EXHIBIT 1.1
3,900,000 Shares
INFORMATION MANAGEMENT
ASSOCIATES, INC.
Common Stock
(No Par Value)
UNDERWRITING AGREEMENT
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__________, 1997
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx, Xxxxxxxx & Company, LLC
Soundview Financial Group, Inc.
As Representatives of the Several Underwriters
c/o Alex. Xxxxx & Sons Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Information Management Associates, Inc., a Connecticut corporation (the
"Company"), and certain shareholders of the Company (the "Selling Shareholders")
propose to sell to the several underwriters (the "Underwriters") named in
Schedule I hereto for whom you are acting as representatives (the
"Representatives") an aggregate of 3,900,000 shares of the Company's Common
Stock, no par value (the "Firm Shares"), of which 2,800,000 shares will be sold
by the Company and 1,100,000 shares will be sold by the Selling Shareholders.
The respective amounts of the Firm Shares to be so purchased by the several
Underwriters are set forth opposite their names in Schedule I hereto, and the
respective amounts to be sold by the Selling Shareholders are set forth opposite
their names in Schedule II hereto. The Company and the Selling Shareholders are
sometimes referred to herein collectively as the "Sellers." The Selling
Shareholders also propose to sell at the Underwriters' option an aggregate of up
to 585,000 additional shares of the Company's Common Stock (the "Option Shares")
as set forth below.
As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Underwriting
Agreement (this "Agreement") on behalf of the several Underwriters, and (b)
that the several Underwriters are willing, acting severally and not jointly, to
purchase the numbers of Firm Shares set forth opposite their respective names in
Schedule I, plus their pro rata portion of the Option Shares if you elect to
exercise the over-allotment option, in whole or in part, for the accounts of the
several Underwriters. The Firm Shares and the Option Shares (to the extent the
aforementioned option is exercised) are herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the Company and the Selling Shareholders.
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(a) The Company represents and warrants to each of the Underwriters
as follows:
(i) A registration statement on Form S-1 (File No. 333-_____)
with respect to the Shares has been carefully prepared by the Company
in conformity with the requirements of the Securities Act of 1933,
as amended (the "Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission.
Copies of such registration statement, including any amendments
thereto, the preliminary prospectuses (meeting the requirements of the
Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have
heretofore been delivered by the Company to you and, to the extent
applicable, were identical to the electronically transmitted copies
thereof filed with the Commission on the Commission's Electronic Data
Gathering, Analysis and Retrieval System ("XXXXX"), except to the
extent permitted by Regulation S-T. Such registration statement,
together with any registration statement filed by the Company pursuant
to Rule 462(b) under the Act, herein referred to as the "Registration
Statement," which shall be deemed to include all information omitted
therefrom in reliance upon Rule 430A and contained in the Prospectus
referred to below, has become effective under the Act and no post-
effective amendment to the Registration Statement has been filed as of
the date of this Agreement. "Prospectus" means (a) the form of
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act, (b) if no filing pursuant to Rule 424(b) is required
and a term sheet in accordance with Rules 434 and 424(b)(7) is not
used, the form of prospectus included in the Registration Statement at
the time of effectiveness or (c) if a term sheet is used, the form of
preliminary prospectus included in the Registration Statement at the
time of effectiveness that is delivered by the Company to the
Underwriters for delivery to purchasers of the Shares, together with
the term sheet or abbreviated term sheet filed with the Commission in
accordance with the provisions of Rule 434 and Rule 424(b)(7) under
the Act. Each
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preliminary prospectus included in the Registration Statement prior to
the time it becomes effective is herein referred to as a "Preliminary
Prospectus." Any reference herein to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to include
any supplements or amendments thereto filed with the Commission after
the date of filing of the Prospectus under Rules 424(b) or 430A, and
prior to the termination of the offering of the Shares by the
Underwriters. Any reference herein to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement
to any of the foregoing, shall be deemed to include the respective
copies thereof filed with the Commission on XXXXX.
(ii) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Connecticut, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement. Each of the subsidiaries of the Company as listed in
Exhibit 21 to Item 16(a) of the Registration Statement (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, with corporate power and authority to own or lease
its properties and conduct its business as described in the
Registration Statement. The Subsidiaries are the only subsidiaries,
direct or indirect, of the Company. The Company and each of the
Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification, except where the failure to be qualified would not have
a material adverse effect on the earnings, business, management,
assets, rights, operations, condition (financial or otherwise) or
prospects of the Company and the Subsidiaries taken as a whole (a
"Material Adverse Effect"). The outstanding shares of capital stock of
each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and are owned by the Company free
and clear of all liens, encumbrances and equities and claims; and no
options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in the Subsidiaries are
outstanding.
(iii) The outstanding shares of Common Stock of the Company,
including all shares to be sold by the Selling Shareholders, have been
duly authorized and validly issued and are fully paid and non-
assessable; the portion of the Shares to be issued and sold by the
Company have been duly authorized and, when issued and paid for as
contemplated herein, will be validly issued, fully paid and non-
assessable; and no preemptive rights of stockholders exist with
respect to any of the Shares or the issue and sale thereof. Neither
the filing of the Registration Statement nor the offering or sale of
the Shares as contemplated by this Agreement
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gives rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any shares of Common
Stock.
(iv) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. All of the
Shares conform to the description thereof contained in the
Registration Statement. The form of certificates for the Shares
conforms to the corporate law of the jurisdiction of the Company's
incorporation.
(v) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering
of the Shares nor instituted proceedings for that purpose. The
Registration Statement contains, and the Prospectus will contain, all
statements which are required to be stated therein by, and will
conform, to the requirements of the Act and the Rules and Regulations.
The Registration Statement does not contain, and will not contain, any
untrue statement of a material fact and do not omit, and will not
omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The
Prospectus does not contain, and will not contain, any untrue
statement of material fact and do not omit, and will not omit, to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to information
contained in or omitted from the Registration Statement or the
Prospectus, in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any
Underwriter through the Representatives, specifically for use in the
preparation thereof.
(vi) The consolidated financial statements of the Company and
the Subsidiaries, together with related notes and schedules as set
forth in the Registration Statement, present fairly the financial
position and the results of operations and cash flows of the Company
and the Subsidiaries, at the indicated dates and for the indicated
periods. Such financial statements and related schedules have been
prepared in accordance with generally accepted accounting principles
("GAAP"), consistently applied throughout the periods involved, except
as disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary
financial data included in the Registration Statement presents fairly
the information shown therein and such data has been compiled on a
basis consistent with the financial statements presented therein and
the books and records of the Company. The pro forma financial
statements and other pro forma financial information included in the
Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, have been properly compiled on the pro forma bases
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described 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 give effect to the transactions or
circumstances referred to therein.
(vii) Xxxxxx Xxxxxxxx LLP, who have certified certain of the
financial statements filed with the Commission as part of the
Registration Statement, are independent public accountants as required
by the Act and the Rules and Regulations.
(viii) There is no action, suit, claim or proceeding pending or,
to the knowledge of the Company, threatened or contemplated against
the Company or any of the Subsidiaries before any court or
administrative agency or otherwise which, if determined adversely to
the Company or any of its Subsidiaries, might result in a Material
Adverse Effect or prevent the consummation of the transactions
contemplated hereby, except as set forth in the Registration
Statement.
(ix) The Company and the Subsidiaries have good and marketable
title to all of the properties and assets reflected in the financial
statements (or as described in the Registration Statement) hereinabove
described, subject to no lien, mortgage, pledge, charge or encumbrance
of any kind except those reflected in such financial statements (or as
described in the Registration Statement) or which are not material in
amount. The Company and the Subsidiaries occupy or have validly
subleased their leased properties under valid and binding leases
conforming in all material respects to the description thereof set
forth in the Registration Statement.
