EXHIBIT 1.1
Common Stock
UNDERWRITING AGREEMENT
August ___, 1999
PRUDENTIAL SECURITIES INCORPORATED
U.S. Bancorp Xxxxx Xxxxxxx
Xxxxx, Xxxxxxxx & Xxxx, Inc.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
Lionbridge Technologies, Inc., a Delaware corporation (the "Company"),
hereby confirms its agreement with the several underwriters named in Schedule 1
hereto (the "Underwriters"), for whom you have been duly authorized to act as
representatives (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 to the Underwriters.
1. SECURITIES. Subject to the terms and conditions herein contained, the
Company proposes to issue and sell to the several Underwriters an aggregate of
4,000,000 shares (the "Firm Securities") of the Company's Common Stock, par
value $.01 per share ("Common Stock"). The Company and Selling Securityholders
identified on Schedule 2 hereto also propose to issue and sell to the several
Underwriters not more than 600,000 additional shares of Common Stock if
requested by the Representatives as provided in Section 3 of this Agreement. Any
and all shares of Common Stock to be purchased by the Underwriters pursuant to
such option are referred to herein as the "Option Securities", and the Firm
Securities and any Option Securities are collectively referred to herein as the
"Securities".
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SECURITYHOLDERS.
A. The Company represents and warrants to, and agrees with, each of
the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-81233) with respect
to the Securities, including a prospectus subject to completion, has been filed
by the Company with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), and one or more amendments to such registration
statement 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 Act, either (A) if the Company relies on Rule 434 under the Act, a
Term Sheet (as hereinafter defined) relating to the Securities, that shall
identify the Preliminary Prospectus (as hereinafter defined) that it supplements
containing such information as is required or permitted by Rules 434, 430A and
424(b) under the Act or (B) if the Company does not rely on Rule 434 under the
Act, a 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 Act or permitted by Rule 424(b) under the Act, and in the case of
either clause (i)(A) or (i)(B) of this sentence 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 Act, an amendment to such
registration statement, including a form of prospectus, a copy of which
amendment has been furnished to and approved by the Representatives prior to the
execution of this Agreement. The Company may also file a related registration
statement with the Commission pursuant to Rule 462(b) under the Act for the
purpose of registering certain additional Securities, which registration shall
be effective upon filing with the Commission. As used in this Agreement, the
term "Original Registration Statement" means the registration statement
initially filed relating to the Securities, as amended at the time when it was
or is declared effective, including all financial schedules and exhibits thereto
and including any information omitted therefrom pursuant to Rule 430A under the
Act and included in the Prospectus (as hereinafter defined); the term "Rule
462(b) Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Act (including the Registration
Statement and any Preliminary Prospectus 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 "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective); the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule 424(b)(7)
under the Act, together with the Preliminary Prospectus identified therein
that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the prospectus
first filed with the Commission pursuant to Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the Act,
the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434
under the Act. Any reference herein to the "date" of a Prospectus that includes
a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or suspending use of
any Preliminary Prospectus. When any Preliminary Prospectus was filed with the
Commission it (i) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the requirements of,
the Act and the rules and regulations of the Commission thereunder and (ii) 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 Act and the rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term Sheet that is
a part thereof or any amendment or supplement to the Prospectus is filed with
the Commission pursuant to Rule 424(b) (or, if the Prospectus or part thereof or
such amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such amendment or
supplement to the Prospectus was or is declared effective) and on the Firm
Closing Date and any Option Closing Date (both as hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (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
Act and the rules and regulations of the Commission thereunder and (ii) 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 (b) 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.
(c) If the Company has elected to rely on Rule 462(b) and the Rule 462(b)
Registration Statement has not been declared effective (i) the Company has filed
a Rule 462(b) Registration Statement in compliance with and that is effective
upon filing pursuant to Rule 462(b) and has received confirmation of its receipt
and (ii) 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 promulgated under the Act or
the Commission has received payment of such filing fee.
(d) The Company and each of its subsidiaries listed in Schedule 3 hereto
(the "subsidiaries") have been duly organized and are validly existing as
corporations in good standing under the laws of their respective jurisdictions
of incorporation and are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other jurisdictions
where the ownership or leasing of their respective properties or the conduct of
their
respective businesses 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.
(e) The Company and each of its subsidiaries listed in Schedule 3 hereto
have full power (corporate and other) to own or lease their respective
properties and conduct their respective businesses as described in the
Registration Statement and the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus; and the Company has full
power (corporate and other) to enter into this Agreement and to carry out all
the terms and provisions hereof to be carried out by it.
(f) The issued shares of capital stock of each of the subsidiaries have
been duly authorized and validly issued, are fully paid and nonassessable and
are owned beneficially by the Company free and clear of any security interests,
liens, encumbrances, equities or claims, except for any security interests,
liens, encumbrances, pledges or other claims in favor of Silicon Valley Bank.
(g) The Company has an authorized, issued and outstanding capitalization as
set forth in the Prospectus or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus. All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable. The Firm Securities and the Option Securities
have been duly authorized and at the Firm Closing Date or the related Option
Closing Date (as the case may be) (both hereinafter defined), after payment
therefor in accordance herewith, 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 Securities, 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 Act in the public
offering contemplated by this Agreement.
(h) After giving effect to the Company's Second Amended and Restated
Certificate of Incorporation to be filed with the Secretary of State of
Delaware, the capital stock of the Company conforms to the description thereof
contained in the Prospectus or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), there are no outstanding (A)
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, (B) 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, or (C) 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.
(j) The consolidated financial statements of the Company and its
consolidated
subsidiaries included in the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present the financial position of the Company and its consolidated
subsidiaries and the results of operations and financial condition as of the
dates and periods therein specified. Such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption "SELECTED
CONSOLIDATED FINANCIAL DATA" in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present, on the basis
stated in the Prospectus (or such Preliminary Prospectus), the information
included therein.
