4,200,000 Shares PeopleSupport, Inc. Common Stock UNDERWRITING AGREEMENT
4,200,000 Shares
Common Stock
November 9, 2006
Credit Suisse Securities (USA) LLC
Xxxxx and Company, LLC
JMP Securities LLC
Xxxxx Xxxxxxx & Co.,
As Representatives (the “Representatives”) of the Several Underwriters,
c/o Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Xxxxx and Company, LLC
JMP Securities LLC
Xxxxx Xxxxxxx & Co.,
As Representatives (the “Representatives”) of the Several Underwriters,
c/o Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. PeopleSupport, Inc., a Delaware corporation (“Company”), agrees with the
several Underwriters named in Schedule A hereto (“Underwriters”) to issue and sell to the several
Underwriters 4,200,000 shares (“Firm Securities”) of its common stock, $0.001 par value
(“Securities”), and also proposes to issue and sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than 630,000 additional shares (“Optional Securities”) of
its Securities as set forth below. The Firm Securities and the Optional Securities are herein
collectively called the “Offered Securities.”
2. Representations and Warranties of the Company. The Company represents and warrants to,
and agrees with, the several Underwriters that:
(a) Filing and Effectiveness of Registration Statement; Certain Defined Terms. The
Company has filed with the Commission a registration statement on Form S-3 (No. 333-135560),
including a related prospectus or prospectuses, covering the registration of the Offered
Securities under the Act, which has become effective. “Registration Statement” at any
particular time means such registration statement in the form then filed with the
Commission, including any amendment thereto, any document incorporated by reference therein
and all 430B Information and all 430C Information with respect to such registration
statement, that in any case has not been superseded or modified. “Registration Statement”
without reference to a time means the Registration Statement as of the Effective Date. For
purposes of this definition, 430B Information shall be considered to be included in the
Registration Statement as of the time specified in Rule 430B.
For purposes of this Agreement:
“430B Information” means information included in a prospectus then deemed to be a part
of the Registration Statement pursuant to Rule 430B(e) or retroactively deemed to be a part
of the Registration Statement pursuant to Rule 430B(f).
“430C Information” means information included in a prospectus then deemed to be a part
of the Registration Statement pursuant to Rule 430C.
“Act” means the Securities Act of 1933, as amended.
“Applicable Time” means 5:30 p.m. (Eastern time) on the date of this Agreement.
“Closing Date” has the meaning defined in Section 3 hereof.
“Commission” means the Securities and Exchange Commission.
“Effective Date” of the Registration Statement relating to the Offered Securities means
the time of the first contract of sale for the Offered Securities.
“Exchange Act” means the Securities Exchange Act of 1934.
“Final Prospectus” means the Statutory Prospectus that discloses the public offering
price, other 430B Information and other final terms of the Offered Securities and otherwise
satisfies Section 10(a) of the Act.
“General Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being so specified in Schedule B to this Agreement.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433, relating to the Offered Securities in the form filed or required to
be filed with the Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g).
“Limited Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not a General Use Issuer Free Writing Prospectus.
“Rules and Regulations” means the rules and regulations of the Commission.
“Securities Laws” means, collectively, the Xxxxxxxx-Xxxxx Act of 2002
(“Xxxxxxxx-Xxxxx”), the Act, the Exchange Act, the Rules and Regulations, the auditing
principles, rules, standards and practices applicable to auditors of “issuers” (as defined
in Xxxxxxxx-Xxxxx) promulgated or approved by the Public Company Accounting Oversight Board
and, as applicable, the rules of the New York Stock Exchange and the NASDAQ Stock Market
(“Exchange Rules”).
“Statutory Prospectus” with reference to any particular time means the prospectus
relating to the Offered Securities that is included in the Registration Statement
immediately prior to that time, including all 430B Information and all 430C Information with
respect to the Registration Statement. For purposes of the foregoing definition, 430B
Information shall be considered to be included in the Statutory Prospectus only as of the
actual time that form of prospectus (including a prospectus supplement) is filed with the
Commission pursuant to Rule 424(b) and not retroactively.
Unless otherwise specified, a reference to a “rule” is to the indicated rule under the
Act.
(b) Compliance with Securities Act Requirements. (i) (A) At the time the Registration
Statement initially became effective, (B) at the time of each amendment thereto for the
purposes of complying with Section 10(a)(3) of the Act (whether by post-effective amendment,
incorporated report or form of prospectus), (C) on the Effective Date relating to the
Offered Securities and (D) on the Closing Date, the Registration Statement conformed and
will conform in all respects to the requirements of the Act and the Rules and Regulations
and did not and will not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein
not misleading and (ii) (A) on its date, (B) at the time of filing the Final Prospectus
pursuant to Rule 424(b) and (C) on the Closing Date, the Final Prospectus will conform in
all respects to the requirements of the Act and the Rules and Regulations, and will not
include any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading. The
preceding sentence does not apply to statements in or omissions from any such document based
upon written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed that the only
such information is that described as such in Section 8(b) hereof.
(c) Shelf Registration Statement. The date of this Agreement is not more than three
years subsequent to the more recent of the initial effective date of the Registration
Statement or December 1, 2005. If, immediately prior to the third anniversary of the more
recent of the initial effective date of the Registration Statement or December 1, 2005, any
of the Offered Securities remain unsold by the Underwriters, the
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Company will prior to that third anniversary file, if it has not already done so, a new
shelf registration statement relating to the Offered Securities, in a form satisfactory to
the Representatives, will use its best efforts to cause such registration statement to be
declared effective within 180 days after that third anniversary, and will take all other
action necessary or appropriate to permit the public offering and sale of the Offered
Securities to continue as contemplated in the expired registration statement relating to the
Offered Securities. References herein to the Registration Statement shall include such new
shelf registration statement.
(d) Ineligible Issuer Status. (i) At the earliest time after the filing of the
Registration Statement that the Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2)) of the Offered Securities and (ii) at the date
of this Agreement, the Company was not and is not an “ineligible issuer,” as defined in Rule
405, including (x) the Company or any other subsidiary in the preceding three years not
having been convicted of a felony or misdemeanor or having been made the subject of a
judicial or administrative decree or order as described in Rule 405 and (y) the Company in
the preceding three years not having been the subject of a bankruptcy petition or insolvency
or similar proceeding, not having had a registration statement be the subject of a
proceeding under Section 8 of the Act and not being the subject of a proceeding under
Section 8A of the Act in connection with the offering of the Securities, all as described in
Rule 405.