(x) The Company and the Subsidiaries have filed all Federal,
state, local and foreign income tax returns which have been required
to be filed and have paid all taxes indicated by said returns and all
assessments received by them or any of them to the extent that such
taxes have become due, except for assessments being contested in good
faith and filings and payments not yet made, but in each case for
which adequate reserves have been provided to the extent required by
GAAP. All tax liabilities have been adequately provided for in the
financial statements of the Company.
(xi) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or
supplemented, there has not been any material adverse change or any
development involving a prospective material adverse change in or
affecting the earnings, business, management, properties, assets,
rights, operations, condition (financial or otherwise), or prospects
of the Company and the Subsidiaries taken as a whole, whether or not
occurring in the ordinary course of business, and there has not been
any material transaction entered into or any material transaction that
is probable of being entered into by the Company or
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the Subsidiaries, other than transactions in the ordinary course of
business and changes and transactions described in the Registration
Statement, as it may be amended or supplemented. The Company and the
Subsidiaries have no material contingent obligations which are not
disclosed in the Company's financial statements which are included in
the Registration Statement.
(xii) Neither the Company nor any of the Subsidiaries is or with
the giving of notice or lapse of time or both, will be, in violation
of or in default under its Certificate of Incorporation ("Charter") or
By-Laws or under any agreement, lease, contract, indenture or other
instrument or obligation to which it is a party or by which it, or any
of its properties, is bound and which default could have a Material
Adverse Effect. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any Subsidiary is a party, or of
the Charter or By-laws of the Company or any order, rule or regulation
applicable to the Company or any Subsidiary of any court or of any
regulatory body or administrative agency or other governmental body
having jurisdiction.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated (except such additional steps as may
be required by the Commission, the National Association of Securities
Dealers, Inc. (the "NASD") or such additional steps as may be
necessary to qualify the Shares for public offering by the
Underwriters under state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.
(xiv) The Company and the Subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate Federal, state,
local or foreign regulatory agencies or bodies necessary to the
conduct of their business, and are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
to possess or comply with such Governmental Licenses would not, singly
or in the aggregate, have a Material Adverse Effect neither the
Company nor any Subsidiary has received any notice of proceedings
relating to or is otherwise aware of a revocation or modification of
any Governmental License which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or funding, would have a
Material Adverse Effect.
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(xv) The Company and the Subsidiaries own or possess adequate
licenses or other rights to use the patents, patent rights,
inventions, copyrights, trademarks, service marks, trade names, trade
secrets, know-how or other intellectual property (collectively,
"Intellectual Property") described in the Prospectus as owned or used
by them or which is necessary to the conduct of their business as
described in the Prospectus. To the knowledge of the Company, none of
the Intellectual Property rights owned or licensed by the Company are
unenforceable or invalid. Neither the Company nor any Subsidiary is
aware of any infringement of or conflict with asserted rights or
claims of others with respect to any of the Company's products or
Intellectual Property which, if the subject of any unfavorable
decision, ruling or funding, could have a Material Adverse Effect.
Neither the Company nor any Subsidiary is aware of any infringement of
any of the Intellectual Property rights by any third party.
(xvi) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940, as amended and the rules and regulations of the
Commission thereunder (the "1940 Act").
(xvii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and
to maintain accountability for assets; (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 existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xviii) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
prudent for the conduct of their respective businesses and the value
of their respective properties and as is customary for companies
engaged in similar industries.
(xix) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any liability;
the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal
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Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension
plan for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in
all material respects and nothing has occurred, whether by action or
by failure to act, which would cause the loss of such qualification.
(xx) Except as would not, singly or in the aggregate, have a
Material Adverse Effect, (A) neither the Company nor any Subsidiary is
in violation of any Federal, state, local or foreign statute, law,
rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment,
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (B) the Company and the Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any
Subsidiary and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any
Subsidiary relating to any Environmental Laws.
(xxi) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of doing Business with
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Cuba, and the Company further agrees that if it commences engaging in
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business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or
has become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"), whichever date
is later, or if the information reported or incorporated by reference
in the Prospectus, if any, concerning the Company's business with Cuba
or with any person or affiliate located in Cuba changes in any
material way, the Company will provide the Department notice of such
business or change, as appropriate, in a form acceptable to the
Department.
(xxii) No contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement is not so described
or filed as required.
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(b) Each of the Selling Shareholders severally and not jointly
represents and warrants as to each such Selling Shareholder as follows:
(i) On the Closing Date and the Option Closing Date (as such
dates are hereinafter defined), each Underwriter that is a bona fide
purchaser within the meaning of the Uniform Commercial Code (the
"Code") will acquire, upon payment therefor, the interest of such
Selling Shareholder in the Firm Shares or the Option Shares, as the
case may be, free and clear of any adverse claim, as defined in the
Code.
(ii) Such Selling Shareholder has full right, power and
authority to execute and deliver this Agreement, the power of attorney
appointing certain individuals as such Selling Shareholder's attorney-
in-fact (the "Attorney-in-Fact") relating to the transactions
contemplated hereby (the "Power of Attorney") and the custody
agreement signed by such Selling Shareholder and the Company, as
custodian, relating to the deposit of the Shares to be sold by such
Selling Shareholder (the "Custody Agreement") and to perform its
obligations under such agreements. The execution and delivery of this
Agreement, the Power of Attorney and the Custody Agreement, and the
consummation by such Selling Shareholder of the transactions
contemplated hereby and thereby and the fulfillment by such Selling
Shareholder of the terms hereof and thereof will not require any
consent, approval, authorization, or other order of any court,
regulatory body, administrative agency or other governmental body
(except as may be required under the Act, state securities laws or
Blue Sky laws) and will not result in a breach of any of the terms and
provisions of, or constitute a default under, organizational documents
of such Selling Shareholder, if not an individual, or any indenture,
mortgage, deed of trust or other agreement or instrument to which such
Selling Shareholder is a party, or of any order, rule or regulation
applicable to such Selling Shareholder of any court or of any
regulatory body or administrative agency or other governmental body
having jurisdiction.
(iii) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which has
constituted, or which might reasonably be expected to cause or result
in the stabilization or manipulation of the price of the Common Stock
of the Company and, other than as permitted by the Act, such Selling
Shareholder will not distribute any prospectus or other offering
material in connection with the offering of the Shares.
(iv) (A) Each such Selling Shareholder that is a Management
Selling Shareholder (the Management Selling Shareholders being defined
as the Selling Shareholders marked with an "+" on Schedule II) has no
reason to believe that the representations and warranties of the
Company contained in this Section 1 are not
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true and correct, and is familiar with the Registration Statement and
has no knowledge of any material fact, condition or information not
disclosed in the Registration Statement which has adversely affected
or may adversely affect the Company or any of the Subsidiaries.
(B) Each such Selling Shareholder other than the Management
Selling Shareholders is familiar with the Registration Statement and
has no actual knowledge that the representations and warranties of the
Company contained in this Section 1 are not true and correct, and has
no actual knowledge of any material fact, condition or information not
disclosed in the Registration Statement which has adversely affected
the Company or any of the Subsidiaries.
(v) The sale of the Shares by such Selling Shareholder pursuant
hereto is not prompted by any information concerning the Company or
any of the Subsidiaries which is not set forth in the Registration
Statement.
(vi) The information pertaining to such Selling Shareholder in
the Prospectus, including without limitation under the caption
"Principal and Selling Shareholders," is complete and accurate in all
material respects.
