Exhibit 1.1
ProBusiness Services, Inc.
_____ Shares Common Stock (1)
UNDERWRITING AGREEMENT
______________, 1998
Xxxxxxx Xxxxx & Company, L.L.C.
BancAmerica Xxxxxxxxx Xxxxxxxx
XX Xxxxx Securities Corporation
As Representatives of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. ProBusiness Services, Inc. ("COMPANY") a
Delaware corporation, has an authorized capital stock consisting of 5,000,000
shares of Preferred Stock, $0.001 par value, none of which were outstanding as
of June 30, 1998 and 60,000,000 shares, $0.001 par value, of Common Stock
("COMMON STOCK"), of which ________ shares were outstanding as of such date.
The Company proposes to issue and sell ________ shares of its authorized but
unissued Common Stock ("FIRM SHARES") to the several underwriters named in
Schedule A as it may be amended by the Pricing Agreement hereinafter defined
("UNDERWRITERS"), who are acting severally and not jointly. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to
__________ additional shares of Common Stock ("OPTION SHARES") as provided in
Section 4 hereof. The Firm Shares and, to the extent such option is exercised,
the Option Shares, are hereinafter collectively referred to as the "SHARES."
You have advised the Company that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon as you deem
advisable after the registration statement hereinafter referred to becomes
effective, if it has not yet become effective, and the Pricing Agreement
hereinafter defined has been executed and delivered.
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(1) Plus an option to acquire up to _____ additional shares to cover
overallotments.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and the Representatives, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form of
Exhibit A hereto (the "PRICING AGREEMENT"). The Pricing Agreement may take the
form of an exchange of any standard form of written telecommunication between
the Company and the Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Shares
will be governed by this Agreement, as supplemented by the Pricing Agreement.
From and after the date of the execution and delivery of the Pricing Agreement,
this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company hereby confirms its agreement with the Underwriters as follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-_____) and a
related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("COMMISSION") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 ACT;" all references herein
to specific rules are rules promulgated under the 0000 Xxx); and the
Company has so prepared and has filed such amendments thereto, if any, and
such amended preliminary prospectuses as may have been required to the date
hereof. If the Company has elected not to rely upon Rule 430A, the Company
has prepared and will promptly file an amendment to the registration
statement and an amended prospectus. If the Company has elected to rely
upon Rule 430A, it will prepare and file a prospectus pursuant to Rule
424(b) that discloses the information previously omitted from the
prospectus in reliance upon Rule 430A. There have been or will promptly be
delivered to you three signed copies of such registration statement and
amendments, three copies of each exhibit filed therewith, and conformed
copies of such registration statement and amendments (but without exhibits)
and of the related preliminary prospectus or prospectuses and final forms
of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the
time it becomes effective and the prospectus constituting a part thereof
(including the information, if any, deemed to be part thereof pursuant to
Rule 430A(b) and/or Rule 434), as from time to time amended or
supplemented, are hereinafter referred to as the "REGISTRATION STATEMENT,"
and the "PROSPECTUS," respectively, except that if any revised prospectus
shall be provided to the Underwriters by the Company for use in connection
with the offering of the Shares which differs from the Prospectus on file
at the Commission at the time the Registration Statement became or becomes
effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b)), the term Prospectus shall refer to
such revised prospectus from and after the time it was provided to the
Underwriters for such use. If the Company elects to rely on Rule 434 of
the 1933 Act, all references
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to "Prospectus" shall be deemed to include, without limitation, the form
of prospectus and the term sheet, taken together, provided to the
Underwriters by the Company in accordance with Rule 434 of the 1933 Act
("RULE 434 PROSPECTUS"). Any registration statement (including any
amendment or supplement thereto or information which is deemed part
thereof) filed by the Company under Rule 462(b) ("RULE 462(b)
REGISTRATION STATEMENT") shall be deemed to be part of the "Registration
Statement" as defined herein, and any prospectus (including any amendment
or supplement thereto or information which is deemed part thereof)
included in such registration statement shall be deemed to be part of the
"Prospectus", as defined herein, as appropriate. The Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
thereunder are hereinafter collectively referred to as the "EXCHANGE ACT".
(b) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus or instituted proceedings for that
purpose, and each preliminary prospectus has conformed in all material
respects with the requirements of the 1933 Act and, as of its date, has not
included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and when the
Registration Statement became or becomes effective, and at all times
subsequent thereto, up to the First Closing Date and the Second Closing
Date hereinafter defined, as the case may be, the Registration Statement,
including the information deemed to be part of the Registration Statement
at the time of effectiveness pursuant to Rule 430A(b), if applicable, and
the Prospectus and any amendments or supplements thereto, contained and
will contain all material information that is required to be stated therein
in accordance with the 1933 Act and in all material respects conformed or
will in all material respects conform to the requirements of the 1933 Act,
and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, included or will include any untrue
statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that the Company makes no
representation or warranty as to information contained in or omitted from
any preliminary prospectus, the Registration Statement, the Prospectus or
any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for use in the
preparation thereof.
(c) The Company and its subsidiaries have been duly incorporated and
are validly existing as corporations in good standing under the laws of
their respective places of incorporation, with corporate and other power
and authority to own, lease and operate their properties and conduct their
business as described in the Prospectus; the Company and each of its
subsidiaries are duly qualified to do business as foreign corporations
under the corporation law of, and are in good standing as such in, each
jurisdiction in which they own or lease substantial properties, have an
office, or in which substantial business is conducted and such
qualification is required except in any such case where the failure to so
qualify or be in good standing would not have a material adverse effect
upon
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the Company and its subsidiaries taken as a whole; no proceeding of
which the Company has knowledge has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such power and authority or qualification; and each of the
Company and its subsidiaries is in possession of and operating in
compliance with all authorizations, licenses, certificates, consents,
orders and permits from state, federal and other regulatory authorities
which are material to the conduct of its business, all of which are valid
and in full force and effect.
(d) Except as disclosed in the Registration Statement, the Company
owns directly or indirectly 100 percent of the issued and outstanding
capital stock of each of its subsidiaries, free and clear of any claims,
liens, pledges, encumbrances or security interests and all of such capital
stock has been duly authorized and validly issued and is fully paid and
nonassessable.
(e) The issued and outstanding shares of capital stock of the Company
as set forth in the Prospectus have been duly authorized and validly
issued, are fully paid and nonassessable, and conform to the description
thereof contained in the Prospectus.