(e) General Disclosure Package. As of the Applicable Time, neither (i) the General Use
Issuer Free Writing Prospectus issued at or prior to the Applicable Time and the preliminary
prospectus supplement, dated November 1, 2006, including the base prospectus, dated June 30,
2006, (which is the most recent Statutory Prospectus distributed to investors generally),
and the other information, if any, stated in Schedule B to this Agreement to be included in
the General Disclosure Package, all considered together (collectively, the “General
Disclosure Package”), nor (ii) any individual Limited Use Issuer Free Writing Prospectus,
when considered together with the General Disclosure Package, included any untrue statement
of a material fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements in or omissions from any
Statutory Prospectus or any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed that the only
such information furnished by any Underwriter consists of the information described as such
in Section 8(b) hereof.
(f) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the public offer and sale
of the Offered Securities or until any earlier date that the Company notified or notifies
Credit Suisse Securities (USA) LLC (“Credit Suisse”) as described in the next sentence, did
not, does not and will not include any information that conflicted, conflicts or will
conflict with the information then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or
development as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the information then contained in the Registration Statement or as a result of
which such Issuer Free Writing Prospectus, if republished immediately following such event
or development, would include an untrue statement of a material fact or omitted or would
omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, (i) the Company has
promptly notified or will promptly notify Credit Suisse and (ii) the Company has promptly
amended or will promptly amend or supplement such Issuer Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or omission.
(g) Good standing of the Company. The Company has been duly incorporated and is
existing and in good standing under the laws of the State of Delaware, with power and
authority (corporate and other) to own its properties and conduct its business as described
in the General Disclosure Package; and the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such qualification.
(h) Subsidiaries. Each subsidiary of the Company has been duly incorporated and is
existing and in good standing under the laws of the jurisdiction of its incorporation, with
power and authority (corporate
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and other) to own its properties and conduct its business as described in the General
Disclosure Package; and each subsidiary of the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such qualification; all of the
issued and outstanding capital stock of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable; and, except to the extent
set forth in the General Disclosure Package and the Prospectus, and except as set forth in
the following sentence in the case of PeopleSupport (Philippines), Inc., the capital stock
of each subsidiary is owned by the Company, directly or through subsidiaries, free from
liens, encumbrances and defects. A de minimis number of shares of PeopleSupport
(Philippines), Inc. is owned by persons who are Philippine nationals as required under
Philippine law.
(i) Offered Securities. The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; the authorized equity capitalization
of the Company is as set forth in the General Disclosure Package; all outstanding shares of
capital stock of the Company are, and, when the Offered Securities have been delivered and
paid for in accordance with this Agreement on each Closing Date, such Offered Securities
will have been, validly issued, fully paid and nonassessable, will conform to the
information in the General Disclosure Package and to the description of such Offered
Securities contained in the Final Prospectus; the stockholders of the Company have no
preemptive rights with respect to the Securities; and none of the outstanding shares of
capital stock of the Company have been issued in violation of any preemptive or similar
rights of any security holder.
(j) No Finder’s Fee. Except as disclosed in the General Disclosure Package, there are
no contracts, agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a brokerage
commission, finder’s fee or other like payment in connection with this offering.
(k) Registration Rights. Except as disclosed in the General Disclosure Package, there
are no contracts, agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration statement under the Act
with respect to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered pursuant to a
Registration Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act (collectively, “registration
rights”), and any person to whom the Company has granted registration rights has agreed not
to exercise such rights until after the expiration of the Lock-Up Period referred to in
Section 5 hereof.
(l) Listing. The Offered Securities have been approved for listing on the NASDAQ
Global Market, subject to notice of issuance.
(m) Absence of Further Requirements. No consent, approval, authorization, or order of,
or filing or registration with, any person (including any governmental agency or body or any
court) is required for the consummation of the transactions contemplated by this Agreement
in connection with the offering, issuance and sale of the Offered Securities by the Company,
except such as have been obtained, or made and such as may be required under state
securities laws.
(n) Title to Property. The Company and its subsidiaries do not own any real property
and, except as disclosed in the General Disclosure Package, the Company and its subsidiaries
hold any material leased real or personal property under valid and enforceable leases with
no terms or provisions that would materially interfere with the use made or to be made
thereof by them.
(o) Absence of Defaults and Conflicts Resulting from Transaction. The execution,
delivery and performance of this Agreement, and the issuance and sale of the Offered
Securities will not result in a breach or violation of any of the terms and provisions of,
or constitute a default or a Debt Repayment Triggering Event (as defined below) under, or
result in the imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, the charter or by-laws of the Company or
any of its subsidiaries, any statute, rule, regulation or order of any governmental agency
or body or any court, domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or
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any of their properties, or any agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or
to which any of the properties of the Company or any of its subsidiaries is subject; a “Debt
Repayment Triggering Event” means any event or condition that gives, or with the giving of
notice or lapse of time would give, the holder of any note, debenture, or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by the Company
or any of its subsidiaries.
(p) Absence of Existing Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its respective charter or by-laws or in default (or with the
giving of notice or lapse of time would be in default) under any existing obligation,
agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease
or other agreement or instrument to which any of them is a party or by which any of them is
bound or to which any of the properties of any of them is subject, except in each case such
violations or defaults that would not, individually or in the aggregate, result in a
material adverse effect on the condition (financial or otherwise), results of operations,
business, properties or prospects of the Company and its subsidiaries taken as a whole
(“Material Adverse Effect”).
(q) Authorization of Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.
(r) Possession of Licenses and Permits. The Company and its subsidiaries possess, and
are in compliance with the terms of, all adequate certificates, authorizations, franchises,
licenses and permits (“Licenses”) necessary or material to the conduct of the business now
conducted or proposed in the General Disclosure Package to be conducted by them and have not
received any notice of proceedings relating to the revocation or modification of any
Licenses that, if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(s) Absence of Labor Dispute. No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent that could
reasonably be expected to have a Material Adverse Effect.
