SHARES
XXXXXX SOFTWARE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
[______], 2001
XXXXXX BROTHERS INC.
XX XXXXXX H&Q
U.S. BANCORP XXXXX XXXXXXX INC.
FIDELITY CAPITAL MARKETS,
As Representatives of the
several underwriters named in Schedule 1 hereto
c/x XXXXXX BROTHERS INC.
000 Xxxxx Xxxxxx
Three World Financial Center
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Xxxxxx Software, Inc., a Delaware corporation (the "COMPANY")
and certain stockholders of the Company (the "SELLING STOCKHOLDERS"), propose to
sell an aggregate of shares (the "FIRM STOCK") of the Company's
Common Stock, par value $0.01 per share (the "COMMON STOCK"). Of the
shares of Firm Stock, shares are being sold by the Company and
shares are being sold by the Selling Stockholders set forth on Schedule
2 hereto. In addition, the Company proposes to grant to the Underwriters named
in Schedule 1 hereto (the "UNDERWRITERS") an option to purchase up to an
additional shares of the Common Stock on the terms and for the
purposes set forth in Section 3 (the "OPTION STOCK"). Of the shares of
the Option Stock, shares are being sold by the Company and
shares by the Selling Stockholders. The Firm Stock and the Option Stock, if
purchased, are hereinafter collectively called the "STOCK." This is to confirm
the agreement concerning the purchase of the Stock from the Company and the
Selling Stockholders by the Underwriters.
SECTION 1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the Stock has
(i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules and
regulations (the "RULES AND REGULATIONS") of the United States Securities and
Exchange Commission (the "COMMISSION") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and each of the amendments
thereto have been delivered by the Company to you as the representatives (the
"REPRESENTATIVES") of the Underwriters. As used in this Agreement, "EFFECTIVE
TIME" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission; "EFFECTIVE DATE" means the date of the Effective Time;
"PRELIMINARY PROSPECTUS" means each prospectus included in such registration
statement, or amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission by the Company with
the consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "REGISTRATION STATEMENT" means such registration statement, as
amended at the Effective Time, including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the registration statement as of the
Effective Time pursuant to Rule 430A of the Rules and Regulations; and
"PROSPECTUS" means the prospectus in the form first used to confirm sales of
Stock. If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule
462 Registration Statement. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations and do not and will not, as of the applicable
effective date (as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation or warranty
is made 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 through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined in Section 17)
have been duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign corporations
in each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and have
all power and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged, except to the extent that
the failure to be so qualified or be in good standing would not have a material
adverse effect on the general affairs, management, consolidated financial
position, stockholders' equity, results of operations or business of the Company
and its subsidiaries (a "Material Adverse Effect"); and none of the subsidiaries
of the Company other than [ ] and [ ] is a "significant subsidiary", as such
term is defined in Rule 405 of the Rules and Regulations.
(d) The Company has an authorized capitalization as set forth in the
Prospectus. All of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, were issued in compliance with federal
and state securities laws, are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus. All of the Company's options,
warrants and other rights to purchase or exchange any securities for shares of
the Company's capital stock have been duly and
2
validly authorized and issued, were issued in compliance with federal and state
securities laws, and conform to the description thereof contained in the
Prospectus. All of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims.
(e) The shares of the Stock to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor in accordance with this Agreement, will
be duly and validly issued, fully paid and non-assessable; and the Stock will
conform to the descriptions thereof contained in the Prospectus. Upon payment
for and delivery of the Stock to be sold by the Company pursuant to this
Agreement, the Underwriters will acquire good and valid title to such Stock, in
each case free and clear of all liens, encumbrances, equities, preemptive
rights, subscription rights, other rights to purchase, voting or transfer
restrictions and other claims.
(f) This Agreement has been duly authorized, executed and delivered by
the Company; and (assuming the due authorization, execution and delivery thereof
by the other parties hereto) constitutes the legal, valid and binding obligation
of the Company, enforceable against it in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law), and except as rights to indemnity hereunder may be limited to
federal and state securities laws.
(g) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets; and except for the
registration of the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act of 1934, as amended (the "Exchange Act") and applicable state or
international securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated hereby.
(h) Except as described in the Prospectus, 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 Securities 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 the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act. The holders of
3
outstanding shares of the Company's capital stock are not entitled to preemptive
or other rights to subscribe for the Stock. Except for (i) shares of
Common Stock granted to officers, directors, employees and consultants under the
Company's Employee Stock Ownership Plan; (ii) options to purchase
shares of Common Stock granted to officers, directors and employees under the
Company's 1996 Stock Incentive Plan; (iii) options to purchase
shares of Common Stock granted to an employee outside of the Company's 1996 and
2001 Stock Incentive Plans; and (iv) warrants to purchase shares of
Common Stock, upon completion of the offering, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding. No shares of the
Common Stock have been issued under the Company's Amended and Restated 2001
Employee Stock Purchase Plan and no options to purchase shares of the Common
Stock have been granted under the Company's 2001 Stock Incentive Plan.