(f) The Shares have been duly authorized and when issued, delivered
and paid for pursuant to this Agreement, will be validly issued, fully paid
and nonassessable, and will conform to the description thereof contained in
the Prospectus.
(g) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and will not violate any provision of the Company's charter or
bylaws and will not result in a breach of, or be in contravention of, or
constitute a default under (i) any provision of any material agreement,
franchise, license, indenture, mortgage, deed of trust, or other instrument
to which the Company or any subsidiary is a party or by which the Company,
any subsidiary or the property of any of them may be bound or affected, or
(ii) any material order, rule or regulation applicable to the Company or
any subsidiary of any court or regulatory body, administrative agency or
other governmental body having jurisdiction over the Company or any
subsidiary or any of their respective properties, or any order of any court
or governmental agency or authority entered in any proceeding to which the
Company or any subsidiary was or is now a party or by which it is bound.
No consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body, domestic or
foreign, is required for the execution and delivery of this Agreement or
the Pricing Agreement or the consummation of the transactions contemplated
herein or therein, except for compliance with the 1933 Act or the Exchange
Act, or blue sky laws applicable to the public offering of the Shares by
the several Underwriters, which requirements will have been satisfied prior
to the Closing Date (as defined herein) in all material respects, and
clearance of such offering with the National Association of Securities
Dealers, Inc. ("NASD"). This Agreement has been duly executed and
delivered by the Company.
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(h) The accountants who have expressed their opinions with respect to
certain of the financial statements and schedules included in the
Registration Statement are independent accountants as required by the 1933
Act.
(i) The consolidated financial statements and schedules of the
Company included in the Registration Statement as filed with the Commission
present fairly the consolidated financial position of the Company and its
subsidiaries as of the respective dates of such financial statements, and
the consolidated results of operations and cash flows of the Company for
the respective periods covered thereby, all in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed in the Prospectus; and the supporting
schedules included in the Registration Statement present fairly the
information required to be stated therein. The financial information set
forth in the Prospectus under "Selected Consolidated Financial Data"
presents fairly on a basis consistent with the audited financial statements
presented in the Prospectus, the information set forth therein. No other
statements or schedules are required to be included in the Registration
Statement. The pro forma financial statements and other pro forma
information included in the Prospectus present fairly the information shown
therein, have been prepared in accordance with generally accepted
accounting principles and the Commission's rules and guidelines with
respect to pro forma financial statements and other pro forma information,
have been properly compiled on the pro forma basis described therein, and,
in the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
under the circumstances.
(j) Neither the Company nor any subsidiary is in violation of its
charter or bylaws or in default under any consent decree, or in default
with respect to any material provision of any material lease, loan
agreement, franchise, license, permit or other contract obligation to which
it is a party; and there does not exist any state of facts which
constitutes an event of default as defined in such documents or which, with
notice or lapse of time or both, would constitute such an event of default,
in each case, except for defaults which neither singly nor in the aggregate
are material to the Company and its subsidiaries taken as a whole.
(k) There are no material legal or governmental proceedings pending,
or to the best of the Company's knowledge, threatened to which the Company,
any subsidiary or any of their respective officers is or may be a party or
of which material property owned or leased, or rights held, by the Company
or any subsidiary is or may be the subject, or related to environmental or
discrimination matters which are not disclosed in the Prospectus, or which
question the validity of this Agreement or the Pricing Agreement or any
action taken or to be taken pursuant hereto or thereto, or which might
prevent consummation of the transactions contemplated therein, or which is
required to be disclosed in the Registration Statement or the prospectus
and is not so disclosed.
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(l) There are no holders of securities of the Company having rights
to registration thereof or preemptive rights to purchase Common Stock
except as disclosed in the Prospectus. Holders of registration rights have
waived such rights with respect to the offering being made by the
Prospectus.
(m) Except as set forth in the Registration Statement and the
Prospectus, the Company and each of its subsidiaries have good and
marketable title to all the properties and assets reflected as owned in the
financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or encumbrance of
any kind except those, if any, reflected in such financial statements (or
elsewhere in the Prospectus) or which are not material to the Company and
its subsidiaries taken as a whole. The Company and each of its
subsidiaries hold their respective leased properties which are material to
the Company and its subsidiaries taken as a whole under valid and
enforceable leases, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally or by general equitable principles.
The Company and its subsidiaries own or lease all such properties necessary
to its operations as described in the Prospectus.
(n) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by the Prospectus, the Company and its subsidiaries, taken as
a whole, have not incurred any material liabilities or obligations, direct
or contingent, nor entered into any material transactions not in the
ordinary course of business and there has not been any material adverse
change in their condition (financial or otherwise) or results of operations
nor any material change in their capital stock, short-term debt or
long-term debt, nor any dividend or distribution of any kind declared, paid
or made on the capital stock of the Company or a subsidiary. There has not
been any loss or damage (whether or not insured) to the property of the
Company or any subsidiary which has had a material adverse effect on the
Company.
(p) The Company agrees not to sell, contract to sell or otherwise
dispose of any Common Stock or securities convertible into Common Stock
(except Common Stock issued pursuant to currently outstanding options,
warrants or convertible securities) for a period of 90 days after this
Agreement becomes effective without the prior written consent of Xxxxxxx
Xxxxx & Company, L.L.C. Each officer and director of the Company has
agreed in writing that each such person will not, for a period beginning
the date of the writing and ending 90 days from the date of the final
Prospectus (the "LOCK-UP PERIOD"), offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect
to (collectively, a "DISPOSITION") any shares of Common Stock, any options
or
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warrants to purchase any shares of Common Stock or any securities
convertible into or exchangeable for shares of Common Stock (collectively,
"SECURITIES") now owned or hereafter acquired directly by such person or
with respect to which such person has or hereafter acquires the power of
disposition, otherwise than (i) if the undersigned is an individual, he or
she may transfer any Securities either during his or her lifetime or on
death by will or intestacy to his or her immediate family or to a trust,
the beneficiaries of which are exclusively the undersigned and/or a member
or members of his or her immediate family; and (ii) if the undersigned is
an entity, it may transfer Securities as a distribution to limited partners
or shareholders of the undersigned, provided, however, that prior to any
such transfer each transferee shall execute an agreement, satisfactory to
Xxxxxxx Xxxxx & Company, L.L.C., pursuant to which each transferee shall
agree to receive and hold such Securities subject to the provisions hereof.
