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EXHIBIT 1
4,700,000 SHARES
ECLIPSYS CORPORATION
COMMON STOCK, PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
June __, 1998
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June __, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxx Brothers Inc.
Xxxxx Xxxxxx Inc
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
XX Xxxxxxxxx Xxxxxxxx International Limited
Xxxxxx Brothers International (Europe)
Xxxxx Xxxxxx Inc
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
Eclipsys Corporation, a Delaware corporation (the "COMPANY"), proposes
to issue and sell to the several Underwriters (as defined below), and ALLTEL
Information Services, Inc., a shareholder of the Company (the "SELLING
SHAREHOLDER") proposes to sell to the several Underwriters, an aggregate of
4,700,000 shares of the Common Stock, par value $.01 per share, of the Company
(the "FIRM SHARES"), of which 4,200,000 shares are to be issued and sold by the
Company and 500,000 shares, to be issued upon conversion of shares of Series D
Convertible Preferred Stock (the "SERIES D PREFERRED STOCK") pursuant to the
terms of the Series D Preferred Stock immediately prior to the purchase of the
Firm Shares by the Underwriters, are to be sold by the Selling Shareholder.
It is understood that, subject to the conditions hereinafter stated,
3,760,000 Firm Shares (the "U.S. FIRM SHARES") will be sold to the several U.S.
Underwriters named in Schedule I hereto (the "U.S. UNDERWRITERS") in connection
with the offering and sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms are
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defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and 940,000 Firm Shares (the "INTERNATIONAL SHARES") will be
sold to the several International Underwriters named in Schedule II hereto (the
"INTERNATIONAL UNDERWRITERS") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX
XXXXXXX"), BancAmerica Xxxxxxxxx Xxxxxxxx, Xxxxxx Brothers Inc. and Xxxxx
Xxxxxx Inc shall act as representatives (the "U.S. REPRESENTATIVES") of the
several U.S. Underwriters, and Xxxxxx Xxxxxxx & Co. International Limited, XX
Xxxxxxxxx Xxxxxxxx International Limited, Xxxxxx Brothers International
(Europe) and Xxxxx Xxxxxx Inc shall act as representatives (the "INTERNATIONAL
REPRESENTATIVES") of the several International Underwriters. The U.S.
Underwriters and the International Underwriters are hereinafter collectively
referred to as the "UNDERWRITERS," and the U.S. Representatives and the
International Representatives are hereinafter collectively referred to as the
"REPRESENTATIVES."
The Company and the Selling Shareholder also propose to sell to the
several U.S. Underwriters not more than an additional 630,000 shares and 75,000
shares, respectively, of Common Stock, par value $.01 per share (collectively,
the "ADDITIONAL SHARES"), if and to the extent that the U.S. Representatives
shall have determined to exercise, on behalf of the U.S. Underwriters, the
right to purchase such shares of common stock granted to the U.S. Underwriters
in Section 3 hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "SHARES." The shares of Common Stock, par value
$.01 per share, of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the "COMMON STOCK."
The Company and the Selling Shareholder are hereinafter sometimes collectively
referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement contains two prospectuses to be used in
connection with the offering and sale of the Shares: the U.S. prospectus, to be
used in connection with the offering and sale of Shares in the United States
and Canada to United States and Canadian Persons, and the international
prospectus, to be used in connection with the offering and sale of Shares
outside the United States and Canada to persons other than United States and
Canadian Persons. The international prospectus is identical to the U.S.
prospectus except for the outside front cover page. The registration statement
as amended at the time it becomes effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION STATEMENT";
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the U.S. prospectus and the international prospectus in the respective forms
first used to confirm sales of Shares is hereinafter referred to as the
"PROSPECTUS." 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.
As part of the offering contemplated by this Agreement, Xxxxxx Xxxxxxx
has agreed to reserve out of the Shares set forth opposite its name on Schedule
I to this Agreement, up to 235,000 shares, for sale to the Company's employees,
officers, and directors and other parties associated with the Company
(collectively, "PARTICIPANTS"), as set forth in the Prospectus under the
heading "Underwriting" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold by
Xxxxxx Xxxxxxx pursuant to the Directed Share Program (the "DIRECTED SHARES")
will be sold by Xxxxxx Xxxxxxx pursuant to this Agreement at the public
offering price. Any Directed Shares not orally confirmed for purchase by any
Participants by the end of the business day on which this Agreement is executed
will be offered to the public by Xxxxxx Xxxxxxx as set forth in the Prospectus.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose are
pending before, or, to the knowledge of the Company, threatened
by, the Commission.