(i) Except as described in the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period preceding the date
of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act other than shares issued pursuant to
employee benefit plans, qualified stock options plans or other employee
compensation plans or pursuant to outstanding options, rights or warrants.
(j) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such date, there
has not been any material change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, in or
affecting the general affairs, management, consolidated financial position,
stockholders' equity, results of operations or business of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved. The pro forma financial information included in the Registration
Statement and Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act and the Rules and Regulations and includes
all adjustments necessary to present fairly the pro forma financial position of
the respective entity or entities presented therein at the respective dates
indicated and the results of their operations for the respective periods
specified.
(l) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who have
delivered the letters referred to in Section 9(g) hereof, are independent public
accountants as required by the Securities Act and the Rules and Regulations.
(m) The Company and each of its subsidiaries have good and marketable
title to all personal property owned by them, in each case free and clear of all
liens,
4
encumbrances and defects, except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; the Company does not own any real property; and
all assets held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries.
(n) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar businesses in similar
industries.
(o) Except as described in the Prospectus, the Company and each of its
subsidiaries own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights and licenses (collectively, the
"Intellectual Property") necessary for the conduct of their respective
businesses and have no reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice of any claim of
conflict with, any such rights of others.
(p) There are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, might have a Material
Adverse Effect and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
(q) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration Statement.
(r) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent, which might be expected to have a
Material Adverse Effect.
(t) 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 the termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "CODE"); and each "pension plan" for
which the Company would have any material liability that is intended to be
5
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.
(u) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has paid
all taxes due thereon, and no tax deficiency has been determined adversely to
the Company or any of its subsidiaries which has had (nor does the Company have
any knowledge of any tax deficiency which, if determined adversely to the
Company or any of its subsidiaries, might have) a Material Adverse Effect.
(v) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(w) The Company (i) makes and keeps accurate books and records and (ii)
maintains internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing assets at
reasonable intervals.
(x) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws, (ii) is in default in any material respect, and no
event has occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant or
condition contained in any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it
is bound or to which any of its properties or assets is subject or (iii) is in
violation in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be subject
or has failed to obtain any material license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business.
(y) Neither the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(z) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its
6
subsidiaries in violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have, or
could not be reasonably likely to have, singularly or in the aggregate with all
such violations and remedial actions, a Material Adverse Effect; there has been
no material spill, discharge, leak, emission, injection, escape, dumping or
release of any kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous wastes or
hazardous substances due to or caused by the Company or any of its subsidiaries
or with respect to which the Company or any of its subsidiaries have knowledge,
except for any such spill, discharge, leak, emission, injection, escape, dumping
or release which would not have or would not be reasonably likely to have,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a Material Adverse
Effect. The terms "HAZARDOUS WASTES", "TOXIC WASTES", "HAZARDOUS SUBSTANCES" and
"MEDICAL WASTES" shall have the meanings specified in any applicable local,
state, federal and foreign laws or regulations with respect to environmental
protection.
(aa) Neither the Company nor any subsidiary is an "investment company"
as defined in the Investment Company Act of 1940, as amended.
(bb) None of the Directed Shares (as defined below) distributed in
connection with the Directed Share Program (as defined below) will be offered or
sold outside of the United States.
(cc) 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.
(dd) The statistical and market-related data included in the Prospectus
and the Registration Statement are based on or derived from sources which the
Company believes to be reliable and accurate.
SECTION 2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally represents, warrants and agrees
that:
(a) The Selling Stockholder has, and immediately prior to each
applicable Delivery Date (as defined in Section 5 hereof) the Selling
Stockholder will have good and valid title to the shares of Stock to be sold by
the Selling Stockholder hereunder on such date, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such shares and payment
therefor pursuant hereto, good and valid title to such shares, free and clear of
all liens, encumbrances, equities or claims, will pass to the several
Underwriters.
(b) The Selling Stockholder has placed in custody under a custody
agreement (the "Custody Agreement" and, together with all other similar
agreements executed by the other Selling Stockholders, the "Custody Agreements")
with [insert name of custodian], as custodian (the "Custodian"), for delivery
under this Agreement, certificates in negotiable form (with signature guaranteed
by a commercial bank or trust company having an office or correspondent in the
United States or a member firm of the New York or American Stock Exchanges)
representing the shares of Stock to be sold by the Selling Stockholder
hereunder.
