially adverse change (including, without limitation,
a change in management or control), or development involving a prospective
materially adverse change, in the condition (financial or otherwise),
management, earnings, property, business affairs or business prospects,
stockholders' equity, net worth or results of operations of the Company or any
of its Subsidiaries, taken as a whole, other than as described in or
contemplated by the Prospectus (exclusive of any amendments or supplements
thereto after the date of this Agreement).
(xxx) No receiver or liquidator (or similar person)
has been appointed in respect of the Company or any Subsidiary of the Company
or in respect of any part of the assets of the Company or any Subsidiary of the
Company; no resolution, order of any court, regulatory body, governmental body
or otherwise, or petition or application for an order, has been passed, made or
presented for the winding up of the Company or any Subsidiary of the Company or
for the protection of the Company or any such Subsidiary from its creditors;
and the Company has not, and no Subsidiary of the Company has, generally
stopped or suspended payments of its debts, become unable to pay its debts or
otherwise become insolvent.
(b) The above representations and warranties shall be deemed to be
repeated at each Closing, and all references therein to the Shares and the
Closing Date shall be deemed to refer to
-18-
20
the Firm Shares or the Option Shares and the First Closing Date or the
applicable Option Closing Date, each as applicable.
Section 6. Indemnity.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all losses, claims, damages or liabilities, joint or several,
to which such Underwriter or such controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made
by the Company in Section 5 hereof,
(ii) any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement or any amendment
thereto, the Basic Prospectus, any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto, or
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, the Basic Prospectus, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other costs or expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement or any amendment thereto, the Basic Prospectus, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein and provided further, that the Company will not be liable to any
Underwriter or any person controlling such Underwriter with respect to any such
untrue statement, alleged untrue statement, omission or alleged omission made
in any Preliminary Prospectus that is corrected in the Prospectus (or any
amendment or supplement thereto) if the person asserting any such loss, claim
or damage or liability purchased Shares from such Underwriter but was not sent
or given a copy of the Prospectus (as amended or supplemented) in any case
where such delivery of the Prospectus (as amended or supplemented) was required
by the Securities Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
-19-
21
Section 3 hereof. The indemnity provided for in this Section 6 shall be in
addition to any liability which the Company may otherwise have. The Company
will not, without the prior written consent of the Representatives, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not any such Representatives or any person who
controls any such Representatives is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment thereto, the
Basic Prospectus, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto or (ii) the omission or the alleged omission to state in
the Registration Statement or any amendment thereto, the Basic Prospectus any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein, and, subject to the limitation
set forth immediately preceding this clause, will reimburse, as incurred, any
legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or any action in respect thereof. The
remedies provided for in this Section 6 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. No Underwriter will, without the prior written
consent of the Company, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not the
Company, any of its officers and directors, or any controlling person, is a
party to such claim, action, suit or proceeding) (other than in the event such
Underwriter has made a demand in writing to the Company with respect to
reimbursement for expenses incurred with respect to such claim, suit or
proceeding in respect of such indemnification and the Company has failed to
reimburse such Underwriter for such expenses promptly following such demand),
unless such settlement, compromise or consent includes an unconditional release
of the Company and such directors, officers and controlling persons from all
liability arising out of such claim, action, suit or proceeding.
-20-
22
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraph (a) or (b) of this Section 6,
such person (for purposes of this paragraph (c), the "indemnified party")
shall, promptly after receipt by such party of notice of the commencement of
such action, notify the person against whom such indemnity may be sought (for
purposes of this paragraph (c) and the following paragraph (d), the
"indemnifying party"), but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 6. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
(based upon the advice of its counsel) that there may be one or more legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of any such action and approval by such indemnified party of counsel
appointed to defend such action (which approval shall not be unreasonably
withheld), the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that in connection with such
action the indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated in writing by the
Representatives in the case of paragraph (a) of this Section 6, representing
the indemnified parties under such paragraph (a) who are parties to such action
or actions), or (ii) the indemnifying party does not promptly retain counsel
reasonably satisfactory to the indemnified party, or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. All fees and expenses to be reimbursed
pursuant to this paragraph (c) shall be reimbursed as they are incurred. After
such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 6 is unavailable or insufficient,
for any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall
-21-
23
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect (i) the relative benefits
received by the indemnifying party or parties on the one hand and the
indemnified party on the other hand, from the Offering or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other hand in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the Offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the parties' relative intents, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (d). Notwithstanding any
other provision of this paragraph (d), no Underwriter shall be obligated to
make contributions hereunder that in the aggregate exceed the total public
offering price of the Shares purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages that such Underwriter has
otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(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 hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters (only as among the Underwriters)
shall be governed by the provisions of the Deutsche Xxxxxx Xxxxxxxx Inc. Master
Agreement Among Underwriters. For purposes of this paragraph (d), each person,
if any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company.