The foregoing restriction has been expressly agreed to preclude the holder
of the Securities from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition
of Securities during the Lock-up Period, even if such Securities would be
disposed of by someone other than such holder. Such prohibited hedging or
other transactions would include, without limitation, any short sale
(whether or not against the box) or any purchase, sale or grant of any
right (including, without limitation, any put or call option) with respect
to any Securities or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any
significant part of its value from Securities. Furthermore, such person
has also agreed and consented to the entry of stop transfer instructions
with the Company's transfer agent against the transfer of the Securities
held by such person except in compliance with this restriction. The
Company has provided to counsel for the Underwriters a complete and
accurate list of all securityholders of the Company and the number and type
of securities held by each securityholder. The Company has provided to
counsel for the Underwriters true, accurate and complete copies of all of
the agreements pursuant to which its officers, directors and stockholders
have agreed to such or similar restrictions (the "LOCK-UP AGREEMENTS")
presently in effect or effected hereby. The Company hereby represents and
warrants that it will not release any of its officers, directors or other
stockholders from any Lock-up Agreements currently existing or hereafter
effected without the prior written consent of Xxxxxxx Xxxxx & Company,
L.L.C.
(q) There is no material document of the Company or its subsidiaries
of a character required to be described or referred to in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which is not accurately described in all material
respects or filed as required.
(r) The Company together with its subsidiaries owns and possesses all
right, title and interest in and to, or has duly licensed from third
parties, all patents, patent rights, trade secrets, inventions, know-how,
trademarks, trade names, copyrights, service marks and other proprietary
rights ("TRADE RIGHTS") material to the business of the Company and each of
its subsidiaries taken as a whole. Neither the Company nor any of its
subsidiaries has received any notice of, and neither has knowledge of, any
infringement, misappropriation or conflict from any third party as to such
material
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Trade Rights which has not been resolved or disposed of and neither the
Company nor any of its subsidiaries has infringed, misappropriated or
otherwise conflicted with material Trade Rights of any third parties,
which infringement, misappropriation or conflict would have a material
adverse effect upon the condition (financial or otherwise), of the Company
and its subsidiaries taken as a whole.
(s) The conduct of the business of the Company and each of its
subsidiaries is in compliance in all respects with applicable federal,
state, local and foreign laws and regulations, except where the failure to
be in compliance would not have a material adverse effect upon the
condition (financial or otherwise) or results of operations of the Company
and its subsidiaries taken as a whole.
(t) All offers and sales of the Company's capital stock have been
issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities, and the authorized and outstanding
capital stock of the Company is as set forth in the Prospectus under the
caption "Capitalization" as of the date stated therein and conforms in all
material respects to the statements relating thereto contained in the
Registration Statement and the Prospectus (and such statements correctly
state the substance of the instruments defining the capitalization of the
Company in all material respects); the Firm Shares and the Option Shares
have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and delivered by the Company
against payment therefor in accordance with the terms of this Agreement,
will be duly and validly issued and fully paid and nonassessable, and will
be sold free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest; and no preemptive right, co-sale right,
registration right, right of first refusal or other similar right of
stockholders exists with respect to any of the Firm Shares or Option Shares
or the issuance and sale thereof other than those that have been expressly
waived prior to the date hereof and those that will automatically expire
upon and will not apply to the consummation of the transactions
contemplated on the Closing Date. No further approval or authorization of
any stockholder, the Board of Directors of the Company or others is
required for the issuance and sale or transfer of the Shares except as may
be required under the 1933 Act or the Exchange Act or under state or other
securities or blue sky laws. All issued and outstanding shares of capital
stock of each subsidiary of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, and were not issued in
violation of or subject to any preemptive right or other rights to
subscribe for or purchase shares and are owned by the Company free and
clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest. Except as disclosed in the Prospectus and the
financial statements of the Company, and the related notes thereto,
included in the Prospectus, the Company does not have outstanding any
options to purchase, or any preemptive rights or other rights to subscribe
for or to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations. The
description of the Company's stock option, stock bonus and other stock
plans or arrangements, and the options or other rights granted and
exercised thereunder, set forth in the Prospectus accurately and fairly
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presents the information required to be shown with respect to such plans,
arrangements, options and rights.
(u) The Company has timely filed all necessary federal and state
income and franchise tax returns and has paid all taxes shown as due
thereon, and there is no tax deficiency that has been, or to the best
knowledge of the Company might be, asserted against the Company or its
subsidiaries or any of its properties or assets that would or could have a
material adverse affect upon the condition (financial or otherwise) of the
Company and its subsidiaries taken as a whole, and all tax liabilities are
adequately provided for on the books of the Company and its subsidiaries.
(v) A registration statement relating to the Common Stock has been
declared effective by the Commission pursuant to the Exchange Act and the
Common Stock is duly registered thereunder. The Shares have been listed on
the Nasdaq National Market, subject to notice of issuance or sale of the
Shares, as the case may be.
(w) The Company has been advised concerning the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder (the
"INVESTMENT COMPANY ACT"), and the Company does not, and does not intend to
conduct its business in a manner in which it would become, an "investment
company" of "controlled" by an "investment company" as defined in
Section 3(a) of the Investment Company Act.
(x) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA.
(y) Neither the Company nor any subsidiary has at any time during the
past five (5) years (i) made any unlawful contribution to any candidate for
foreign office or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any federal or state governmental officer
or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.
(z) The Company and each subsidiary maintain insurance with insurers
of recognized financial responsibility of the types and in the amounts
generally deemed adequate for their respective business and consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal
property owned or leased by the Company or any subsidiary against theft,
damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect;
neither the Company nor any subsidiary has been refused any insurance
coverage sought or applied for; and neither the Company nor any 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
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be necessary to continue its business at a cost that would not materially
and adversely affect the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and the
subsidiaries considered as one enterprise.
(aa) To the best of Company's knowledge, no labor disturbance by the
employees of the Company or any subsidiary exists or is imminent; and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal third-party service providers that might
be expected to result in a material adverse change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and the subsidiaries considered as one enterprise.
No collective bargaining agreement exists with any of employees of the
Company or any subsidiary and, to the best of the Company's knowledge, no
such agreement is imminent.
(bb) Each of the Company and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(cc) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any subsidiary or any of the members of the
families of any of them that are required to be disclosed in the
Registration Statement and Prospectus that are not so disclosed.