7
(c) The Selling Stockholder has duly and irrevocably executed and
delivered a power of attorney (the "Power of Attorney" and, together with all
other similar agreements executed by the other Selling Stockholders, the "Powers
of Attorney") appointing the Custodian and one or more other persons, as
attorneys-in-fact, with full power of substitution, and with full authority
(exercisable by any one or more of them) to execute and deliver this Agreement
and to take such other action as may be necessary or desirable to carry out the
provisions hereof on behalf of the Selling Stockholder.
(d) The Selling Stockholder has full right, power and authority to
enter into this Agreement, the Power of Attorney and the Custody Agreement; the
execution, delivery and performance of this Agreement, the Power of Attorney and
the Custody Agreement by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or to which
any of the property or assets of the Selling Stockholder is subject, nor will
such actions result in any violation of the provisions of the charter or by-laws
of the Selling Stockholder (if applicable), the articles of partnership of the
Selling Stockholder (if applicable), the deed of trust of the Selling
Stockholder (if applicable) or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder; and, except
for the registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in connection with
the purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Power of Attorney or the Custody Agreement by
the Selling Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby and thereby.
(e) The Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus will,
when they become effective or are filed with the Commission, as the case may be,
do not and will not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date (as to
the Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided that no representation or warranty is made 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 through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein.
(f) The Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1 hereof are
not materially true and correct, is familiar with the Registration Statement and
the Prospectus (as amended or supplemented) and has no knowledge of any material
fact, condition or information not disclosed in the Registration Statement, as
of the effective date, or the Prospectus (or any amendment or supplement
thereto), as of the applicable filing date, which has adversely affected or may
adversely affect the business of the Company and is not prompted to sell
8
shares of Common Stock by any information concerning the Company which is not
set forth in the Registration Statement and the Prospectus.
(g) The Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the shares of the Stock.
SECTION 3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 12,700,000 shares of
the Firm Stock and the Selling Stockholders agree to sell 300,000 shares of Firm
Stock to the several Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase the number of shares of the Firm Stock set forth
opposite that Underwriter's name in Schedule 1 hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,950,000 shares of Option Stock and each Selling Stockholder
grants to the Underwriters an option to purchase up to the number of shares of
Option Stock set opposite his, her or its name in Schedule 2 hereto, severally
and not jointly. Such option is granted for the purpose of covering
over-allotments in the sale of Firm Stock and is exercisable as provided in
Section 5 hereof. Each Underwriter shall be obligated to purchase from the
Company, and from each Selling Stockholder, that number of shares of the Option
Stock which represents the same proportion of the number of shares of the Option
Stock to be sold by the Company, and by each Selling Stockholder, as the number
of shares of the Option Stock set forth opposite the name of such Underwriter in
Schedule 1 [represents of the total number of shares of the Option Stock to be
purchased by all of the Underwriters pursuant to this Agreement]. The respective
purchase obligations of each Underwriter with respect to the Option Stock shall
be adjusted by the Representatives so that no Underwriter shall be obligated to
purchase Option Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be $____
per share.
The Company and the Selling Stockholders shall not be obligated to
deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), except upon payment for all the Stock to be purchased on such Delivery
Date as provided herein.
SECTION 4. Offering of Stock by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
It is understood that approximately _________ shares of the Firm Stock
("Directed Shares") will initially be reserved by the Underwriters for offer and
sale to employees and persons having business relationships with the Company
("Directed Share Participants") upon the terms and conditions set forth in the
Prospectus (the "Directed Share Program") and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. ("NASD"),
and that any allocation of such Directed Shares among such persons will be made
in accordance with timely directions received by Xxxxxx Brothers Inc. from the
Company. Under no circumstances will
9
Xxxxxx Brothers Inc. or any Underwriter be liable to the Company or to any
Directed Share Participant for any action taken or omitted to be taken in good
faith in connection with such Directed Share Program. To the extent that any
Directed Shares are not affirmatively reconfirmed for purchase by any Directed
Share Participant on or immediately after the date of this Agreement, such
Directed Shares may be offered to the public as part of the public offering
contemplated hereby.
SECTION 5. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time, on the
fourth full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives
and the Company. This date and time are sometimes referred to as the "FIRST
DELIVERY DATE." On the First Delivery Date, the Company and the Selling
Stockholders shall deliver or cause to be delivered certificates representing
the Firm Stock to the Representatives for the account of each Underwriter
against payment to or upon the order of the Company of the purchase price by
wire transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Company and the Selling
Stockholders shall make the certificates representing the Firm Stock available
for inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "SECOND DELIVERY DATE" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "DELIVERY
DATE".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company and the Selling Stockholders
shall deliver or cause to be delivered the certificates representing the Option
Stock to the Representatives for the account of each Underwriter against payment
to or upon the order of the Company of the purchase price by wire transfer in
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Option Stock
shall be registered in such names and in such denominations as the
10
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Stock, the Company and the Selling Stockholders shall make the certificates
representing the Option Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to such Second Delivery Date.