(t) Possession of Intellectual Property. The Company and its subsidiaries own, possess
or can acquire on reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other intellectual
property (collectively, “intellectual property rights”) necessary to conduct the business
now operated by them, or presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse Effect.
(u) Environmental Laws. Except as disclosed in the General Disclosure Package, neither
the Company nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, “environmental laws”), owns or operates any real
property contaminated with any substance that is subject to any environmental laws, is
liable for any off-site disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material Adverse Effect;
and the Company is not aware of any pending investigation which might lead to such a claim.
(v) Accurate Disclosure. The statements contained (i) in the General Disclosure
Package and the Final Prospectus under the heading “Description of Securities—Common Stock”
and (ii) in the Company’s 10-K for the fiscal period ended December 31, 2005 and
incorporated by reference in the General Disclosure Package and the Final Prospectus under
the headings “Business—Regulation” and “Legal Proceedings,” insofar as such statements
summarize legal matters, agreements, documents or proceedings
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discussed therein, are accurate and fair summaries of such legal matters, agreements,
documents or proceedings and present the information required to be shown.
(w) Absence of Manipulation. The Company has not taken, directly or indirectly, any
action that is designed to or that has constituted or that would reasonably be expected to
cause or result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Offered Securities.
(x) Statistical and Market-Related Data. Any third-party statistical and
market-related data included or incorporated by reference in a Registration Statement, a
Statutory Prospectus or the General Disclosure Package are based on or derived from sources
that the Company has no reason to believe are not reliable and accurate.
(y) Internal Controls and Compliance with the Xxxxxxxx-Xxxxx Act. Except as set forth
in the General Disclosure Package, the Company, its subsidiaries and the Company’s Board of
Directors (the “Board”) are in compliance with Xxxxxxxx-Xxxxx and all applicable rules under
the Exchange Act. The Company maintains a system of internal controls, including, but not
limited to, disclosure controls and procedures, internal controls over accounting matters
and financial reporting, an internal audit function and legal and regulatory compliance
controls (collectively, “Internal Controls”) that comply with the Securities Laws and are
sufficient to provide reasonable assurances that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with U.S. General
Accepted Accounting Principles 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 the existing assets at
reasonable intervals and appropriate action is taken with respect to any differences. The
Internal Controls are, or upon consummation of the offering of the Offered Securities will
be, overseen by the Audit Committee (the “Audit Committee”) of the Board in accordance with
Exchange Rules. The Company has not publicly disclosed or reported to the Audit Committee or
the Board, and within the next 90 days the Company does not reasonably expect to
publicly disclose or report to the Audit Committee or the Board, (i) a significant
deficiency, material weakness, change in Internal Controls or fraud involving management or
other employees who have a significant role in Internal Controls, which would have a
Material Adverse Effect, or (ii) any violation of, or failure to comply with, the Securities
Laws, or any matter which, if determined adversely, would have a Material Adverse Effect
(each of subsections (i) and (ii) above an “Internal Control Event”).
(z) Absence of Accounting Issues. A member of the Audit Committee has confirmed to the
Chief Executive Officer, Chief Financial Officer or General Counsel that, except as set
forth in the General Disclosure Package, the Audit Committee is not reviewing or
investigating, and neither the Company’s independent auditors nor its internal auditors have
recommended that the Audit Committee review or investigate, (i) adding to, deleting,
changing the application of, or changing the Company’s disclosure with respect to, any of
the Company’s material accounting policies; (ii) any matter which could result in a
restatement of the Company’s financial statements for any annual or interim period during
the current or prior three fiscal years; or (iii) any Internal Control Event.
(aa) Litigation. There are no pending actions, suits or proceedings (including any
inquiries or investigations by any court or governmental agency or body, domestic or
foreign) against or affecting the Company, any of its subsidiaries or any of their
respective properties that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to perform its obligations
under this Agreement, or which are otherwise material in the context of the sale of the
Offered Securities; and no such actions, suits or proceedings (including any inquiries or
investigations by any court or governmental agency or body, domestic or foreign) are
threatened or, to the Company’s knowledge, contemplated.
(bb) Financial Statements. The financial statements included in the Registration
Statement and the General Disclosure Package present fairly the financial position of the
Company and its consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and,
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except as otherwise disclosed in the General Disclosure Package, such financial
statements have been prepared in conformity with the generally accepted accounting
principles in the United States—applied on a consistent basis.
(cc) No Material Adverse Change in Business. Except as disclosed in the General
Disclosure Package, since the end of the period covered by the latest audited financial
statements included in the General Disclosure Package (i) there has been no change, nor any
development or event involving a prospective change, in the condition (financial or
otherwise), results of operations, business, properties or prospects of the Company and its
subsidiaries, taken as a whole that is material and adverse, (ii) except as disclosed in or
contemplated by the General Disclosure Package, there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its capital stock and
(iii) except as disclosed in or contemplated by the General Disclosure Package, there has
been no material adverse change in the capital stock, short-term indebtedness, long-term
indebtedness, net current assets or net assets of the Company and its subsidiaries.
(dd) Investment Company Act. The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the proceeds thereof as
described in the General Disclosure Package, will not be an “investment company” as defined
in the Investment Company Act of 1940 (the “Investment Company Act”).
(ee) Ratings. No “nationally recognized statistical rating organization” as such term
is defined for purposes of Rule 436(g)(2) has imposed (or has informed the Company that it
is considering imposing) any condition (financial or otherwise) on the Company’s retaining
any rating assigned to the Company or any securities of the Company.
(ff) PFIC Status. The Company is not a Passive Foreign Investment Company (“PFIC”)
within the meaning of Section 1296 of the United States Internal Revenue Code of 1986, and
the Company is not likely to become a PFIC.
(gg) Tax Filings. The Company and its subsidiaries have filed all federal, state,
local and non-U.S. tax returns that are required to be filed or have requested extensions
thereof (except in any case in which the failure so to file would not have a Material
Adverse Effect); and, except as set forth in the General Disclosure Package, the Company and
its subsidiaries have paid all taxes (including any assessments, fines or penalties)
required to be paid by them, except for any such taxes, assessments, fines or penalties
currently being contested in good faith or as would not, individually or in the aggregate,
have a Material Adverse Effect.