Section 7. Conditions Precedent The obligations of the several
Underwriters to purchase and pay for the Shares shall be subject, in the
Representatives' sole discretion, to the accuracy of the representations and
warranties of the Company contained in Section 5 herein as of the date hereof
and as of each Closing Date, as if made on and as of each Closing Date, to the
accuracy of the statements of the Company's officers made pursuant to Section
7(e), to the performance by
-22-
24
the Company of its covenants and agreements hereunder and to the following
additional conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the First Closing Date has not been declared effective
as of the time of execution hereof, the Original Registration Statement or such
amendment shall have been declared effective not later than 6:00 P.M. New York
City time on the date of determination of the public offering price, if such
determination occurred at or prior to 4:30 P.M. New York City time on such
date, or 12:00 Noon New York City time on the business day following the day on
which the public offering price was determined, if such determination occurred
after 4:30 P.M. New York City time on such date, and (ii) if the Company has
elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have been declared effective not later than the time confirmations are sent or
given as specified by Rule 462(b)(2), or such later time and date as shall have
been consented to by the Representatives; if required, the Prospectus and any
amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rule 424(b) under the
Securities Act; no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto shall have been issued, and no proceedings
for that purpose shall have been instituted or threatened or, to the knowledge
of the Company or the Representatives, shall be contemplated by the Commission;
and the Company shall have complied with any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise).
(b) The Representatives shall have received a legal opinion from
Fenwick & West, LLP, counsel for the Company, dated the Closing Date, to the
effect that:
(i) the Registration Statement is effective under the
Securities Act; any required filing of the Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period required by Rule 424(b);
and, to its knowledge, no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued and, to the
best knowledge of such counsel, no proceedings for that purpose are pending or
threatened by the Commission;
(ii) the Original Registration Statement and each
amendment thereto, any Rule 462(b) Registration Statement and the Prospectus
(in each case, other than the financial statements and other financial
information contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder;
(iii) at January 31, 1998, the Company had an authorized,
issued and outstanding capitalization (solely with respect to authorized,
issued and outstanding stock) as set forth in the "Capitalization" section of
the Prospectus Supplement dated May 21, 1998; all of the issued shares of
capital stock of the Company have been duly authorized and validly issued and,
assuming payment therefor in accordance with the resolutions authorizing such
issuances or in
-23-
25
accordance with the terms of the applicable option or warrant, as the case may
be, are fully paid and nonassessable, and were not issued in violation of or
subject to any statutory preemptive rights, preemptive rights set forth in the
Company's Certificate of Incorporation or Bylaws or Material Agreements or to
such counsel's knowledge other similar rights to subscribe for or purchase
securities of the Company; the Shares have been duly authorized by all
necessary corporate action of the Company and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will be validly
issued, fully paid and nonassessable; no holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Shares under applicable law or the Company's
Certificate of Incorporation or Bylaws or Material Agreements; and to such
counsel's knowledge, no holder of securities of the Company has any right which
has not been fully exercised or waived to require the Company to register the
offer or sale of any securities owned by such holder under the Securities Act
in the Offering contemplated by this Agreement; for purposes of this Agreement,
"Material Agreement" is defined as any agreement filed or which would be
required to be filed as an Exhibit to an Annual Report on Form 10-K of the
Company pursuant to Item 601(b)(10) or Regulation S-K as if such Form 10-K was
being filed as of the date of such opinion for the first time, as certificated
to such counsel by the Company.