SECTION 6. Further Agreements of the Company. The Company covenants and agrees:
(a) To prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the Securities Act; to
make no further amendment or any supplement to the Registration Statement or to
the Prospectus except as permitted herein; to advise the Representatives,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to advise the Representatives, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of the
Stock for offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statement or the Prospectus or
for additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Stock or any
other securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
the Representatives and, upon their request, to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance;
11
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to furnish
to the Representatives copies of all materials furnished by the Company to its
shareholders and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange upon
which the Common Stock may be listed pursuant to requirements of or agreements
with such exchange or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
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;
(i) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock (other than (i) the Stock and shares issued pursuant to
employee benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights and rights and (ii) stock and shares of
capital stock issued in connection with the acquisition by the Company of
businesses or divisions of businesses in their entirety, provided that any such
stock or shares of capital stock so issued shall not be registered under the
Securities Act), or sell or grant options, rights or warrants with respect to
any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans existing
on the date hereof), (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, or (3) file or cause to be
filed a registration statement on Form S-8 or other similar form with respect to
any shares of Common Stock or securities convertible, exercisable or
exchangeable into Common Stock or any other securities of the Company, in each
case without the prior written consent of Xxxxxx Brothers Inc. on
12
behalf of the Underwriters; and to cause all of the Company's officers and
directors as well as each stockholder that holds more than _____ shares of
Common Stock and optionholders of the Company collectively holding ___________
options to purchase _________ shares of Common Stock and each Directed Share
Participant to furnish to the Representatives, prior to the First Delivery Date,
a letter or letters, substantially in the form of Exhibit A hereto, pursuant to
which each such person shall agree not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 180 days from the date of the
Prospectus, without the prior written consent of Xxxxxx Brothers Inc. on behalf
of the Underwriters;
(j) To apply for the inclusion of the Stock on the Nasdaq National
Market System, and to use its best efforts to effect that quotation, subject
only to official notice of issuance, prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock as set forth
in the Prospectus;
(l) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" as defined in
the Investment Company Act of 1940, as amended and the rules and regulations of
the Commission thereunder;
(m) In connection with the Directed Share Program, to ensure that the
Directed Shares will be restricted to the extent required by the NASD or the
rules of such association from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement, and Xxxxxx Brothers Inc. will
notify the Company as to which Directed Share Participants will need to be so
restricted. At the request of Xxxxxx Brothers Inc., the Company will direct the
transfer agent to place stop transfer restrictions upon such securities for such
period of time; and
(n) To comply with all applicable securities and other applicable laws,
rules and regulations in each foreign jurisdiction in which the Directed Shares
are offered in connection with the Directed Share Program.
SECTION 7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder agrees:
(a) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock (other than the Stock) or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common
13
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx Brothers
Inc.
(b) That the Stock to be sold by the Selling Stockholder hereunder,
which is represented by the certificates held in custody for the Selling
Stockholder, is subject to the interest of the Underwriters and the other
Selling Stockholders thereunder, that the arrangements made by the Selling
Stockholder for such custody are to that extent irrevocable, and that the
obligations of the Selling Stockholder hereunder shall not be terminated by any
act of the Selling Stockholder, by operation of law, by the death or incapacity
of any individual Selling Stockholder or, in the case of a trust, by the death
or incapacity of any executor or trustee or the termination of such trust, or
the occurrence of any other event.
(c) To deliver to the Representatives prior to the First Delivery Date
a properly completed and executed United States Treasury Department Form W-8 (if
the Selling Stockholder is a non-United States person or Form W-9 (if the
Selling Stockholder is a United States person.)
SECTION 8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement, any
supplemental agreement among the Underwriters and any other related documents in
connection with the offering, purchase, sale and delivery of the stock; (e) the
filing fees incident to securing the review by the NASD of the terms of sale of
the Stock; (f) any applicable listing or other fees; (g) the fees and expenses
of qualifying the Stock under the securities laws of the several jurisdictions
as provided in Section 6(h) and of preparing, printing and distributing a Blue
Sky Memorandum (including related fees and expenses of counsel to the
Underwriters); (h) all costs and expenses of the Underwriters, including the
fees and disbursements of counsel for the Underwriters, incident to the Directed
Share Program described in Section 4; (i) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Stock, including, without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show and (j) all other costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholders under this Agreement;
provided that, except as provided in this Section 8 and in Section 13 the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters.
