EXHIBIT 1.1
SCANSOFT, INC.
Common Stock
($0.001 par value)
UNDERWRITING AGREEMENT
December __, 2002
Xxxxxx Xxxxxx Partners LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Investec Inc.
c/o Thomas Xxxxxx Partners LLC
Pacific Telesis Tower
Xxx Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
ScanSoft, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell, and the selling stockholders listed in Schedule B hereto (the "Selling
Stockholders") each propose to sell, severally and not jointly, the respective
number of shares (the "Firm Shares") of the Company's common stock, $0.001 par
value (the "Common Stock"), set forth in Schedule B hereto to Xxxxxx Xxxxxx
Partners LLC, Xxxxx, Xxxxxxxx & Xxxx, Inc. and Investec Inc. (collectively, the
"Underwriters"), for whom Xxxxxx Xxxxxx Partners LLC is acting as representative
(in such capacity, the "Representative"), and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company and the Selling
Stockholders the respective number of Firm Shares set forth in Schedule A
hereto. The Company also agrees to issue and sell to the Underwriters, severally
and not jointly, not more than an additional 1,050,000 shares of Common Stock
(the "Additional Shares"), and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company the respective number of Additional
Shares set forth opposite its name in Schedule A hereto, if and to the extent
that the Underwriters shall have determined to exercise their right to purchase
some or all of the Additional Shares granted to the Underwriters in Section 2
hereof. The Firm Shares and the Additional Shares are hereinafter called,
collectively, the "Shares".
Lernout & Hauspie Speech Products N.V., a corporation organized and
existing under the laws of the Kingdom of Belgium ("L&H"), as a Selling
Stockholder, wishes to sell the Firm Shares held by the L&H to the Underwriters,
and the Underwriters wish to purchase such Firm Shares from L&H, pursuant to the
Order, dated August 16, 2002, of the United States Bankruptcy Court for the
District of Delaware approving the terms of the Agreement among L&H, L&H
Holdings USA, Inc. ("Holdings") and the Company regarding Re-Purchase and
Registration of Common Stock of the Company (the "L&H Approval Order").
Holdings, a Delaware corporation that is a wholly-owned subsidiary of L&H, as a
Selling Stockholder, wishes to sell the Firm Shares held by Holdings to the
Underwriters, and the Underwriters wish to purchase such Firm Shares from
Holdings, pursuant to the Order, dated August 13, 2002, of the United States
Bankruptcy Court for the District of Delaware Confirming the First Amended Plan
of Liquidation of Holdings (the "Holdings Approval Order" and, together with the
L&H Approval Order, the "Approval Orders").
1. (a) Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Underwriter that:
(i) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement, including a
related prospectus, and such amendments thereto as required, on Form S-1 (file
number 333-100647), which has become effective, for the registration under the
Securities Act of 1933, as amended (the "Act") of the Shares. Such registration
statement, as amended as of the time it became effective (including the Rule
430A Information, as defined below), complies in all other material respects
with the Act and the rules and regulations promulgated thereunder (the "1933 Act
Regulations"), including, without limitation, Regulation S-K. Such registration
statement, including the exhibits thereto, as amended as of the time it became
effective (including the Rule 430A Information), is hereinafter called the
"Registration Statement". Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the 1933 Act Regulations and paragraph
(b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations. The information
included in such prospectus that was omitted from such registration statement at
the time it became effective but that is deemed to be part of such registration
statement at the time it became effective pursuant to paragraph (b) of Rule 430A
is referred to as "Rule 430A Information". Each prospectus used before such
registration statement became effective, and any prospectus that omitted the
Rule 430A Information that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus". The final prospectus, in the form first furnished to the
Underwriters for use in connection with the offering of the Firm Shares is
herein called the "Final Prospectus". At or prior to the related Closing Date
(as defined below), the Firm Shares and any Additional Shares will be duly
approved for quotation in the Nasdaq National Market upon official notice of
issuance.
(ii) Each preliminary prospectus and the Final Prospectus filed by
electronic transmission pursuant to the Commission's Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX") (except as may be permitted by
Regulation S-T under the Act), is or will be, as the case may be, substantively
identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Shares. As of the date hereof, when
the Final Prospectus is filed with the Commission pursuant to Rule 424(b) or
Rule 434 of the regulations under the Act and on the Firm Commitment Closing
Date, the Registration Statement and the Final Prospectus complied or will
comply, as the case may be, in all material respects with the applicable
provisions of the Act and the 1933 Act Regulations. As of the date hereof, when
the Final Prospectus is filed with the Commission pursuant to Rule 424(b) or
Rule 434 of the regulations under the Act and on the Firm Commitment Closing
Date, the Registration Statement does not and will not contain an untrue
statement of a material fact and does not and
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will not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. As of the date
hereof, when the Final Prospectus is filed with the Commission pursuant to Rule
424(b) or Rule 434 of the regulations under the Act and on the Firm Commitment
Closing Date, the Final Prospectus does not and will not contain an untrue
statement of a material fact and does not and will not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434. The Commission has not issued any stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of the Final Prospectus or, to the knowledge of
the Company, instituted proceedings for that purpose.
(iii) As of the date of this Agreement, the Company has, and on each
Closing Date will have, an authorized capitalization not materially different
from that which is set forth in the Registration Statement and the Final
Prospectus; all of the issued and outstanding shares of capital stock of the
Company, including the Common Stock, have been duly and validly authorized and
issued and are fully paid and non-assessable, have been issued in compliance
with all applicable laws (including, but not limited to, federal and state
securities laws) and were not issued in violation of any preemptive right,
resale right, right of first refusal or similar right.
(iv) The Company has been duly incorporated and is validly existing
as a corporation and is in good standing under the laws of the State of Delaware
with all requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as conducted and as proposed to be
conducted as described in the Registration Statement and the Final Prospectus.
(v) The Company is duly qualified or registered to do business as a
foreign corporation in good standing in each jurisdiction in which it conducts
business and in which it proposes to conduct business as described in the
Registration Statement and the Final Prospectus, except (i) where the ownership
or leasing of its properties and the conduct of its business does not require
such qualification or (ii) where the failure to so qualify, individually or in
the aggregate, would not have a Material Adverse Effect (as defined below).
(vi) Each "significant subsidiary" of the Company (as such term is
defined in Rule 1-02 of Regulation S-X) (each a "Subsidiary" and, collectively,
the "Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business; except as otherwise disclosed in
the Registration Statement and the Final Prospectus, all of the issued and
outstanding capital stock of each such Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such
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Subsidiary. The only subsidiaries of the Company are (a) the subsidiaries listed
on Schedule D hereto and (b) certain other subsidiaries which, considered in the
aggregate as a single Subsidiary, do not constitute a "significant subsidiary"
as defined in Rule 1-02 of Regulation S-X.
(vii) Complete and correct copies of the certificate of
incorporation and of the by-laws of the Company and all amendments thereto have
been included in the Registration Statement, and no changes therein will be made
during the term of this Agreement.
(viii) Except as disclosed in the Registration Statement and the
Final Prospectus, the Company is in compliance in all material respects with all
applicable laws, orders, rules, regulations, directives, decrees and judgments.
(ix) Except as disclosed in the Registration Statement and the Final
Prospectus, the Company is not in breach of, or in default (nor has any event
occurred which with notice, lapse of time, or both would result in any breach
of, or constitute a default) (i) under its certificate of incorporation or
by-laws or (ii) in the performance or observance of any obligation, agreement,
covenant or condition contained in any license, indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which the Company is a party
or by which it or any of its properties is bound which would produce any
material adverse change, or any development that would reasonably be expected to
result in a material adverse change, in the business, prospects, properties,
assets, the results of operations, condition (financial or otherwise) or
operations of the Company, whether or not arising in the ordinary course of
business (a "Material Adverse Effect").