2. Purchase, Sale and Delivery of the Firm Shares.
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(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the
Sellers agree to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a price of $___ per share, the
number of Firm Shares set forth opposite the name of each Underwriter in
Schedule I hereof, subject to adjustments in accordance with Section 9
hereof. The number of Firm Shares to be purchased by each Underwriter from
each Seller shall be as nearly as practicable in the same proportion to the
total number of Firm Shares being sold by each Seller as the number of Firm
Shares being purchased by each Underwriter bears to the total number of
Firm Shares to be sold hereunder. The obligations of the Company and of
each of the Selling Shareholders shall be several and not joint.
(b) Payment for the Firm Shares to be sold hereunder is to be made by
wire transfer of same-day funds to an account for the Company for the
Shares to be sold by it and to an account of the Company "as Custodian" for
the Shares to be sold by the Selling Shareholders, in each case against
delivery of certificates therefor to the Representatives for the several
accounts of the Underwriters. Such payment and delivery are to be made at
the offices of Alex. Xxxxx & Sons Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx, at 10:00 a.m., Baltimore time, on the fourth business
day after the date of this Agreement or at such other time and date not
later than five business days thereafter as you
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and the Company shall agree upon, such time and date being herein referred
to as the "Closing Date." (As used herein, "business day" means a day on
which the New York Stock Exchange is open for trading and on which banks in
New York are open for business and not permitted by law or executive order
to be closed.) The certificates for the Firm Shares will be delivered in
such denominations and in such registrations as the Representatives request
in writing not later than the second full business day prior to the Closing
Date, and will be made available for inspection by the Representatives at
least one business day prior to the Closing Date.
(c) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth,
the Selling Shareholders hereby grant an option to the several Underwriters
to purchase the Option Shares at the price per share as set forth in the
first paragraph of this Section 2. The option granted hereby may be
exercised in whole or in part by giving written notice (i) at any time
before the Closing Date and (ii) only once thereafter within 30 days after
the date of this Agreement, by you, as Representatives of the several
Underwriters, to the Company and the Attorney-in-Fact, setting forth the
number of Option Shares as to which the several Underwriters are exercising
the option, the names and denominations in which the Option Shares are to
be registered and the time and date at which such certificates are to be
delivered. If the option granted hereby is exercised by the several
Underwriters in part, the respective number of Option Shares to be sold by
each of the Selling Shareholders listed on Schedule II shall be determined
on a pro rata basis in accordance with the percentages of Option Shares set
forth opposite their names on Schedule II, as adjusted by you in such
manner to avoid fractional shares. The time and date at which certificates
for Option Shares are to be delivered shall be determined by the
Representatives but shall not be earlier than three nor later than ten full
business days after the exercise of such option, nor in any event prior to
the Closing Date (such time and date being herein referred to as the
"Option Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the
Closing Date as the Option Closing Date. The number of Option Shares to be
purchased by each Underwriter shall be in the same proportion to the total
number of Option Shares being purchased as the number of Firm Shares being
purchased by such Underwriter bears to the total number of Firm Shares,
adjusted by you in such manner as to avoid fractional shares. The option
with respect to the Option Shares granted hereunder may be exercised only
to cover over-allotments in the sale of the Firm Shares by the
Underwriters. You, as Representatives of the several Underwriters, may
cancel such option at any time prior to its expiration by giving written
notice of such cancellation to the Company and the Attorney-in Fact. To the
extent, if any, that the option is exercised, payment for the Option Shares
shall be made on the Option Closing Date by wire transfer of same-day funds
to an account of the Company "as Custodian" for the Option Shares to be
sold by the Selling Shareholders, against delivery of certificates therefor
at the offices of Alex. Xxxxx & Sons Incorporated, 000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
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(d) Certificates in negotiable form, or option or warrant agreements
together with properly executed notices of exercise, for the total number
of the Shares to be sold hereunder by the Selling Shareholders have been
placed in custody with the Company as custodian (the "Custodian") pursuant
to the Custody Agreement executed by each Selling Shareholder for delivery
of all Shares to be sold hereunder by the Selling Shareholders. Each of the
Selling Shareholders specifically agrees that the Shares represented by the
certificates held in custody for the Selling Shareholders under the Custody
Agreement are subject to the interests of the Underwriters hereunder, that
the arrangements made by the Selling Shareholders for such custody are to
that extent irrevocable, and that the obligations of the Selling
Shareholders hereunder shall not be terminable by any act or deed of the
Selling Shareholders (or by any other person, firm or corporation including
the Company, the Custodian or the Underwriters) or by operation of law
(including the death of an individual Selling Shareholder or the
dissolution of a corporate Selling Shareholder) or by the occurrence of any
other event or events, except as set forth in the Custody Agreement. If any
such event should occur prior to the delivery to the Underwriters of the
Shares hereunder, certificates for the Shares shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as
if such event has not occurred. The Custodian is authorized to receive and
acknowledge receipt of the proceeds of sale of the Shares held by it
against delivery of such Shares.
(e) If on the Closing Date or the Option Closing Date, as the case
may be, any Selling Shareholder fails to sell the Shares which such Selling
Shareholder has agreed to sell on such date as set forth in Schedule II
hereto, the Company agrees that it will sell or arrange for the sale of
that number of shares of Common Stock to the Underwriters which represents
Shares which such Selling Shareholder has failed to so sell, as set forth
in Schedule II hereto, or such lesser number as may be requested by the
Representatives.
3. Offering by the Underwriters.
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It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representatives deem it advisable to
do so. The Firm Shares are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.
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4. Covenants of the Company and the Selling Shareholders.
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(a) The Company covenants and agrees with the several Underwriters
that:
(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in
Rule 430A of the Rules and Regulations is followed, to prepare and
timely file with the Commission under Rule 424(b) of the Rules and
Regulations a Prospectus in a form approved by the Representatives
containing information previously omitted at the time of effectiveness
of the Registration Statement in reliance on Rule 430A of the Rules
and Regulations, and (B) not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Representatives
shall not previously have been advised and furnished with a copy or to
which the Representatives shall have reasonably objected in writing or
which is not in compliance with the Rules and Regulations. To the
extent applicable, the copies of the Registration Statement (including
all exhibits filed therewith), any Preliminary Prospectus or
Prospectus furnished to the Underwriters shall be identical to the
copies thereof electronically filed with the Commission on XXXXX,
except to the extent permitted by Regulation S-T.
(ii) The Company will advise the Representatives promptly (A)
when the Registration Statement or any post-effective amendment
thereto shall have become effective, (B) of receipt of any comments
from the Commission, (C) of any request of the Commission for
amendment of the Registration Statement or for supplement to the
Prospectus or for any additional information, and (D) of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the use of the Prospectus or of the
institution of any proceedings for that purpose. The Company will use
its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as
soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws
of such jurisdictions as the Representatives may reasonably have
designated in writing and will make such applications, file such
documents, and furnish such information as may be reasonably required
for that purpose, provided the Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from
time to time, prepare and file such statements, reports, and other
documents, as are or may be required to continue such qualifications
in effect for so long a period as the Representatives may reasonably
request for distribution of the Shares.
-13-
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company
will deliver to, or upon the order of, the Representatives during the
period when delivery of a Prospectus is required under the Act, as
many copies of the Prospectus in final form, or as thereafter amended
or supplemented, as the Representatives may reasonably request. The
Company will deliver to the Representatives, at or before the Closing
Date, four signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will
deliver to the Representatives such number of copies of the
Registration Statement (including such number of copies of the
exhibits filed therewith that may reasonably be requested), and of all
amendments thereto, as the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules and
Regulations, and the Securities Exchange Act of 1934 (the "Exchange
Act"), and the rules and regulations of the Commission thereunder, so
as to permit the completion of the distribution of the Shares as
contemplated in this Agreement and the Prospectus. If during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, any event shall occur as a result of which, in
the judgment of the Company or in the reasonable opinion of counsel to
the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of
the circumstances existing at the time the Prospectus is delivered to
a purchaser, not misleading, or, if it is necessary at any time to
amend or supplement the Prospectus to comply with any law, the Company
promptly will prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will
not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with the law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the Registration
Statement, an earning statement (which need not be audited) in
reasonable detail, covering a period of at least 12 consecutive months
beginning after the effective date of the Registration Statement,
which earning statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will
advise you in writing when such statement has been so made available.