(k) PricewaterhouseCoopers 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 included in
the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), are independent public
accountants as required by the Act and the applicable rules and regulations
thereunder.
(l) The execution and delivery of this Agreement have been duly authorized
by 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.
(m) No legal or governmental proceedings are pending 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 (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus),
and, to the knowledge of the Company, no such proceedings have been threatened
against the Company or any of its subsidiaries or with respect to any of their
respective properties; and no contract or other document is required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that is not described therein (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) or filed
as required.
(n) The issuance, offering and sale of the Securities 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 (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue sky laws, such as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") and, if the registration
statement filed with respect to the Securities (as amended) is not effective
under the Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act, or (ii) conflict
with or result in a breach or violation of any of the terms and provisions of,
or constitute a default under, 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 are bound, or 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 except where any such conflict, breach, violation or default would
not, singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise) management, business prospects, net worth or
results of operations of the Company and its subsidiaries, taken as a whole.
(o) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus, neither the Company nor any
of its subsidiaries, taken as a whole, 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 not
been any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise), management,
business prospects, net worth, or results of the operations of the Company or
any of its subsidiaries, taken as a whole, except in each case as described in
or contemplated by the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus.
(p) The Company has not, directly or indirectly, (i) 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
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company (except for
the sale of Securities by the Selling Securityholders under this Agreement).
(q) The Company has not distributed and, prior to the later of (i) the
Closing Date (as hereinafter defined) and (ii) the completion of the
distribution of the Securities, will not distribute any offering material in
connection with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or other materials, if
any permitted by the Act.
(r) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), (i) the Company and its
subsidiaries have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary course
of business; (ii) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock; and (iii) there has not been any material change in
the capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(s) 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 by each of them, in each case free and clear of any security
interests, liens, encumbrances, equities, claims and other defects, except (i)
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 (ii) for security interests, liens and other
encumbrances in favor of Silicon Valley Bank, 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 of such property and buildings
by the Company or such subsidiary, in each case except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(t) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the Company's knowledge, is threatened or imminent
that could result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(u) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks, service
marks, trade names, licenses, copyrights and proprietary or other confidential
information currently employed by them in connection with their respective
businesses, and 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 result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(v) 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 prudent and customary in the businesses in which they are engaged
and for companies of similar size as the Company and its subsidiaries, taken as
a whole; 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), business prospects, net worth or results of operations
of the Company and its subsidiaries, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(w) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except (i) as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) or (ii) prohibited in that certain Loan
Agreement dated September 26, 1997 by and between Silicon Valley Bank,
Lionbridge Technologies Holdings B.V. and Lionbridge Technologies B.V., as
amended to date.
(x) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses (except
those the failure to possess which would not result in material adverse change
in the condition (financial or otherwise), management, business prospects, net
worth, results of operations of the Company and its subsidiaries, taken as a
whole), 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 result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(y) The Company has conducted its operations in a manner that will not
subject it to registration as an investment company under the Investment Company
Act of 1940, as amended, and as a result of this transaction, has not caused the
Company to become an investment company subject to registration under such Act.
(z) The Company has filed all foreign, federal, state and local tax returns
that are required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not have a material 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 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 (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(aa) 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
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 in the
aggregate, result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, taken
as a whole, except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(bb) Each certificate signed by the Chief Executive Officer, Chief
Financial Officer or Secretary of the Company and delivered to the
Representatives or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
(cc) 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 (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(dd) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ee) No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a violation or default in the due
performance and observance any term, covenant or condition of the Company's
charter documents or, by-laws, 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 or may be affected in any material adverse
respect with regard to property, business or operations of the Company and its
subsidiaries which would, singly or in the aggregate, result in a material
adverse change in the financial condition, net worth or results of operations of
the Company and its subsidiaries, taken as a whole.
B. Xxxx X. Xxxxx and Xxxxxxx X. Xxxxxxxx, jointly and severally, and
each of Xxxxx X. Xxxxxx, Xxxxxx Xxxxx Xxxxxxxxx and Xxxxxxx X. Xxxxxxx,
severally and not jointly, represents and warrants to, and agrees with, each of
the several Underwriters that:
(i) Such Selling Securityholder has full power (corporate and other) to
enter into this Agreement and to sell, assign, transfer and deliver to the
Underwriters the Securities to be sold by such Selling Securityholders hereunder
in accordance with the terms of this Agreement; and this Agreement has been duly
executed and delivered by such Selling Securityholder.
(ii) Such Selling Securityholders has duly executed and delivered a power
of attorney and custody agreement (with respect to such Selling Securityholder,
the "Power of Attorney" and the "Custody Agreement", respectively), each in the
form heretofore delivered to the
Representatives, appointing Xxxx X. Xxxxx and Xxxxxxx X. Xxxxxxxx as such
Selling Securityholder's attorneys-in-fact (the "Attorneys-in-Fact") with
authority to execute, deliver and perform this Agreement on behalf of such
Selling Securityholder and appointing the Company, as custodian thereunder (the
"Custodian"). Certificates in negotiable form, endorsed in blank or accompanied
by blank stock powers duly executed, with signatures appropriately guaranteed,
representing the Securities to be sold by such Selling Securityholder hereunder
have been deposited with the Custodian pursuant to the Custody Agreement for the
purpose of delivery pursuant to this Agreement. The Custody Agreement and the
Power of Attorney have been duly executed and delivered by such Selling
Securityholder and, assuming due authorization, execution and delivery by the
Custodian, are the valid, binding and enforceable instruments of such Selling
Securityholder. Such Selling Securityholder agrees that each of the Securities
represented by the certificates on deposit with the Custodian is subject to the
interests of the Underwriters hereunder, that the arrangements made for such
custody, the appointment of the Attorneys-in-Fact and the right, power and
authority of the Attorneys-in-Fact to execute and deliver this Agreement, to
agree on the price at which the Securities (including such Selling
Securityholder's Securities) are to be sold to the Underwriters, and to carry
out the terms of this Agreement, are to that extent irrevocable and that the
obligations of such Selling Securityholder hereunder shall not be terminated,
except as provided in this Agreement or the Custody Agreement, by any act of
such Selling Securityholder, by operation of law or otherwise, whether in the
case of any individual Selling Securityholder by the death or incapacity of such
Selling Securityholder, in the case of a trust or estate by the death of the
trustee or trustees or the executor or executors or the termination of such
trust or estate. If any individual Selling Securityholder, trustee or executor
should die or become incapacitated or any such trust should be terminated, or if
any other event should occur, before the delivery of such Securities hereunder,
the certificates for such Securities deposited with the Custodian shall be
delivered by the Custodian in accordance with the respective terms and
conditions of this Agreement as if such death, incapacity, termination,
liquidation or dissolution or other event had not occurred, regardless of
whether or not the Custodian or the Attorneys-in-Fact shall have received notice
thereof.