(x) The execution, delivery and performance of this Agreement, the
issuance and sale of the Shares and the consummation of the transactions
contemplated hereby will not conflict with, or result in any breach of or
constitute a default under (nor constitute any event which with notice, lapse of
time, or both would result in any breach of, or constitute a default under) (i)
any provision of the certificate of incorporation or by-laws of the Company,
(ii) any provision of any license, indenture, mortgage, deed of trust, bank loan
or credit agreement or other evidence of indebtedness, or any lease, contract or
other agreement or instrument to which the Company is a party or by which it or
any of its properties may be bound or affected which would result in a Material
Adverse Effect or (iii) any federal, state, local or foreign law, regulation or
rule or any decree, judgment or order applicable to the Company.
(xi) The Company has full legal right, power and authority to enter
into and perform this Agreement and to consummate the transactions contemplated
herein; this Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company enforceable
in accordance with its terms, except (i) as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or (ii) as any rights to indemnity or contribution hereunder
may be limited by federal and state securities laws and public policy
considerations.
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(xii) The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained in the
Registration Statement and the Final Prospectus.
(xiii) The offer of the Shares being issued and sold by the Company
by the Underwriters as contemplated hereby and the issuance and sale of the
Shares being issued and sold by the Company by the Company have been duly
authorized by the Company; when issued and delivered against payment therefor as
provided in this Agreement, the Shares being issued and sold by the Company will
be validly issued, fully paid and non-assessable; the Firm Shares being sold by
the Selling Stockholders have been validly issued and are fully paid and
non-assessable; except as disclosed in the Registration Statement and the Final
Prospectus, the issuance of the Shares being issued and sold by the Company
hereunder will not be subject to any preemptive or similar rights of any
securityholder of the Company, no person or entity holds a right to require or
participate in the registration under the Act of the Shares pursuant to the
Registration Statement and no person or entity has preemptive rights, co-sale
rights, rights of first refusal or other rights to purchase any of the Shares
other than those that have been expressly waived before the date hereof.
(xiv) Except as disclosed in the Registration Statement, there are
no contracts, agreements or understandings between the Company and any person or
entity granting such person or entity the right, contractual or otherwise, to
cause the Company to issue to it, or register pursuant to the Act, any
securities or shares of capital stock of the Company upon the issue and sale of
the Shares contemplated by this Agreement, or to require the Company to include
such securities with the Shares registered pursuant to the Registration
Statement.
(xv) Schedule C hereto contains a true, complete and correct list of
all persons and entities subject to lock-up agreements, each of whom has
executed and delivered to the Underwriters a lock-up agreement substantially in
the applicable form set forth in Exhibit D hereto.
(xvi) The form of certificates evidencing the Shares (to the extent
such Shares are certificated) complies with all applicable legal requirements
and with all applicable requirements of the certificate of incorporation and
by-laws of the Company and the requirements of the National Association of
Securities Dealers, Inc. (the "NASD").
(xvii) All of the information provided by the Company to the
Underwriters or to counsel for the Underwriters in connection with letters,
filings or other supplemental information provided to NASD Regulation Inc.
pursuant to NASD Conduct Rule 2710 or 2720 is true, complete and correct in all
material respects, and there is a "bona fide independent market", as defined in
Section 2720(a)(3) of the NASD Conduct Rules, for the Shares.
(xviii) No approval, authorization, consent or order of or filing
with any federal, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with (i) the execution,
delivery and performance by the Company of this Agreement and the consummation
of the transactions contemplated hereby or (ii) the sale and delivery of the
Shares being sold by the Company hereunder, other than (x) such as have
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been obtained, or will have been obtained as of the Firm Commitment Closing
Date, under the Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (y) such approvals as have been obtained in connection with the
approval of the listing of the Shares on the Nasdaq National Market System and
(z) any necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the Underwriters.
(xix) PricewaterhouseCoopers LLP ("PWC"), whose reports on the
financial statements of the Company are filed with the Commission and are
included in the Registration Statement and the Final Prospectus, are and were,
during the periods covered by such reports, independent public accountants as
required by the Act and the 1933 Act Regulations.
(xx) The Company has all necessary licenses, permits,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state, local or foreign law, regulation or rule, and
has obtained all necessary licenses, permits, authorizations, consents and
approvals from other persons, in order to conduct its business as set forth in
the Registration Statement; the Company is not in violation of or in default
under, and the Company has not received any notice regarding a possible
violation, default or revocation of, any such license, permit, authorization,
consent or approval or any federal, state, local or foreign law, regulation or
rule or any decree, order or judgment applicable to the Company.
(xxi) All legal or governmental proceedings, contracts, leases and
documents of a character required to be described in the Registration Statement
or the Final Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed as required.
(xxii) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company or any of its
officers or directors (in their capacity as officers or directors, as the case
may be) is a party or of which any of the Company's properties is subject at law
or in equity, or before or by any federal, state, local or foreign governmental
or regulatory commission, which, if determined adversely to the Company, could
result in a judgment, decree or order or prevent consummation of the
transactions contemplated hereby, and the Company has not been informed of any
other material pending legal or governmental proceeding to which any of its
officers or directors is otherwise subject.
(xxiii) Except as described in the Final Prospectus or as would not
reasonably be expected to result in a Material Adverse Effect, neither the
Company nor, to the knowledge of the Company, any of its predecessors in
interest has stored, disposed, generated, manufactured, spilled, discharged,
refined, transported, handled or treated any toxic waste, hazardous waste or
hazardous substance at, upon or from any of the property now or previously owned
or leased or under contract for purchase by the Company in violation of any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit
or which would require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit; and the terms "hazardous
waste," "toxic waste" and "hazardous substance" shall have the meaning specified
in any applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.
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(xxiv) The financial statements of the Company included in the
Registration Statement and the Final Prospectus present fairly in all material
respects the financial position of the Company as of the dates indicated and the
results of operations and cash flows of the Company for the periods specified;
such financial statements have been prepared in conformity with generally
accepted accounting principles as applied in the United States and on a
consistent basis during the periods involved and in accordance with Regulation
S-X promulgated by the Commission; the financial statement schedules included in
the Registration Statement and the Final Prospectus fairly present in all
material respects the information required to be shown therein; all requirements
of Form S-1 and the 1933 Act Regulations with respect to financial statements
and schedules to be included in the Registration Statement and the Final
Prospectus are satisfied in all material respects; the pro forma financial
statements and other pro forma financial information included in the
Registration Statement and the Final Prospectus present fairly the information
shown therein, have been prepared in accordance with the Commission's rules and
guidelines for pro forma financial statements, have been properly compiled on
the pro forma bases set forth therein and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to reflect the transaction or circumstances
referred to therein.
(xxv) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, there has not been
(i) any development, whether or not arising in the ordinary course of business,
that would reasonably be expected to result in a Material Adverse Effect, (ii)
any material loss or interference with the business of the Company from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, (iii) any
transaction which is material to the Company, planned or entered into by the
Company, (iv) any obligation, direct or contingent, which is material to the
Company, incurred by the Company, except obligations incurred in the ordinary
course of business, (v) any change in the capital stock or outstanding
indebtedness of the Company[, other than pursuant to the exercise or conversion
of exchangeable securities or the granting of stock options, all to the extent
and as set forth in the Registration Statement and the Final Prospectus] or (vi)
any purchase by the Company of its outstanding capital stock or any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company. The Company does not have any material contingent obligation which is
not disclosed in the Registration Statement.