(iv) all of the Shares have been duly authorized and
accepted for quotation on the Nasdaq National Market, subject to official
notice of issuance;
(v) the Company and each of its United States domestic
Subsidiaries listed in Exhibit 22 to the most recently filed Annual Report on
Form 10-K of the Company incorporated by reference in the Registration
Statement have been duly organized and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation; to such counsel's knowledge, the Company and each of its
Subsidiaries have full power and authority to own, lease and operate their
respective properties and assets and conduct their respective businesses as
described in the Registration Statement and the Prospectus, and the Company has
corporate power to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it; all of the issued and outstanding
shares of capital stock of each of the Company's Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and, except for
directors' qualifying shares or legally required nominee shares and as
otherwise set forth in the Prospectus, are owned beneficially by the Company,
to the knowledge of such counsel, free and clear of any perfected security
interests or any other security interests, liens, encumbrances, equities or
claims;
(vi) the statements set forth under the headings "Recent
Events--Proposed Acquisition of Lacerte," "Risk Factors--Risks of Pending
Acquisition," "Description of Capital Stock" and "Underwriting" in the
Prospectus and under Item 15 in the Registration Statement and under "Proposed
Acquisition of Lacerte" in the Form 8-K dated May 18, 1998, and the first
sentence set forth in the second paragraph under the heading "Risk
Factors--Year 2000 Risks and Litigation" in the Prospectus, insofar as such
statements constitute a summary of the laws, documents or proceedings referred
to therein, have been reviewed by such counsel and fairly
-24-
26
present the information called for with respect to such laws, documents and
proceedings in all material respects as required by the Securities Act and the
Exchange Act and the respective rules and regulations thereunder;
(vii) the execution and delivery of this Agreement have
been duly authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(viii) the issuance, offering and sale of the Shares to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (x) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as (A) have been obtained or made (and
specified in such opinion), (B) may be required by the securities or Blue Sky
laws of the various states of the United States of America and other U.S.
jurisdictions in connection with the offer and sale of the Shares by the
Underwriters, (C) may be required by any foreign jurisdiction or under the
bylaws or rules of the NASD in connection with the offer and sale of the Shares
by the Underwriters or (D) may be described in the Prospectus, or (y) to such
counsel's knowledge, conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any Material
Agreements to which 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 are bound, or the charter documents or by-laws of the Company or any
of its Subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any United States domestic court or other United States domestic
governmental authority or any arbitrator known to such counsel and applicable
to the Company or its subsidiaries;
(ix) the Company is not an "investment company" and, after
giving effect to the Offering and the application of the proceeds therefrom,
will not be an "investment company", as such term is defined in the 1940 Act;
and
(x) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any of
its Subsidiaries is a party or to which the property of the Company or any of
its Subsidiaries is subject that are required to be described or incorporated
in the Registration Statement or the Prospectus and are not described or
incorporated therein or any statutes, regulations, contracts or other documents
that are required to be described or incorporated in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not described or incorporated therein or filed as required.
Such opinion shall also state such counsel has participated in certain
conferences with officers and other representatives of the Company,
representatives of the independent certified public accountants for the Company
and representatives of the Underwriters, at which conferences the contents of
the Registration Statement and the Prospectus and related matters
-25-
27
were discussed and, although such counsel is not passing upon and does not
assume any responsibility for, nor has such counsel independently verified, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus, on the basis of the foregoing, no facts
have come to such counsel's attention that have caused such counsel to believe
that either the Registration Statement, at the time of such Registration
Statement became effective, or the Prospectus as of the date hereof, 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 (except, in the cease of both the Registration Statement and the
Prospectus, for the financial statements, notes thereto and other schedules,
financial and accounting information and statistical data contained therein, as
to which such counsel need express no view).
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and of public officials.
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto at the
date of such opinion. The opinions of issuer's counsel described herein shall
be rendered to the Underwriters at the request of the Company and shall so
state therein.