(iii) Such Selling Securityholder is the lawful owner of the Securities to
be sold by such Selling Securityholder hereunder and upon sale and delivery of,
and payment for, such Securities, as provided herein, such Selling
Securityholder will convey good and marketable title to such Securities, free
and clear of any security interests, liens, encumbrances, equities, claims or
other defects.
(iv) Such Selling Securityholder has not, directly or indirectly, (i) taken
any action designed to cause or 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
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company (except for
the sale of Securities by the Selling Securityholders under this Agreement).
(v) To the extent that any statements or omissions are made in the
Registration Statement, 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 Selling Securityholder specifically
for use therein, such Preliminary Prospectus did, and the Registration Statement
and the Prospectus and any amendments or supplements thereto, when they become
effective or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they are made, not misleading.
Such Selling Securityholder has reviewed the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) and the
Registration Statement, and the information regarding such Selling
Securityholder set forth therein under the caption "Principal and Selling
Stockholders" is complete and accurate.
(vi) The sale by such Selling Securityholder of Securities pursuant hereto
is not prompted by any adverse information concerning the Company that is not
set forth in the Registration Statement or the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(vii) The sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by Such Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein contemplated do
not (i) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have been
obtained, such as may be required under state securities or blue sky laws, such
as may be required by the NASD and, if the registration statement filed with
respect to the Securities (as amended) is not effective under the Act as of the
time of execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act and the Exchange Act and the Trust
Indenture Act, or (ii) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which such
Selling Securityholder is a party or any statute or any judgment, decree, order,
rule or regulation of any court or other governmental authority or any
arbitrator applicable to such Selling Securityholder.
(viii) Xxxx X. Xxxxx and Xxxxxxx X. Xxxxxxxx agree that the representations
and warranties included in Section 2A hereof are true and correct.
3. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. (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 a purchase
price of $________ per share, the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule 1 hereto. One or more certificates in
definitive form for the Firm Securities that the several Underwriters have
agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Representatives request upon notice to the Company at least 48 hours prior to
the Firm Closing Date, shall be delivered by or on behalf of the Company to the
Representatives for the respective accounts of the Underwriters, against payment
by or on behalf of the Underwriters of the purchase price therefor by wire
transfer in same-day funds (the "Wired Funds") to the account of the Company.
Such delivery of and payment for the Firm Securities shall be made at the
offices of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 at 9:30 A.M., New York time, on __________, 1999, or at such
other place, time or date as the Representatives and the Company may agree upon
or as the Representatives may determine pursuant to Section 9 hereof, such time
and date of delivery against payment being herein referred to as the "Firm
Closing Date". The Company will make such certificate or certificates for the
Firm Securities available for checking and packaging by the Representatives at
the offices in New York, New York of the Company's transfer agent or registrar
or of Prudential Securities Incorporated at least 24 hours prior to the Firm
Closing Date.
(b) For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Securities as contemplated by the Prospectus,
each Selling Securityholder, severally and not jointly, hereby grants to the
several Underwriters an option to purchase, the number of Option Securities set
forth opposite the name of such Selling Securityholder in Schedule II hereto.
The purchase price to be paid for any Option Securities shall be the same price
per share as the price per share for the Firm Securities set forth above in
paragraph (a) of this Section 3. The option granted hereby may be exercised as
to all or any part of the Option Securities from time to time within (thirty)
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 is open for trading). If the Underwriters exercise the
over-allotment option in part, the number of Option Securities to be sold be
each Selling Securityholder will be determined first on a pro-rata basis among
the Selling Securityholders (based upon the percentage of the total number of
Option Securities purchased from each Selling Securityholder obtained by
dividing the total number of Option Securities offered by such Selling
Securityholder by the aggregate number of Option Securities offered by the
Selling Securityholders hereunder) up to the total number of Option Securites
offered hereunder, and then from the Company. The Underwriters shall not be
under any obligation to purchase any of the Option Securities 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 and the Selling Securityholders (and the
Attorneys-in-Fact) setting forth the aggregate number of Option Securities as to
which the several Underwriters are then exercising the option and the date and
time for delivery of and payment for such Option Securities. Any such date of
delivery shall be determined by the Representatives but shall not be earlier
than two business days or later than five business days after such exercise of
the option and, in any event, shall not be earlier than the Firm Closing Date.