SECTION 9. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Stockholders
14
contained herein, to the performance by the Company and the Selling Stockholders
of their respective obligations hereunder, and to each of the following
additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company and the Selling Stockholders shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to
pass upon such matters.
(c) Xxxxxx & Whitney LLP shall have furnished to the Representatives
their written opinion, as counsel to the Company, addressed to the Underwriters
and dated such Delivery Date, in form and substance reasonably satisfactory to
the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdictions
of incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction within the United States in which its
ownership or lease of property or the conduct of its business requires such
qualification and has all power and authority necessary to own or hold its
properties and conduct the business in which it is engaged, except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect on the Company. [Discuss subsidiaries];
(ii) The Company has an authorized capitalization as set forth
in the Prospectus. All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, were issued in compliance with
federal and state securities laws, are fully paid and non-assessable and conform
to the description thereof contained in the Prospectus. All of the Company's
options, warrants and other rights to purchase or exchange any securities for
shares of the Company's capital stock have been duly and validly authorized and
issued, were issued in compliance with federal and state securities laws, and
conform to the description thereof contained in the Prospectus. All of the
issued shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued and are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(iii) The shares of the Stock being delivered on such Delivery
Date to the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor will be duly and validly
issued, fully paid and non-assessable;
(iv) Except as described in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer
15
of, any shares of the Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel;
(v) To such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject which is
required to be set forth in the Prospectus;
(vi) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph of Rule
424(b) of the Rules and Regulations specified in such opinion on the date
specified therein and to the knowledge of such counsel no stop order suspending
the effectiveness of the Registration Statement has been issued and, to the
knowledge of such counsel, no proceeding for that purpose is pending or
threatened by the Commission;
(vii) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to such
Delivery Date (except for the financial statements and financial schedules and
other financial and statistical data included therein, as to which such counsel
need express no belief) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
(viii) The statements contained in the Prospectus under the
captions "Business", "Certain Relationships and Related Transactions",
"Description of Capital Stock" and "Shares Eligible for Future Sales", insofar
as they describe federal statutes, rules and regulations, constitute a fair
summary thereof and the opinion of such counsel filed as Exhibit [ ] to the
Registration Statement is confirmed and the Underwriters may rely upon such
opinion as if it were addressed to them;
(ix) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations which have not been described or filed as
exhibits to the Registration Statement;
(x) This Agreement has been duly authorized, executed and
delivered by the Company;
(xi) The issue and sale of the shares of Stock being delivered
on such Delivery Date by the Company pursuant to this Agreement and the
execution, delivery and compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such counsel 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 property or assets of
the Company or any of its subsidiaries is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties or
assets; and, except for the registration of the
16
Stock under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, except for such consents, approvals, authorizations,
orders, filings or registrations as have been obtained or made;
(xii) Except as described in the Prospectus, to the best of
such counsel's knowledge, 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 Securities 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 the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Securities Act;
(xiii) [Discuss] The Company owns, holds, licenses to or
otherwise has rights to use, all of the Intellectual Property that is necessary
for the conduct of the Company's business as now conducted or as proposed in the
Prospectus to be conducted. Except as set forth in the Prospectus, (A) there are
no rights of third parties to any such Intellectual Property; (B) to the
knowledge of such counsel, there is no infringement by third parties of any such
Intellectual Property; (C) there is no pending or, to such counsel's knowledge,
threatened action, suit, proceeding or claim by others challenging the Company's
rights in or to any such Intellectual Property; (D) there is no pending or, to
the knowledge of such counsel, threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual Property and
(E) there is no pending or, to such counsel's knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of others, and such counsel is unaware of any other fact which would form
a reasonable basis for any such claim;
(xiv) [Discuss] The Company is in compliance in all material
respects with all presently applicable provisions of 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 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; and
(xv) Neither the Company nor any subsidiary is an "investment
company" as defined in the Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the General Corporation Law of the State
of Delaware. Such opinion shall also be to the effect that (x) such counsel has
acted as counsel to the Company in connection with the preparation of the
Registration Statement and (y) based
17
on the foregoing, no facts have come to the attention of such counsel which lead
them to believe that the Registration Statement (except for the financial
statements and financial schedules and other financial and statistical data
included therein, as to which such counsel need express no belief) as of the
Effective Date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus (except as
stated above) contains any untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as set forth in clause
(viii) above).