(b) (i) The Registration Statement, when it became
effective, did not contain and, as amended or supplemented, if
applicable, will not contain any 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, (ii) the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder
and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
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relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, 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 Company and its
subsidiaries, taken as a whole.
(d) Each of the Company's subsidiaries (which term, as
used herein, does not include Xxxxxxx Central Holdings Company,
Inc.) has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, 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 Company and its subsidiaries, taken as a
whole; all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens,
encumbrances, equities or claims, except for those securing the
Company's commercial credit facility as described in the
Prospectus.
(e) This Agreement has been duly authorized, executed
and delivered by the Company.
(f) The authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus, including as it relates to the
preferred stock of the Company to be converted or redeemed in
connection with the offering of the Shares.
(g) The shares of Common Stock outstanding prior to the
issuance of the Shares to be sold by the Company have been duly
authorized and are validly issued, fully paid and
non-assessable.
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(h) The shares of Common Stock to be issued upon
conversion of the Series D Preferred Stock sold by the Selling
Shareholder will, upon such conversion, have been duly
authorized and be validly issued, fully paid and non-assessable.
(i) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the
terms of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights.
(j) The Company has deposited with BankBoston, N.A., as
Custodian (the "CUSTODIAN"), a certificate representing
2,077,497 shares of Common Stock, which shares will be
sufficient to effect the conversion of the Selling Shareholder's
Series D Preferred Stock into Common Stock pursuant to the terms
of the Series D Preferred Stock immediately prior to the
Closing.
(k) The execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or
any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Shares.
(l) There has not occurred any material adverse change,
or any development involving a prospective material adverse
change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement).
(m) There are no legal or governmental proceedings
pending or, to the Company's knowledge, threatened, to which the
Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so
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described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as
required.
(n) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects
with the Securities Act and the applicable rules and regulations
of the Commission thereunder.
(o) The accountants who have certified the financial
statements included in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) are
independent public accountants as required by the Securities
Act.
(p) The financial statements of the Company and its
predecessor, ALLTEL Healthcare Information Services, Inc.,
together with related schedules and notes, included in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), present fairly the consolidated financial
position, results of operations, shareholders' equity and cash
flows of the Company and its subsidiaries and its predecessor,
respectively, on the basis stated in the Registration Statement
at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have
been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved,
except as disclosed therein; and the other financial and
statistical information and data of the Company and its
predecessor included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) are
accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the
Company and its subsidiaries and its predecessor, respectively.
(q) The pro forma combined financial statements of the
Company and its subsidiaries included in the Registration
Statement present fairly the information shown therein, have
been prepared in accordance with the Commission's rules and
guidelines with respect to the pro forma financial statements,
have been prepared on the basis of assumptions described in the
Registration Statement and the Prospectus, and such assumptions
used in the preparation thereof are reasonable, and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
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(r) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(s) The Company and its subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(t) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital
or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(u) Except as disclosed 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 or to require the
Company to include such securities with the Shares registered
pursuant to the Registration Statement.
(v) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, (i) the Company and its subsidiaries have not
incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) the Company has not purchased
any of its outstanding capital stock, nor declared, paid or
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otherwise made any dividend or distribution of any kind on its
capital stock other than ordinary and customary dividends; and
(iii) there has not been any material change in the capital
stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in
or contemplated by the Prospectus (exclusive of any amendments
or supplements thereto subsequent to the date of this
Agreement).
(w) The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, all material patents, patent
rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names currently employed by
them in connection with the business now operated by them, and
neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling
or finding, would result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a
whole.
(x) The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged;
neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the
Company nor any such subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely
affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries,
taken as a whole, except as described in or contemplated by the
Prospectus.
(y) The Company and its subsidiaries possess all
certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities
necessary to conduct their respective businesses the absence of
which would have a material adverse effect on the Company and
its subsidiaries taken as a whole, and neither the Company nor
any such subsidiary has received any notice of proceedings
relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the
aggregate, if
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the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition, financial
or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
(z) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
the existing assets at reasonably intervals and appropriate
action is taken with respect to any differences.