(xxvi) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(xxvii) Except as disclosed in the Registration Statement and the
Final Prospectus, there are no outstanding (i) securities or obligations of the
Company convertible into or exchangeable for any capital stock of the Company,
(ii) warrants, rights or options to subscribe for or purchase from the Company
any such capital stock or any such convertible or exchangeable securities or
obligations or (iii) obligations of the Company to issue any shares of capital
stock, any such convertible or exchangeable securities or obligation, or any
such warrants, rights or options.
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(xxviii) The Company and each of its officers, directors and
controlling persons has not taken, and will not take, directly or indirectly,
any action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Shares or is otherwise proscribed by Regulation M promulgated by the Commission.
(xxix) The Company (i) is not required to register as a "broker" or
"dealer" in accordance with the provisions of the Exchange Act or the 1934
Regulations and (ii) directly, or indirectly through one or more intermediaries,
does not control any member firm of the NASD.
(xxx) The Company has not relied upon any of the Underwriters or
legal counsel to the Underwriters for any legal, tax or accounting advice in
connection with the offering and sale of the Shares.
(xxxi) All agreements between the Company and third parties filed as
exhibits to the Registration Statement or referenced in the Final Prospectus are
legal, valid and binding obligations of the Company, enforceable in accordance
with their respective terms, except to the extent enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity.
(xxxii) No relationship, direct or indirect, exists between or among
the Company, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, on the other hand, which is required by
the Act to be described in the Registration Statement and the Final Prospectus
that is not so described.
(xxxiii) The Company has good and marketable title in fee simple to
all real property, if any, and good title to all personal property owned by it,
in each case free and clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are disclosed in the Final
Prospectus or such as would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect; and any real property and
buildings held under lease by the Company are held under valid, existing and
enforceable leases, with such exceptions as are disclosed in the Final
Prospectus or such as would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
(xxxiv) The Company has ownership or license or legal right to use
all material patent, copyright, trade secret and trademark rights and technology
necessary to the conduct of the business of the Company as now conducted
(collectively, "Intellectual Property") other than Intellectual Property
generally available on commercial terms from other sources.
(xxxv) All material licenses or other material agreements under
which (i) the Company has been granted rights in Intellectual Property or (ii)
the Company has granted rights to others in Intellectual Property owned or
licensed by the Company, are in full force and effect and there is no material
default by the Company or, to the Company's knowledge, any other party thereto.
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(xxxvi) Except as disclosed in the Registration Statement and the
Final Prospectus, no proceeding charging the Company with infringement of any
adversely held Intellectual Property has been filed or is pending or, to the
knowledge of the Company, is threatened to be filed. Except as disclosed in the
Registration Statement and the Final Prospectus, the Company has not received
any notice and is not otherwise aware of any infringement of or conflict with
asserted rights of others with respect to Intellectual Property other than any
infringement or conflict that would not be reasonably expected to result in a
Material Adverse Effect. The Company has not received written notice from any
third party alleging that the activities of the Company or of any of its
employees on behalf of the Company violate any agreements or arrangements, if
any, which any such employees have with other persons and which are known to the
Company.
(xxxvii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain asset accountability, (iii) access
to assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Board of Directors of the Company maintains an
audit committee that meets the listing standards imposed by the Nasdaq National
Market for companies whose stock is approved for quotation in that market and
the members of which are independent of the Company as required by such listing
standards. The audit committee meets regularly and has reviewed with management
and PWC, as appropriate, all financial statements filed with the Commission from
January 1, 1999 to the present.
(xxxviii) The Company has filed on a timely basis all material
federal, state, local and foreign income and franchise tax returns required to
be filed through the date hereof and have paid all taxes shown as due thereon;
no tax deficiency has been asserted against the Company, nor does the Company
know of any tax deficiency which is likely to be asserted; all tax liabilities
are adequately provided for on the books of the Company.
(xxxix) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the businesses in which it is engaged, and the Company has no
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 have a Material Adverse Effect.
(xl) In connection with this offering, the Company has not offered
and will not offer shares of its Common Stock or any other securities
convertible into or exchangeable or exercisable for shares of Common Stock in a
manner in violation of the Act; the Company has not distributed and will not
distribute any offering material in connection with the offer and sale of the
Shares, other than the Final Prospectus, the Registration Statement and other
materials permitted by the Act.
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(b) Representations and Warranties by the Selling Stockholders. Each
Selling Stockholder severally represents and warrants to each Underwriter as of
the date hereof and agrees with each Underwriter, as follows:
(i) Such Selling Stockholder has the full right, power and authority
to enter into this Agreement and a Custody Agreement (the "Custody Agreement")
and to sell, transfer and deliver the Firm Shares to be sold by such Selling
Stockholder hereunder. The execution and delivery of this Agreement and the
Custody Agreement and the sale and delivery of the Firm Shares to be sold by
such Selling Stockholder and the consummation of the transactions contemplated
herein and compliance by such Selling Stockholder with its obligations hereunder
have been duly authorized by such Selling Stockholder and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any tax, lien, charge or encumbrance upon the Firm
Shares to be sold by such Selling Stockholder pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, license,
lease or other agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder is bound, nor will such action result
in any violation of the provisions of the charter or by-laws or other
organizational instrument of such Selling Stockholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, including specifically any Bankruptcy Court, having jurisdiction over
such Selling Stockholder or any of its properties.
(ii) Upon delivery of the Firm Shares and payment of the purchase
price therefor as herein contemplated, assuming the Underwriters have no notice
of any adverse claim, the Underwriters will receive good and marketable title to
the Firm Shares purchased by them from such Selling Stockholder, free and clear
of any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
(iii) Such Selling Stockholder has duly executed and delivered, in
the form heretofore furnished to the Underwriters the Custody Agreement with
____________, as custodian (the "Custodian"); and the Custodian is authorized to
deliver the Firm Shares to be sold by such Selling Stockholder hereunder and to
accept payment therefor.
(iv) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which would reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(v) With the exception of the orders of the applicable Bankruptcy
Courts, which have been obtained, no filing with, or authorization, approval,
consent, vote, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, or any creditor of such
Selling Stockholder or, if applicable, any of its subsidiaries, or any
stockholder, partner, member or securityholder of or holder of an equity
interest in such Selling Stockholder or, if applicable, any of its subsidiaries,
is necessary or required for the execution or delivery by such Selling
Stockholder of, or the performance by such Selling Stockholder of its
obligations under, this Agreement or the Custody Agreement for the sale and
delivery by such Selling Stockholder of the Firm Shares to be sold by it under
this
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Agreement or for the consummation by such Selling Stockholder of the other
transactions contemplated by this Agreement or the Custody Agreement, except
such as may be required under the Act or the 1933 Act Regulations or the 1934
Act or the 1934 Act Regulations or state securities laws.
(vi) Certificates for all of the Firm Shares to be sold by such
Selling Stockholder pursuant to this Agreement, in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or assignment
in blank with signatures guaranteed, have been placed in custody with the
Custodian with irrevocable conditional instructions to deliver such Firm Shares
to the Underwriters pursuant to this Agreement and the Custody Agreement.
(vii) Neither such Selling Stockholder nor any of its affiliates
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, or has any other association
with (within the meaning of Article I, Section 1(m) of the By-laws of the NASD),
any member firm of the NASD.