(vii) The Company will, for a period of five years from the
Closing Date, deliver to the Representatives copies of annual reports
and copies of all other documents, reports and information furnished
by the Company to its shareholders
-14-
or filed with any securities exchange pursuant to the requirements of
such exchange or with the Commission pursuant to the Act or the
Securities Exchange Act of 1934, as amended. The Company will deliver
to the Representatives similar reports with respect to significant
subsidiaries, as that term is defined in the Rules and Regulations,
which are not consolidated in the Company's financial statements. To
the extent applicable, such reports and documents shall be identical
to the copies thereof electronically filed with the Commission on
XXXXX, except to the extent permitted by Regulation S-T.
(viii) The Company will not issue, sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or other securities
convertible into or exchangeable or exercisable for shares of Common
Stock or derivative of Common Stock (or enter into any agreement for
such) for a period of 180 days after the date of this Agreement
otherwise than hereunder or with the prior written consent of Alex.
Xxxxx & Sons Incorporated, except that the Company may, without such
consent, (A) issue shares upon the exercise of options outstanding on
the date of this Agreement issued pursuant to its 1991 Amended and
Restated Stock Option Plan, 1996 Non-Employee Directors Stock Option
Plan and 1996 Employee and Consultant Stock Option Plan, (B) grant
options and offer to sell shares of Common Stock to its employees and
directors pursuant to the plans listed in clause (A), provided that
the Company will not grant any options which will become exercisable
within 180 days after the date of this Agreement and (C) issue shares
of Common Stock to its employees pursuant to the Employee Stock
Purchase Plan, provided that the Company will not permit the
withdrawal of such shares from the plan for 180 days after the date
of this Agreement.
(ix) The Company will use its best efforts to list, subject to
notice of issuance, the Shares on the Nasdaq National Market.
(x) The Company has caused to be furnished to you, on or prior
to the date of this Agreement, a letter or letters executed by (i)
each officer and director of the Company, substantially in the form
attached hereto as Exhibit A-1; (ii) certain shareholders of the
Company, substantially in the form attached hereto as Exhibit A-1 or
A-2; and (iii) each holder of options to purchase Common Stock (other
than the officers and directors referred to in clause (i) above),
substantially in the form attached hereto as Exhibit A-3.
(xi) The Company shall apply the net proceeds of its sale of
the Shares as set forth in the Prospectus and shall file such reports
with the Commission with respect to the sale of the Shares and the
application of the proceeds therefrom as may be required in accordance
with Rule 463 under the Act.
(xii) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a
manner as would require the
-15-
Company or any of the Subsidiaries to register as an investment
company under the 1940 Act.
(xiii) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
(xiv) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.
(b) Each of the Selling Shareholders covenants and agrees with the
several Underwriters that:
(i) Such Selling Shareholder has furnished to you, on or prior
to the date of this Agreement, a letter or letters substantially in
the form attached hereto as Exhibit A-1 or A-2 (such letters of the
Selling Shareholders and the letters referred to in Section 4(a)(x)
being collectively referred to as the "Lockup Agreements").
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax
Compliance Act of 1983 with respect to the transactions herein
contemplated, such Selling Shareholder agrees to deliver to the
Representatives prior to or at the Closing Date a properly completed
and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department
regulations in lieu thereof).
(iii) Such Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any securities of the
Company.
5. Costs and Expenses.
------------------
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Sellers under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting
fees of the Company; the fees and disbursements of counsel for the Company; the
cost of printing and delivering to, or as requested by, the Underwriters copies
of the Registration Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Underwriters' invitation letter, the listing application, the
Blue Sky survey and any supplements or amendments thereto; the filing fees of
the Commission; the filing fees incurred
-16-
in connection with securing any required review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Shares;
the listing fee of the Nasdaq National Market; and the expenses, including the
fees and disbursements of counsel for the Underwriters, incurred in connection
with the qualification of the Shares under State securities or Blue Sky laws. To
the extent, if at all, that any Selling Shareholder engages special legal
counsel to represent it in connection with this offering, the fees and expenses
of such counsel shall be borne by such Selling Shareholder, except as otherwise
provided in the registration rights agreements between the Company and certain
Selling Shareholders. The Sellers shall not, however, be required to pay for any
of the Underwriters expenses (other than those related to qualification under
NASD regulations and State securities or Blue Sky laws) except that, if this
Agreement shall not be consummated because the conditions in Section 6 hereof
are not satisfied, or because this Agreement is terminated by the
Representatives pursuant to Section 11 hereof , or by reason of any failure,
refusal or inability on the part of the Company or the Selling Shareholders to
perform any undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on their part to be performed, unless such failure
to satisfy said condition or to comply with said terms be due to the default or
omission of any Underwriter, then the Company shall reimburse the several
Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Sellers shall not in any event be liable to
any of the several Underwriters for damages on account of loss of anticipated
profits from the sale by them of the Shares.
6. Conditions of Obligations of the Underwriters.
---------------------------------------------
The several obligations of the Underwriters to purchase the Firm Shares on
the Closing Date and the Option Shares, if any, on the Option Closing Date are
subject to the accuracy, as of the Closing Date or the Option Closing Date, as
the case may be, of the representations and warranties of the Company and the
Selling Shareholders contained herein, and to the performance by the Company and
the Selling Shareholders of their covenants and obligations hereunder and to the
following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by
Rule 424 and Rule 430A of the Rules and Regulations shall have been made,
and any request of the Commission for additional information (to be
included in the Registration Statement or otherwise) shall have been
disclosed to the Representatives and complied with to their reasonable
satisfaction. No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been taken or, to the
knowledge of the Company, shall be contemplated by the Commission and no
injunction, restraining order, or order of any nature by a Federal or state
court of competent jurisdiction shall have been issued as of the Closing
Date which would prevent the issuance of the Shares.
-17-
(b) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of LeBoeuf, Lamb,
Xxxxxx & XxxXxx LLP, counsel for the Company, dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriters (and
stating that it may be relied upon by counsel to the Underwriters) to the
effect that:
(i) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Connecticut, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement; each of 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, with corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement; the Company and each of the
Subsidiaries are duly qualified to transact business in each
jurisdiction in which the Company or any Subsidiary maintains an
office or owns or leases property; and the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable and are owned
of record and, to such counsel's knowledge, beneficially, by the
Company; and, to such counsel's knowledge, the outstanding shares of
capital stock of each of the Subsidiaries is owned free and clear of
all liens, encumbrances and equities and claims, and no options,
warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into any shares of
capital stock or of ownership interests in the Subsidiaries are
outstanding.
(ii) As of the date set forth under the caption "Capitalization"
in the Prospectus, the Company has authorized and outstanding capital
stock as set forth therein; the authorized shares of the Company's
Common Stock have been duly authorized; the outstanding shares of the
Company's Common Stock, including the Shares to be sold by the Selling
Shareholders, have been duly authorized and validly issued and are
fully paid and non-assessable; all of the Shares conform to the
description thereof contained in the Prospectus; the certificates for
the Shares, assuming they are in the form filed with the Commission,
are in due and proper form; the shares of Common Stock, including the
Option Shares, if any, to be sold by the Company pursuant to this
Agreement have been duly authorized and will be validly issued, fully
paid and non-assessable when issued and paid for as contemplated by
this Agreement; and no statutory preemptive rights and, to such
counsel's knowledge, no contractual preemptive rights of stockholders
exist with respect to any of the Shares or the issue or sale thereof.