(aa) The Company has not offered, or caused the
Underwriters to offer, Shares to any person pursuant to the
Directed Share Program with the specific intent to unlawfully
influence (i) a customer or supplier of the Company to alter the
customer's or supplier's level or type of business with the
Company, or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
Furthermore, the Company represents and warrants to Xxxxxx Xxxxxxx
that (i) the Registration Statement, the Prospectus and any preliminary
prospectus comply, and any further amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program,
and that (ii) no authorization, approval, consent, license, order,
registration or qualification of or with any government, governmental
instrumentality or court, other than such as have been obtained, is necessary
under the securities laws and regulations of foreign jurisdictions in which the
Directed Shares are offered outside the United States.
2. Representations and Warranties of the Selling Shareholder.
The Selling Shareholder represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder.
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(b) The execution and delivery by the Selling
Shareholder of, and the performance by the Selling Shareholder
of its obligations under, this Agreement, the Custody Agreement
between the Selling Shareholder and the Custodian, relating to
the deposit of the Series D Preferred Stock and the conversion
thereof into the Shares to be sold by the Selling Shareholder
(the "CUSTODY AGREEMENT"), and the Power of Attorney appointing
certain individuals as the Selling Shareholder's
attorneys-in-fact to the extent set forth therein, relating to
the transactions contemplated hereby and by the Registration
Statement (the "POWER OF ATTORNEY"), will not contravene any
provision of applicable law, or the certificate of incorporation
or by-laws of the Selling Shareholder, or any agreement or other
instrument binding upon the Selling Shareholder that is material
to the Selling Shareholder or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over
the Selling Shareholder, and no consent, approval, authorization
or order of, or qualification with, any governmental body or
agency is required for the performance by the Selling
Shareholder of its obligations under this Agreement, the Custody
Agreement or the Power of Attorney, except such as may be
required by the securities or Blue Sky laws of the various
states or countries other than the United States in connection
with the offer and sale of the Shares.
(c) The Selling Shareholder currently has valid title
to the Series D Preferred Stock and on the Closing Date will
have valid title to the Shares to be sold by the Selling
Shareholder and the legal right and power, and all
authorizations and approvals required by law, to enter into this
Agreement, the Custody Agreement and the Power of Attorney and
to sell, transfer and deliver the Shares to be sold by the
Selling Shareholder.
(d) The Custody Agreement and the Power of Attorney
have been duly authorized, executed and delivered by the Selling
Shareholder and are valid and binding agreements of the Selling
Shareholder.
(e) Delivery of the Shares to be sold by the Selling
Shareholder pursuant to this Agreement upon payment therefor
pursuant to this Agreement will pass title to such Shares to the
Underwriters free and clear of any security interests, claims,
liens and other encumbrances.
(f) (i) the Registration Statement, when it became
effective, did not contain and, as amended or supplemented, if
applicable, will not contain
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any 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 and (ii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that clause (i) or (ii) of this Section 2(f) shall apply
only to any statements or omissions made in the Registration Statement and the
Prospectus relating to the information set forth in a letter dated June __,
1998 between the Selling Shareholder and the Representatives (the "LETTER
AGREEMENT").
3. Agreements to Sell and Purchase. Each Seller, severally and not
jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at $______ a share (the "PURCHASE
PRICE") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
number of Firm Shares to be sold by such Seller as the number of Firm Shares
set forth in Schedules I and II hereto opposite the name of such Underwriter
bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company and the Selling
Shareholder agree to sell to the U.S. Underwriters the Additional Shares, and
the U.S. Underwriters shall have a one-time right to purchase, severally and
not jointly, up to the number of Additional Shares set forth opposite their
name in Schedule I hereto at the Purchase Price. If the U.S. Representatives,
on behalf of the U.S. Underwriters, elect to exercise such option, the U.S.
Representatives shall so notify the Company and the Selling Shareholder in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the U.S.
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each U.S.
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares
as the U.S. Representatives may determine) that bears the same proportion to
the total number of Additional Shares to be purchased as the number of U.S.
Firm Shares set forth in Schedule I hereto opposite the name of such U.S.
Underwriter bears to the total number of U.S. Firm Shares.
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If the U.S. Underwriters elect to purchase less than all of the Additional
Shares, any such election shall be made in proportion to the maximum number of
Additional Shares to be sold by each of the Company and the Selling
Shareholder.