The time and date set forth in such notice, or such other time on such other
date as the Representatives and the Selling Securityholders may agree upon or as
the Representatives may determine pursuant to Section 9 hereof, is herein called
the "Option Closing Date" with respect to such Option Securities. Upon exercise
of the option as provided herein, the Selling Securityholders shall become
obligated to sell, severally and not jointly, to each of the several
Underwriters, 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 Selling Securityholders,
the same percentage of the total number of the Option Securities as to which the
several Underwriters are then exercising the option as such Underwriter is
obligated to purchase of the aggregate number of Firm Securities, as adjusted by
the Representatives in such manner as they deem advisable to avoid fractional
shares. If the option is exercised as to all or any portion of the Option
Securities, one or more certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on the related Option
Closing Date in the manner, and upon the terms and conditions, set forth in
paragraph (a) of this Section 3, except that reference therein to the Firm
Securities and the Firm Closing Date shall be deemed, for purposes of this
paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively. In the event that any of the Selling Securityholders fail to
provide any portion of the Option Securities set forth opposite their name on
Schedule 2 hereto, the Company shall become obligated to sell and, subject to
the terms and conditions herein set forth, each of the Underwriters (severally
and not jointly) shall become obligation to purchase from the Company, such
portion of the Option Securities.
(c) The Company hereby acknowledges that the wire transfer by or on behalf
of the Underwriters of the purchase price for any Securities does not constitute
closing of a purchase and sale of the Securities. Only execution and delivery of
a receipt for Securities by the Underwriters indicates completion of the closing
of a purchase of the Securities from the Company. Furthermore, in the event that
the Underwriters wire funds to the Company prior to the completion of the
closing of a purchase of Securities, the Company hereby acknowledges that until
the Underwriters execute and deliver a receipt for the Securities, by facsimile
or otherwise, the Company will not be entitled to the Wired Funds and shall
return the Wired Funds 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 Securities is not completed and the Wired Funds are not returned by
the Company to the Underwriters on the same day the Wired Funds were received by
the Company, the Company agrees to pay to the Underwriters in respect of each
day the Wired Funds are not returned by it, in same-day funds, interest on the
amount of such Wired Funds in an amount representing the Underwriters' cost of
financing as reasonably determined by Prudential Securities Incorporated.
(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 Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such Underwriter
or Underwriters from any of its or their obligations hereunder.
4. OFFERING BY THE UNDERWRITERS. Upon your authorization of the release of
the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. COVENANTS OF THE COMPANY AND SELLING SECURITYHOLDERS.
A. The Company covenants and agrees with each of the Underwriters
that:
(a) The Company will 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 or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the
Act. During any time when a prospectus relating to the Securities is required to
be delivered under the Act, the Company (i) will comply with all requirements
imposed upon it by the 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 Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the prospectus, Term Sheet or the amendment referred to in the second
sentence of Section 2(a) hereof, any amendment or supplement to such Prospectus,
Term Sheet or any amendment to the Registration Statement or any Rule 462(b)
Registration Statement of which the Representatives previously have been advised
and furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Representatives shall not have given their
consent, 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 Securities by the several
Underwriters, and will use its best efforts to cause any such amendment to the
Registration Statement to be declared effective by the Commission as promptly as
possible. 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 thereto has been filed and will provide evidence satisfactory to
the Representatives of each such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Original Registration
Statement or any Rule 462(b) Registration Statement or any amendment thereto or
any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, (ii) the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, (iii)
the institution, threatening or contemplation of any proceeding for any such
purpose or (iv) 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.
(c) The Company will arrange for the qualification of the Securities for
offering and sale under the securities or blue sky laws of such jurisdictions as
the Representatives may designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of the
Securities, PROVIDED, HOWEVER, that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, 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 a 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 is necessary at any time to
amend or supplement the Prospectus to comply with the Act or the rules or
regulations of the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 5.A.(a) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the Representatives
and to counsel for the Underwriters a conformed copy of the registration
statement originally filed with respect to the Securities and each amendment
thereto (in each case including exhibits thereto) or any Rule 462(b)
Registration Statement, certified by the Secretary or an Assistant Secretary of
the Company to be true and complete copies thereof as filed with the Commission
by electronic transmission, (ii) to each other Underwriter, a conformed copy of
such registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the 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 (iii) of this sentence, the Company, not
later than (A) 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 10:00
A.M., New York City time, on such date or (B) 2:00 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 10:00 A.M., 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 Firm Closing Date. The Company will provide or cause to be
provided to each of the Representatives, and to each Underwriter that so
requests in writing, a copy of its periodic report filed pursuant to Sections
13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, which
includes the Company's disclosure of its use of proceeds from the sale of the
Securities as required under Rule 463 of the Act.
(f) The Company, as soon as practicable, will make generally available to
its securityholders and to the Representatives a consolidated earnings statement
of the Company and its subsidiaries that satisfies the provisions of Section
11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the Securities
as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell,
contract to sell, pledge, grant any option to purchase or otherwise sell or
dispose (or announce any offer, sale, offer of sale, contract of sale, pledge,
grant of any option to purchase or other sale or disposition) of any shares of
Common Stock or any securities convertible into, or exchangeable or exercisable
for, shares of Common Stock for a period of 180 days after the date hereof,
except pursuant to this Agreement and except for issuances pursuant to (i) the
exercise of employee stock options outstanding on the date hereof, (ii) the
Company's 1998 Stock Option Plan, (iii) the terms of convertible securities of
the Company outstanding on the date hereof, (iv) the Company's 1999 Employee
Stock Purchase Plan, (v) the exercise of warrants as disclosed in the
Prospectus, (vi) the acquisition (whether by merger or otherwise) by the Company
or any of its subsidiaries of all or substantially all of the capital stock or
assets of any other entity or all or a substantial portion of the assets of a
business operated by another entity provided that the recipient executes a
lock-up agreement including the restrictions of this paragraph (h), or (vii) any
stock plan established at any of the Company's foreign subsidiaries provided
that under no circumstances will the options issued under such plan vest prior
to 180 days after the date hereof.
(i) The Company will not, 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 manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by the Selling Securityholders
under this Agreement).
(j) The Company will obtain the agreements described in Section 7(f) hereof
prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Common Stock 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 written notice from you advising the
Company to the effect set forth above, forthwith prepare, consult with you
concerning the appropriateness and advisability of preparing and disseminating a
press release or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall both
file a 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 Act by the earlier of (i) 10:00 P.M. Eastern time on the date of this
Agreement and (ii) the time confirmations are sent or given, as specified by
Rule 462(b)(2).