(viii) Such Selling Stockholder and its obligations under this
Agreement and under the Custody Agreement are subject to civil and commercial
law and to suit and neither such Selling Stockholder nor any of its properties,
assets or revenues has any right of immunity from any legal action, suit or
proceeding, from the giving of any relief in any such legal action, suit or
proceeding, from setoff or counter-claim, from the jurisdiction of any court,
from service of process, attachment upon or prior to judgment, or attachment in
aid of execution of judgment, or from execution of a judgment, or other legal
process or proceeding for the giving of any relief or for the enforcement of a
judgment, in any jurisdiction, with respect to his or her obligations,
liabilities or any other matter under or arising out of or in connection with
this Agreement and the Custody Agreement, and to the extent that such Selling
Stockholder or any of its properties, assets or revenues may have or may
hereafter become entitled to any such right of immunity in any jurisdiction in
which proceedings may at any time be commenced, such Selling Stockholder has
effectively waived such right and consented to such relief and enforcement
pursuant to Section 16 of this Agreement.
(ix) Such Selling Stockholder has not granted with respect to the
Firm Shares to be sold by such Selling Stockholder under this Agreement, and the
Firm Shares to be sold by such Selling Stockholder under this Agreement are not
subject to, any option, warrant, put, call, right of first refusal or other
right to acquire or purchase any such Firm Shares other than pursuant to this
Agreement, except as may be required under Section 409(h) of the Internal
Revenue Code of 1986, as amended (the "Code").
(x) Such Selling Stockholder has not granted and has no preemptive
right, right of first refusal or other similar right to purchase any of the Firm
Shares that are to be sold by the Company pursuant to this Agreement; and such
Selling Stockholder does not own or hold any Common Stock or any securities
convertible into or exchangeable or exercisable for or repayable with Common
Stock or have any right or arrangement to acquire any capital stock, rights,
warrants, options or other securities of the Company.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Underwriters or to counsel
to the
11
Underwriters shall be deemed a representation and warranty by the Company to the
Underwriters as to the matters covered thereby; and any certificate signed by or
on behalf of any Selling Stockholder as such and delivered to the Underwriters
or to counsel to the Underwriters pursuant to the terms of this Agreement shall
be deemed a representation and warranty by such Selling Stockholder to the
Underwriters as to the matters covered thereby.
2. Purchase and Sale.
(a) The Company and the Selling Stockholders each hereby agrees,
severally and not jointly, to sell to the Underwriters, and the Underwriters,
upon the basis of the representations, warranties and covenants contained in
this Agreement and subject to its terms and conditions, agree, severally and not
jointly, to purchase, the Shares from the Company and the Selling Stockholders
at $____ per share (the "Purchase Price").
(b) Upon the basis of the representations, warranties and covenants
contained in this Agreement and subject to its terms and conditions, the Company
hereby agrees to issue and sell to the Underwriters the Additional Shares, and
the Underwriters shall have a one-time right to purchase up to the respective
number of Additional Shares set forth in Schedule A hereto, at the Purchase
Price. If the Underwriters elect to exercise such option, it shall so notify the
Company in writing not later than thirty days after the date of this Agreement,
which notice shall specify the number of Additional Shares to be purchased by
the Underwriter and the date on which such Additional Shares are to be
purchased. Such date may be the same as the Firm Commitment Closing Date but not
earlier than the Firm Commitment Closing Date nor later than ten Business Days
(as defined below) after the date of such notice. The Additional Shares may be
purchased as provided in Section 3 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares.
(c) The Company and the Selling Stockholders are advised by the
Underwriters that the Underwriters propose to make a public offering of the
Shares as soon after this Agreement has been executed as in the Underwriters'
judgment is advisable. The Company and the Selling Stockholders are further
advised by the Underwriters that the Shares are to be offered to the public
initially at $______ per share (the "Public Offering Price") and to certain
dealers selected by the Underwriters at a price that represents a concession not
in excess of $______ per share less than the Public Offering Price and that such
dealers may allow a concession, not in excess of $_____ per share less than the
Public Offering Price, to certain other dealers.
(d) The Company hereby agrees that, without the prior written
consent of the Representative, it will not, during the period ending 180 days
after the Firm Commitment Closing Date, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (i) the Shares to be sold
hereunder,
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(ii) the issuance by the Company of shares of Common Stock upon the exercise of
warrants or the conversion of a security which are outstanding on the date
hereof and are described in the Registration Statement, (iii) the award of
warrants under the Company's stock plans in the ordinary course of business
consistent with past practices that, solely with respect to individuals listed
in Schedule C hereto, are not exercisable within 180 days after the Firm
Commitment Closing Date or (iv) the Company's issuance of shares of Common Stock
in connection with the acquisition by the Company of another company or entity
or any other strategic partnership or other joint venture, provided that the
terms of such issuance contractually prohibit the resale or other disposition of
such shares of Common Stock within [180] days after the Firm Commitment Closing
Date.
3. Delivery and Payment.
(a) Payment of the Purchase Price for the Shares offered and sold
pursuant to this Agreement shall be made to the Company and each Selling
Stockholder, respectively, by Federal Funds wire transfer of immediately
available funds to bank accounts designated by the Company and each Selling
Stockholder, against delivery of the certificates for the Shares to the
Underwriters through the facilities of the Depository Trust Company ("DTC") for
the account of each Underwriter. Such payment and delivery shall be made at
10:00 a.m., New York City time, on _______ __, 2002 or at such other time on the
same or such other date (so long as such other date is a Business Day), in any
event not later than _______ __, 2002, as shall be designated in writing by the
Representative. The time and date of such payment and delivery of the Firm
Shares is herein referred to as the "Firm Commitment Closing Date".
(b) Payment of the Purchase Price for any Additional Shares offered
and sold pursuant to this Agreement shall be made to the Company by Federal
Funds wire transfer against delivery of the certificates for such Additional
Shares to the Underwriters through the facilities of DTC for the account of the
Underwriters. Such payment and delivery shall be made at 10:00 a.m., New York
City time, on the date specified in the notice described in Section 2(b) or at
such other time on the same or on such other date (so long as such other date is
a Business Day), in any event not later than _______ __, 2002, as shall be
designated in writing by the Representative. The time and date of such payment
and delivery of any Additional Shares is herein referred to as the "Option
Closing Date" and the Firm Commitment Closing Date and the Option Closing Date
are each herein referred to as a "Closing Date".
(c) Certificates for the Firm Shares and the Additional Shares, if
any, shall be delivered to the Underwriters in definitive form in such names and
in such denominations as the Representative shall specify no later than the
second Business Day preceding the respective Closing Date. For the purpose of
expediting the checking of the certificates for the Shares by the Underwriters,
the Company and each Selling Stockholder agrees to make such certificates
available to the Representative for such purpose at least one full Business Day
preceding the respective Closing Date. As used herein, "Business Day" means any
day other than a Saturday or Sunday or any other day on which banking
institutions in New York, New York are required or permitted by law or executive
order to be closed.
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4. Agreements. The Company agrees with the Underwriters that:
(a) Prior to the termination of the offering of the Shares, the
Company will not file any amendment of the Registration Statement or supplement
to the Final Prospectus unless the Company has furnished the Underwriters a copy
for the Underwriters' review not fewer than two Business Days prior to the
intended date of filing and will not file any such proposed amendment or
supplement to which the Underwriters reasonably object. Subject to the foregoing
sentence, the Company will cause each Final Prospectus to be filed with the
Commission pursuant to Rule 424 or Rule 434 via XXXXX. The Company will advise
the Underwriters promptly (i) when each Final Prospectus shall have been filed
with the Commission pursuant to Rule 424 or Rule 434, (ii) when any amendment to
the Registration Statement relating to the Shares shall have become effective,
(iii) of any request by the Commission for any amendment of the Registration
Statement or amendment of or supplement to any Final Prospectus or for any
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt by the
Company of any notification with respect to the suspension of the approval of
the Shares for quotation in the Nasdaq National Market or qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its reasonable best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, except with respect to any such delivery
requirement imposed upon an affiliate of the Company in connection with any
secondary market sales, any event occurs as a result of which in the view of
counsel to the Underwriters or counsel to the Company a Final Prospectus as then
amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein in
light of the circumstances under which they were made not misleading, or if it
shall be necessary to amend or supplement a Final Prospectus to comply with the
Act or the Exchange Act or the 1933 Act Regulations or 1934 Act Regulations, the
Company promptly will prepare and file with the Commission, subject to the first
sentence of paragraph (a) of this Section 4, an amendment or supplement which
will correct such statement or omission or an amendment which will effect such
compliance.