Each of the Company and the Selling Shareholder hereby agrees that,
without the prior written consent of Xxxxxx Xxxxxxx on behalf of the
Underwriters, it will not, during the period ending 180 days after the date of
the Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder, (B) the issuance by the Company of options to purchase shares of
Common Stock pursuant to stock plans described in the Prospectus or shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of which the Underwriters have been
advised in writing or which is described in the Prospectus or (C) transactions
by any person other than the Company relating to shares of Common Stock or
other securities acquired in open market transactions after the completion of
the offering of the Shares. In addition, the Selling Shareholder agrees that,
without the prior written consent of Xxxxxx Xxxxxxx on behalf of the
Underwriters, it will not, during the period ending 360 days after the date of
the Prospectus, (i) effect any public sale or distribution of any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or (ii) make any demand for, or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock; provided,
however, that 181 days after the date of the Prospectus and thereafter, the
Selling Shareholder may participate in a "piggy-back" registration pursuant to
Section 4 of the Second Amended and Restated Registration Agreement among the
Company and certain of its shareholders.
4. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at
$___ a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by
you at a
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price that represents a concession not in excess of $____ a share under the
Public Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $___ a share, to any Underwriter or to
certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares to be sold by
each Seller shall be made to such Seller in Federal or other funds immediately
available in New York City by wire transfer to an account or accounts specified
by the Sellers against delivery of such Firm Shares for the respective accounts
of the several Underwriters at 10:00 a.m., New York City time, on [ ], 1998, or
at such other time on the same or such other date, not later than [ ], 1998, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3 or at such other time on the same or on such
other date, in any event not later than _______, 1998, as shall be designated
in writing by the U.S. Representatives. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of
the Sellers to sell the Shares to the Underwriters and the several obligations
of the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than [__________] (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date there shall not have occurred any change,
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or any development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set forth
in the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect that the representations and warranties
of the Company contained in this Agreement are true and correct as of
the Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Xxxx and Xxxx LLP, outside counsel for the Company, dated
the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction listed on an
attachment to such opinion, which, to such counsel's knowledge,
are the only jurisdictions in the United States in which the
Company owns or leases real property or has employees;
(ii) each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction listed on an attachment to such opinion, which, to
such counsel's knowledge, are the only jurisdictions in the United
States in which such subsidiary owns or leases real property or
has employees;
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(iii) the authorized capital stock of the Company
conforms as to legal matters in all material respects to the
description thereof contained in the Prospectus, including as it
relates to the preferred stock of the Company to be converted or
redeemed in connection with the offering of the Shares;
(iv) the shares of Common Stock outstanding prior to
the issuance of the Shares to be sold by the Company have been
duly authorized and are validly issued, fully paid and
non-assessable;
(v) the shares of Common Stock to be issued upon
conversion of the Series D Preferred Stock and sold by the Selling
Shareholder will, upon such conversion, have been duly authorized
and be validly issued, fully paid and non-assessable;
(vi) all of the issued shares of capital stock of each
U.S. subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are
owned of record directly by the Company or another U.S.
subsidiary, to the knowledge of such counsel free and clear of all
liens, encumbrances, equities or claims, except for those securing
the Company's commercial credit facility as described in the
Prospectus;
(vii) the Shares to be sold by the Company have been
duly authorized and, when issued and delivered in accordance with
the terms of this Agreement, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights under Delaware law or
the Company's certificate of incorporation or by-laws or, to such
counsel's knowledge, under any other instrument or agreement;
(viii) this Agreement has been duly authorized, executed
and delivered by the Company;
(ix) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or any
agreement or other instrument that is filed as an exhibit to the
Registration Statement and is binding upon the Company or
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any of its subsidiaries or any judgment, order or decree known to
such counsel of any governmental body, agency or court
specifically naming the Company or any U.S. subsidiary, and no
consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer
and sale of the Shares;
(x) the statements (A) in the Prospectus under the
captions "The Company," "Use of Proceeds," "Management
--Employment Agreements," "--Stock Plans," "Certain Transactions,"
"Description of Capital Stock" and "Underwriters" and (B) in the
Registration Statement in Items 14 and 15, in each case insofar as
such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present in
all material respects the information called for with respect to
such legal matters, documents and proceedings and fairly summarize
in all material respects the matters referred to therein;
(xi) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or any of its U.S. subsidiaries is a party or to which any
of the properties of the Company or any of its U.S. subsidiaries
is subject that are required by the terms of Form S-1 to be
described in the Registration Statement or the Prospectus and are
not so described or of any statutes, regulations, contracts or
other documents that are required by the terms of Form S-1 to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not
described or filed as required;
(xii) the Company is not and, after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended;
(xiii) to such counsel's knowledge, except as described
in the Prospectus, there is no holder of any security of the
Company or any other person who has the right, contractual or