(c) The Representatives shall have received a legal opinion from
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for the
Underwriters, dated the Closing Date, covering the issuance and sale of the
Shares, the Registration Statement and the Prospectus, and such other related
matters as the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(d) The Representatives shall have received from Ernst & Young LLP
with respect to the Company and from Price Waterhouse LLP with respect to
Lacerte Software Corporation, a Delaware corporation, and Lacerte Educational
Services, Inc., a Delaware Corporation (together, "Lacerte") a letter or
letters dated, respectively, the date hereof and the Closing Date, in form and
substance satisfactory to the Representatives, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than the date hereof. In the event that the letters referred
to above set forth any such changes, decreases or increases, it shall be a
further condition to the obligations of the Underwriters that (I) such letters
shall be accompanied by a written explanation of the Company as to the
significance thereof, unless the Representatives deem such explanation
unnecessary, and (II) such changes, decreases or increases do not, in the sole
judgment of the Representatives, make it impractical or inadvisable to proceed
with the purchase and delivery of the Shares as contemplated by the
Registration Statement, as amended as of the date hereof. References to the
-26-
28
Registration Statement and the Prospectus in this paragraph (d) with respect to
either letter referred to above shall include any amendment or supplement
thereto at the date of such letter.
(e) The Company shall have furnished or caused to be furnished to
the Underwriters at the Closing a certificate of its (A) Chairman of the Board
or its President or Chief Executive Officer and its (B) Vice President, Chief
Financial Officer and Chief Accounting Officer satisfactory to the Underwriters
to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Closing Date;
the Registration Statement, as amended as of the Closing Date, does not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading, and the Prospectus, as
amended or supplemented as of the Closing Date, does not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and the Company has performed all
covenants and agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to the best
of the Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
(exclusive of any amendment or supplement thereto after the date of this
Agreement), neither the Company nor any of its Subsidiaries has sustained any
material loss or material interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any material adverse change
(including, without limitation, a change in management or control), or
development involving a prospective material adverse change, in the condition
(financial or otherwise), management, earnings, properties, business affairs or
business prospects, stockholders' equity, net worth or results of operations of
the Company or any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or supplement
thereto).
(f) The Representatives shall have received from each person who
is a director or executive officer of the Company an agreement dated on or
before the date of this Agreement to the effect that such person will not
publicly announce any intention to and will not, without the prior written
consent of the Representatives on behalf of the Underwriters, (i) offer,
pledge, sell, offer to sell, contract to sell, sell any option or contract to
purchase, purchase any option to sell, grant any option right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any of
the shares of Common Stock or any securities convertible into, or exercisable
-27-
29
or exchangeable for, Common Stock, 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 shares of Common Stock or any securities convertible into,
or exercisable or exchangeable for, shares of Common Stock (whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of shares of Common Stock or such other securities, in cash or otherwise), in
each case, beneficially owned (within the meaning of Rule 13d-3 under the
Exchange Act) or otherwise controlled by such person on the date hereof or
hereafter acquired, for a period beginning from the date hereof and continuing
to and including the date which is the number of days after the date hereof
specified in Schedule I hereto; provided, however, that such person may,
without the prior written consent of the Representatives on behalf of the
Underwriters, transfer shares of Common Stock or such other securities to
members of such person's immediate family or to trusts for the benefit of
members of such person's immediate family or in connection with bona fide
gifts, provided, that any transferee agrees to the transfer restrictions
described above; provided further, that the foregoing restrictions shall not
apply to an aggregate of 89,200 shares of Common Stock issuable upon the
exercise of a warrant held by Xxxxxxx X. Xxxxxxx.
(g) Prior to the commencement of the Offering, the Company shall
have made an application for the quotation of the Shares on the Nasdaq National
Market and the Shares shall have been included for trading on the Nasdaq
National Market, subject to official notice of issuance.
(h) On or before the Closing Date, the Representatives and counsel
for the Underwriters shall have received such further certificates, documents
or other information as they may have reasonably requested from the Company.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Shares shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Shares, except that all references therein
to the Shares and the Closing Date shall be deemed to refer to the Firm Shares
or the Option Shares and the First Closing Date or the related Option Closing
Date, each as applicable.