(d) Counsel for each of the Selling Stockholders shall have furnished
to the Representatives its written opinion, as counsel to the Selling
Stockholders for whom it is acting as counsel, addressed to the Underwriters and
dated the First Delivery Date, in form and substance reasonably satisfactory to
the Representatives, to the effect that:
(i) Each Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of this Agreement, the Power
of Attorney and the Custody Agreement by each Selling Stockholder and the
consummation by each Selling Stockholder of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which any Selling Stockholder is a party or
by which any Selling Stockholder is bound or to which any of the property or
assets of any Selling Stockholder is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of any Selling
Stockholder (if applicable), the articles of partnership of any Selling
Stockholder (if applicable), the deed of trust of any Selling Stockholder (if
applicable) or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction over any
Selling Stockholder or the property or assets of any Selling Stockholder; and,
except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Power of Attorney or the Custody
Agreement by any Selling Stockholder and the consummation by any Selling
Stockholder of the transactions contemplated hereby and thereby;
(ii) This Agreement has been duly authorized (if applicable),
executed and delivered by or on behalf of each Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement have been
duly authorized (if applicable), executed and delivered by each Selling
Stockholder and constitute valid and binding agreements of each Selling
Stockholder, enforceable in accordance with their respective terms;
18
(iv) Immediately prior to the each Delivery Date, each Selling
Stockholder had good and valid title to the shares of Stock to be sold by such
Selling Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, and full right, power and authority to sell,
assign, transfer and deliver such shares to be sold by such Selling Stockholder
hereunder; and
(v) Good and valid title to the shares of Stock to be sold by
each Selling Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the several
Underwriters.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of America
and the laws of the State of New York. Such counsel shall also have furnished to
the Representatives a written statement, addressed to the Underwriters and dated
each Delivery Date, in form and substance satisfactory to the Representatives,
to the effect that (x) such counsel [has acted as counsel to each Selling
Stockholder on a regular basis and] has acted as counsel to each Selling
Stockholder in connection with the preparation of the Registration Statement,
and (y) based on the foregoing, no facts have come to the attention of such
counsel which lead it to believe that the Registration Statement, as of the
Effective Date, contained any untrue statement of a material fact relating to
any Selling Stockholder or omitted to state such a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue statement of a material
fact relating to any Selling Stockholder or omits to state such a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The foregoing opinion and statement may be qualified by a statement
to the effect that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus.
(e) The Representatives shall have received from Xxxxxx, Xxxx &
Xxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter or letters, in form
and substance satisfactory to the Representatives, addressed to the Underwriters
and dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(g) With respect to the letter or letters of PricewaterhouseCoopers LLP
referred to in the preceding paragraph and delivered to the Representatives
concurrently
19
with the execution of this Agreement (the "INITIAL LETTERS"), the Company shall
have furnished to the Representatives a letter (the "BRING-DOWN LETTER") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letters and (iii)
confirming in all material respects the conclusions and findings set forth in
the initial letters.
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date; the Company
has complied with all its agreements contained herein; and the conditions set
forth in Sections 9(a) and 9(h) have been fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (B)
since the Effective Date no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement or the Prospectus
which has not been so set forth.
(i) Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholders) shall have furnished to
the Representatives on each Delivery Date a certificate, dated such Delivery
Date, signed by, or on behalf of, the Selling Stockholder (or the Custodian or
one or more attorneys-in-fact) stating that the representations, warranties and
agreements of the Selling Stockholder contained herein are true and correct as
of the Delivery Date and that the Selling Stockholder has complied with all
agreements contained herein to be performed by the Selling Stockholder at or
prior to such Delivery Date.
(j) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus (A) any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (B) since such date,
there shall not have been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (A) or
(B), is, in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public
20
offering or the delivery of the Stock being delivered on such Delivery Date on
the terms and in the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions, including without limitation as a result of terrorist
activities after the date hereof, or the effect of international conditions on
the financial markets in the United States shall be such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to proceed with
the public offering or delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(l) The Nasdaq National Market System shall have approved the Stock for
quotation, subject only to official notice of issuance.
(m) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the reasonable opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP,
counsel for the Underwriters, is material or omits to state a fact which, in the
reasonable opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
SECTION 10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or (B) in
any materials or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the offering of the Stock,
including any roadshow or investor presentations made to investors by the
Company (whether in person or electronically) (the "Marketing Materials"), (ii)
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any
21
amendment or supplement thereto, or in any Marketing Materials, any 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
Stock 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
Company 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 shall reimburse each
Underwriter and each such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein which information consists solely of the information specified
in Section 10(f). The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter; provided, however,
that the foregoing indemnity agreement with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter if (W) a loss,
claim, liability, expense or damage results solely from an untrue statement of a
material fact contained in, or the omission of a material fact from, such
Preliminary Prospectus, which untrue statement or omission was completely
corrected in the Prospectus (as then amended or supplemented) and (X) the
Company sustains the burden of proving that the Underwriters sold Shares to the
person alleging such loss, claim, liability, expense or damage without sending
or giving, at or prior to the written confirmation of such sale, a copy of the
Prospectus (as then amended or supplemented) and (Y) the Company had previously
furnished copies thereof to the Underwriters within a reasonable amount of time
prior to such sale or such confirmation, and (Z) the Underwriters failed to
deliver the corrected Prospectus, if required by law to have so delivered it and
if delivered would have been a complete defense against the person asserting
such loss, claim, liability, expense or damage.