otherwise, to cause the Company to have any shares of Common
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Stock or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of
the Registration Statement to require registration under the
Securities Act of any shares of Common Stock or other securities
of the Company; and
(xiv) the Registration Statement and Prospectus (except
for financial statements and schedules and other financial and
statistical data included therein as to which such counsel need
not express any opinion) comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
In connection with the preparation of the Registration Statement
and the Prospectus, such counsel participated in conferences with
officers and representatives of the Company, counsel for the
Underwriters and the independent accountants of the Company, at which
conferences such counsel made inquiries of such persons and others and
discussed the contents of the Registration Statement and the
Prospectus. While the limitations inherent in the independent
verification of factual matters and the character of determinations
involved in the registration process are such that such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, subject to the foregoing and
based on such participation, inquiries and discussions, no facts have
come to such counsel's attention which have caused such counsel to
believe that the Registration Statement, as of the date it became
effective (but after giving effect to changes incorporated pursuant to
Rule 430A under the Securities Act), contained any untrue statement of
a material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading (except that such counsel expresses no such view with
respect to the financial statements, including the notes and schedules
thereto, or any other financial or statistical data included therein),
or that the Prospectus, as of the date thereof or as of the date
hereof, contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (except that such counsel expresses no such view with
respect to the financial statements, including the notes and schedules
thereto, or any other financial or statistical data included therein).
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(d) The Underwriters shall have received an opinion of T. Xxxx
Xxxxxxxxxxx, XX, Vice President, General Counsel of the Company, to the
effect that:
(i) the statements in the Prospectus under the caption
"Risk Factors--Possible Adverse Effects of Government Regulation"
fairly summarize the legal matters, documents or proceedings set
forth therein;
(ii) the Company and its subsidiaries own or possess, or
can acquire on reasonable terms, all material patents, patent
rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures), trademarks,
service marks and trade names currently employed by them in
connection with the business now operated by them, and neither the
Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with
respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding,
would result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole.
(iii) except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the
issuance of, and such counsel does not know of any commitment,
plan or arrangement to issue any shares of capital stock of the
Company or any security convertible into or exchangeable or
exercisable for capital stock of the Company;
(iv) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or any
agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as may be
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required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Shares;
(v) upon the conversion of the Series D Preferred Stock
into Common Stock and immediately prior to the sale of the Shares
to be sold by the Selling Shareholder on the Closing Date or the
Option Closing Date, as the case may be, the Selling Shareholder
was the sole registered owner of such Shares;
(vi) the Company and its subsidiaries (A) are in
compliance with any and all applicable Environmental Laws, (B)
have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their
respective businesses and (C) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole; and
(vii) such counsel (A) has no reason to believe that
(except for financial statements and schedules and other financial
and statistical data as to which such counsel need not express any
belief) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (B) has no
reason to believe that (except for financial statements and
schedules and other financial and statistical data as to which
such counsel need not express any belief) the Prospectus contains
any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(e) The Underwriters shall have received on the Closing Date
an opinion of Kutack Rock, counsel for the Selling Shareholder, dated
the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder;
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(ii) the execution and delivery by the Selling
Shareholder of, and the performance by the Selling Shareholder of
its obligations under, this Agreement, the Custody Agreement and
the Power of Attorney will not contravene any provision of
applicable law, or the certificate of incorporation or by-laws of
the Selling Shareholder, or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon the
Selling Shareholder that is material to the Selling Shareholder
or, to the best of such counsel's knowledge, any judgment, order
or decree of any governmental body, agency or court specifically
naming the Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Selling
Shareholder of its obligations under this Agreement or the Custody
Agreement or the Power of Attorney, except such as may be required
by the securities or Blue Sky laws of the various states or
countries other than the United States in connection with offer
and sale of the Shares;
(iii) all authorizations and approvals required by law to
enter into this Agreement, the Custody Agreement and Power of
Attorney and to sell, transfer and deliver the Shares to be sold
by such Selling Shareholder have been obtained;
(iv) the Custody Agreement and the Power of Attorney
have been duly authorized, executed and delivered by the Selling
Shareholder and are valid and binding agreements of the Selling
Shareholder; and
(v) upon (x) delivery to the Underwriters of the Shares
to be sold by the Selling Shareholder and (y) registration of such
Shares in the names of the Underwriters in the stock records of
the Company upon the issuance of new certificates representing
such Shares or the registration of transfer of such Shares by the
Company, assuming the Underwriters purchased the Shares without
notice of any adverse claim to such Shares within the meaning of
the Uniform Commercial Code, the Underwriters will have acquired
all rights of the Selling Shareholder in such Shares free of any
adverse claim, any lien in favor of the Company, and any
restrictions on transfer imposed by the Company; and the owner of
the Shares, if other than the Selling Shareholder, would be
precluded from asserting against the
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Underwriters the ineffectiveness of any unauthorized endorsement.