(hh) The Company and its subsidiaries are insured by insurers with appropriately rated
claims paying abilities against such losses and risks and in such amounts as management
reasonably believes are prudent and customary for the businesses in which they are engaged;
all policies of insurance and fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees, officers and directors are
in full force and effect; the Company and its subsidiaries are in compliance with the terms
of such policies and instruments in all material respects; and there are no claims by the
Company or any of its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of rights clause,
except for any such claims which would not have a Material Adverse Effect; neither the
Company nor any such subsidiary has been refused any insurance coverage sought or applied
for, except for any such coverage the lack thereof would not have a Material Adverse Effect;
and neither the Company nor any such subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue its business
at a cost that would not have a Material Adverse Effect, except as set forth in or
contemplated in the General Disclosure Package.
(ii) Each of the Company, its subsidiaries, its affiliates and any of their respective
officers, directors, supervisors, managers, agents, or employees, has not violated, its
participation in the offering will not violate, and has instituted and maintains policies
and procedures designed to ensure continued compliance each of the following laws: (a)
anti-bribery laws, including but not limited to, any applicable law, rule, or
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regulation of any locality, including but not limited to any law, rule, or regulation
promulgated to implement the OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions, signed December 17, 1997, including the
U.S. Foreign Corrupt Practices Act of 1977 or any other law, rule or regulation of similar
purpose and scope, (b) anti-money laundering laws, including but not limited to, applicable
federal, state, international, foreign or other laws, regulations or government guidance
regarding anti-money laundering, including, without limitation, Title 18 U.S. Code section
1956 and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money
laundering principals or procedures by an intergovernmental group or organization, such as
the Financial Action Task Force on Money Laundering, of which the United States is a member
and with which designation the United States representative to the group or organization
continues to concur, all as amended, and any Executive order, directive, or regulation
pursuant to the authority of any of the foregoing, or any orders or licenses issued
thereunder or (c) laws and regulations imposing U.S. economic sanctions measures, including,
but not limited to, the International Emergency Economic Powers Act, the Trading with the
Enemy Act, the United Nations Participation Act, and the Syria Accountability and Lebanese
Sovereignty Act, all as amended, and any Executive Order, directive, or regulation pursuant
to the authority of any of the foregoing, including the regulations of the United States
Treasury Department set forth under 31 CFR, Subtitle B, Chapter V, as amended, or any orders
or licenses issued thereunder.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations,
warranties and agreements and subject to the terms and conditions set forth herein, the Company
agrees to sell to the several Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $18.90 per share, the respective
number of shares of Firm Securities set forth opposite the names of the Underwriters in Schedule A
hereto.
The Company will deliver the Firm Securities to or as instructed by the Representatives for
the accounts of the several Underwriters in a form reasonably acceptable to the Representatives
against payment of the purchase price by the Underwriters in Federal (same day) funds by official
bank check or checks or wire transfer to an account at a bank acceptable to Credit Suisse drawn to
the order of the Company at the office of Sheppard, Mullin, Xxxxxxx & Xxxxxxx LLP, at 10:00 A.M.,
New York time, on November 15, 2006, or at such other time not later than seven full business days
thereafter as the Representatives and the Company determine, such time being herein referred to as
the “First Closing Date.” For purposes of Rule 15c6-1 under the Securities Exchange Act of 1934,
the First Closing Date (if later than the otherwise applicable settlement date) shall be the
settlement date for payment of funds and delivery of securities for all the Offered Securities sold
pursuant to the offering. The Firm Securities so to be delivered or evidence of their issuance
will be made available for checking at the above office of Sheppard, Mullin, Xxxxxxx & Hampton LLP
at least 24 hours prior to the First Closing Date.
In addition, upon written notice from the Representatives given to the Company from time to
time (up to two times) not more than 30 days subsequent to the date of the Final Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the purchase price per
Security to be paid for the Firm Securities. The Company agrees to sell to the Underwriters the
number of shares of Optional Securities specified in such notice and the Underwriters agree,
severally and not jointly, to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the number of shares of
Firm Securities set forth opposite such Underwriter’s name bears to the total number of shares of
Firm Securities (subject to adjustment by the Representatives to eliminate fractions) and may be
purchased by the Underwriters only for the purpose of covering over-allotments made in connection
with the sale of the Firm Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and delivered. The right to
purchase the Optional Securities or any portion thereof may be exercised from time to time and to
the extent not previously exercised may be surrendered and terminated at any time upon notice by
the Representatives to the Company.
Each time for the delivery of and payment for the Optional Securities, being herein referred
to as an “Optional Closing Date,” which may be the First Closing Date (the First Closing Date and
each Optional Closing Date, if any, being sometimes referred to as a “Closing Date”), shall be
determined by the Representatives but shall be not later than five full business days after written
notice of election to purchase Optional Securities is given. The Company will deliver the Optional
Securities being purchased on each Optional Closing Date to or as instructed by the Representatives
for the accounts of the several Underwriters in a form reasonably acceptable to the
8
Representatives against payment of the purchase price therefor in Federal (same day) funds by
official bank check or checks or wire transfer to an account at a bank acceptable to Credit Suisse
drawn to the order of the Company, at the above office of Sheppard, Mullin, Xxxxxxx & Xxxxxxx LLP.
The Optional Securities being purchased on each Optional Closing Date or evidence of
their issuance will be made available for checking at the above office of Sheppard, Mullin, Xxxxxxx
& Hampton LLP at a reasonable time in advance of such Optional Closing Date.
As compensation for the Underwriters’ commitments, the Company will pay to the Representatives
for the Underwriters’ proportionate accounts the sum of $1.10 per share times the total number of
Offered Securities purchased by the Underwriters on each Closing Date. Such payment will be made on
each Closing Date with respect to the Offered Securities purchased on such Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters propose to offer
the Offered Securities for sale to the public as set forth in the Final Prospectus.