(c) The Company will make generally available to its security
holders and to the Underwriters as soon as practicable, but not later than 90
days after the close of the period covered thereby, an earnings statement (in
form complying with the provisions of Rule 158 under the Act) covering a
12-month period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
(d) The Company will furnish to the Underwriters and counsel to the
Underwriters, without charge, copies of the Registration Statement (including
exhibits thereto) and each amendment thereto which shall become effective on or
prior to the Firm Commitment Closing Date. The Company will make available to
the Underwriters, as soon as practicable after the Registration Statement
becomes effective, and thereafter from time to time will furnish
14
to the Underwriters, as many copies of the Final Prospectus (or of the Final
Prospectus as amended or supplemented if the Company shall have made any
amendment or supplement thereto after the effective date of the Registration
Statement) as the Underwriters may reasonably request for the purposes
contemplated by the Act; and for so long as this Agreement is in effect, or in
any case if any Underwriter is required to deliver a prospectus within the
nine-month period referred to in Section 10(a)(3) of the Act in connection with
the sale of the Shares, the Company will prepare and file promptly such
amendment or amendments to the Registration Statement and the Final Prospectus
as may be necessary to comply with the requirements of Section 10(a)(3) of the
Act.
(e) The Company will arrange for the qualification of the Shares for
sale under the laws of such jurisdictions as the Representative may reasonably
designate and will maintain such qualifications in effect so long as required
for the distribution of the Shares; provided, however, that the Company shall
not be required to (i) qualify to do business in any jurisdiction where it is
not now so qualified, (ii) take any action which would subject it to general or
unlimited service of process of any jurisdiction where it is not now so subject,
(iii) become a dealer of securities or (iv) become subject to general taxation
on its earnings in any jurisdiction where it is not now so subject.
(f) Until [180] days after the Firm Commitment Closing Date, the
Company will not, without the consent of the Representative, offer or sell,
announce the offering of, or file with the Commission any registration statement
with respect to any shares of Common Stock or any securities exercisable for or
convertible into shares of Common Stock; provided, however, the Company may, at
any time, offer or sell or announce the offering of any securities covered by a
registration statement on Form S-8.
(g) The Company will prepare a Final Prospectus with respect to the
Shares, in a form previously approved by the Underwriters and their counsel, and
file such prospectus supplement pursuant to Rule 424(b) under the Act not later
than 5:00 p.m., New York City time, on the second Business Day after the signing
of this Agreement, and to provide copies of such Final Prospectus to each
Underwriter via e-mail in ".pdf" format to one or more accounts designated by
such Underwriter. The Company will furnish to each Underwriter, without Charge,
during the period when the Final Prospectus is required to be delivered under
the Act of the 1934 Act, such number of copies of the Final Prospectus (as
amended or supplemented) as such Underwriter may reasonably request. The Final
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(h) The Company will furnish to the Underwriters for a period of one
year from the date of this Agreement (i) copies of any reports or other
communications which the Company shall send to its stockholders or shall from
time to time publish or publicly disseminate, (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms 10-K, 10-Q and
8-K, or such other similar form as may be designated by the Commission, (iii)
copies of documents or reports filed with any national securities exchange on
which any class of securities of the Company is listed and (iv) such other
information as the Underwriters
15
may reasonably request regarding the Company, in each case as soon as such
reports, communications, documents or information becomes available.
(i) The Company will furnish to the Underwriters five signed copies
of the Registration Statement, as initially filed with the Commission, and of
all amendments thereto, including all exhibits thereto and all documents
incorporated by reference therein.
(j) The Company will apply the net proceeds from the sale of the
Shares in the manner set forth under the caption "Use of Proceeds" in the Final
Prospectus.
(k) The Company will pay all costs, expenses, fees and taxes in
connection with (i) the preparation and filing of the Registration Statement,
each preliminary prospectus, the Final Prospectus, and any amendment or
supplement thereto, and the printing and furnishing of copies of each thereof to
the Underwriters and to the dealers (including costs of mailing and shipment),
(ii) the registration, issue, sale and delivery of the Shares, (iii) the
producing, word processing and/or printing of this Agreement, any powers of
attorney and any closing documents (including compilations thereof) and the
reproduction and/or printing and furnishing of copies of each thereof to the
Underwriters (including costs of mailing and shipment), (iv) the qualification
of the Shares for offering and sale under state laws and the determination of
their eligibility for investment under state law as aforesaid (including the
legal fees and filing fees and other disbursements of counsel to the
Underwriters in connection therewith) and the printing and furnishing of copies
of any blue sky surveys or legal investment surveys to the Underwriters, (v) the
quotation of the Shares on the Nasdaq National Market and any registration
thereof under the Exchange Act, (vi) any filing for review of the public
offering of the Shares by the NASD, including the fees and disbursements of
counsel to the Underwriters in connection therewith, (vii) all other fees and
disbursements of counsel to the Company and (viii) the performance of the
Company's other obligations hereunder, provided that the Underwriters shall be
responsible for any transfer taxes on resale of Shares by them and, provided
further, that the Company shall not be responsible for the fees and expenses of
counsel to the Selling Stockholders (other than as specifically agreed to in
writing by the Company) nor for the underwriting discounts and commissions of
the Shares sold by the Selling Stockholders.
(l) The Company will use its best efforts to effect and maintain the
quotation of the Shares on the Nasdaq National Market and will file with the
Nasdaq National Market all documents and notices required by the Nasdaq National
Market of companies that have securities that are traded in the over-the-counter
market and quotations for which are reported by the Nasdaq National Market.
(m) The Company, during the period when the Final Prospectus is
required to be delivered under the Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act Regulations.
5. Bankruptcy Covenants.
(a) Prior to the Firm Commitment Closing Date, the Approval Orders
shall not have been stayed, modified, reversed or amended.
16
(b) From and after the date hereof, none of the Selling
Stockholders, the Company and any Underwriter shall, and the Selling
Stockholders, the Company and any Underwriter shall ensure that none of their
respective subsidiaries and affiliates shall, take any action or fail to take
any action, which action or failure to act would reasonably be expected to (i)
prevent or impede the consummation of the transactions contemplated by this
Agreement in accordance with the terms of this Agreement, or (ii) with respect
to the Approval Orders, result in (A) the reversal, avoidance, revocation,
vacating or modification (in any manner which would reasonably be expected to
materially and adversely affect any Underwriter's rights hereunder) or (B) the
entry of a stay pending appeal of such Approval Orders.
(c) Each of the Selling Stockholders shall promptly (within 24
hours) provide the Underwriters with drafts of all documents, motions, orders,
filings or pleadings that such Selling Stockholder proposes to file with the
applicable Bankruptcy Courts which relate to the consummation or approval of
this Agreement and will provide the Underwriters with reasonable opportunity to
review and approve such filings as reasonably practical. The Selling
Stockholders shall also promptly (within 24 hours) provide the Underwriters with
copies of all pleadings received by or served by or upon the Selling
Stockholders in connection therewith which have not otherwise been served on the
Representative.