(m) The Company will cause the Securities to be duly included for quotation
on The Nasdaq Stock Market's National Market (the "Nasdaq National Market")
prior to the Firm Closing Date. The Company will use best efforts to ensure that
the Securities remain included
for quotation on the Nasdaq National Market or another national quotation system
or listed on a national securities exchange following the Firm Closing Date.
B. Each of the Selling Securityholders covenants and agrees with each
of the Underwriters that:
(a) Such Selling Securityholder will not, without the prior written consent
of Prudential Securities Incorporated, on behalf of the Underwriters, directly
or indirectly, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of (i) any shares of Common Stock and/or certain
other securities (the "Other Securities") of the Company or of securities
substantially similar thereto or (ii) any other securities convertible into, or
exchangeable or exercisable for, shares of Common Stock or such similar
securities, beneficially owned (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) by such Selling Securityholder on
the date hereof or hereafter acquired for a period of 180 days (the "Lock-up
Period") subsequent to the date of the final Prospectus filed with the
Commission pursuant to Rule 424(b) of the Act or if no filing under Rule 424(b)
is made, the date of the final Prospectus included in the Registration Statement
when declared effective under the Act. Notwithstanding the foregoing, solely
with respect to options (and the shares of Common Stock underlying such options)
beneficially owned by such Selling Securityholder, such Lock-up Period shall be
90 days; provided further, that any such sale, transfer or disposition may be
made within the applicable Lock-up Period if such Selling Securityholder first
requires any and all offering or acquiring parties to execute and deliver to
Prudential Securities Incorporated an agreement of substantially this provision
5.B.(a).
(b) Such Selling Securityholder will not, 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 manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by Such Selling Securityholder
under this Agreement).
6. EXPENSES. The Company will pay all costs and expenses incident to the
performance of the obligations of the Company and the Selling Securityholders
under this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses incident to (i) the printing or other
production of documents with respect to the transactions, including any costs of
printing the registration statement originally filed with respect to the
Securities and any amendment thereto, any Rule 462(b) Registration Statement,
any Preliminary Prospectus and the Prospectus and any amendment or supplement
thereto, this Agreement and any blue sky memoranda, (ii) all arrangements
relating to the delivery to the Underwriters of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel for the Company and
the Selling Securityholders, and the accountants and any other experts or
advisors retained by the Company, (iv) preparation, issuance and delivery to the
Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (vi) the filing fees of the Commission and the NASD relating
to the Securities, (vii) any quotation of the Securities on the Nasdaq National
Market and, (viii) expenses of the Company's officers incurred in connection
with any meetings with prospective investors in the Securities (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters) and (ix) advertising relating to the offering of the
Securities (other than as shall have been specifically approved by the
Representatives to be paid for by the Underwriters). If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 hereof is not satisfied,
because this Agreement is terminated pursuant to Section 11(a)(i) or (ii) hereof
or because of any failure, refusal or inability on the part of the Company or
the Selling Securityholders to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
counsel fees and disbursements) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities. The Company
and the Selling Securityholders shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement. The provisions of this Section 6 shall not effect any
agreement which the Selling Securityholders and the Company have made for the
sharing of such expenses and costs.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm Closing
Date, to the accuracy of the statements of the Company's officers made pursuant
to the provisions hereof, to the performance by 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 Firm Closing Date has not been declared effective as of the time of
execution hereof, the Original Registration Statement or such amendment and, 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 earlier of (i)
11:00 A.M., New York time, on the date on which the amendment to the
registration statement originally filed with respect to the Securities or to the
Registration Statement, as the case may be, containing information regarding the
initial public offering price of the Securities has been filed with the
Commission and (ii) the time confirmations are sent or given as specified by
Rule 462(b)(2), or with respect to the Original Registration Statement, or such
later time and date as shall have been consented to by the Representatives; if
required, the Prospectus or any Term Sheet that constitutes a part thereof and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rules 434 and 424(b) under the
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 an opinion, dated the Firm
Closing Date, of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for the Company, to
the effect that:
(i) the Company and each of its subsidiaries which is incorporated in
the United States (the "U.S. Subsidiaries") have been duly organized and
are validly existing as corporations in good standing under the laws of
their respective jurisdictions listed on Schedule 3 hereto;
(ii) the Company and each of the U.S. Subsidiaries have corporate
power to own or lease their respective properties 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;
(iii) the issued shares of capital stock of each of the U.S.