(dd) Except as set forth in the Registration Statement and Prospectus,
(i) each of the Company and the Subsidiary is in compliance with all rules,
laws and regulations relating to the use, treatment, storage and disposal
of toxic substances and protection of health or the environment
("Environmental Laws") which are applicable to its business, (ii) neither
the Company nor the Subsidiary has received notice from any governmental
authority or third party of an asserted claim under Environmental Laws,
which claim is required to be disclosed in the Registration Statement and
the Prospectus, (iii) to its knowledge, neither the Company nor the
Subsidiary has conducted any activities that would require it to make
future material capital expenditures to comply with Environmental Laws and
(iv) no property which is owned, leased or occupied by the Company or the
Subsidiary has been designated as a Superfund site pursuant to the
Comprehensive Response, Compensation, and Liability Act of 1980, as amended
(42 U.S.C. Section 9601, ET SEQ.), or otherwise designated as a
contaminated site under applicable state or local law.
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(ee) The agreements to which the Company or the Subsidiary is a party
described in the Registration Statement and Prospectus are valid
agreements, enforceable by the Company and the Subsidiary (as applicable)
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles
and, to the best of the Company's knowledge, the other contracting party or
parties thereto are not in material breach or material default under any of
such agreements.
(ff) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date, or any date on which Option Shares are
to be purchased, as the case may be, and (ii) completion of the
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectuses,
the Prospectus, the Registration Statement and other materials, if any,
permitted by the Act.
(gg) All outstanding shares of capital stock of the Company have been
issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities, and the authorized and outstanding
capital stock of the Company is as set forth in the Prospectus under the
caption "Capitalization" as of the date stated therein and conforms in all
material respects to the statements relating thereto contained in the
Registration Statement and the Prospectus (and such statements correctly
state the substance of the instruments defining the capitalization of the
Company in all material respects); the Firm Shares and the Option Shares
have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and delivered by the Company
against payment therefor in accordance with the terms of this Agreement,
will be duly and validly issued and fully paid and nonassessable, and will
be sold free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest; and no preemptive right, co-sale right,
registration right, right of first refusal or other similar right of
stockholders exists with respect to any of the Firm Shares or Option Shares
or the issuance and sale thereof other than those that have been expressly
waived prior to the date hereof and those that will automatically expire
upon and will not apply to the consummation of the transactions
contemplated on the Closing Date. No further approval or authorization of
any stockholder, the Board of Directors of the Company or others is
required for the issuance and sale or transfer of the Shares except as may
be required under the Act or the Exchange Act or under state or other
securities or blue sky laws. All issued and outstanding shares of capital
stock of each subsidiary of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, and were not issued in
violation of or subject to any preemptive right or other rights to
subscribe for or purchase shares and are owned by the Company free and
clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest. Except as disclosed in the Prospectus and the
financial statements of the Company, and the related notes thereto,
included in the Prospectus, the Company does not have has outstandng any
options to purchase, or any preemptive rights or other rights to subscribe
for or to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock or
any such options,
-11-
rights, convertible securities or obligations. The description of the
Company's stock option, stock bonus and other stock plans or arrangements,
and the options or other rights granted and exercised thereunder, set
forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options
and rights.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representatives, on behalf of the several Underwriters, represent and warrant
to the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering and (b) under "Underwriting" in the Prospectus was furnished to the
Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and is correct and complete in all
material respects.
SECTION 4. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of
the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to sell to
the Underwriters named in Schedule A hereto, and the Underwriters agree,
severally and not jointly, to purchase the Firm Shares from the Company at
the price per share set forth in the Pricing Agreement. The obligation of
each Underwriter to the Company shall be to purchase from the Company that
number of full shares which (as nearly as practicable, as determined by you)
bears to ________________, the same proportion as the number of Shares set
forth opposite the name of such Underwriter in Schedule A hereto bears to the
total number of Firm Shares to be purchased by all Underwriters under this
Agreement. The initial public offering price and the purchase price shall be
set forth in the Pricing Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted
under Rule 15c6-1 under the Exchange Act, (or the third business day if
required under Rule 15c6-1 under the Exchange Act or unless postponed in
accordance with the provisions of Section 12) following the date the
Registration Statement becomes effective (or, if the Company has elected to
rely upon Rule 430A, the fourth business day, if permitted under Rule 15c6-1
under the Exchange Act, (or the third business day if required under Rule
15c6-1 under the Exchange Act) after execution of the Pricing Agreement), or
such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company, the Company will deliver
to you at the offices of counsel for the Underwriters or through the
facilities of The Depository Trust Company for the accounts of the several
Underwriters, certificates representing the Firm Shares to be sold by it
against payment of the purchase price therefor by delivery of federal or
other immediately available funds, by wire transfer or otherwise, to the
Company. Such time of delivery and payment is herein referred to as the
"First Closing Date." The certificates for the Firm Shares so to be delivered
will be in such denominations and registered in such names as you request by
notice to the Company prior to 10:00 A.M., Chicago Time, on the second full
business day preceding the First Closing Date, and will be made available at
the Company's expense for checking and packaging by the Representatives at
10:00 A.M., Chicago Time, on the business day preceding the First Closing
Date. Payment for the Firm Shares so to be delivered shall be made at the
time and in the manner described above at the offices of counsel for the
Underwriters.
-12-
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of ________ Option
Shares, at the same purchase price per share to be paid for the Firm Shares,
for use solely in covering any overallotments made by the Underwriters in the
sale and distribution of the Firm Shares. The option granted hereunder may
be exercised at any time (but not more than once) within 30 days after the
date of the initial public offering upon notice by you to the Company setting
forth the aggregate number of Option Shares as to which the Underwriters are
exercising the option, the names and denominations in which the certificates
for such shares are to be registered and the time and place at which such
certificates will be delivered. Such time of delivery (which may not be
earlier than the First Closing Date), being herein referred to as the "Second
Closing Date," shall be determined by you, but if at any time other than the
First Closing Date, shall not be earlier than three nor later than 10 full
business days after delivery of such notice of exercise. The number of
Option Shares to be purchased by each Underwriter shall be determined by
multiplying the number of Option Shares to be sold by a fraction, the
numerator of which is the number of Firm Shares to be purchased by such
Underwriter as set forth opposite its name in Schedule A and the denominator
of which is the total number of Firm Shares (subject to such adjustments to
eliminate any fractional share purchases as you in your absolute discretion
may make). Certificates for the Option Shares will be made available at the
Company's expense for checking and packaging at 10:00 A.M., Chicago Time, on
the first full business day preceding the Second Closing Date. The manner of
payment for and delivery of the Option Shares shall be the same as for the
Firm Shares as specified in the preceding paragraph.