6. Reimbursement of Underwriters' Expenses. If the sale of the Shares to
the Underwriters as contemplated by this Agreement is not consummated for any
reason other than as a result of the Representative terminating its obligations
hereunder in accordance with Section 8(b)(ii) hereof, the Company shall, in
addition to paying the amounts described in Section 4(k) hereof, reimburse the
Underwriters for all reasonable out-of-pocket expenses, including the fees and
disbursements of counsel to the Underwriters. This notwithstanding, in the event
that the offering is terminated by the Underwriters as a result of a default in
the performance of their obligations by the Underwriters pursuant to Section 10
of this Agreement, the Company shall not be responsible for payment of the
expenses of the Underwriters.
7. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase and pay for the Firm Shares on each Closing Date
pursuant to this Agreement shall be subject to: (i) the accuracy in all material
respects of the representations and warranties on the part of the Company and
the Selling Stockholders contained herein as of the date hereof, as of the date
of the Final Prospectus, as of the date of the effectiveness of any amendment to
the Registration Statement filed prior to such Closing Date and as of such
Closing Date; (ii) the accuracy in all material respects of the statements of
the Company and the Selling Stockholders made in any certificates pursuant to
the provisions hereof; (iii) the performance in all material respects by each of
the Company and the Selling Stockholders of its obligations hereunder; and (iv)
the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and be in
effect, and no proceedings for that purpose shall have been instituted or
threatened; and the Final Prospectus and any amendment or supplement thereto
shall have been filed with the Commission within the time period prescribed by
the Commission.
17
(b) The Company shall have furnished to the Underwriters the opinion
of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for the
Company, dated as of such Closing Date, substantially in the form attached
hereto as Exhibit A.
(c) The Underwriters shall have received the opinion, dated as of
the Firm Commitment Closing Date, of Milbank, Tweed, Xxxxxx & XxXxxx LLP,
counsel for the Selling Stockholders, with respect to the laws of the United
States, dated as of such Closing Date, substantially in the form attached hereto
as Exhibit B.
(d) The Underwriters shall have received the certificate, dated as
of the Firm Commitment Closing Date, of Xxxx-Xxxx Vanstaen, curator for the
bankruptcy estate of L&H, under the laws of the Kingdom of Belgium, dated as of
such Closing Date, substantially in the form attached hereto as Exhibit C.
(e) The Underwriters shall have received from Sidley Xxxxxx Xxxxx &
Xxxx LLP, counsel to the Underwriters, such opinion or opinions, dated as of
such Closing Date, with respect to the issuance and sale of the Firm Shares or
the Additional Shares, as the case may be, the Registration Statement, the Final
Prospectus and other related matters as the Underwriters may reasonably require,
and the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Underwriters a
certificate of the Company, signed by the Chairman and Chief Executive Officer
or the President and the principal financial officer of the Company, dated as of
such Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company in this
Agreement were true and correct in all material respects on and as of the date
hereof and are true and correct in all material respects on and as of such
Closing Date with the same effect as if made on such date, and the Company has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such Firm Commitment Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and is currently in effect
and no proceedings for that purpose have been instituted or, to the best of
their knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Final Prospectus, there has been no material adverse change in
the condition (financial or other), earnings, business or properties of the
Company, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Prospectus.
(g) On the date hereof and on the Closing Date, PWC shall have
furnished to the Underwriters a letter or letters (which may refer to letters
previously delivered to the Underwriters), dated as of such date, in form and
substance satisfactory to the Underwriters.
18
(h) On the date hereof and on the Closing Date, KPMG Accountants,
N.V. ("KPMG") shall have furnished to the Underwriters a letter or letters
(which may refer to letters previously delivered to the Underwriters), dated as
of such date, in form and substance satisfactory to the Underwriters.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, there shall not
have been (i) any change or decrease specified in the letter or letters referred
to in paragraphs (g) and (h) of this Section 7 or (ii) any change, or any
development involving a prospective change, in or affecting the earnings,
business or properties of the Company the effect of which, in any case referred
to in clause (i) or (ii) above, is, in the reasonable judgment of the
Representative, so material and adverse as to make it impractical or inadvisable
to proceed with the offering or the delivery of the Firm Shares or the
Additional Shares, as the case may be, as contemplated by the Registration
Statement, the Final Prospectus and this Agreement.
(j) The Underwriters shall have received a certificate from each
Selling Stockholder, signed by an authorized signatory of such Selling
Stockholder, dated as of such Closing Date, to the effect that:
(i) the representations and warranties of such Selling
Stockholder contained in Section 1(b) of this Agreement are true and correct in
all respects with the same force and effect as though expressly made on and as
of such Closing Date;
(ii) the information furnished in writing by such Selling
Stockholder specifically for inclusion in the Registration Statement, as amended
as of such Closing Date, or approved in writing by such Selling Stockholder for
inclusion in the Registration Statement as so amended, 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 information furnished in
writing by such Selling Stockholder specifically for inclusion in the Final
Prospectus, as amended or supplemented as of such Closing Date, or approved in
writing by such Selling Stockholder for inclusion in the Final Prospectus as so
amended and supplemented, 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
(iii) such Selling Stockholder has complied with all
conditions and has performed all covenants and agreements on its part to be
complied with, performed or satisfied at or prior to such Closing Date.
(k) The Underwriters shall have received from each Selling
Stockholder a duly completed Form W-9, signed by such Selling Stockholder or
trustee of such Selling Stockholder, if applicable.
(l) The Company shall have furnished to the Underwriters such
further information, certificates and documents as the Underwriters may
reasonably request.
(m) The NASD has confirmed that it has not raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
19
(n) At the date of this Agreement, the Underwriters shall have
received an agreement substantially in the form of Exhibit D hereto signed by
the persons listed on Schedule C hereto.
(o) The Approval Orders shall not have been stayed, modified,
reversed or amended.
If any of the conditions specified in this Section 7 to be fulfilled as of
or prior to the applicable Closing Date have not been so fulfilled in all
material respects when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement to be
delivered to the Underwriters as of or prior to such Closing Date shall not be
in all material respects reasonably satisfactory in form and substance to the
Underwriters and their counsel, all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, such Closing Date by the
Representative. Notice of such cancellation shall be given to the Company in
writing or by telephone or telegraph confirmed in writing.
8. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective (i) if Rule 430A under the
Act is not used, when the Underwriters shall have received notification of the
effectiveness of the Registration Statement or (ii) if Rule 430A under the Act
is used, when the parties hereto have executed and delivered this Agreement.
(b) The Underwriters' obligations hereunder shall be subject to
termination in the Underwriters' absolute discretion if: (i) since the time of
execution of this Agreement or the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, there has been any
material adverse or unfavorable change, financial or otherwise (other than as
referred to in the Registration Statement and the Final Prospectus at the time
of execution of this Agreement), in the operations, business, condition or
prospects of the Company, which would, in the Underwriters' judgment, make it
impracticable or inadvisable to proceed with the offering or the delivery of the
Shares as contemplated by the Registration Statement and the Final Prospectus,
or (ii) since the execution of this Agreement (x) trading securities on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market
shall have been suspended or limitations or minimum prices shall have been
established on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market, (y) a banking moratorium shall have been declared either
by the United States or New York State authorities or (z) the United States
shall have declared war in accordance with its constitutional processes or there
shall have occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis of such magnitude in its effect on
the financial markets of the United States as, in the Underwriters' judgment, to
make it impracticable or inadvisable to proceed with the offering or the
delivery of the Shares as contemplated by the Registration Statement and the
Final Prospectus.