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and are owned beneficially by the Company free and clear
of any perfected security interests or, to the best knowledge of such
counsel, any other security interests, liens, encumbrances, equities or
claims except for security interests, liens, encumbrances, pledges or other
claims in favor of Silicon Valley Bank;
(iv) after giving effect to the Company's Second Amended and Restated
Certificate of Incorporation to be filed with the Secretary of State of
Delaware, 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, to such counsel's
knowledge, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities; the Firm
Securities 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; to such counsel's knowledge, 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 Securities; and to
such counsel's knowledge, no holders of securities of the Company are
entitled to have such securities registered under the Registration
Statement other than those holders who have waived such rights;
(v) the statements set forth under the heading "Description of Capital
Stock" in the Prospectus, to the extent that it constitutes matters of law
or legal conclusions, has been reviewed by such counsel and is a fair
summary in all material respects of such matters and conclusions; and the
statements set forth under the headings "Intellectual
Property Rights" and "Legal Proceedings" in the Prospectus, insofar as such
statements purport to summarize legal matters, documents or proceedings,
provide a fair summary of such legal matters, documents and proceedings;
(vi) 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;
(vii) (A) to the knowledge of such counsel, no legal or governmental
proceedings are pending to which the Company or any of the subsidiaries is
a party or to which the property of the Company or any of the subsidiaries
is subject that are required to be described in the Registration Statement
or the Prospectus and are not described therein, and, to the best knowledge
of such counsel, no such proceedings have been threatened against the
Company or any of the subsidiaries or with respect to any of their
respective properties and (B) no contract or other document known to such
counsel is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement that
is not described therein or filed as required;
(viii) the issuance, offering and sale of the Securities 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 (A)
require the consent, approval, authorization, registration or qualification
of or with any governmental authority, except such as have been obtained
and such as may be required under the NASD or state securities or blue sky
laws, or (B) conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument, known to
such counsel, to which the Company or any of the subsidiaries is a party or
by which the Company or any of the U.S. Subsidiaries or any of their
respective properties are bound, or the charter documents or by-laws of the
Company or any of the U.S. Subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator known to such counsel and applicable to the
Company or subsidiaries;
(ix) such counsel has been informed by the Commission that the
Registration Statement is effective under the Act; any required filing of
the Prospectus, or any Term Sheet that constitutes a part thereof, pursuant
to Rules 434 and 424(b) has been made in the manner and within the time
period required by Rules 434 and 424(b); and such counsel has been informed
by the Commission that 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, to such counsel's
knowledge, threatened or are contemplated by the Commission;
(x) the Registration Statement originally filed with respect to the
Securities 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
Act and the rules and regulations of the Commission thereunder; and
(xi) if the Company elects to rely on Rule 434, the Prospectus is not
"materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or an effective post-effective amendment thereto (including
such information that is permitted to be omitted pursuant to Rule 430A).
Such counsel shall also state that, during the course of the
preparation of the Registration Statement, they participated in conferences with
representatives of the Underwriters, and with officers and other representatives
of the Company and with PricewaterhouseCoopers LLP, the Company's independent
certified public accountants, at which the contents of the Registration
Statement and the Prospectus were discussed. Based upon their participation as
described above, we are of the opinion that the Registration Statement and the
Prospectus (other than the financial statements, including the notes and
schedules thereto, and the other financial and statistical data included in the
Registration Statement and Prospectus, as to which we express no opinion), as of
the effective date of the Registration Statement, complies as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations thereunder. Based on their participation as described above, nothing
has come to their attention that leads them to believe that (i) the Registration
Statement, at the time it became effective under the Act, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the date hereof, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (it being
understood in each case that they express no view as to the financial
statements, including the footnotes and supporting schedules, and the other
financial and statistical data included therein).
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 public officials.
(c) The Selling Securityholders shall have furnished to the Representatives
the opinion of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for the Selling
Securityholders, dated the Closing Date, to the effect that:
(i) this Agreement, the Custody Agreement and the Power of Attorney
have been duly authorized, executed and delivered by such Selling
Securityholder;
(ii) the delivery by each Selling Securityholder to the several
Underwriters of certificates for the Securities being sold hereunder by
such Selling Securityholder against payment therefor as provided herein,
will convey good and marketable title to such
Securities to the several Underwriters, free and clear of all security
interests, liens, encumbrances, equities, claims or other defects;
(iii) the sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained and such as may be required under the NASD or
state securities or blue sky laws, or (ii) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which such Selling Securityholder is a party or
by which such Selling Securityholder's respective properties are bound, or
any statute or any judgment, decree, order, rule or regulation of any court
or other governmental authority or any arbitrator applicable to such
Selling Securityholder or any of its subsidiaries.
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or the date of such opinion, included or includes any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Yves Leservoiser & Xxxxxxxxx Xxxxxxx, counsel for the Company's
Lionbridge Technologies (France) subsidiary, in the form acceptable to
Representatives.
(e) The Representatives shall have received an opinion, dated the Firm
Closing Date, of De Brauw Blackstone Westbroek p.c., counsel for the Company's
Lionbridge Technologies Holdings B.V. and Lionbridge Technologies B.V.
subsidiaries, in the form acceptable to Representatives.
(f) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxx Xxx, counsel for the Company's Lionbridge Technologies
Ireland subsidiary, in the form acceptable to Representatives.
(g) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the Underwriters,
with respect to the issuance and sale of the Firm Securities, 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. In rendering such opinion, such counsel
may rely as to all matters of law upon the opinions provided pursuant to
paragraphs (b), (c), (d), (e) and (f)
above.
(h) The Representatives shall have received from PricewaterhouseCoopers LLP
a letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
(i) they are independent accountants with respect to the Company and
its consolidated subsidiaries within the meaning of the Act and the
applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial statements
and schedules and pro forma financial statements examined by them and
included in the Registration Statement and the Prospectus comply in form in
all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations;
(iii) on the basis of a reading of the latest available interim
unaudited consolidated condensed financial statements of the Company and
its consolidated subsidiaries, carrying out certain specified procedures
(which do not constitute an examination made in accordance with generally
accepted auditing standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph
(iii), a reading of the minute books of the shareholders, the board of
directors and any committees thereof of the Company and each of its
consolidated subsidiaries, and inquiries of certain officials of the
Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that:
(A) the unaudited consolidated condensed financial statements of
the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus do not comply in form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder or are
not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
consolidated financial statements included in the Registration
Statement and the Prospectus;]
(B) at a specific date not more than five business days prior to
the date of such letter, there were any changes in the capital stock
or long-term debt of the Company and its consolidated subsidiaries or
any decreases in not current assets or stockholders' equity of the
Company and its consolidated subsidiaries, in each case compared with
amounts shown on the March 31, 1999 unaudited consolidated balance
sheet included in the Registration Statement and the Prospectus, or
for the period from the date of such balance sheet to such specified
date there were any decreases, as compared with the quarterly period
ending as of the date of such balance sheet, in total revenues loss
from operations or basic and diluted net loss per share attributable
to common stockholders of the Company and its consolidated
subsidiaries, except in all instances for changes, decreases or
increases set forth in such letter; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records
of the Company and its consolidated subsidiaries and are included in the
Registration Statement and the Prospectus under the captions "Prospectus
Summary - Summary Financial Data," Risk Factors," "Use of Proceeds,"
Capitalization," "Dilution," "Selected Financial Information,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business," "Management," "Certain Transactions," "Principal
and Selling Stockholders," "Description of Capital Stock," "Shares Eligible
for Future Sale," and in Exhibit 11 to the Registration Statement, and have
compared such amounts, percentages and financial information with such
records of the Company and its consolidated subsidiaries and with
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation.