(f) The Underwriters shall have received on the Closing Date
an opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
6(c)(vii), 6(c)(viii), 6(c)(x) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters") and
6(c)(xiv) above.
With respect to Section 6(c)(xiv) above, Xxxx and Xxxx LLP and
Xxxxx Xxxx & Xxxxxxxx may state that their opinion and belief are based
upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without
independent check or verification, except as specified. With respect
to Section 6(e) above, Kutack Rock may rely with respect to factual
matters and to the extent such counsel deems appropriate, upon the
representations of the Selling Shareholder contained herein and in the
Custody Agreement, the Power of Attorney and other documents and
instruments; provided that copies of the Custody Agreement and Power of
Attorney and of any such other documents and instruments shall be
delivered to you and shall be in form and substance satisfactory to
your counsel.
The opinions of Xxxx and Xxxx LLP described in Section 6(c), T.
Xxxx Xxxxxxxxxxx, XX described in Section 6(d) and Kutack Rock
described in Section 6(e) shall be rendered to the Underwriters at the
request of the Company or the Selling Shareholder, as the case may be,
and shall so state therein.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, from each of Price Waterhouse LLP,
independent public accountants, and KPMG Peat Marwick LLP, independent
public accountants, in form and substance satisfactory to the
Underwriters, each containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letters delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
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(h) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other
dispositions of shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date.
(i) The Series D Preferred Stock deposited with the Custodian
by the Selling Shareholder shall have been converted into Common Stock
pursuant to the terms of the Series D Preferred Stock.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to the delivery to the U.S. Representatives on the
Option Closing Date of such documents as they may reasonably request with
respect to the good standing of the Company, the due authorization and issuance
of the Additional Shares and other matters related to the issuance of the
Additional Shares.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter and, for purposes of clauses (a) and (b) only, the Selling
Shareholder as follows:
(a) To furnish to the Representatives, without charge, five
signed copies of the Registration Statement (including exhibits
thereto) and for delivery to each other Underwriter and the Selling
Shareholder a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to the Representatives in New York
City, without charge, prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 7(c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as the Representatives may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to the Representatives and the
Selling Shareholder a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which the Representatives reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such
Rule.
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(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses the Representatives will furnish
to the Company) to which Shares may have been sold by the
Representatives on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request.
(e) To make generally available to the Company's security
holders and to the Representatives as soon as practicable an earning
statement covering the twelve-month period ending June 30, 1999 that
satisfies the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder.
(f) That in connection with the Directed Share Program, the
Company will ensure that the Directed Shares will be restricted to the
extent require by the National Association of Securities Dealers, Inc.
(the "NASD") or the NASD rules from sale, transfer, assignment, pledge
or hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. Xxxxxx Xxxxxxx will notify
the Company as to which Participants will need to be so restricted.
The Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time.
Furthermore, the Company covenants with Xxxxxx Xxxxxxx that the Company
will 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.