-18-
(iii) Except as described in or contemplated by the Prospectus,
to the knowledge of such counsel, there are no outstanding securities
of the Company convertible or exchangeable into or evidencing the
right to purchase or subscribe for any shares of capital stock of the
Company and there are no outstanding or authorized options, warrants
or rights of any character obligating the Company to issue any shares
of its capital stock or any securities convertible into or
exchangeable for or evidencing the right to purchase or subscribe for
any shares of such stock; and except as described in the Prospectus,
to the knowledge of such counsel, no holder of any securities of the
Company or any other person has the right, contractual or otherwise,
which has not been satisfied or effectively waived, to cause the
Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, any of the Shares or the right to have any
Common Shares or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of the
Registration Statement, to require registration under the Act of any
shares of Common Stock or other securities of the Company.
(iv) The Registration Statement has become effective under the
Act and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending
or threatened under the Act.
(v) The Registration Statement as of its effective date and
the Prospectus as of its date comply as to form in all material
respects with the requirements of the Act and the applicable rules and
regulations thereunder (except that such counsel need express no
opinion as to the financial statements, schedules and statistical
information contained therein).
(vi) The statements under the captions "Risk Factors--Shares
Eligible for Future Sale; Registration Rights," "Risk Factors--
Antitakeover Provisions," "Certain Transactions," "Description of
Capital Stock," and "Shares Eligible for Future Sale" in the
Prospectus accurately summarize in all material respects the
provisions of the laws and documents referred to therein.
(vii) Such counsel does not know of any contracts or documents
required to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus which are
not so filed or described as required, and summaries of such contracts
and documents contained in the Registration Statement or the
Prospectus are accurate in all material respects.
(viii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries except as set forth in the Prospectus.
-19-
(ix) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the Charter or By-laws
of the Company, or any agreement listed as an exhibit to the
Registration Statement.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution
and delivery of this Agreement and the consummation of the
transactions herein contemplated (other than as may be required by the
NASD or as required by State securities and Blue Sky laws as to which
such counsel need express no opinion) except such as have been
obtained or made.
(xii) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by this Agreement,
and application of the net proceeds therefrom as described in the
Prospectus, required to register as an investment company under the
1940 Act.
(xii) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Shareholders.
(xiv) Each Selling Shareholder has the legal right, power and
authority, and any approval required by law (other than as required by
State securities and Blue Sky laws as to which such counsel need
express no opinion), to sell, assign, transfer and deliver the portion
of the Shares to be sold by such Selling Shareholder under this
Agreement.
(xv) The Custody Agreement and the Power of Attorney executed
and delivered by each Selling Shareholder are valid and binding.
(xvi) On the Closing Date and the Option Closing Date, each
Underwriter that is a bona fide purchaser within the meaning of the
Code will acquire, upon payment therefor, the interest of such Selling
Shareholder in the Firm Shares or the Option Shares, as the case may
be, free and clear of any adverse claim, as defined in the Code.
In rendering such opinion, LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP may rely
as to matters governed by the laws of states other than Connecticut or
Federal laws on local
-20-
counsel in such jurisdictions and as to the matters set forth in
subparagraphs (xiii), (xiv) (xv) and (xvi) on opinions of other counsel
representing the respective Selling Shareholders (provided that in each
case LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP shall state that they believe that
they and the Underwriters are justified in relying on such other counsel)
and, as to matters of fact, on the representations and warranties of such
Selling Shareholders contained herein and in the Custody Agreement and the
Power of Attorney. In addition to the matters set forth above, such opinion
shall also include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the Act (but
after giving effect to any modifications incorporated therein pursuant to
Rule 430A under the Act) and as of the Closing Date or the Option Closing
Date, as the case may be, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant to
the Rules and Regulations and as of the Closing Date or the Option Closing
Date, as the case may be, contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they are made,
not misleading (except that such counsel need express no view as to
financial statements, schedules and statistical information therein). With
respect to such statement, LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP may state
that their belief is based upon the procedures set forth therein, but is
without independent check and verification.
(c) The Representatives shall have received from Ropes & Xxxx,
counsel for the Underwriters, an opinion dated the Closing Date or the
Option Closing Date, as the case may be, substantially to the effect
specified in subparagraphs (iii), (iv), (x) and (xi) of Paragraph (b) of
this Section 6, and that the Company is a duly organized and validly
existing corporation under the laws of the State of Connecticut. In
rendering such opinion Ropes & Xxxx may rely as to all matters governed
other than by the laws of the Commonwealth of Massachusetts or Federal laws
on the opinion of counsel referred to in Paragraph (b) of this Section 6.
In addition to the matters set forth above, such opinion shall also include
a statement to the effect that nothing has come to the attention of such
counsel which leads them to believe that (i) the Registration Statement as
of the time it became effective under the Act (but after giving effect to
any modifications incorporated therein pursuant to Rule 430A under the Act)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements, in the light of the circumstances under which they are
made, not misleading (except that such counsel need express no view as to
financial statements, schedules and statistical information therein). With
respect to such statement,
-21-
may state that their belief is based upon the procedures set forth therein,
but is without independent check and verification.
(d) The Representatives shall have received at or prior to the
Closing Date from Ropes & Xxxx a memorandum or summary, in form and
substance satisfactory to the Representatives, with respect to the
qualification for offering and sale by the Underwriters of the Shares under
the State securities or Blue Sky laws of such jurisdictions as the
Representatives may reasonably have designated to the Company.
(e) You shall have received, on each of the dates hereof, the Closing
Date and the Option Closing Date, as the case may be, a letter dated the
date hereof, the Closing Date or the Option Closing Date, as the case may
be, in form and substance satisfactory to you, of Xxxxxx Xxxxxxxx LLP,
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder
and stating that in their opinion the financial statements and schedules
examined by them and included in the Registration Statement comply in form
in all material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations; and containing such
other statements and information as is ordinarily included in accountants'
"comfort letters" to Underwriters with respect to the financial statements
and certain financial and statistical information contained in the
Registration Statement and Prospectus.
(f) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, a certificate or certificates
of the Chief Executive Officer and the Chief Financial Officer of the
Company to the effect that, as of the Closing Date or the Option Closing
Date, as the case may be, each of them severally represents as follows:
(i) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have
been taken or are, to his knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company contained
in Section 1 hereof are true and correct as of the Closing Date or the
Option Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to Rules
424 or 430A under the Act have been made;
(iv) He has carefully examined the Registration Statement and
the Prospectus and, in his opinion, as of the effective date of the
Registration
-22-
Statement, the statements contained in the Registration Statement were
true and correct, and such Registration Statement and Prospectus did
not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and
since the effective date of the Registration Statement, no event has
occurred which should have been set forth in a supplement to or an
amendment of the Prospectus which has not been so set forth in such
supplement or amendment; and
(v) Since the respective dates as of which information is given
in the Registration Statement and Prospectus, there has not been any
material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole or the
earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the
Company and the Subsidiaries taken as a whole, whether or not arising
in the ordinary course of business.
(g) The Company and the Selling Shareholders shall have furnished to
the Representatives such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein
and related matters as the Representatives may reasonably have requested.
(h) The Firm Shares and Option Shares, if any, shall have been
approved for designation upon notice of issuance on the Nasdaq National
Market.
(i) The Lockup Agreements shall be in full force and effect.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Ropes & Xxxx, counsel for
the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company and the Selling Shareholders of such
termination in writing or by telegram at or prior to the Closing Date or the
Option Closing Date, as the case may be.