You have advised the Company that each Underwriter has authorized you to
accept delivery of its Shares, to make payment and to receipt therefor. You,
individually and not as the Representatives of the Underwriters, may make
payment for any Shares to be purchased by any Underwriter whose funds shall
not have been received by you by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any obligation hereunder.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and
agrees that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose, and will also advise you promptly of any
request of the Commission for amendment or supplement of the Registration
Statement, of any preliminary prospectus or of the Prospectus, or for
additional information.
(b) The Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement (including any post-
effective amendment) or any Rule 462(b)
-13-
Registration Statement or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by
the Underwriters in connection with the offering of the Shares which
differs from the prospectus on file at the Commission at the time the
Registration Statement became or becomes effective, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) and
any term sheet as contemplated by Rule 434) and will furnish you with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not
file any such amendment or supplement or use any such prospectus to
which you or counsel for the Underwriters shall reasonably object.
(c) If the Company elects to rely on Rule 434 of the 1933 Act, the
Company will prepare a term sheet that complies with the requirements of
Rule 434. If the Company elects not to rely on Rule 434, the Company will
provide the Underwriters with copies of the form of prospectus, in such
numbers as the Underwriters may reasonably request, and file with the
Commission such prospectus in accordance with Rule 424(b) of the 1933 Act
by the close of business in New York City on the second business day
immediately succeeding the date of the Pricing Agreement. If the Company
elects to rely on Rule 434, the Company will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such numbers as the
Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
include an untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) to comply with
the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; and, in case any Underwriter is required to deliver
a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the 1933 Act.
(e) Neither the Company nor any of its subsidiaries will, prior to
the earlier of the Second Closing Date or termination or expiration of the
related option, incur any liability or obligation, direct or contingent, or
enter into any material transaction, other than in the ordinary course of
business, except as contemplated by the Prospectus.
-14-
(f) Neither the Company nor any of its subsidiaries will acquire any
capital stock of the Company prior to the earlier of the Second Closing
Date or termination or expiration of the related option nor will the
Company declare or pay any dividend or make any other distribution upon the
Common Stock payable to stockholders of record on a date prior to the
earlier of the Second Closing Date or termination or expiration of the
related option, except in either case as contemplated by the Prospectus.
(g) Not later than November 30, 1999 the Company will make generally
available to its securityholders an earnings statement (which need not be
audited) covering a period of at least 12 months beginning after the
effective date of the Registration Statement, which will satisfy the
provisions of the last paragraph of Section 11(a) of the 1933 Act.
(h) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, copies of the
Registration Statement, the Prospectus, each preliminary prospectus and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as you may reasonably request, for the
purposes contemplated by the 1933 Act.
(i) The Company will cooperate with the Underwriters in qualifying or
registering the Shares for sale under the blue sky laws of such
jurisdictions as you designate, and will continue such qualifications in
effect so long as reasonably required for the distribution of the Shares.
The Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any such jurisdiction where
it is not currently qualified or where it would be subject to taxation as a
foreign corporation.
(j) During the period of five years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon as
practicable after the filing thereof, of each report filed by the Company
with the Commission, any securities exchange or the NASD; (ii) as soon as
practicable after the release thereof, of each material press release in
respect of the Company; and (iii) as soon as available, of each report of
the Company mailed to stockholders.
(k) The Company will use the net proceeds received by it from the
sale of the Shares being sold by it in the manner specified in the
Prospectus.
(l) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A and/or Rule 434, then immediately following the execution of the
Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A, Rule 424(b)
and/or Rule 434, copies of an amended Prospectus, or, if required by such
Rule 430A and/or Rule 434, a post-effective
-15-
amendment to the Registration Statement (including an amended Prospectus),
containing all information so omitted. If required, the Company will
prepare and file, or transmit for filing, a Rule 462(b) Registration
Statement not later than the date of the execution of the Pricing
Agreement. If a Rule 462(b) Registration Statement is filed, the Company
shall make payment of, or arrange for payment of, the additional
registration fee owing to the Commission required by Rule 111.
(m) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National Market.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as
to all of its provisions or is terminated, the Company agrees to pay (i) all
costs, fees and expenses (other than legal fees and disbursements of counsel
for the Underwriters and the expenses incurred by the Underwriters) incurred
in connection with the performance of the Company's obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the
preparation, printing, filing and distribution of the Registration Statement,
each preliminary prospectus and the Prospectus (including exhibits and
financial statements) and all amendments and supplements provided for herein,
this Agreement, the Pricing Agreement and the blue sky Memorandum, (ii) all
costs, fees and expenses (including legal fees not to exceed $__________ and
disbursements of counsel for the Underwriters) incurred by the Underwriters
in connection with qualifying or registering all or any part of the Shares
for offer and sale under blue sky laws, including the preparation of a blue
sky memorandum relating to the Shares and clearance of such offering with the
NASD; and (iii) all fees and expenses of the Company's transfer agent,
printing of the certificates for the Shares and all transfer taxes, if any,
with respect to the sale and delivery of the Shares to the several
Underwriters.
SECTION 7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm
Shares on the First Closing Date and the Option Shares on the Second Closing
Date shall be subject to the accuracy of the representations and warranties
on the part of the Company herein set forth as of the date hereof and as of
the First Closing Date or the Second Closing Date, as the case may be, to the
accuracy of the statements of officers of the Company made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 1:00 P.M.,
Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 1:00 P.M., Chicago Time, on the third full business day
following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company or you, shall be
-16-
contemplated by the Commission. If the Company has elected to rely upon
Rule 430A and/or Rule 434, the information concerning the initial public
offering price of the Shares and price-related information shall have
been transmitted to the Commission for filing pursuant to Rule 424(b)
within the prescribed period and the Company will provide evidence
satisfactory to the Representatives of such timely filing (or a
post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of
Rules 430A and 424(b)). If a Rule 462(b) Registration Statement is
required, such Registration Statement shall have been transmitted to the
Commission for filing and become effective within the prescribed time
period and, prior to the First Closing Date, the Company shall have
provided evidence of such filing and effectiveness in accordance with
Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky
laws of such states as shall have been specified by the Representatives.