(c) If the Underwriters elect to terminate this Agreement as
provided in this Section 8, the Company shall be notified promptly by letter,
telegram, email or telecopy.
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9. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company and, solely in
connection with statements with respect to each Selling Stockholder furnished in
writing by such Selling Stockholder specifically for inclusion in the
Registration Statement and the Final Prospectus or as approved in writing by
such Selling Stockholder for inclusion in the Registration Statement and the
Final Prospectus, each Selling Stockholder agree, jointly and severally, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in (i) the Registration Statement or any amendment
thereof, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) the Final Prospectus (as amended or supplemented
if the Company shall have furnished any amendment or supplement thereto), or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
(x) insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to the Underwriters furnished to the Company in
writing by the Representative expressly for use therein and (y) that with
respect to any preliminary prospectus, the foregoing indemnity agreement shall
not inure to the benefit of the Underwriters from whom the person asserting any
loss, claim, damage or liability purchased Shares, or any person controlling the
Underwriters, if copies of the Final Prospectus were timely delivered to the
Underwriters pursuant to Section 4 and a copy of the Final Prospectus (as then
amended or supplemented if the Company shall have furnished any amendment or
supplement thereto) was not sent or given by or on behalf of the Underwriters to
such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the Final
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense.
(b) Indemnification by the Underwriters. Each Underwriter agrees to
indemnify and hold harmless the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement, the Selling
Stockholders and each person, if any, who controls the Company or the Selling
Stockholders within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof
or the Final Prospectus (as amended or supplemented if the Company shall have
furnished any amendment or supplement thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only with
reference to information relating to the Underwriters furnished to the Company
in writing by the Underwriters expressly for use in the Registration Statement,
the Final Prospectus or any amendment or supplement thereto.
21
(c) Indemnification Procedures. In case any proceeding (including
any governmental investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to this Section 9, such person
(the "indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Underwriters and all persons, if any, who
control the Underwriters within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Company, its directors,
its officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Underwriters and such control persons of the
Underwriters, such firm shall be designated in writing by the Representative. In
the case of any such separate firm for the Company, and such directors, officers
and control persons of the Company, such firm shall be designated in writing by
the Company. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnifying party shall not have responded in writing
to such request, specifying those expenses that it has chosen not to reimburse
and explaining the reason for such non-reimbursement, prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) Contribution Agreement. To the extent the indemnification
provided for in this Section 9 is unavailable to an indemnified party or
insufficient in respect of any losses,
22
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party or parties on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party or parties on the
one hand and of the indemnified party or parties on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other hand in connection with the offering
of the Shares shall be deemed to be in the same respective proportions as the
net proceeds from the offering of the Shares (before deducting expenses)
received by the Company and the Selling Stockholders and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Final Prospectus, bear to the aggregate
Public Offering Price of the Shares. The relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company and the
Selling Stockholders or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) Contribution Amounts. The Company, the Selling Stockholders and
the Underwriters agree that it would not be just or equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in Section 9(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 9, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Shares underwritten by it
and distributed to the public exceeds the amount of any damages that the
Underwriters have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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 remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) Limitation of Selling Stockholder Liability. The liability of
each Selling Stockholder under this Section 9 shall not exceed an amount equal
to the net proceeds received by such Selling Stockholder from the sale of Firm
Shares by such Selling Stockholder to the Underwriters hereunder.
23
(g) Survival of Provisions. The indemnity and contribution
provisions contained in this Section 9 and the representations, warranties and
other statements of the Company, the Selling Stockholders and the Underwriters
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of the Underwriters or any person controlling the Underwriters
or the Company, its officers or directors or any person controlling the Company
or any Selling Stockholder, its officers or directors or any person controlling
such Selling Stockholder and (iii) acceptance of and payment for any of the
Shares.
10. Default of Underwriters. If one or more Underwriters default in their
obligations to purchase Firm Shares or Additional Shares hereunder and the
aggregate number of such Shares that such defaulting Underwriter or Underwriters
agreed but failed to purchase is ten percent or less of the aggregate number of
Firm Shares or Additional Shares to be purchased by all of the Underwriters at
such time hereunder, the other Underwriters may make arrangements satisfactory
to the Representative for the purchase of such Shares by other persons (who may
include one or more of the non-defaulting Underwriters, including the
Representative), but if no such arrangements are made by the applicable Closing
Date, the other Underwriters shall be obligated severally in proportion to their
respective commitments hereunder to purchase the Firm Shares or Additional
Shares 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 Shares that is more than ten percent of the aggregate number of Firm
Shares or Additional Shares, as the case may be, to be purchased by all of the
Underwriters at such time hereunder, and if arrangements satisfactory to the
Representative 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 Representative) of the Shares 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 9(g) hereof. In the event of any default by one or more Underwriters as
described in this Section 10, the Representative shall have the right to
postpone the applicable Closing Date, 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 Shares or Additional Shares, as the case may be. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10. Nothing herein shall relieve any defaulting
Underwriter from liability for its default.
11. Default by the Selling Stockholders.
(a) If any Selling Stockholder shall fail at the Firm Commitment
Closing Date to sell and deliver the number of Shares that such Selling
Stockholder is obligated to sell hereunder, then the Company may sell and
deliver such number of Shares to cure such default by such Selling Stockholder.
If any Selling Stockholder shall fail at the Firm Commitment Closing Date to
sell and deliver the number of Shares that such Selling Stockholder is obligated
to sell and the Company does not cure such default, the Underwriters may, at the
option of the Representative, either (a) terminate this Agreement without any
liability on the fault of any non-defaulting party except that the provisions of
Sections 8 and 10 shall remain in full force and effect or (b) elect to purchase
the Shares which the Selling Stockholders have agreed to sell. No
24
action taken pursuant to this Section 11 shall relieve the Selling Stockholders
so defaulting from liability, if any, in respect of such default.
(b) In the event of a default by the Selling Stockholders as
referred to in this Section 11, the Representative shall have the right to
postpone the Firm Commitment Closing Date for a period not exceeding seven days
in order to effect any required change in the Registration Statement or
Prospectus or in any other documents or arrangements.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Underwriters, will be mailed, delivered by
courier or facsimile and confirmed to the Representative, at Pacific Telesis
Tower, Xxx Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; Attention Xxx
Xxxxxx or, if sent to the Company, will be mailed, delivered by courier or
facsimile and confirmed to it at ScanSoft, Inc., 0 Xxxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000, Attention: [ ]; if sent to L&H, will be mailed, delivered
by courier or facsimile and confirmed to it at [ ], Attention: [ ]; or, if sent
to Holdings, will be mailed, delivered by courier or facsimile and confirmed to
it at [ ], Attention: [ ].
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and controlling persons
referred to in Section 9 hereof, and no other person will have any right or
obligation hereunder.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute a single instrument.
15. Applicable Law. This Agreement will be governed by, and construed in
accordance with, the internal laws of the State of New York, without regard to
the principles of conflict of laws.
16. Waiver of Immunities. To the extent that each Selling Stockholder or
any of its properties, assets or revenues may have or may hereafter become
entitled to, or have attributed to any Selling Stockholder, any right of
immunity, on the grounds of sovereignty or otherwise, from any legal action,
suit or proceeding, from the giving of any relief in any such legal action, suit
or proceeding, from setoff or counterclaim, from the jurisdiction of any court,
from service of process, from attachment upon or prior to judgment, from
attachment in aid of execution of judgment, or from execution of judgment, or
other legal process or proceeding for the giving of any relief or for the
enforcement of any judgment, in any jurisdiction in which proceedings may at any
time be commenced, with respect to the obligations and liabilities of such
Selling Stockholder, or any other matter under or arising out of or in
connection with this Agreement, each Selling Stockholder hereby irrevocably and
unconditionally waives, and agrees not to plead or claim, any such immunity and
consents to such relief and enforcement.
17. Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all other prior and contemporaneous agreements and undertakings, both
written and oral, among the parties hereto with regard to the subject matter
hereof.
18. Waiver of Jury Trial. The Company, each of the Selling Stockholders
and the Underwriters each hereby irrevocably waives any right it may have to a
trial by jury in respect of any claim based upon or arising out of this
agreement or any transaction contemplated hereby.
25
If the foregoing correctly sets forth the understanding between the
Company, the Selling Stockholders and the Underwriters, please so indicate in
the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement between the Company, the Selling Stockholders and
the Underwriters.
Very truly yours,
SCANSOFT, INC.
By:______________________________
Name: Xxxx Xxxxx
Title: Chairman of the Board and
Chief Executive Officer
LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.,
as Selling Stockholder
By:______________________________
Name:
Title:
L&H HOLDINGS USA, INC.,
as Selling Stockholder
By:______________________________
Name:
Title:
ACCEPTED as of the date first
above written
XXXXXX XXXXXX PARTNERS LLC,
for themselves and as Representative for
the Underwriters
By:______________________________
Name:
Title:
SCHEDULE A
-----------------
UNDERWRITERS
---------------
Number of Maximum Number of
Firm Shares Additional Shares
Name of Underwriter to be purchased to be purchased
------------------- --------------- -----------------
Xxxxxx Xxxxxx Partners LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Investec Inc.
--------------- -----------------
Total 7,034,406 1,050,000
Schedule A-1
SCHEDULE B
SHARES BEING SOLD
Maximum
Number of Number of
Firm Shares Additional Shares
Name of Seller to be sold to be sold
-------------- ----------- -----------------
ScanSoft, Inc. 1,000,000 1,050,000
Lernout & Hauspie Speech
Products N.V. 4,040,400
L&H Holdings USA, Inc. 1,994,006
----------- -----------------
Total 7,034,406 1,050,000
Schedule B-1
SCHEDULE C
LIST OF PERSONS AND ENTITIES SUBJECT TO LOCK-UP
Entities
Xerox Corporation (solely with respect to 4,500,000 shares)
State of Wisconsin Investment Board (solely with respect to 3,500,000 shares)
SF Capital Partners Ltd. (1,000,000 shares)
Xxxxxxx Xxxxx & Co. (65,100 shares)
Individuals
Xxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxx
Xxxxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxx X. Xxxxxxx
Xxxxxx X. Xxxx
Xxxxxx X. Xxxxxxxx
Schedule C-1
SCHEDULE D
LIST OF SUBSIDIARIES
Caere Corporation (Delaware)
Caere Kft (Hungary)
Formatt, Ltd. (United Kingdom)
Formonix, Inc. (Colorado)
ScanSoft AB (Sweden)
ScanSoft BV (The Netherlands)
ScanSoft BVBA (Belgium)
ScanSoft Europe Ltd. (United Kingdom)
ScanSoft FSC (Guam)
ScanSoft GmbH (Germany)
ScanSoft Hungary Corp. (Hungary)
ScanSoft Japan KK (Japan)
ScanSoft SARL (France)
ScanSoft SpA (Italy)
Schedule D-1
EXHIBIT D
FORM OF LOCK-UP AGREEMENT RELATING TO AN ENTITY
October ___, 2002
ScanSoft, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Re: Proposed Public Offering by ScanSoft, Inc.
Dear Sirs:
The undersigned, a stockholder of ScanSoft Inc. (the "Company"),
understands that the Company proposes to enter into an Underwriting Agreement
(the "Underwriting Agreement") with Xxxxxx Xxxxxx Partners LLC, Xxxxx, Xxxxxxxx
& Xxxx, Inc., and Investec, Inc. providing for the public offering of shares of
the Company's common stock, par value $0.001 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with the Company that, during a period of 90 days following
the date of the Underwriting Agreement, the undersigned will not directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any shares
of the Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock with respect to the offer and resale of which the
undersigned has or hereafter acquires the right to require or participate in the
filing of any registration statement under the Securities Act of 1933, as
amended ( "Registrable Securities") or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Registrable Securities,
whether any such swap or transaction is to be settled by delivery of Registrable
Securities or other securities, in cash or otherwise.
Notwithstanding the foregoing, the undersigned entity may transfer
Registrable Securities to any wholly-owned subsidiary of such entity; provided,
however, that in any such case, it shall be a condition to the transfer that the
transferee execute an agreement stating that the transferee is receiving and
holding such Registrable Securities subject to the provisions of this Agreement,
and provided further that any such transfer shall not involve a disposition for
value.
Exhibit D-1
Very truly yours,
---------------------------
[Name of stockholder]
By:___________________________
Title:________________________
Exhibit D-2
FORM OF LOCK-UP AGREEMENT RELATING TO AN INDIVIDUAL
October ___, 2002
Xxxxxx Xxxxxx Partners LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Investec Inc.
c/o Thomas Xxxxxx Partners LLC
Pacific Telesis Tower
Xxx Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: Proposed Public Offering by ScanSoft, Inc.
Dear Sirs:
The undersigned, an officer and/or director of ScanSoft Inc., a Delaware
corporation (the "Company"), understands that Xxxxxx Xxxxxx Partners LLC, Xxxxx,
Xxxxxxxx & Xxxx, Inc., and Investec Inc. (collectively, the "Underwriters")
propose to enter into an Underwriting Agreement (the "Underwriting Agreement")
with the Company providing for the public offering of shares (the "Shares") of
the Company's common stock, par value $0.001 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as an officer and/or director of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Underwriting Agreement that, during a period on the date hereof and ending on
the date 180 days immediately following the date of the Underwriting Agreement,
the undersigned will not, without the prior written consent of Xxxxxx Xxxxxx
Partners LLC, directly or indirectly, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant for the sale of, or otherwise dispose
of or transfer any shares of the Company's Common Stock or any securities
convertible into or exchangeable or exercisable for Common Stock, whether now
owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file any
registration statement under the Securities Act of 1933, as amended, with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Notwithstanding the foregoing, the undersigned may transfer shares of
Common Stock (i) as a bona fide gift or gifts, provided that the donee or donees
thereof agree to be bound by the restrictions set forth herein or (ii) to any
trust for the direct or indirect benefit of the undersigned or the immediate
family of the undersigned, provided that the trustee of the trust agrees to be
bound by the restrictions set forth herein, and provided further, that any such
transfer shall not
Exhibit D-3
involve a disposition for value. For purposes of this agreement, "immediate
family" shall mean any relationship by blood, marriage or adoption, not more
remote than first cousin.
Notwithstanding anything contained in this agreement, solely in the event
that the undersigned ceases to be an employee or director of the Company for any
reason, then: (i) this lock-up agreement shall be of no further force and effect
on and after the ninetieth (90th) day following the date of the Underwriting
Agreement, and (ii) prior to expiration or termination of this lock-up
agreement, the undersigned shall be entitled to transfer in any manner
(including any manner otherwise restricted by this lock-up agreement) a number
of shares of Common Stock (or securities convertible into or exchangeable for
Common Stock) equal to the greater of (a) 25% of the number of all shares of
Common Stock beneficially owned (on an as converted and as exercised basis) by
the signatory, and (b) 200,000 shares of Common Stock.
This agreement shall terminate and be of no further force or effect if the
Underwriting Agreement has not been signed on or prior to February 28, 2003.
Very truly yours,
Signature:_________________________
Print Name:________________________
Exhibit D-4