In such event, the Selling Shareholders, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
-23-
7. Conditions of the Obligations of the Sellers.
--------------------------------------------
The obligations of the Sellers to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the condition that at the Closing Date or the Option Closing Date, as
the case may be, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and in effect or proceedings therefor initiated
or threatened.
8. Indemnification.
---------------
(a) The Sellers jointly and severally agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act, against any losses, claims,
damages or liabilities to which such Underwriter or any such controlling
person may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus or the Prospectus, (ii) the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii)
any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Shares or
the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of
or based upon matters covered by clause (i) or (ii) above (provided that
the Sellers shall not be liable under this clause (iii) to the extent that
it is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from
any such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct); and will
reimburse each Underwriter and each such controlling person upon demand for
any legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such
loss, claim, damage or liability, action or proceeding or in responding to
a subpoena or governmental inquiry related to the offering of the Shares,
whether or not such Underwriter or controlling person is a party to any
action or proceeding; provided that the Selling Shareholders shall not be
liable for indemnification pursuant to clause (iii) above; and provided
further that with respect to the indemnity of each Selling Shareholder,
other than the Principal Selling Shareholders (the Principal Selling
Shareholders being defined as the Selling Shareholders marked with an "*"
on Schedule II), the indemnity shall, in each case, apply only to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement, or omission or
alleged omission made in the Registration Statement, any Preliminary
Prospectus or the Prospectus in reliance upon and in conformity with
written information furnished by such Selling Shareholder specifically for
use in the preparation thereof; and provided further that the Sellers will
not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission made in the
-24-
Registration Statement, any Preliminary Prospectus or the Prospectus, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives specifically for use in the
preparation thereof. Neither the Underwriters nor any such controlling
person shall seek indemnification from the Selling Shareholders for any
losses, claims, damages, expenses, or liabilities suffered by them unless
either (i) they have first reduced their indemnification claims against the
Company to judgment and such claims remain unsatisfied or (ii) the Company
is then bankrupt, in which event the Underwriters and any such controlling
person shall be entitled to seek indemnification from the Selling
Shareholders for the unsatisfied portion of such losses, claims, damages,
liabilities or expenses. In no event, however, shall the liability of any
Selling Shareholder for indemnification under this Section 8(a) or breach
of the representations contained in Section 1(b)(iv) or (v) exceed the
proceeds, net of underwriting discounts and commissions, received by such
Selling Shareholder from the Underwriters in the offering. This indemnity
agreement will be in addition to any liability which the Sellers may
otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, each of its directors, each of its officers
who have signed the Regis tration Statement, the Selling Shareholders, and
each person, if any, who controls the Company or any Selling Shareholder
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer, Selling
Shareholder or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus or the
Prospectus, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, Selling
Shareholder or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that each Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus or the Prospectus, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to this Section 8, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought
(the "indemnifying party") in writing. No indemnification provided for in
Section 8(a) or (b) shall be available to any party who shall
-25-
fail to give notice as provided in this Section 8(c) if the party to whom
notice was not given was unaware of the proceeding to which such notice
would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have
to the indemnified party for contribution or otherwise than on account of
the provisions of Section 8(a) or (b). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party and shall pay
as incurred 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 at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30 days
of presentation) the fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel, (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
or (iii) the indemnifying party shall have failed to assume the defense and
employ counsel acceptable to the indemnified party within a reasonable
period of time after notice of commencement of the action. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate firm for all such indemnified
parties. Such firm shall be designated in writing by you in the case of
parties indemnified pursuant to Section 8(a) and by the Company and the
Selling Shareholders in the case of parties indemnified pursuant to Section
8(b). 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. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified
party is an actual or potential party to such claim, action or proceeding)
unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of such
claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in re spect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
-26-
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on the one
hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Selling Shareholders on the
one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
the Company and the Selling Shareholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Shareholders on the one
hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company, the Selling Shareholders and the Underwriters agree
that it would not be just and equitable if contributions pursuant to
Section 8(d) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in Section 8(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
above in Section 8(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of Section 8(d), (i) no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, (ii) 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, and (iii) no
Selling Shareholder shall be required to contribute any amount in excess of
the proceeds, net of underwriting discounts and commissions, received by
such Selling Shareholder from the Underwriters in the offering. The
Underwriters' obligations in Section 8(d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
-27-
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus or the Prospectus, each party against whom
contribution may be sought under this Section 8 hereby consents to the
jurisdiction of any court having jurisdiction over any other contributing
party, agrees that process issuing from such court may be served upon him
or it by any other contributing party and consents to the service of such
process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other
contributing party is a party.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers or any
persons controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Underwriter, or to the Company, its directors or officers,
or any person controlling the Company, shall be entitled to the benefits of
the indemnity, contribution and reimbursement agreements contained in this
Section 8.
9. Default by Underwriters.
-----------------------
If on the Closing Date or the Option Closing Date, as the case may be, any
Underwriter shall fail to purchase and pay for the portion of the Shares which
such Underwriter has agreed to purchase and pay for on such date (otherwise than
by reason of any default on the part of the Company or a Selling Shareholder),
you, as Representatives of the Underwriters, shall use your reasonable efforts
to procure within 36 hours thereafter one or more of the other Underwriters, or
any others, to purchase from the Company and the Selling Shareholders such
amounts as may be agreed upon and upon the terms set forth herein, the Firm
Shares or Option Shares, as the case may be, which the defaulting Underwriter or
Underwriters failed to purchase. If during such 36 hours you, as such
Representatives, shall not have procured such other Underwriters, or any others,
to purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the
-28-
case may be, covered hereby, the other Underwriters shall be obligated,
severally, in proportion to the respective numbers of Firm Shares or Option
Shares, as the case may be, which they are obligated to purchase hereunder, to
purchase the Firm Shares or Option Shares, as the case may be, which such
defaulting Underwriter or Underwriters failed to purchase, or (b) if the
aggregate number of shares of Firm Shares or Option Shares, as the case may be,
with respect to which such default shall occur exceeds 10% of the Firm Shares or
Option Shares, as the case may be, covered hereby, the Company or you as the
Representatives of the Underwriters will have the right, by written notice given
within the next 36-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting Underwriters,
the Company or the Selling Shareholders except to the extent provided in Section
8 hereof. In the event of a default by any Underwriter or Underwriters, as set
forth in this Section 9, the Closing Date or Option Closing Date, as the case
may be, may be postponed for such period, not exceeding seven days, as you, as
Representatives, may determine in order that the required changes in the
Registration Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriter" includes any person
substituted for a defaulting Underwriter. Any action taken under this Section 9
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
10. Notices.
-------
All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, telecopied or telegraphed and
confirmed as follows: if to the Underwriters, to Alex. Xxxxx & Sons
Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention:
Syndicate; with a copy to Alex. Xxxxx & Sons Incorporated, 000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000. Attention: General Counsel; if to the Company
or to the Attorney-in-Fact, to Information Management Associates, Inc., Xxx
Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxx 00000, Attention: General
Counsel; with a copy to LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP, Xxxxxxx Square, 000
Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000; Attention: Xxxxxx X. Xxxxxxxxx,
Esq.; and if to a Selling Shareholder, to the address of such Selling
Shareholder set forth on Schedule II hereto.