(c) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form of
the certificates representing the Shares, the execution and delivery of
this Agreement and the Pricing Agreement, and all corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial statements) shall have been
approved by counsel for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its subsidiaries, whether or not arising in the ordinary
course of business, which, in the judgment of the Representatives, makes it
impractical or inadvisable to proceed with the public offering or purchase
of the Shares as contemplated hereby.
(f) There shall have been furnished to you, as Representatives of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
(i) An opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.,
counsel for the Company, addressed to the Underwriters and dated the
First Closing Date or the Second Closing Date, as the case may be,
to the effect that:
-17-
(1) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation;
(2) The Company has the corporate power and authority to
own, lease and operate its properties and to conduct its business
as described in the Prospectus;
(3) The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction,
if any, in which the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where
the failure to be so qualified or be in good standing would not
have a material adverse effect on the condition (financial or
otherwise), earnings, operations or business of the Company and the
Subsidiary considered as one enterprise. To such counsel's
knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
BeneSphere Administrators, Inc.;
(4) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus under the caption
"Capitalization" as of the date stated therein, the issued and
outstanding shares of capital stock of the Company have been duly
and validly issued and are fully paid and nonassessable, and, to
such counsel's knowledge, will not have been issued in violation of
or subject to any preemptive right, co-sale right, registration
right, right of first refusal or other similar right;
(5) The Firm Shares or the Option Shares, as the case
may be, to be issued by the Company pursuant to the terms of this
Agreement have been duly authorized and, upon issuance and delivery
against payment therefor in accordance with the terms hereof, will
be duly and validly issued and fully paid and nonassessable, and
will not have been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of first
refusal or other similar right;
(6) The Company has the corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it hereunder;
(7) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has been
duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by you, is a valid and
binding agreement of the Company, enforceable in accordance with
its terms, except insofar as indemnification provisions may be
limited by applicable law and except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally
or by general equitable principles;
-18-
(8) The Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are pending or threatened under the Act;
(9) The Registration Statement and the Prospectus, and
each amendment or supplement thereto (other than the financial
statements, including supporting schedules, and financial data
derived therefrom, as to which such counsel need express no
opinion), as of the effective date of the Registration Statement,
complied as to form in all material respects with the requirements
of the Act and the applicable Rules and Regulations;
(10) The information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such
counsel and is a fair summary of such matters and conclusions; and
the forms of certificates evidencing the Common Stock and filed as
exhibits to the Registration Statement comply with Delaware law;
(11) The description in the Registration Statement and
the Prospectus of the charter and bylaws of the Company and of
federal statutes and the General Corporation Law of the State of
Delaware are accurate summaries thereof and fairly present the
information required to be presented by the Act and the applicable
Rules and Regulations;
(12) To such counsel's knowledge, there are no
agreements, contracts, leases or documents to which the Company is
a party of a character required to be described or referred to in
the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which are not described or
referred to therein or filed as required;
(13) The performance of this Agreement and the
consummation of the transactions herein contemplated (other than
performance of the Company's indemnification obligations hereunder,
concerning which no opinion need be expressed) will not (a) result
in any violation of the Company's charter or bylaws or (b) to such
counsel's knowledge, result in a material breach or violation of
any of the terms and provisions of, or constitute a material
default under, any material bond, debenture, note or other evidence
of indebtedness, or any material lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument known to such counsel to which the Company
is a party or by which its properties are bound, or any applicable
statute, rule or regulation known to such counsel or, to such
counsel's knowledge, any material order, writ or decree of any
court, government or governmental agency or body having
jurisdiction over the Company or over any of its properties or
operations;
-19-
(14) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or
body having jurisdiction over the Company or over any of its
properties or operations is necessary in connection with the
consummation by the Company of the transactions herein
contemplated, except such as have been obtained under the Act or
such as may be required under state or other securities or Blue Sky
laws in connection with the purchase and the distribution of the
Shares by the Underwriters;
(15) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company
or the Subsidiary of a character required to be disclosed in the
Registration Statement or the Prospectus by the Act or the Rules
and Regulations, other than those described therein;
(16) To such counsel's knowledge, the Company is not
presently (a) in material violation of its charter or bylaws or (b)
in material breach of any order, writ or decree of any court or
governmental agency or body having jurisdiction over the Company or
over any of its properties or operations; and
(17) To such counsel's knowledge, except as set forth in
the Registration Statement and Prospectus, no holders of Common
Stock or other securities of the Company have registration rights
with respect to securities of the Company and, except as set forth
in the Registration Statement and Prospectus, all holders of
securities of the Company having rights known to such counsel to
registration of such shares of Common Stock or other securities,
because of the filing of the Registration Statement by the Company
have, with respect to the offering contemplated by this Agreement,
waived such rights or such rights have expired by reason of lapse
of time following notification of the Company's intent to file the
Registration Statement.
In addition, such counsel shall state that such counsel has
participated in conferences with certain officers and other
representatives of the Company, including its independent certified
public accountants and with you and your counsel, at which such
conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed, and although they
have not independently verified the accuracy, completeness or
fairness of such information, nothing has come to the attention of
such counsel which leads them to believe that, at the time the
Registration Statement became effective and at all times subsequent
thereto up to and on the Closing Date and on any later date on
which Option Shares are to be purchased, the Registration Statement
(other than the financial statements, including supporting
schedules, and other financial and statistical information derived
therefrom, as to which such counsel need express no comment)
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
-20-
statements therein not misleading, or at the Closing Date or
any later date on which the Option Shares are to be purchased, as the case
may be, the Prospectus (except as aforesaid) contained any untrue statement
of a material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions
of law not involving the laws of the United States or the State of
California and Delaware upon opinions of local counsel, and as to
questions of fact upon representations or certificates of officers of
the Company, and of government officials, in which case their opinion
is to state that they are so relying and that they have no knowledge
of any material misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation
or certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' Counsel.
In rendering such opinion, such counsel may state that they are
relying upon the certificate of Norwest Bank Minnesota, National
Association, the transfer agent for the Common Stock, as to the number of
shares of Common Stock at any time or times outstanding, and that insofar
as their opinion under clause (7) above relates to the accuracy and
completeness of the Prospectus and Registration Statement, it is based upon
a general review with the Company's representatives and independent
accountants of the information contained therein, without independent
verification by such counsel of the accuracy or completeness of such
information. Such counsel may also rely upon the opinions of other
competent counsel and, as to factual matters, on certificates of officers
of the Company and of state officials, in which case their opinion is to
state that they are so doing and copies of said opinions or certificates
are to be attached to the opinion unless said opinions or certificates (or,
in the case of certificates, the information therein) have been furnished
to the Representatives in other form.