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8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees
to pay or cause to be paid all expenses incident to the performance of its and
the Selling Shareholder's obligations under this Agreement, including: (i) the
fees, disbursements and expenses of the Company's counsel, the Company's
accountants and counsel for the Selling Shareholder in connection with the
registration and delivery of the Shares under the Securities Act and all other
fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies thereof to
the Underwriters and dealers, in the quantities herein above specified, (ii)
all costs and expenses related to the transfer and delivery of the Shares to
the Underwriters, including any transfer or other taxes payable thereon, (iii)
the cost of printing or producing any Blue Sky or Legal Investment memorandum
in connection with the offer and sale of the Shares under state securities laws
and all expenses in connection with the qualification of the Shares for offer
and sale under state securities laws as provided in Section 7(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection with such qualification and in connection with
the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Shares by
the NASD, (v) all fees and expenses in connection with the preparation and
filing of the registration statement on Form 8-A relating to the Common Stock
and all costs and expenses incident to listing the Shares on the Nasdaq
National Market, (vi) the cost of printing certificates representing the
Shares, (vii) the costs and charges of any transfer agent, registrar or
depositary, (viii) the costs and charges of the Custodian and any expenses
relating to the conversion of the Series D Preferred Stock into Common Stock,
(ix) 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 Shares, 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, (x) all other
costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section,
(xi) all expenses in connection with any offer and sale of the Shares outside
of the United States, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with offers and
sales outside of the United States, and (xii) all fees and disbursements of
counsel incurred by the Underwriters in connection with
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the Directed Share Program and stamp duties, similar taxes or duties or other
taxes, if any, incurred by the Underwriters in connection with the Directed
Share Program. It is understood, however, that except as provided in this
Section, Section 9 entitled "Indemnity and Contribution", and the last
paragraph of Section 11 below, the Underwriters will pay all of their costs and
expenses, including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Shares by them and any advertising
expenses connected with any offers they may make.
The provisions of this Section shall not supersede or otherwise affect
any agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
9. Indemnity and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(b) The Company agrees to indemnify and hold harmless Xxxxxx Xxxxxxx
and each person, if any, who controls Xxxxxx Xxxxxxx within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
("Xxxxxx Xxxxxxx Entities"), from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) (i) caused by any untrue statement or alleged untrue
statement of a material fact contained in the prospectus wrapper material
prepared by or with the consent of the Company for distribution in foreign
jurisdictions in connection with the Directed Share Program attached to the
Prospectus or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein, when considered in conjunction with
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the Prospectus or any applicable preliminary prospectus, not misleading; (ii)
caused by the failure of any Participant to pay for and accept delivery of the
shares which, immediately following the effectiveness of the Registration
Statement, were subject to a properly confirmed agreement to purchase; or (iii)
related to, arising out of, or in connection with the Directed Share Program,
provided that the Company shall not be responsible under this subparagraph
(iii) for any losses, claim, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of Xxxxxx Xxxxxxx Entities.
(c) The Selling Shareholder agrees to indemnify and hold harmless the
Xxxxxx Xxxxxxx Entities and the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but this indemnity applies only with reference to
information set forth in the Letter Agreement. Notwithstanding the provisions
of this Section 9, the Selling Shareholder shall not be required to indemnify
any indemnified party (as defined below) for any amount in excess of the
aggregate net proceeds received by it pursuant to the sale of the Shares by it
hereunder.
(d) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Selling Shareholder, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or the Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Underwriter
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furnished to the Company in writing by such Underwriter through you expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(e) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 9(a), 9(b), 9(c) or 9(d), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (i) the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, (ii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section and (iii) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Selling Shareholder and all persons, if any, who control the Selling
Shareholder within the meaning of either such Section, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of any
Underwriters, such firm shall be designated in writing by Xxxxxx Xxxxxxx. In
the case of any such separate firm for the Company, and such directors,
officers and control persons of the Company, such firm shall be designated in
writing by the Company. In the case of any such separate firm for the Selling
Shareholder and such control persons of the Selling Shareholder, such firm
shall be designated in writing by the Selling Shareholder. Notwithstanding
anything contained herein to the contrary, if indemnity may be sought pursuant
to Section 9(b) hereof in respect of such action or proceeding, then in
addition to such separate firm for the indemnified
27
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parties, the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate firm (in addition to any local counsel)
for Xxxxxx Xxxxxxx for the defense of any losses, claims, damages and
liabilities arising out of the Directed Share Program, and all persons, if any,
who control Xxxxxx Xxxxxxx within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(f) To the extent the indemnification provided for in Section 9(a),
9(b), 9(c) or 9(d) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (iv) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 9(f)(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 9(f)(i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net
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proceeds from the offering of the Shares (before deducting expenses) received
by each Seller and the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the Shares. The
relative fault of the Sellers on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Sellers or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 9 are several in proportion to the respective number of Shares
they have purchased hereunder, and not joint.