Section 8. Default of Underwriters. If, at the First Closing, any one or
more of the Underwriters shall fail or refuse to purchase Shares that it has 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 ten percent or less of the aggregate number of the
Shares to be purchased on such date, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Shares by other persons
-28-
30
(who may include one or more of the non-defaulting Underwriters, including the
Representatives), but if no such arrangements are made by the First Closing
Date, the other Underwriters shall be obligated severally in the proportions
that the number of Firm Shares set forth opposite their respective names in
Schedule II hereto bears to the aggregate number of Firm 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. If, at the First Closing, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
ten per cent of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either the
Representatives or the Company shall have the right to postpone the Closing,
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. If, at any Option Closing, any
Underwriter or Underwriters shall fail or refuse to purchase Option Shares, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase Option Shares or (ii) purchase not less than
the number of Option Shares that such non-defaulting Underwriters would have
been obligated to purchase in the absence of such default. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 8. Any action taken under this Section 8 shall
not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
Section 9. Termination. This Agreement shall be subject to termination
in the sole discretion of the Representatives by notice to the Company given
prior to any Closing Date in the event that the Company shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior thereto or, if at
or prior to any Closing Date, (a) trading in securities generally on the New
York Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited or minimum or maximum prices shall have been established by
or on, as the case may be, the Commission or the New York Stock Exchange or the
Nasdaq National Market; (b) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market; (c) a general
moratorium on commercial banking activities shall have been declared by either
Federal or New York State authorities; (d) there shall have occurred (i) an
outbreak or escalation of hostilities between the United States and any foreign
power, (ii) an outbreak or escalation of any other insurrection or armed
conflict involving the United States, or (iii) any other calamity or crisis or
materially adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
reasonable judgment of the Representatives, makes it impractical or inadvisable
to proceed with the public offering or the delivery of the Shares as
contemplated by the Registration Statement, as amended as of the date hereof;
or (e) the Company or any of its Subsidiaries shall have, in the reasonable
judgment of the Representatives, sustained any material loss or interference
with their respective businesses or
-29-
31
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, or there shall have been any materially adverse change
(including, without limitation, a change in management or control), or a
development involving a prospective materially adverse change, in the condition
(financial or otherwise), management, earnings, properties, business affairs or
business prospects, stockholders' equity, net worth or results of operations of
the Company or any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or supplement
thereto after the date of this Agreement). Termination of this Agreement
pursuant to this Section 9 shall be without liability of any party to any other
party except for the liability of the Company in relation to expenses as
provided in Sections 4 and 10 hereof, the indemnity provided in Section 6
hereof and any liability arising before or in relation to such termination.
Section 10. Reimbursement of Expenses. If the sale of the Shares provided
for herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 7 hereof is not satisfied or because of any
termination pursuant to Section 9 hereof (other than by reason of a default by
any of the Underwriters), the Company shall reimburse the Underwriters,
severally upon demand, for all out-of-pocket expenses (including fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Shares.
Section 11. Information Supplied by Underwriters. The statements set
forth in the last paragraph on the front cover page and in the third and
seventh paragraphs under the heading "Underwriting" in any Preliminary
Prospectus or the Prospectus (to the extent such statements relate to the
Underwriters) constitute the only information furnished by any Underwriter
through the Representatives to the Company for the purposes of Section 5(a)(ii)
and Section 6 hereof. The Underwriters confirm that such statements (to such
extent) are correct.
Section 12. Notices. In all dealings hereunder, you shall act on behalf
of each of the Underwriters, and the parties hereto shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Representatives. Any notice or notification
in any form to be given under this Agreement may be delivered in person or sent
by telex, facsimile or telephone (subject in the case of a communication by
telephone to confirmation by telex or facsimile) addressed to:
in the case of the Company:
Intuit Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxxx, Esq.
-30-
32
in the case of the Underwriters:
Deutsche Xxxxxx Xxxxxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
Any such notice shall take effect, in the case of delivery, at the time of
delivery and, in the case of telex or facsimile, at the time of dispatch.
Section 13. Miscellaneous.
(a) Time shall be of the essence of this Agreement.
(b) The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect, the meaning or
interpretation of this Agreement.
(c) For purposes of this Agreement, (a) "business day" means any
day on which the New York Stock Exchange is open for trading, and (b)
"subsidiary" has the meaning set forth in Rule 405 under the Securities Act.
(d) This Agreement may be executed in any number of counterparts,
all of which, taken together, shall constitute one and the same Agreement and
any party may enter into this Agreement by executing a counterpart.