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 (A) 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 (B) 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
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in paragraphs
(b), (c), (d) and (e) referred to above shall include any amendment or
supplement thereto at the date of such letter.
(i) The Representatives shall have received a certificate, dated the Firm
Closing Date, of the principal executive officer and the principal financial or
accounting officer of the Company 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 Firm Closing
Date; the Registration Statement, as amended as of the Firm 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 Firm 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 Firm
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, 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
not been any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or
otherwise), management, business prospects, 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).
(j) The Representatives shall have received from each person who owns
greater than 3,334 shares of Common Stock or options exercisable within 90 days
of the date of this Agreement for 3,334 shares of Common Stock an agreement to
the effect that such person will not, without the prior written consent of
Prudential Securities Incorporated, on behalf of the Underwriters, directly or
indirectly, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of (i) any shares of Common Stock and/or Other
Securities of the Company or of securities substantially similar thereto or (ii)
any other securities convertible into, or exchangeable or exercisable for,
shares of Common Stock or such similar securities, beneficially owned (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
by such person on the date hereof or hereafter acquired for a period of 180 days
(the "Lock-up Period") subsequent to the date of the final Prospectus filed with
the Commission pursuant to Rule 424(b) of the Act or if no filing under Rule
424(b) is made, the date of the final Prospectus included in the Registration
Statement when declared effective under the Act. Notwithstanding the foregoing,
solely with respect to options (and the shares of Common Stock underlying such
options) beneficially owned by such person, such Lock-up Period shall be 90
days; provided further, that any such sale, transfer or disposition may be made
within the applicable Lock-up Period if such person first requires any and all
offering or acquiring parties to execute and deliver to Prudential Securities
Incorporated an agreement of substantially this provision.
(k) On or before the Firm 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.
(l) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq National Market.
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 Option Securities shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Securities, except that all references
to the Firm Securities and the Firm Closing Date shall be deemed to refer to
such Option Securities and the related Option Closing Date, respectively.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) 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 Act or Section 20 of the Securities Exchange Act of 1934 (the
"Exchange Act"), against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of, caused by, related to,
based upon or arising out of or in connection with:
(i) any untrue statement or alleged untrue statement made by the
Company in Section 2 of this Agreement;
(ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Securities under the securities or
blue sky laws thereof or filed with the Commission or any securities
association or securities exchange (each a "Company Application");
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application 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; or
(iv) any untrue statement or alleged untrue statement of any material
fact contained in any audio or visual materials, including, without
limitation, slides, videos, films and tape recordings used in connection
with the marketing of the Securities, including, without limitation,
statements communicated to securities analysts employed by the
Underwriters,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other 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 such
registration statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or any Company Application 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 or 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, damage or liability purchased Securities
from such Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written confirmation of the sale of
such Securities to such person in any case where such delivery of the Prospectus
(as amended or supplemented) is required by the Act, unless such failure to
deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 5.A.(d) and (e) of this Agreement.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have. The Company will not, without the prior written consent of
the Underwriter or Underwriters purchasing, in the aggregate, more than fifty
percent (50%) of the Securities, 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 Underwriter or any person who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act 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 of Xxxx X. Xxxxx and Xxxxxxx X. Lipshatz, Xxxxx X. Xxxxxx,
Xxxxxx Xxxxx Xxxxxxxxx and Xxxxxxx X. Xxxxxxx, severally and not jointly, agree
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of, caused by,
related to, based upon or arising out of or in connection with:
(i) any untrue statement or alleged untrue statement made by such
Selling Securityholder in Section 2.B. of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto or (B) any application or other document, or any amendment or
supplement thereto, executed by the Selling Securityholder or based upon
written information furnished by or on behalf of the Selling Securityholder
filed in any jurisdiction in order to qualify the Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities
association or securities exchange (each a "Selling Securityholder
Application" and collectively with a Company Application, an
"Application"), or
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Selling
Securityholder Application 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 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 such Selling Securityholder
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 such
registration statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or any Selling Securityholder
Application in reliance upon and in conformity with written information
furnished to such Selling Securityholder by such Underwriter through the
Representatives specifically for use therein; and PROVIDED, FURTHER, that such
Selling Securityholder will not be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
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, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Section 5.A.(d) and (e) of this Agreement; and PROVIDED, FURTHER, that each
individual Selling Securityholder shall be liable under the foregoing indemnity
agreement only to the extent of the proceeds (net of underwriting discounts and
commissions) received by such Selling Securityholder from the sale of the
Securities to the Underwriters pursuant to this Agreement. This indemnity
agreement will be in addition to any liability which such Selling Securityholder
may otherwise have. Such Selling Securityholder will not, without the prior
written consent of the Underwriter or Underwriters purchasing, in the aggregate,
more than fifty percent (50%) of the Securities, 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 Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act 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, each
of the Selling Securityholders, and each person, if any, who controls the
Company or such Selling Securityholder within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company or any such Selling Securityholder, director,
officer or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or any Application or (ii) the omission or the
alleged omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein, in light of the circumstances under
which they were made, 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 Selling
Securityholder or director, officer, controlling person of the company of such
Selling Securityholder in connection with investigating or defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or any action in respect thereof. This indemnity agreement
will be in addition to any liability which such Underwriter may otherwise have.