The Company agrees to indemnify and hold harmless Xxxxxx Brothers Inc.
(including its officers and employees) and each person, if any, who controls
Xxxxxx Brothers Inc. within the meaning of the Securities Act ("XXXXXX BROTHERS
ENTITIES"), from and against any loss, claim, damage or liability or any action
in respect thereof to which any of the Xxxxxx Brothers Entities may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) arises out of,
or is based upon, any untrue statement or alleged untrue statement of a material
fact contained in any material prepared by or with the approval of the Company
for distribution to Directed Share Participants in connection with the Directed
Share Program or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) arises out of the failure of the Directed Share Participant
to pay for and accept delivery of Directed Shares that the Directed Share
Participant agreed to purchase or (iii)
22
is otherwise related to the Directed Share Program, other than losses, finally
judicially determined to have resulted directly from the bad faith or gross
negligence of Xxxxxx Brothers Inc.
(b) The Selling Stockholders, jointly and severally, shall indemnify
and hold harmless each Underwriter, its officers and employees, and each person,
if any, who controls any Underwriter within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
each Underwriter, its officers and employees and each such controlling person
for any legal or other expenses reasonably incurred by that Underwriter, its
officers and employees or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Selling
Stockholders shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or in any such amendment or supplement in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein which information consists solely of the information specified
in Section 10(f). The foregoing indemnity agreement is in addition to any
liability which the Selling Stockholders may otherwise have to any Underwriter
or any officer, employee or controlling person of that Underwriter.
(c) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors,
and each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter specifically for inclusion
therein, which information is limited to the information set forth in Section
10(f), and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or any such
23
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Company or any such director, officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ one counsel (in addition to
any local counsel) to represent jointly the Representatives and those other
Underwriters and their respective officers, employees and controlling persons
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriters against the Company or the Selling
Stockholders under this Section 10 if, in the reasonable judgment of the
Representatives, it is advisable for the Representatives and those Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company or the Selling Stockholders.
Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to Section 10(a) hereof in respect of such claim or action, then
in addition to such separate firm for the indemnified parties, the indemnifying
party shall be liable for the fees and expenses of not more than one separate
firm (in addition to any local counsel) for the Xxxxxx Brothers Entities for the
defense of any loss, claim, damage, liability or action arising out of the
Directed Share Program. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
24
(e) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Stock 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 and
the Selling Stockholders on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, 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 whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section were to be 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 into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 10(f), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 10(f), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise paid or become liable to pay by
reason of any 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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 10(f) are
several in proportion to their respective underwriting obligations and not
joint.
(f) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of, the concession and
reallowance figures appearing under the caption "Underwriting" and the
information provided under the headings "Stabilization, Short
25
Positions and Penalty Bids," "Offer and Sales in Canada" and "Electronic
Distribution" under the caption "Underwriting" in, the Prospectus are correct
and constitute the only information concerning such Underwriters furnished in
writing to the Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
SECTION 11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 4. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Company and the Selling Stockholders to
sell, the Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 8 and 13. As used in this Agreement, the term
"UNDERWRITER" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 11, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for damages
caused by its default. If other Underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
SECTION 12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock if, prior to that time, any
of the events described in Sections 9(j) or 9(k), shall have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement.
26
SECTION 13. Reimbursement of Underwriters' Expenses. If the Company or any
Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Company or the Selling Stockholder(s) is not fulfilled, the
Company or the Selling Stockholder(s) will reimburse the Underwriters for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company and the Selling Stockholders
shall pay the full amount thereof to the Representatives. If this Agreement is
terminated pursuant to Section 11 by reason of the default of one or more
Underwriters, neither the Company nor any Selling Stockholder shall be obligated
to reimburse any defaulting Underwriter on account of those expenses.
SECTION 14. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Xxxxxx Brothers Inc., Three World Financial Center,
New York, New York 10285, Attention: Syndicate Department (Fax: 000-000-0000),
with a copy, in the case of any notice pursuant to Section 10(d), to the
Director of Litigation, Office of the General Counsel, Xxxxxx Brothers Inc.,
Three World Financial Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: General Counsel (Fax: 000-000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives; and
(c) if to any Selling Stockholders, shall be delivered or sent by mail,
telex or facsimile transmission to such Selling Stockholder at the address set
forth on Schedule 2 hereto.