(ii) Such opinion or opinions of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
P.C., counsel for the Underwriters, dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to the incorporation
of the Company, the validity of the Shares, the Registration Statement and
the Prospectus and other related matters as you may reasonably require, and
the Company shall have furnished to such counsel such documents and shall
have exhibited to them such papers and records as they request for the
purpose of enabling them to pass upon such matters.
(iii) A certificate of the chief executive officer and the chief
financial officer of the Company, dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
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(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of the
date of this Agreement and as of the First Closing Date or the
Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such
Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary prospectus
filed as a part of the Registration Statement or any amendment
thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued; and to the best knowledge
of the respective signers, no proceedings for that purpose have
been instituted or are pending or contemplated under the 1933 Act.
The delivery of the certificate provided for in this subparagraph
shall be and constitute a representation and warranty of the Company as to
the facts required in the immediately foregoing clauses (1) and (2) of this
subparagraph to be set forth in said certificate.
(iv) At the time the Pricing Agreement is executed and also on the
First Closing Date or the Second Closing Date, as the case may be, there
shall be delivered to you a letter addressed to you, as Representatives of
the Underwriters, from Ernst & Young, LLP independent auditors, the first
one to be dated the date of the Pricing Agreement, the second one to be
dated the First Closing Date and the third one (in the event of a second
closing) to be dated the Second Closing Date, to the effect set forth in
Schedule B. There shall not have been any change or decrease specified in
the letters referred to in this subparagraph which makes it impractical or
inadvisable in the judgment of the Representatives to proceed with the
public offering or purchase of the Shares as contemplated hereby.
(v) Such further certificates and documents as you may reasonably
request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Xxxxxx Godward LLP, counsel for the Underwriters, which approval shall not be
unreasonably withheld. The Company shall furnish you with such manually signed
or conformed copies of such opinions, certificates, letters and documents as you
request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification to the Company
without liability on the part of any Underwriter or the Company, except for
the expenses to be paid or reimbursed by the Company pursuant to Sections 6
and 10 hereof and except to the extent provided in Section 11 hereof.
-22-
SECTION 8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, unless such
failure to satisfy such condition or to comply with any provision hereof is due
to the default or omission of any Underwriter, the Company agrees to reimburse
you and the other Underwriters upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
reasonably incurred by you and them in connection with the proposed purchase and
the sale of the Shares. Any such termination shall be without liability of any
party to any other party except that the provisions of this Section, Section 6
and Section 10 shall at all times be effective and shall apply.
SECTION 9. EFFECTIVENESS OF REGISTRATION STATEMENT. You and the
Company will use your and its best efforts to cause the Registration Statement
to become effective, if it has not yet become effective, and to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
SECTION 10. INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the 1933 Act or the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the 1933 Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including the information
deemed to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A and/or Rule 434, if applicable, any preliminary
prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that (i) any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus to such person
at or prior to the confirmation
-23-
of the sale of such Shares in any case where such delivery is required by the
1933 Act. In addition to its other obligations under this Section 10(a), the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based
upon any statement or omission, or any alleged statement or omission,
described in this Section 10(a), it will reimburse the Underwriters on a
monthly basis for all reasonable legal and other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Company's obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the 1933 Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company, or any such director, officer or controlling
person may become subject under the 1933 Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus, or any amendment or
supplement thereto in reliance upon and in conformity with Section 3 of this
Agreement or any other written information furnished to the Company by such
Underwriter through the Representatives specifically for use in the preparation
thereof; and will reimburse any legal or other expenses reasonably incurred by
the Company, or any such director, officer or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action. In addition to their other obligations under this Section 10(b), the
Underwriters agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 10(b), they will reimburse the Company on a monthly basis for all
reasonable legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. This indemnity agreement will be
in addition to any liability which such Underwriter may otherwise have.
-24-
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; PROVIDED, HOWEVER,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a)
representing all indemnified parties not having different or additional defenses
or potential conflicting interest among themselves who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnifid 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 arising out
of such proceeding.
(d) If the indemnification provided for in this Section is unavailable to
an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Underwriters in
connection
-25-
with the statements or omissions which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and
the Underwriters shall be deemed to be in the same proportion in the case of
the Company as the total price paid to the Company for the Shares by the
Underwriters (net of underwriting discount but before deducting expenses),
and in the case of the Underwriters as the underwriting discount received by
them bears to the total of such amounts paid to the Company and received by
the Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages and liabilities referred
to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section, 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 which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section are several
in proportion to their respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
SECTION 11. DEFAULT OF UNDERWRITERS. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Shares
hereunder, and of each Underwriter to purchase the Shares hereunder, that,
except as hereinafter in this paragraph provided, each of the Underwriters shall
purchase and pay for all Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representatives of all such Shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Shares hereunder on the First Closing Date and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10 percent of the total number of
Shares which the Underwriters are obligated to purchase on the First Closing
Date, the Representatives may make arrangements satisfactory to the Company for
the purchase of such Shares by other persons, including any of the Underwriters,
but if no such arrangements are made by such date the nondefaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Shares which such defaulting Underwriters agreed but
failed to purchase on such
-26-
date. If any Underwriter or Underwriters so default and the aggregate number
of Shares with respect to which such default or defaults occur is more than
the above percentage and arrangements satisfactory to the Representatives and
the Company for the purchase of such Shares by other persons are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any nondefaulting Underwriter or the Company, except
for the expenses to be paid by the Company pursuant to Section 6 hereof and
except to the extent provided in Section 10 hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 12. EFFECTIVE DATE. This Agreement shall become effective
immediately as to Sections 6, 8, 10 and 13 and as to all other provisions at
10:00 A.M., Chicago Time, on the day following the date upon which the Pricing
Agreement is executed and delivered, unless such a day is a Saturday, Sunday or
holiday (and in that event this Agreement shall become effective at such hour on
the business day next succeeding such Saturday, Sunday or holiday); but this
Agreement shall nevertheless become effective at such earlier time after the
Pricing Agreement is executed and delivered as you may determine on and by
notice to the Company or by release of any Shares for sale to the public. For
the purposes of this Section, the Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Shares or upon the release by you of telegrams (i) advising
Underwriters that the Shares are released for public offering, or (ii) offering
the Shares for sale to securities dealers, whichever may occur first.