The Underwriters will not, 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 is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of the Company, its directors and officers,
each of the Selling Securityholders and any controlling persons of the Company
or such Selling Securityholders from all liability arising out of such claim,
action, suit or proceeding.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof; 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 8 except to the extent the party to whom notice was not given was
prejudiced by the failure to give such notice. 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 reasonably
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
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 thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 8 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 by the Representatives in
the case of paragraph (a) of this Section 8, 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 within a reasonable time after
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. 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 8 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 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 from the offering of the Securities 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 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 and such Selling Securityholder on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the net 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, the Selling Securityholders 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, the Selling Securityholders 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 Securities 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 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 shall be governed by the provisions
of the Prudential Securities Incorporated 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 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 or such
Selling Securityholder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the Company
or such Selling Securityholder, as the case may be.
9. DEFAULT OF UNDERWRITERS. If one or more Underwriters default in their
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 10 hereof. In the event of any default by one or more Underwriters as
described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall
relieve any defaulting Underwriter from liability for its default.
10. SURVIVAL. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, the Selling
Securityholders 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, the Selling
Securityholders and any Underwriter or any controlling person referred to in
Section 8 hereof and (ii) delivery of and payment for the Securities. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 6 and 8 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. TERMINATION. (a) This Agreement may be terminated with respect to the
Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, 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 the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of its subsidiaries shall have, in the sole
judgment of the Representatives, 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 or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company), in
the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally
on the New York Stock Exchange or Nasdaq National Market shall have been
suspended or minimum or maximum prices shall have been established on any
such exchange or market system;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or material
adverse change in general economic, political or financial conditions, in
each case having an effect on the U.S. financial markets that, in the sole
judgment of the Representatives, makes it impractical or inadvisable to
proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement, as
amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. INFORMATION SUPPLIED BY UNDERWRITERS. The statements set forth in the
last paragraph on the front cover page and 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
Sections 2.A.(b) and 8 hereof. The Underwriters confirm that such statements (to
such extent) are correct.
13. NOTICES. All communications hereunder shall be in writing and, if sent
to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; and if sent to the Company or the Selling Securityholders,
shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to the Company at 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxxxxxxx 00000, Attention: President (telecopier: (000) 000-0000); with a
copy to Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxxx, XX 00000,
Attention: Xxxxxx X. Xxxxx, Esq. (telecopier: (000) 000-0000).
14. SUCCESSORS. This Agreement shall inure to the benefit of and shall be
binding upon the several Underwriters, the Company, the Selling Securityholders
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 and the Selling Securityholders
contained in Section 8 of this Agreement shall also be for the benefit of any
person or persons who control any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Underwriters contained in Section 8 of this Agreement shall also be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement, the Selling Securityholders and any person or
persons who control the Company and any Selling Securityholders within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser
of Securities from any Underwriter shall be deemed a successor because of such
purchase.
15. APPLICABLE 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.
16. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent
jurisdiction in the State of New York, and by execution and delivery of this
Agreement, each of the Selling Securityholders accepts for itself and in
connection with its properties, generally and unconditionally, the nonexclusive
jurisdiction of the aforesaid courts and waives any defense of forum non
conveniens and irrevocably agrees to be bound by any judgment rendered thereby
in connection with this Agreement. Each Selling Securityholders designates and
appoints Xxxx X. Xxxxx, and such other persons as may hereafter be selected by
the Selling Securityholders irrevocably agreeing in writing to so serve, as its
agent to receive on its behalf service of all process in any such proceedings in
any such court, such service being hereby acknowledged by the Selling
Securityholders to be effective and binding service in every respect. A copy of
any such process so served shall be mailed by registered mail to the Selling
Securityholder at its address provided in Section 13 hereof; PROVIDED, HOWEVER,
that, unless otherwise provided by applicable law, any failure to mail such copy
shall not affect the validity of service of such process. If any agent appointed
by the Selling Securityholders refuses to accept service, each of the Selling
Securityholders hereby agrees that service of process sufficient for personal
jurisdiction in any action against such Selling Securityholder in the State of
New York may be made by registered or certified mail, return receipt requested,
to such Selling Securityholder at his or her address provided in Section 13
hereof, and such Selling Securityholder hereby acknowledges that such service
shall be effective and binding in every respect. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of any Underwriter to bring proceedings against the Selling
Securityholders in the courts of any other jurisdiction.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company, each of the
Selling Securityholders and each of the several Underwriters.
Any person executing and delivering this Agreement as Attorneys-in-Fact for
a Selling Securityholder represents that he or she has been duly appointed as
Attorneys-in-Fact by such Selling Securityholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorneys-in-Fact to take
such action.
Very truly yours,
LIONBRIDGE TECHNOLOGIES, INC.
By ________________________________
Xxxx X. Xxxxx
President and Chief Executive Officer
SELLING SECURITYHOLDERS LISTED ON
SCHEDULE 2 HERETO
By ________________________________
Attorney-in-Fact
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
PRUDENTIAL SECURITIES INCORPORATED
U.S. BANCORP XXXXX XXXXXXX
XXXXX, XXXXXXXX & XXXX, INC.
By PRUDENTIAL SECURITIES INCORPORATED
By _____________________
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives of several Underwriters listed
on Schedule 1.
SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- --------------
Prudential Securities Incorporated................
U.S. Bancorp Xxxxx Xxxxxxx........................
Xxxxx, Xxxxxxxx & Xxxx, Inc.......................
---------
Total ............. 4,000,000
SCHEDULE 2
OFFERED SECURITIES
Firm Securities Number Of Shares
--------------- ----------------
Company 4,000,000
Option Securities Number Of Shares
----------------- ----------------
Xxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx
Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxxxx Irrevocable Trust
Company
SCHEDULE 3
SUBSIDIARIES
Name Jurisdiction of Incorporation
---- -----------------------------