5. Certain Agreements of the Company. The Company agrees with the several Underwriters that:
(a) Filing of Prospectuses. The Company has filed or will file each Statutory
Prospectus (including the Final Prospectus) pursuant to and in accordance with Rule
424(b)(2) (or, if applicable and consented to by the Representatives, subparagraph (5)) not
later than the second business day following the earlier of the date it is first used or the
execution and delivery of this Agreement. The Company has complied and will comply with
Rule 433.
(b) Filing of Amendments; Response to Commission Requests. The Company will promptly
advise the Representatives of any proposal to amend or supplement the Registration Statement
or any Statutory Prospectus at any time and will offer the Representatives a reasonable
opportunity to comment on any such amendment or supplement; and the Company will also advise
the Representatives promptly of (i) the filing of any such amendment or supplement, (ii) any
request by the Commission or its staff for any amendment to the Registration Statement, for
any supplement to any Statutory Prospectus or for any additional information, (iii) the
institution by the Commission of any stop order proceedings in respect of the Registration
Statement or the threatening of any proceeding for that purpose, and (iv) the receipt by the
Company of any notification with respect to the suspension of the qualification of the
Offered Securities in any jurisdiction or the institution or threatening of any proceedings
for such purpose. The Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(c) Continued Compliance with Securities Laws. If, at any time when a prospectus
relating to the Offered Securities is (or but for the exemption in Rule 172 would be)
required to be delivered under the Act by any Underwriter or dealer, any event occurs as a
result of which the Final Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Registration Statement or
supplement the Final Prospectus to comply with the Act, the Company will promptly notify the
Representatives of such event and will promptly prepare and file with the Commission and
furnish, at its own expense, to the Underwriters and the dealers and any other dealers upon
request of the Representatives, an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance. Neither the Representatives’
consent to, nor the Underwriters’ delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 7 hereof.
(d) Rule 158. As soon as practicable, but not later than 16 months, after the date of
this Agreement, the Company will make generally available to its securityholders an earnings
statement covering a period of at least 12 months beginning after the date of this Agreement
and satisfying the provisions of Section 11(a) of the Act and Rule 158.
(e) Furnishing of Prospectuses. The Company will furnish to the Representatives copies
of the Registration Statement, including all exhibits (but not including any exhibits
incorporated by reference), any Statutory Prospectus, the Final Prospectus and all
amendments and supplements to such documents, in
9
each case as soon as available and in such quantities as the Representatives
reasonably request. The Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) Blue Sky Qualifications. The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as required for the
distribution.
(g) Reporting Requirements. During the period of three years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the other Underwriters, as
soon as practicable after the end of each fiscal year, a copy of its annual report to
stockholders for such year; and the Company will furnish to the Representatives (i) as soon
as available, a copy of each report and any definitive proxy statement of the Company filed
with the Commission under the Exchange Act or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as the Representatives may reasonably
request. However, so long as the Company is subject to the reporting requirements of either
Section 13 or Section 15(d) of the Exchange Act and is timely filing reports with the
Commission on its Electronic Data Gathering, Analysis and Retrieval system (“XXXXX”), it is
not required to furnish such reports or statements to the Underwriters.
(h) Payment of Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including but not limited to any filing fees and
other reasonable expenses (including fees and disbursements of counsel to the Underwriters)
incurred in connection with qualification of the Offered Securities for sale under the laws
of such jurisdictions as the Representatives designate and the preparation and printing of
memoranda relating thereto, reasonable costs and expenses related to the review by the
National Association of Securities Dealers, Inc. of the Offered Securities (including filing
fees and the fees and expenses of counsel for the Underwriters relating to such review),
costs and expenses relating to investor presentations or any “road show” in connection with
the offering and sale of the Offered Securities including, without limitation, any travel
expenses of the Company’s officers and employees and any other expenses of the Company
including the chartering of airplanes, fees and expenses incident to listing the Offered
Securities on the New York Stock Exchange, American Stock Exchange, NASDAQ Stock Market and
other national and foreign exchanges, fees and expenses in connection with the registration
of the Offered Securities under the Exchange Act, and expenses incurred in distributing
preliminary prospectuses and the Final Prospectus (including any amendments and supplements
thereto) to the Underwriters and for expenses incurred for preparing, printing and
distributing any Issuer Free Writing Prospectuses to investors or prospective investors.
(i) Use of Proceeds. The Company will use the net proceeds received in connection with
this offering in the manner described in the “Use of Proceeds” section of the General
Disclosure Package and, except as disclosed in the General Disclosure Package, the Company
does not intend to use any of the proceeds from the sale of the Offered Securities hereunder
to repay any outstanding debt owed to any affiliate of any Underwriter. The Company shall
manage its affairs and investments in such a manner as not to be or become an “investment
company” within the meaning of the Investment Company Act and the rules and regulations
thereunder.
(j) Absence of Manipulation. The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be expected to cause or
result in, stabilization or manipulation of the price of any securities of the Company to
facilitate the sale or resale of the Offered Securities.
(k) Restriction on Sale of Securities. For the period specified below (the “Lock-Up
Period”), the Company will not, directly or indirectly, take any of the following actions
with respect to its Securities or any securities convertible into or exchangeable or
exercisable for any of its Securities (“Lock-Up Securities”): (i) offer, sell, issue,
contract to sell, pledge or otherwise dispose of Lock-Up Securities, (ii) offer, sell,
issue, contract to sell, contract to purchase or grant any option, right or warrant to
purchase Lock-Up Securities, (iii) enter into any swap, hedge or any other agreement that
transfers, in whole or in part, the economic consequences of ownership of Lock-Up
Securities, (iv) establish or increase a put equivalent position or liquidate or decrease a
call equivalent position in Lock-Up Securities within the
10
meaning of Section 16 of the Exchange Act or (v) file with the Commission a
registration statement under the Act relating to Lock-Up Securities, or publicly disclose
the intention to take any such action, without the prior written consent of Credit Suisse
and Xxxxx and Company, LLC (“Cowen”) other than a registration statement on Form S-8, the
Company’s sale of stock hereunder and the issuance of shares pursuant to employee benefit
plans, qualified stock option plans or other employee compensation plans existing on the
date hereof. The initial Lock-Up Period will commence on the date hereof and continue for
90 days after the date hereof or such earlier date that Credit Suisse and Cowen consent to
in writing; provided, however, that if (1) during the last 17 days of the initial Lock-Up
Period, the Company releases earnings results or material news or a material event relating
to the Company occurs or (2) prior to the expiration of the initial Lock-Up Period, the
Company announces that it will release earnings results during the 16-day period beginning
on the last day of the initial Lock-Up Period, then in each case the Lock-Up Period will be
extended until the expiration of the 18-day period beginning on the date of release of the
earnings results or the occurrence of the materials news or material event, as applicable,
unless Credit Suisse and Cowen waive, in writing, such extension. The Company will provide
Credit Suisse and Cowen with notice of any announcement described in clause (2) of the
preceding sentence that gives rise to an extension of the Lock-Up Period.