(e) This Agreement shall inure to the benefit of and shall be
binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person,
except that (i) the indemnities of the Company contained in Section 6 hereof
shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act and (ii) the indemnities of the Underwriters contained
in Section 6 hereof shall also be for the benefit of the directors of the
Company, the officers of the Company who have signed the Registration Statement
and any person or persons who control the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act. No purchaser of
Shares from any Underwriter shall be deemed a successor because of such
purchase.
-31-
33
(f) The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and
the several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the
Company, any of its officers or directors, any Underwriter or any controlling
person referred to in Section 6 hereof and (ii) delivery of and payment for the
Shares. The respective agreements, covenants, indemnities and other statements
set forth in Sections 4, 6 and 10 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
Section 14. Severability. It is the desire and intent of the parties that
the provisions of this Agreement be enforced to the fullest extent permissible
under the law and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, in the event that any provision of this
Agreement would be held in any jurisdiction to be invalid, prohibited or
unenforceable for any reason, such provision, as to such jurisdiction, shall be
ineffective, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 15. Governing Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
-32-
34
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in the Deutsche
Xxxxxx Xxxxxxxx Inc. Master Agreement Among Underwriters, the form of which
shall be submitted to the Company for examination upon request, but without
warranty on your part as to the authority of the signers thereof.
Very truly yours,
INTUIT INC.
By /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President & CEO
The foregoing Agreement is hereby
confirmed and accepted as of the date
specified in Schedule I hereto.
DEUTSCHE XXXXXX XXXXXXXX INC.
XXXXXX XXXXXXX & CO. INCORPORATED
BANCAMERICA XXXXXXXXX XXXXXXXX
XX XXXX XXXXX
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXX & XXXXX LLC
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: DEUTSCHE XXXXXX XXXXXXXX INC.
By: /s/ Xxxxxxx X.X. Xxxxx, III
--------------------------------
Name: Xxxxxxx X.X. Xxxxx, III
Title: Managing Director
-33-
35
SCHEDULE I
Underwriting Agreement dated: May 21, 1998
Representatives: None
Type of Offering: Rule 415 Offering
Amount and Purchase Price of Securities:
Number of Firm Shares: 9,000,000
Number of Option Shares: 1,350,000
Purchase price per share: $45.675
Closing Date, Time and Location: May 28, 1998 at the offices of Fenwick & West
LLP, Two Palo Alto Square, Palo Xxxx,
Xxxxxxxxxx 00000
Registration Statement No. 33-99646 and 333-50417 (together, the "Original
Registration Statement")
Number of days referred to in Section 3(f): 90 days
Number of days referred to in Section 7(f): 90 days
I-1
36
SCHEDULE II
The Underwriters
Underwriter Underwriting commitment
----------- -----------------------
Deutsche Xxxxxx Xxxxxxxx Inc. . . . . . . . . . . . . . . . 3,600,000
Xxxxxx Xxxxxxx & Co. Incorporated . . . . . . . . . . . . . 3,510,000
BancAmerica Xxxxxxxxx Xxxxxxxx . . . . . . . . . . . . . . 378,000
BT Xxxx Xxxxx . . . . . . . . . . . . . . . . . . . . . . . 378,000
Xxxxxxx Xxxxx & Company, L.L.C. . . . . . . . . . . . . . . 378,000
Xxxxxxxxx & Xxxxx LLC . . . . . . . . . . . . . . . . . . . 378,000
NationsBanc Xxxxxxxxxx Securities LLC . . . . . . . . . . . 378,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000,000
II-1
37
SCHEDULE III
Private Companies
Direct Link Software -- 100 shares of Common Stock (March 5, 1993)
Financial Technologies International Corporation -- 10,000 shares of Series B
Convertible Preferred Stock (April 20, 1998)
GHR Systems, Inc. -- 2,635 shares of Series D Preferred Stock
Just In Time Solutions, Inc. -- 800,000 shares of Series A Preferred Stock
(February 25, 1998)
Venture Finance Software Corp. -- 880,000 shares of Class A Common Stock (May
4, 1998)
Verisign, Inc. -- 250,000 shares of Series C Preferred Stock (November 18,
1996)
Public Companies
Concentric Network Corporation -- 127,041 shares of Common Stock (August 1,
1997)
Checkfree Corporation -- 9,340,000 shares of Common Stock (February 11, 1997)
Excite, Inc. -- 2,000,000 shares of Common Stock (June 25, 1997)
II-2