11. Termination.
-----------
This Agreement may be terminated by you by notice to the Sellers as
follows:
(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters, or (ii) 11:30 a.m.
on the first business day following the date of this Agreement;
(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse
change or any development involving a prospective material adverse change
in or affecting the condition, financial or otherwise, of the Company and
its Subsidiaries taken as a whole or the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise)
or prospects of the Company and its Subsidiaries taken as a whole, whether
or not arising in the ordinary course of business, (ii) any outbreak or
escalation of hostilities or declaration of war or national emergency or
other national or international calamity or crisis or change
-29-
in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable judgment,
make it impracticable to market the Shares or to enforce contracts for the
sale of the Shares, or (iii) suspension of trading in securities generally
on the New York Stock Exchange or the American Stock Exchange or limitation
on prices (other than limitations on hours or numbers of days of trading)
for securities on either such Exchange, (iv) the enactment, publication,
decree or other promulgation of any statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially
and adversely affects or may materially and adversely affect the business
or operations of the Company, (v) declaration of a banking moratorium by
United States or New York State authorities, (vi) any downgrading in the
rating of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Exchange Act); (vii) the suspension of trading of the Company's
common stock by the Commission on the Nasdaq National Market or (viii) the
taking of any action by any governmental body or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. Successors.
----------
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign merely because of such
purchase.
13. Information Provided by Underwriters.
------------------------------------
The Company, the Selling Shareholders and the Underwriters acknowledge and
agree that the only information furnished or to be furnished by any Underwriter
to the Company for inclusion in any Prospectus or the Registration Statement
consists of the information set forth in the last paragraph on the front cover
page (insofar as such information relates to the Underwriters), legends required
by Item 502(d) of Regulation S-K under the Act and the information under the
caption "Underwriting" in the Prospectus.
14. Miscellaneous.
-------------
The reimbursement, indemnification and contribution agreements contained in
this Agreement and the representations, warranties and covenants in this
Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation
-30-
made by or on behalf of any Underwriter or controlling person thereof, or by or
on behalf of the Company or its directors or officers and (c) delivery of and
payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders, the
Company and the several Underwriters in accordance with its terms.
-31-
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Shareholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
INFORMATION MANAGEMENT ASSOCIATES, INC.
By_______________________________
Name:
Title:
Selling Shareholders listed on Schedule II
By_______________________________
Attorney-in-Fact
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
ALEX. XXXXX & SONS INCORPORATED
XXXXXXXXX, XXXXXXXX & COMPANY, LLC
SOUNDVIEW FINANCIAL GROUP, INC.
As Representatives of the several
Underwriters listed on Schedule I
By: Alex. Xxxxx & Sons Incorporated
By_____________________________
Authorized Officer
-32-
SCHEDULE I
SCHEDULE OF UNDERWRITERS
NUMBER OF
UNDERWRITER FIRM SHARES
TO BE PURCHASED
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx, Xxxxxxxx & Company, LLC
SoundView Financial Group, Inc.
---------------
TOTAL UNDERWRITERS ( )
-33-
SCHEDULE II
SCHEDULE OF SELLING SHAREHOLDERS
MAXIMUM
NUMBER OF NUMBER OF
FIRM SHARES PERCENTAGE OF OPTION SHARES PERCENTAGE OF
SELLING SHAREHOLDER TO BE SOLD FIRM SHARES TO BE SOLD OPTION SHARES
------------------- ---------- ----------- ---------- -------------
Wand/IMA Investments, L.P.*.....
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Wand/IMA Investments II L.P.*...
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Wand/IMA Investments III L.P.*..
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxxxxx, Xx.*+.......
Xxxx X. Xxxxxxx*+...............
Andrei Poludnewycz *+...........
Xxxxx X. Xxxxxxxxxxx............
Xxxx X. Xxxxxxxxx...............
Xxxxx X. Xxxxxxxx...............
Xxxxx X. Xxxxxxxx...............
Xxxxxxx X. XxXxxxxxx *+.........
Xxxx X. Xxxxxxx *+..............
Xxxxx X. Xxxxxxx *..............
c/o Wand Partners Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxx *................
c/o Wand Partners Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxxx *..............
_______________
+ Management Selling Shareholders. See Section 1(b)(iv).
* Principal Selling Shareholders. See Section 8(a).
Unless otherwise indicated, each person or entity listed hereon maintains a
mailing address c/o Information Management Associated, Xxx Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxxx 00000.
-34-
MAXIMUM
NUMBER OF NUMBER OF
FIRM SHARES PERCENTAGE OF OPTION SHARES PERCENTAGE OF
SELLING SHAREHOLDER TO BE SOLD FIRM SHARES TO BE SOLD OPTION SHARES
------------------- ---------- ----------- ---------- -------------
Mercury Asset Management plc...
Xxxxx X. Xxxxxxx, Xx. .........
Xxxxxxx Xxxxxxx................
Xxxxxx Xxxxxxxx................
Xxxxxx XxXxx, Jr. .............
Xxxxxx Xxxxxxxx................
Xxxxxxx and Xxxxxxx Xxxxxxxxx..
Xxxxx Xxxxxxx..................
Xxxxxxx Xxxxxx.................
Xxxxx Xxxx.....................
Xxxxxx Xxxxxxxx................
---------- ---------- ---------- ---------
TOTAL
_______________
+ Management Selling Shareholders. See Section 1(b)(iv).
* Principal Selling Shareholders. See Section 8(a).
Unless otherwise indicated, each person or entity listed hereon maintains a
mailing address c/o Information Management Associated, Xxx Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxxx 00000.
-00-
XXXXXXX X-0
FORM OF LOCK-UP LETTER FOR
DIRECTORS, OFFICERS AND CERTAIN SHAREHOLDERS
February ___, 1997
CONFIDENTIAL
------------
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx Xxxxxxxx & Company, LLC
Soundview Financial Group, Inc.
As Representatives of the
Several Underwriters
c/o Alex. Xxxxx & Sons Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Information Management Associates, Inc.
Xxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000
Re: Restriction on Transfer of Common Stock
---------------------------------------
Ladies and Gentlemen:
The undersigned officer, director or beneficial owner of securities of
Information Management Associates, Inc. (the "Company") understands that the
Company is engaged in the preparation of a Registration Statement (the
"Registration Statement") for the initial public offering (the "Offering") of
its Common Stock, no par value per share (the "Common Stock"), underwritten by
Alex. Xxxxx & Sons Incorporated, Xxxxxxxxx Xxxxxxxx & Company, LLC and Soundview
Financial Group, Inc. (the "Representatives") and several other underwriters
(collectively with the Representatives, the "Underwriters").
The undersigned recognizes that it is in the best financial interests of the
undersigned, as an officer, director or securityholder of the Company, that the
Company complete the Offering and you have requested this agreement to
facilitate the Offering.
In consideration of the Underwriters' agreement to purchase and undertake the
Offering and for other good and valuable consideration, receipt of which is
hereby acknowledged, the undersigned hereby agrees, except as provided herein,
that the undersigned will not, for a period beginning on the date hereof and
expiring one hundred and eighty (180) days following the date the Registration
Statement is declared effective by the Securities and Exchange Commission: (i)
offer, pledge, sell, contract to sell, grant any option to purchase, purchase
any option to sell, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock, any options, rights or warrants to purchase any
shares of Common Stock (including any stock appreciation right, or similar right
with an exercise or conversion privilege at a price related to or derived from
the market price of the Common Stock) or any securities convertible into or
exchangeable for shares of Common Stock owned directly by the undersigned or
with respect to which the undersigned has the power of disposition; or (ii)
engage in any hedging transactions with respect to the Common Stock that may
have an impact on the market price of the Common Stock.
Notwithstanding the foregoing restrictions on transfer, the undersigned shall
be permitted to make the following transfers: (i) transfers made by gift, will
or intestacy, provided that each transferee agrees in writing to be bound by the
terms hereof; (ii) transfers to the transferor's affiliates, as such term is
defined in Rule 405 promulgated under the Securities Act of 1933, as amended,
provided that each transferee agrees in writing to be bound by the terms hereof;
(iii) in the event the undersigned is an individual, transfers to members of the
immediate family, provided that each transferee agrees in writing to be bound by
the terms hereof; (iv) transfers made with the prior written consent of each of
the Representatives; and (v) transfers pursuant to the Registration Statement.