6. Free Writing Prospectuses. The Company represents and agrees that, unless it obtains the
prior consent of Credit Suisse, and each Underwriter represents and agrees that, unless it obtains
the prior consent of the Company and Credit Suisse, it has not made and will not make any offer
relating to the Offered Securities that would constitute an Issuer Free Writing Prospectus, or that
would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required
to be filed with the Commission. Any such free writing prospectus consented to by the Company and
Credit Suisse is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company
represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus
as an “issuer free writing prospectus,” as defined in Rule 433,and has complied and will comply
with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus,
including timely Commission filing where required, legending and record keeping.
7. Conditions of the Obligations of the Underwriters. The obligations of the several
Underwriters to purchase and pay for the Firm Securities on the First Closing Date and the Optional
Securities to be purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties of the Company herein (as though made on such Closing Date), to the
accuracy of the statements of Company officers made pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following additional conditions
precedent:
(a) Accountants’ Comfort Letter. The Representatives shall have received letters,
dated, respectively, the date hereof and each Closing Date, of BDO Xxxxxxx, LLP confirming
that they are a registered public accounting firm and independent public accountants within
the meaning of the Securities Laws and substantially in the form of Schedule C hereto
(except that, in any letter dated a Closing Date, the specified date referred to in Schedule
C hereto shall be a date no more than three days prior to such Closing Date).
(b) Filing of Prospectus. The Final Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) hereof. No stop
order suspending the effectiveness of the Registration Statement or of any part thereof
shall have been issued and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter, shall be contemplated by the Commission.
(c) No Material Adverse Change. Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company and its subsidiaries taken as a
whole which, in the judgment of the Representatives, is material and adverse and makes it
impractical or inadvisable to market the Offered Securities; (ii) any change in U.S. or
international financial, political or economic conditions or currency exchange rates or
exchange controls the effect of which is such as to make it, in the judgment of the
Representatives, impractical to market or to enforce contracts for the sale of the Offered
Securities, whether in the primary market or in respect of dealings in the secondary market;
(iii) any suspension or material limitation of trading in securities
11
generally on the New York Stock Exchange, or any setting of minimum or maximum prices
for trading on such exchange; (iv) or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (v) any banking moratorium
declared by any U.S. federal or New York authorities; (vi) any major disruption of
settlements of securities, payment, or clearance services in the United States or any other
country where such securities are listed or (vii) any attack on, outbreak or escalation of
hostilities or act of terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency if, in the judgment of
the Representatives, the effect of any such attack, outbreak, escalation, act, declaration,
calamity or emergency is such as to make it impractical or inadvisable to market the Offered
Securities or to enforce contracts for the sale of the Offered Securities.
(d) Opinion of Counsel for Company. The Representatives shall have received an
opinion, dated such Closing Date, of Xxxxxxxx Xxxxxx Xxxxxxx & Xxxxxxx LLP, counsel for the
Company, substantially in the form attached hereto as Exhibit A.
(e) Opinion of Foreign Counsel. Romulo, Mabanta, Xxxxxxxxxxxx Xxxxx and de Los
Angeles shall have furnished to the Representatives such counsel’s written opinion, as
Philippine counsel to the Company, addressed to the Underwriters and dated the Closing Date,
substantially in the form attached hereto as Exhibit B.
(f) Opinion of Counsel for Underwriters. The Representatives shall have received from
Xxxxxx & Xxxxxxx LLP, counsel for the Underwriters, such opinion and negative assurance
letter, dated such Closing Date, with respect to such matters as the Representatives may
require, and the Company shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(g) Officer’s Certificate. The Representatives shall have received a certificate,
dated such Closing Date, of an executive officer of the Company and a principal financial or
accounting officer of the Company in which such officers shall state that: the
representations and warranties of the Company in this Agreement are true and correct; the
Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date; no stop order suspending
the effectiveness of the Registration Statement has been issued, and no proceedings for that
purpose have been instituted or, to the best of their knowledge and after reasonable
investigation, are contemplated by the Commission; and, subsequent to the date of the most
recent financial statements in the General Disclosure Package, there has been no material
adverse change, nor any development or event involving a prospective material adverse
change, in the condition (financial or otherwise), results of operations, business,
properties or prospects of the Company and its subsidiaries taken as a whole except as set
forth in the General Disclosure Package or as described in such certificate.
(h) Certificate of Chief Financial Officer. The Representatives shall have received a
certificate, dated such Closing Date, in form and substance reasonably satisfactory to the
Representatives, of the chief financial officer of the Company in which such officer shall
certify as to the accuracy of certain financial matters.
The Company will furnish the Representatives with such conformed copies of such opinions,
certificates, letters and documents as the Representatives reasonably request. Credit Suisse may
in its sole discretion waive on behalf of the Underwriters compliance with any conditions to the
obligations of the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
8. Indemnification and Contribution.
(a) Indemnification of Underwriters. The Company will indemnify and hold harmless each
Underwriter, its partners, members, directors, officers, employees, agents, affiliates and each
person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act (each, an “Indemnified Party”), against any and all losses, claims,
damages or liabilities, joint or several, to which such Indemnified Party may become subject, under
the Act, the Exchange Act, other Federal or state statutory law or regulation or
12
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any part of the Registration Statement at any time, any Statutory
Prospectus as of any time, the Final Prospectus or any Issuer Free Writing Prospectus, or arise out
of or are based upon the omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will reimburse each
Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending against any loss, claim, damage, liability, action,
litigation, investigation or proceeding whatsoever (whether or not such Indemnified Party is a
party thereto), whether threatened or commenced, and in connection with the enforcement of this
provision with respect to any of the above as such expenses are incurred; provided, however, that
the Company will not be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in subsection (b) below.