SECTION 13. TERMINATION. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
or by you by notice to the Company at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company to any
Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 6 hereof and except to the extent provided in Section 10 hereof) or
of any Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 4, if exercised, may be
cancelled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange shall have been suspended or
minimum prices shall have been established on such exchange, or (ii) a
banking moratorium shall have been declared by Illinois, New York, or
United States authorities, or (iii) there shall have been
-27-
any change in financial markets or in political, economic or financial
conditions which, in the opinion of the Representatives, either renders
it impracticable or inadvisable to proceed with the offering and sale of
the Shares on the terms set forth in the Prospectus or materially and
adversely affects the market for the Shares, or (iv) there shall have been
an outbreak of major armed hostilities between the United States and any
foreign power which in the opinion of the Representatives makes it
impractical or inadvisable to offer or sell the Shares. Any termination
pursuant to this paragraph (b) shall be without liability on the part of
any Underwriter to the Company or on the part of the Company to any
Underwriter (except for expenses to be paid or reimbursed pursuant to
Section 6 hereof and except to the extent provided in Section 10 hereof).
SECTION 14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, principals, members, officers or
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Shares sold hereunder.
SECTION 15. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o Xxxxxxx Xxxxx & Company, L.L.C., 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, with a copy to Xxxxxxx X. Xxxxxxxx, Xxxxxx Godward LLP,
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; and if sent to
the Company will be mailed, delivered or telegraphed and confirmed to the
Company at its corporate headquarters with a copy to Xxxx X. Xxxxxx, Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx, 00000.
SECTION 16. SUCCESSORS. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal representatives and assigns, and to the benefit
of the officers and directors and controlling persons referred to in Section 10,
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchase.
SECTION 17. REPRESENTATION OF UNDERWRITERS. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
SECTION 18. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 19. APPLICABLE LAW. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
-28-
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters
including you, all in accordance with its terms.
Very truly yours,
PROBUSINESS SERVICES, INC.
By
Xxxxxx X. Xxxxxx
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
BANCAMERICA XXXXXXXXX XXXXXXXX
XX XXXXX SECURITIES CORPORATION
Acting as Representatives of the several
Underwriters named in Schedule A.
By Xxxxxxx Xxxxx & Company, L.L.C.
By
-------------------------------------------
-29-
SCHEDULE A
Number of Firm Shares to be
Underwriter Purchased
----------- ----------------------------
Xxxxxxx Xxxxx & Company, L.L.C . . . . . . . .
BancAmerica Xxxxxxxxx Xxxxxxx. . . . . . . . .
XX Xxxxx Securities Corporatio . . . . . . . .
-----------------------------
TOTAL. . . . . . . . . . . . . . .
-----------------------------
-----------------------------
SCHEDULE B
Comfort Letter of Ernst & Young, LLP
(1) They are independent public accountants with respect to the Company
and its subsidiaries within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and schedules
of the Company and its subsidiaries included in the Registration Statement and
the consolidated financial statements of the Company from which the information
presented under the caption "Selected Consolidated Financial Data" has been
derived which are stated therein to have been examined by them comply as to form
in all material respects with the applicable accounting requirements of the 1933
Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company and its subsidiaries responsible for financial
and accounting matters as to transactions and events subsequent to ____________,
1998, a reading of minutes of meetings of the stockholders and directors of the
Company and its subsidiaries since ____________, 1998, a reading of the latest
available interim unaudited consolidated financial statements of the Company and
its subsidiaries (with an indication of the date thereof) and other procedures
as specified in such letter, nothing came to their attention which caused them
to believe that (i) the unaudited consolidated financial statements of the
Company and its subsidiaries included in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act or that such unaudited financial statements are not
fairly presented in accordance with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements included in the Registration Statement, and (ii) at a specified date
not more than five days prior to the date thereof in the case of the first
letter and not more than two business days prior to the date thereof in the case
of the second and third letters, there was any change in the capital stock or
long-term debt or short-term debt (other than normal payments) of the Company
and its subsidiaries on a consolidated basis or any decrease in consolidated net
current assets or consolidated stockholders' equity as compared with amounts
shown on the latest unaudited balance sheet of the Company included in the
Registration Statement or for the period from the date of such balance sheet to
a date not more than five days prior to the date thereof in the case of the
first letter and not more than two business days prior to the date thereof in
the case of the second and third letters, there were any decreases, as compared
with the corresponding period of the prior year, in consolidated net sales,
consolidated income before income taxes or in the total or per share amounts of
consolidated net income except, in all instances, for changes or decreases which
the Prospectus discloses have occurred or may occur or which are set forth in
such letter.
(4) They have carried out specified procedures, which have been agreed to
by the Representatives, with respect to certain information in the Prospectus
specified by the Representatives, and on
the basis of such procedures, they have found such information to be in
agreement with the general accounting records of the Company and its
subsidiaries.
-32-
EXHIBIT A
PROBUSINESS SERVICES, INC.
____________ Shares Common Stock (2)
---------------------
(2)Plus an option to acquire up to _______ additional shares to cover
overallotments.
PRICING AGREEMENT
____________, 1998
Xxxxxxx Xxxxx & Company, L.L.C.
BancAmerica Xxxxxxxxx Xxxxxxxx
XX Xxxxx Securities Corporation
As Representatives of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated ____________, 1998 (the
"UNDERWRITING AGREEMENT") relating to the sale by the Company and the purchase
by the several Underwriters for whom Xxxxxxx Xxxxx & Company, L.L.C.,
BancAmerica Xxxxxxxxx Xxxxxxxx and XX Xxxxx Securities Corporation are acting as
representatives (the "REPRESENTATIVES"), of the above Shares. All terms herein
shall have the definitions contained in the Underwriting Agreement except as
otherwise defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company agrees
with the Representatives as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares to be paid by the several
Underwriters shall be $__________, being an amount equal to the initial public
offering price set forth above less $__________ per share.
Schedule A is amended as follows:
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters,
including you, all in accordance with its terms.
-34-
Very truly yours,
PROBUSINESS SERVICES, INC.
By
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
BANCAMERICA XXXXXXXXX XXXXXXXX
XX XXXXX SECURITIES CORPORATION
Acting as Representatives of the several
Underwriters.
By Xxxxxxx Xxxxx & Company, L.L.C.
By
--------------------------------------
Principal
-35-