(g) The Sellers and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 9(f). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, (v) no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and (vi) the Selling Shareholder shall not be
required to contribute any amount in excess of the aggregate net proceeds
received by it pursuant to the sale of Shares by it hereunder. 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 remedies provided for in
this Section 9 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
(h) The indemnity and contribution provisions contained in this
Section 9 and the representations, warranties and other statements of the
Company and the Selling Shareholder contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter, the Selling Shareholder or any
person
29
31
controlling the Selling Shareholder or acting as an attorney-in-fact for the
Selling Shareholder, or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the NASD, the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses
10(a)(i) through 10(a)(iv), such event, singly or together with any other such
event, makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I or Schedule
II bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
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32
arrangements satisfactory to you, the Company and the Selling Shareholder for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholder. In any
such case either you or the relevant Sellers shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus
or in any other documents or arrangements may be effected. If, on the Option
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Additional
Shares or (ii) purchase not less than the number of Additional Shares that such
non-defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
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33
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
ECLIPSYS CORPORATION
By:
----------------------------------------
Name:
Title:
ALLTEL INFORMATION SERVICES, INC.
By:
----------------------------------------
Attorney-in-Fact
34
Accepted as of the date hereof:
XXXXXX XXXXXXX & CO.
INCORPORATED
BANCAMERICA XXXXXXXXX
XXXXXXXX
XXXXXX BROTHERS INC.
XXXXX XXXXXX INC.
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto.
By: XXXXXX XXXXXXX & CO.
INCORPORATED
By:
--------------------------
Name:
Title:
XXXXXX XXXXXXX & CO.
INTERNATIONAL LIMITED
XX XXXXXXXXX XXXXXXXX
INTERNATIONAL LIMITED
XXXXXX BROTHERS INTERNATIONAL
(EUROPE)
XXXXX XXXXXX INC.
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By: XXXXXX XXXXXXX & CO.
INTERNATIONAL LIMITED
By:
--------------------------
Name:
Title:
35
SCHEDULE I
U.S. UNDERWRITERS
NUMBER OF FIRM SHARES NUMBER OF ADDITIONAL
UNDERWRITER TO BE PURCHASED SHARES TO BE PURCHASED
------------------------------------------------ --------------------- ----------------------
Xxxxxx Xxxxxxx & Co. Incorporated . . . . . . .
BancAmerica Xxxxxxxxx Xxxxxxxx . . . . . . . .
Xxxxxx Brothers Inc. . . . . . . . . . . . . .
Xxxxx Xxxxxx Inc. . . . . . . . . . . . . . . .
[Other U.S. Underwriters]
--------------------- ----------------------
Total U.S. Firm Shares . . . . . . . .
===================== ======================
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SCHEDULE II
INTERNATIONAL UNDERWRITERS
NUMBER OF FIRM SHARES TO BE
UNDERWRITER PURCHASED
-------------------------------------------------------- ----------------------------
Xxxxxx Xxxxxxx & Co. International Limited . . . . . .
XX Xxxxxxxxx Xxxxxxxx International Limited . . . . . .
Xxxxxx Brothers International (Europe) . . . . . . . .
Xxxxx Xxxxxx Inc. . . . . . . . . . . . . . . . . . . .
[Other International Underwriters] . . . . . . . . . .
----------------------------
Total International Firm Shares . . . . . . . .
============================
37
EXHIBIT A
[FORM OF LOCK-UP LETTER]
, 1998
------------
Xxxxxx Xxxxxxx & Co. Incorporated
BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxx Brothers Inc.
Xxxxx Xxxxxx Inc
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. International Limited
XX Xxxxxxxxx Xxxxxxxx International Limited
Xxxxxx Brothers International (Europe)
Xxxxx Xxxxxx Inc
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") and Xxxxxx Xxxxxxx & Co. International Limited ("MSIL")
propose to enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT")
with Eclipsys Corporation, a Delaware corporation (the "COMPANY"), and ALLTEL
Information Services, Inc., a shareholder of the Company (the "SELLING
SHAREHOLDER"), providing for the public offering (the "PUBLIC OFFERING") by the
several Underwriters, including Xxxxxx Xxxxxxx and MSIL (the "UNDERWRITERS"),
of 4,700,000 shares (the "SHARES") of the Common Stock, par value $.01 per
share, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to
38
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (a) the sale of any Shares to the Underwriters
pursuant to the Underwriting Agreement or (b) transactions relating to shares
of Common Stock or other securities acquired in open market transactions after
the completion of the Public Offering. In addition, the undersigned agrees
that, without the prior written consent of Xxxxxx Xxxxxxx on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 180 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for
Common Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
----------------------------------------
(Name)
----------------------------------------
(Address)
2