(b) Indemnification of Company. Each Underwriter will severally and not jointly indemnify
and hold harmless the Company, each of its directors and each of its officers who signs a
Registration Statement and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (each, an “Underwriter Indemnified Party”),
against any losses, claims, damages or liabilities to which such Underwriter Indemnified Party may
become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation
or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any part of the Registration Statement at any time, any Statutory
Prospectus as of any time, the Final Prospectus, or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or the alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by such Underwriter Indemnified
Party in connection with investigating or defending against any such loss, claim, damage,
liability, action, litigation, investigation or proceeding whatsoever (whether or not such
Underwriter Indemnified Party is a party thereto), whether threatened or commenced, based upon any
such untrue statement or omission, or any such alleged untrue statement or omission as such
expenses are incurred, it being understood and agreed that the only such information furnished by
any Underwriter consists of the following information in the Final Prospectus furnished on behalf
of each Underwriter: the concession figures appearing in the fourth paragraph under the caption
“Underwriting” and the information contained in the tenth paragraph under the caption
“Underwriting.”
(c) Actions against Parties; Notification. Promptly after receipt by an indemnified party
under this Section of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b)
above, notify the indemnifying party of the commencement thereof; but the failure to notify the
indemnifying party shall not relieve it from any liability that it may have under subsection (a) or
(b) above except to the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided further that the failure to notify
the indemnifying party shall not relieve it from any liability that it may have to an indemnified
party otherwise than under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the defense thereof
other than reasonable costs of investigation. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending or threatened action
in respect of which any indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party unless such settlement (i) includes an
unconditional release of such
13
indemnified party from all liability on any claims that are the subject matter of such action
and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to
act by or on behalf of an indemnified party.
(d) Contribution. If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i)
in such proportion as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the Offered Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company 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 as well as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint. The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this 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 in this Section 8(d).
9. Default of Underwriters. If any Underwriter or Underwriters default in their obligations
to purchase Offered Securities hereunder on either the First or any Optional Closing Date and the
aggregate number of shares of Offered Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date, Credit Suisse may
make arrangements satisfactory to the Company for the purchase of such Offered Securities by other
persons, including any of the Underwriters, but if no such arrangements are made by such Closing
Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any Underwriter or Underwriters
so default and the aggregate number of shares of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of Offered Securities that the
Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory to Credit
Suisse and the Company for the purchase of such Offered Securities by other persons are not made
within 36 hours after such default, this Agreement will terminate without liability on the part of
any non-defaulting Underwriter or the Company, except as provided in Section 10 (provided that if
such default occurs with respect to Optional Securities after the First Closing Date, this
Agreement will not terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term “Underwriter” includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
10. Survival of Certain Representations and Obligations. The respective indemnities,
agreements, representations, warranties and other statements of the Company or its officers and of
the several Underwriters set forth in or made pursuant to this Agreement will remain in full force
and effect, regardless of any investigation, or statement as to the results thereof, made by or on
behalf of any Underwriter, the Company or any of their respective
14
representatives, officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If the purchase of the Offered Securities by the
Underwriters is not consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 9 hereof, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities, and the respective obligations of the
Company and the Underwriters pursuant to Section 8 hereof shall remain in effect. In addition, if
any Offered Securities have been purchased hereunder, the representations and warranties in Section
2 and all obligations under Section 5 shall also remain in effect.
11. Notices. All communications hereunder will be in writing and, if sent to the
Underwriters, will be mailed, delivered or telegraphed and confirmed to the Representatives c/o
Credit Suisse Securities (USA) LLC at Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention:
LCD-IBD, or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it
at 0000 Xxxxxxx Xxx., Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Corporate Counsel (Fax:
000-000-0000); provided, however, that any notice to an Underwriter pursuant to Section 8 will be
mailed, delivered or telegraphed and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers and directors and controlling persons
referred to in Section 8, and no other person will have any right or obligation hereunder.
13. Representation of Underwriters. The Representatives will act for the several
Underwriters in connection with this financing, and any action under this Agreement taken by the
Representatives jointly or by Credit Suisse will be binding upon all the Underwriters.
14. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall together constitute one
and the same Agreement.
15. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) No Other Relationship. The Representatives have been retained solely to act as
underwriters in connection with the sale of Offered Securities and that no fiduciary, advisory or
agency relationship between the Company and the Representatives has been created in respect of any
of the transactions contemplated by this Agreement or the Final Prospectus, irrespective of whether
the Representatives have advised or are advising the Company on other matters;
(b) Arms’ Length Negotiations. The price of the Offered Securities set forth in this
Agreement was established by the Company following discussions and arms-length negotiations with
the Representatives and the Company is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) Absence of Obligation to Disclose. The Company has been advised that the Representatives
and their affiliates are engaged in a broad range of transactions which may involve interests that
differ from those of the Company and that the Representatives have no obligation to disclose such
interests and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; and
(d) Waiver. The Company waives, to the fullest extent permitted by law, any claims it may
have against the Representatives for breach of fiduciary duty or alleged breach of fiduciary duty
and agrees that the Representatives shall have no liability (whether direct or indirect) to the
Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim
on behalf of or in right of the Company, including stockholders, employees or creditors of the
Company.
16. Applicable Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
15
The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts
in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. The Company irrevocably and
unconditionally waives any objection to the laying of venue of any suit or proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby in Federal and state
courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such suit or proceeding in any
such court has been brought in an inconvenient forum.
(Signature Page Follows)
16
If the foregoing is in accordance with the Representatives’ understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a
binding agreement between the Company and the several Underwriters in accordance with its terms.
Very truly yours,
| PeopleSupport, Inc. |
||||
| By: | /s/ Xxxxx Xxxxxxxxxx | |||
| Name: | ||||
| Title: | ||||
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written.
| Credit Suisse Securities (USA) LLC |
||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: Xxxx Xxxxxxx | ||||
| Title: Managing Director | ||||
Acting on behalf of itself and the
Representatives of the several Underwriters.