SECTION 15. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Selling
Stockholders, the Company, and their respective successors. This Agreement and
the terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Selling Stockholders contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 10(c) of this
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than
27
the persons referred to in this Section 15, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
SECTION 16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Selling Stockholders and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
SECTION 17. Definition of the Terms "BUSINESS DAY" and "SUBSIDIARY". For
purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "SUBSIDIARY" has the meaning set forth in Rule 405 of the Rules
and Regulations.
SECTION 18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
SECTION 19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
28
If the foregoing correctly sets forth the agreement between the
Company, the Selling Stockholders and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
XXXXXX SOFTWARE, INC.
By
---------------------------------
Name:
----------------------------
Title:
---------------------------
The Selling Stockholders named in
Schedule 2 to this Agreement
By
---------------------------------
Attorney-in-Fact
Accepted:
XXXXXX BROTHERS INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By
--------------------------
Authorized Representative
29
SCHEDULE 1
Underwriter Number of Firm Shares to be Purchased
Xxxxxx Brothers Inc. ....................
JPMorgan H&Q ............................
U.S. Bancorp Xxxxx Xxxxxxx ..............
Fidelity Capital Markets ................
Total:
SCHEDULE 2
EXHIBIT A
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
XX XXXXXX H&Q
U.S. BANCORP XXXXX XXXXXXX INC.
FIDELITY CAPITAL MARKETS,
As Representatives of the
several underwriters
c/x XXXXXX BROTHERS INC.
000 Xxxxx Xxxxxx
Three World Financial Center
Xxx Xxxx, XX 00000
RE: XXXXXX SOFTWARE, INC.
Ladies and Gentlemen:
The undersigned understands that you and/or certain other
firms propose to enter into an
Underwriting Agreement (the "
Underwriting
Agreement") providing for the purchase by you and/or such other firms (the
"Underwriters") of shares of Common Stock, $.01 par value per share (the "Common
Stock"), of Xxxxxx Software, Inc. (the "Company") (such shares of Common Stock
are hereinafter referred to as the "Shares") and that the Underwriters propose
to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the
Underwriting
Agreement by the Underwriters, and for other good and valuable consideration,
the undersigned hereby irrevocably agrees that, without the prior written
consent of Xxxxxx Brothers Inc., the undersigned will not, directly or
indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter
into any transaction or device that is designed to, or could be expected to,
result in the disposition by any person at any time in the future of) any Common
Stock (including, without limitation, Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and Common Stock that may
be issued upon exercise of any option or warrant) or securities convertible into
or exchangeable for Common Stock owned by the undersigned on the date of
execution of this Lock-Up Letter Agreement or on the date of the completion of
the Offering, (2) offer for sale, sell, pledge, or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
Common Stock (including, without limitation, Common Stock that may be deemed to
be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and Common Stock that may
be issued upon exercise of any option or warrant) or securities convertible into
or exchangeable for Common Stock issued to the undersigned or purchased by the
undersigned under any option plan or employee stock purchase plan or other
equity compensation plan of the Company and owned by the undersigned on the
date of execution of this Lock-Up Letter Agreement or on any date prior to 180
days after the date of the final Prospectus relating to the Offering or (3)
enter into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of such
Common Stock, whether any such transaction described in clause (1), (2) or (3)
above is to be settled by delivery of Common Stock or other securities, in cash
or otherwise, for a period of 180 days after the date of the final Prospectus
relating to the Offering, provided, however, that the undersigned may effect a
disposition of shares of Common Stock (a) by gifts, (b) by will or the laws of
descent and distribution or (c) by private sale that is exempt from registration
under applicable federal and state securities laws and that is not transacted
under Rule 144 or Rule 701 under the Securities Act or 1933 and is not
transacted using Nasdaq, the New York Stock Exchange or any other public
securities market; provided, however that no transfer may be given effect
pursuant to clause (a), (b) or (c) unless and until the proposed transferee
agrees in writing to be bound by the restrictions contained in this Lock-Up
letter Agreement and delivers a copy of such agreement to the Representatives
and the Company.
In furtherance of the foregoing, the Company and its transfer
agent are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies you that it
does not intend to proceed with the Offering, if the
Underwriting Agreement does
not become effective by December 31, 2001, or if the
Underwriting Agreement
(other than the provisions thereof which survive termination) shall terminate or
be terminated prior to payment for and delivery of the Shares, the undersigned
will be released from its obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the
Underwriters will proceed with the Offering in reliance on this Lock-Up Letter
Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary in connection with the enforcement hereof. Any obligations
of the undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:
-------------------------------
Name:
Title:
Dated: , 2001
----------------------