The undersigned also agrees and consents to the entry of stock transfer
instructions with the Company's transfer agent against the transfer of shares of
Common Stock issued or issuable to the undersigned, except in accordance with
the terms hereof. This instrument shall terminate if the Underwriting Agreement
relating to the Offering (other than the provisions thereof that survive
termination) shall terminate or be terminated prior to payment for and delivery
of the shares thereunder.
The undersigned understands that the Company and the Underwriters will proceed
with the Offering in reliance on this agreement.
2
The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this agreement. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors and assigns of the undersigned.
Very truly yours,
________________________________
By:_____________________________
Name:__________________________
(Print)
Title:___________________________
Date Signed: February __, 1997
3
EXHIBIT A-2
FORM OF LOCK-UP LETTER FOR CERTAIN SHAREHOLDERS
February ___, 1997
CONFIDENTIAL
------------
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx Xxxxxxxx & Company, LLC
Soundview Financial Group, Inc.
As Representatives of the
Several Underwriters
c/o Alex. Xxxxx & Sons Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Information Management Associates, Inc.
Xxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000
Re: Restriction on Transfer of Common Stock
---------------------------------------
Ladies and Gentlemen:
The undersigned officer, director or beneficial owner of securities of
Information Management Associates, Inc. (the "Company") understands that the
Company is engaged in the preparation of a Registration Statement (the
"Registration Statement") for the initial public offering (the "Offering") of
its Common Stock, no par value per share (the "Common Stock"), underwritten by
Alex. Xxxxx & Sons Incorporated, Xxxxxxxxx Xxxxxxxx & Company, LLC and Soundview
Financial Group, Inc. (the "Representatives") and several other underwriters
(collectively with the Representatives, the "Underwriters").
The undersigned recognizes that it is in the best financial interests of the
undersigned, as an officer, director or securityholder of the Company, that the
Company complete the Offering and you have requested this agreement to
facilitate the Offering.
In consideration of the Underwriters' agreement to purchase and undertake the
Offering and for other good and valuable consideration, receipt of which is
hereby acknowledged, the undersigned hereby agrees, except as provided herein,
that the undersigned will not, for a period beginning on the date hereof and
expiring ninety (90) days following the date the Registration Statement is
declared effective by the Securities and Exchange Commission: (i) offer,
pledge, sell, contract to sell, grant any option to purchase, purchase any
option to sell, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock, any options, rights or warrants to purchase any shares
of Common Stock (including any stock appreciation right, or similar right with
an exercise or conversion privilege at a price related to or derived from the
market price of the Common Stock) or any securities convertible into or
exchangeable for shares of Common Stock owned directly by the undersigned or
with respect to which the undersigned has the power of disposition; or (ii)
engage in any hedging transactions with respect to the Common Stock that may
have an impact on the market price of the Common Stock.
Notwithstanding the foregoing restrictions on transfer, the undersigned shall
be permitted to make the following transfers: (i) transfers made by gift, will
or intestacy, provided that each transferee agrees in writing to be bound by the
terms hereof; (ii) transfers to the transferor's affiliates, as such term is
defined in Rule 405 promulgated under the Securities Act of 1933, as amended,
provided that each transferee agrees in writing to be bound by the terms hereof;
(iii) in the event the undersigned is an individual, transfers to members of the
immediate family, provided that each transferee agrees in writing to be bound by
the terms hereof; (iv) transfers made with the prior written consent of each of
the Representatives; and (v) transfers pursuant to the Registration Statement.
The undersigned also agrees and consents to the entry of stock transfer
instructions with the Company's transfer agent against the transfer of shares of
Common Stock issued or issuable to the undersigned, except in accordance with
the terms hereof. This instrument shall terminate if the Underwriting Agreement
relating to the Offering (other than the provisions thereof that survive
termination) shall terminate or be terminated prior to payment for and delivery
of the shares thereunder.
The undersigned understands that the Company and the Underwriters will proceed
with the Offering in reliance on this agreement.
2
The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this agreement. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors and assigns of the undersigned.
Very truly yours,
________________________________
By:_____________________________
Name:__________________________
(Print)
Title:___________________________
Date Signed: February __, 1997
3
EXHIBIT A-3
FORM OF LOCK-UP LETTER FOR EMPLOYEE OPTION HOLDERS
February ___, 1997
CONFIDENTIAL
------------
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx Xxxxxxxx & Company, LLC
Soundview Financial Group, Inc.
As Representatives of the
Several Underwriters
c/o Alex. Xxxxx & Sons Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Information Management Associates, Inc.
Xxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000
Re: Restriction on Transfer of Common Stock
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Ladies and Gentlemen:
The undersigned officer, director or beneficial owner of securities of
Information Management Associates, Inc. (the "Company") understands that the
Company is engaged in the preparation of a Registration Statement (the
"Registration Statement") for the initial public offering (the "Offering") of
its Common Stock, no par value per share (the "Common Stock"), underwritten by
Alex. Xxxxx & Sons Incorporated, Xxxxxxxxx Xxxxxxxx & Company, LLC and Soundview
Financial Group, Inc. (the "Representatives") and several other underwriters
(collectively with the Representatives, the "Underwriters").
The undersigned recognizes that it is in the best financial interests of the
undersigned, as an officer, director or securityholder of the Company, that the
Company complete the Offering and you have requested this agreement to
facilitate the Offering.
In consideration of the Underwriters' agreement to purchase and undertake the
Offering and for other good and valuable consideration, receipt of which is
hereby acknowledged, the
undersigned hereby agrees, except as provided herein, that the undersigned will
not, for a period beginning on the date hereof and expiring one hundred and
eighty (180) days following the date the Registration Statement is declared
effective by the Securities and Exchange Commission: (i) offer, pledge, sell,
contract to sell, grant any option to purchase, purchase any option to sell, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock, any options, rights or warrants to purchase any shares of Common Stock
(including any stock appreciation right, or similar right with an exercise or
conversion privilege at a price related to or derived from the market price of
the Common Stock) or any securities convertible into or exchangeable for shares
of Common Stock owned directly by the undersigned or with respect to which the
undersigned has the power of disposition; or (ii) engage in any hedging
transactions with respect to the Common Stock that may have an impact on the
market price of the Common Stock.
Notwithstanding the foregoing restrictions on transfer, the undersigned shall
be permitted to make the following transfers: (i) transfers made by gift, will
or intestacy, provided that each transferee agrees in writing to be bound by the
terms hereof; (ii) transfers to the transferor's affiliates, as such term is
defined in Rule 405 promulgated under the Securities Act of 1933, as amended,
provided that each transferee agrees in writing to be bound by the terms hereof;
(iii) in the event the undersigned is an individual, transfers to members of the
immediate family, provided that each transferee agrees in writing to be bound by
the terms hereof; (iv) transfers made with the prior written consent of each of
the Representatives; (v) transfers pursuant to the Registration Statement; and
(vi) transfers of up to ________ shares of Common Stock issued upon exercise of
stock options.
The undersigned also agrees and consents to the entry of stock transfer
instructions with the Company's transfer agent against the transfer of shares of
Common Stock issued or issuable to the undersigned, except in accordance with
the terms hereof. This instrument shall terminate if the Underwriting Agreement
relating to the Offering (other than the provisions thereof that survive
termination) shall terminate or be terminated prior to payment for and delivery
of the shares thereunder.
The undersigned understands that the Company and the Underwriters will proceed
with the Offering in reliance on this agreement.
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The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this agreement. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors and assigns of the undersigned.
Very truly yours,
________________________________
By:_____________________________
Name:__________________________
(Print)
Title:___________________________
Date Signed: February __, 1997
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