17
SCHEDULE A
| Number of | ||||
| Underwriter | Firm Securities | |||
Credit Suisse Securities (USA) LLC |
1,411,200 | |||
Xxxxx and Company, LLC |
1,411,200 | |||
JMP Securities, LLC |
604,800 | |||
Xxxxx Xxxxxxx & Co. |
604,800 | |||
X.X. Xxxxxxx & Sons, Inc. |
42,000 | |||
RBC Capital Markets Corporation |
42,000 | |||
Susquehanna Financial Group, LLLP |
42,000 | |||
ThinkEquity Partners LLC |
42,000 | |||
Total |
4,200,000 | |||
Schedule A-1
SCHEDULE B
| 1. | General Use Free Writing Prospectuses (included in the General Disclosure Package) |
| “General Use Issuer Free Writing Prospectus” includes each of the following documents: | ||
| None. |
| 2. | Other Information Included in the General Disclosure Package |
| The following information is also included in the General Disclosure Package: |
| 1. The initial price to the public of the Offered Securities. | |||
| 2. The aggregate number of Firm Securities. |
Schedule B-1
SCHEDULE C
The Representatives shall have received letters, dated, respectively, the date hereof and the
First Closing Date, of BDO Xxxxxxx, LLP confirming that they are a registered public accounting
firm and independent public accountants within the meaning of the Securities Laws to the effect
that:
(i) in their opinion the audited consolidated financial statements and schedules
examined by them and included in the Registration Statement and the General Disclosure
Package comply as to form in all material respects with the applicable accounting requirements of
the Securities Laws;
(ii) with respect to the period(s) covered by the unaudited quarterly consolidated financial
statements included in the Registration Statement and the General Disclosure Package, they have
performed the procedures specified by the American Institute of Certified Public Accountants for a
review of interim financial information as described in XX 000, Xxxxxxx Financial Information, on
the unaudited quarterly consolidated financial statements (including the noted thereto) of the
Company and its consolidated subsidiaries included in the Registration Statement and the General
Disclosure Package, and have made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and its consolidated
subsidiaries as to whether such unaudited quarterly consolidated financial statements comply as to
form in all material respects with the applicable accounting requirements of the Securities Act and
the related published rules and regulations; they have read the latest unaudited monthly
consolidated financial statements (including the notes thereto) and the supplementary summary
unaudited financial information of the Company and its consolidated subsidiaries made available by
the Company and the minutes of the meetings of the stockholders, Board of Directors and committees
of the Board of Directors of the Company; and have made inquiries of certain officials of the
Company who have responsibility for financial and accounting matters of the Company and its
consolidated subsidiaries as to whether the unaudited monthly financial statements are stated on a
basis substantially consistent with that of the audited consolidated financial statements included
in the Registration Statement and General Disclosure Package; and on the basis thereof, nothing
came to their attention which caused them to believe that:
(A) the unaudited financial statements included in the Registration Statement or the
General Disclosure Package do not comply as to form in all material respects with the
applicable accounting requirements of the Securities Laws, or that any material
modifications should be made to the unaudited quarterly consolidated financial
statements for them to be in conformity with generally accepted accounting
principles;
(B) with respect to the period subsequent to the date of the most recent unaudited
quarterly consolidated financial statements included in the General Disclosure Package, at a
specified date at the end of the most recent month, there were any increases in the
short-term debt or long-term debt of the Company and its consolidated subsidiaries, or any
change in stockholders’ equity or the consolidated capital stock of the Company and its
consolidated subsidiaries or any decreases in the net current assets or net assets
of the Company and its consolidated subsidiaries, as compared with the
amounts shown on the latest balance sheet included in the General Disclosure Package; or for
the period from the day after the date of the most recent unaudited quarterly consolidated
financial statements for such entities included in the General Disclosure Package to such
specified date, there were any decreases, as compared with the corresponding period in the
preceding year, in consolidated net sales, net operating income in the total or per share
amounts of consolidated income before extraordinary items or net income of the Company and
its consolidated subsidiaries, except for such changes, increases or decreases set forth in
such letter which the General Disclosure Package discloses have occurred or may occur;
(iii) With respect to any period as to which officials of the Company have advised that no
consolidated financial statements as of any date or for any period subsequent to the specified date
referred to in (ii)(B) above are available, they have made inquiries of certain officials of the
Company who have responsibility for the financial and accounting matters of the Company and its
consolidated subsidiaries as to whether, at a specified date not more than three business days
prior to the date of such letter, there were any increases in the short-term debt or long-term debt
of the Company and its consolidated subsidiaries, or any change in stockholders’ equity or the
consolidated capital stock of the Company and its consolidated subsidiaries or any decreases in the
net current assets or net assets of the Company and its consolidated subsidiaries, as
compared with the amounts shown on the most recent balance sheet
B-1
for such entities included in the General Disclosure Package; or for the period from the day
after the date of the most recent unaudited quarterly financial statements for such entities
included in the General Disclosure Package to such specified date, there were any decreases, as
compared with the corresponding period in the preceding year, in net sales, net operating income,
in the total or per share amounts of consolidated income before extraordinary items or net income
of the Company and its consolidated subsidiaries and, on the basis of such inquiries and the review
of the minutes described in paragraph (ii) above, nothing came to their attention which caused them
to believe that there was any such change, increase, or decrease, except for such changes,
increases or decreases set forth in such letter which the General Disclosure Package discloses have
occurred or may occur; and
(iv) they have compared specified dollar amounts (or percentages derived from such dollar
amounts) and other financial and statistical information contained in the Registration Statement,
each Issuer Free Writing Prospectus (other than any Issuer Free Writing Prospectus that is an
“electronic road show,” as defined in Rule 433(h)) and the General Disclosure Package (in each case
to the extent that such dollar amounts, percentages and other financial and statistical information
are derived from the general accounting records of the Company and its subsidiaries or are derived
directly from such records by analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures specified in such letter and have
found such dollar amounts, percentages and other financial and statistical information to be in
agreement with such results.
All financial statements and schedules included in material incorporated by reference into the
Registration Statement or the General Disclosure Package shall be deemed included in the
Registration Statement or the General Disclosure Package for purposes of this Schedule.
B-2
