EXHIBIT 1.1
TIER TECHNOLOGIES, INC.
3,910,000 SHARES/1/
CLASS B COMMON STOCK
(NO PAR VALUE PER SHARE)
______________
UNDERWRITING AGREEMENT
__________________, 1997
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc.
As representatives of the several
Underwriters named in Schedule I hereto,
▇/▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Tier Technologies, Inc., a California corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to you and the several Underwriters named in Schedule I hereto (collectively,
the "Underwriters"), for whom you are acting as representatives (the
"Representatives") an aggregate of 2,725,000 shares (the "Company Firm Shares")
and, at the election of the Underwriters, up to 510,000 additional shares (the
"Optional Shares") of Class B Common Stock of the Company, no par value per
share ("Common Stock"), and the shareholders listed on Schedule II hereto (the
"Selling Shareholders"), propose, subject to the terms and conditions stated
herein, to sell to the Underwriters an aggregate of 675,000 shares of Class B
Common Stock in the amounts set forth opposite each Selling Shareholder's name
on Schedule II (the "Selling Shareholders' Firm Shares," and together with the
Company Firm Shares, the "Firm Shares") of Class B Common Stock. The Firm
Shares and any Optional Shares that the Underwriters elect to purchase pursuant
to Section 3 hereof are herein collectively called the "Shares."
________________________
/1/ Includes 510,000 shares subject to an option to purchase additional shares
to cover over-allotments.
1.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, each of the Underwriters that:
(A) A registration statement on Form S-1 (File No. 333-37661) (the
"Initial Registration Statement") in respect of the Shares has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement including any pre-effective amendments thereto and any
post-effective amendment thereto, each in the form heretofore delivered to you,
and, excluding exhibits thereto, to you for each of the other Underwriters, have
been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a "Rule
462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or any Rule 462(b) Registration Statement has been issued and
no proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement and incorporated by reference in any Rule
462(b) Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement and any Rule 462(b) Registration Statement, including all
exhibits thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 6(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it was declared
effective or any Rule 462(b) Registration Statement at the time it became
effective, each as amended at the time such part of such registration statement
became effective, are hereinafter collectively called the "Registration
Statement"; and such final prospectus, in the form first filed pursuant to Rule
424(b) under the Act, is hereinafter called the "Prospectus");
(B) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through you expressly for use therein. The Company acknowledges that
the statements set forth under the heading "Underwriting" in the Prospectus
constitute the only information relating to
2.
any Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement;
(C) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and, as of each Time of Delivery (as
hereinafter defined), neither the Registration Statement nor the Prospectus nor
any further amendment or supplement thereto made by the Company prior to such
Time of Delivery contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, provided, however,
that these representations and warranties shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through you expressly for use therein;
(D) There are no contracts or other documents required to be described in
the Registration Statement or to be filed as exhibits to the Registration
Statement by the Act or by the rules and regulations of the Commission
thereunder which have not been described or filed as required; the contracts so
described in the Prospectus to which the Company or any of its subsidiaries is a
party have been duly authorized, executed and delivered by the Company or its
subsidiaries, constitute valid and binding agreements of the Company or its
subsidiaries and are enforceable against and by the Company or its subsidiaries
in accordance with their respective terms, and are in full force and effect on
the date hereof; and neither the Company nor any of its subsidiaries, nor, to
the best of the Company's knowledge, any other party is in breach of or default
under any of such contracts except to the extent that such breach or default
would not have a material adverse effect on the business, management, financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(E) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included in the Prospectus
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been any change in the capital stock (excluding the grant of
3.
stock options under the Company's Amended and Restated 1996 Equity Incentive
Plan which in any event have not exceeded the unallocated reserve for such plan
as described in the Prospectus) or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business, management,
financial position, shareholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(F) Except as disclosed in the Prospectus and the financial statements of
the Company, and the related notes thereto, included in the Prospectus, or such
as are not material to the business, prospects, financial condition or results
of operation of the Company and its subsidiaries, taken as a whole, the Company
and each of its subsidiaries has good and marketable title, free and clear of
all liens, claims, encumbrances and restrictions except liens for taxes not yet
due and payable, to all property and assets described in the Registration
Statement as being owned by it. Except as disclosed in the Prospectus and the
financial statements of the Company, and the related notes thereto, included in
the Prospectus, neither the Company nor any subsidiary of the Company owns any
real property; any real property and buildings held under lease by the Company
are held by it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries; the Company owns or leases all such properties as are necessary to
its operations as now conducted, except where the failure to so own or lease
would not result in a material adverse change in or affecting the business,
management, financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole;
(G) Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation, each with full power and authority
(corporate and otherwise) to own its properties and conduct its business as
described in the Prospectus, and each has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so qualified in
any such jurisdiction;
(H) The Company has an authorized capitalization as set forth in the
Prospectus, and all the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable, were
not issued in violation of or subject to any preemptive rights, registration
rights, co-sale rights or other rights to subscribe for or purchase any
securities which have not been waived or satisfied and conform in all material
respects to the description of capital stock contained in the
4.
Prospectus under the heading "Description of Capital Stock"; all of the issued
shares of capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens, encumbrances, equities or
claims; except as disclosed in or contemplated by the Prospectus and the
financial statements of the Company, and the related notes thereto, included in
the Prospectus, neither the Company nor any subsidiary has outstanding any
options to purchase, or any preemptive rights, registration rights, co-sale
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; and the description of the Company's stock option and stock
purchase plans 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, options and rights;
(I) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform in all
material respects to the description of the Class B Common Stock contained in
the Prospectus under the heading "Description of Capital Stock"; no preemptive
rights, registration rights, co-sale rights or other rights to subscribe for or
purchase exist with respect to the issuance and sale of the Shares by the
Company or, to the best of the Company's knowledge, the sale of the Selling
Shareholders Firm Shares by the Selling Shareholders pursuant to this Agreement
which have not been waived or satisfied; no shareholder of the Company has any
right which has not been waived to require the Company to register the sale of
any shares of capital stock owned by such shareholder under the Act in the
public offering contemplated by this Agreement; and no further approval or
authority of the shareholders or the Board of Directors of the Company will be
required for the issuance and sale of the Shares to be sold by the Company or
for the sale of the Shares to be sold by the Selling Shareholders as
contemplated herein;
(J) The Company has full corporate power and authority to enter into this
Agreement; this Agreement has been duly authorized, executed and delivered by
the Company, constitutes a valid and binding obligation of the Company and is
enforceable against the Company in accordance with its terms;
(K) The issuance and sale of the Shares by the Company and the compliance
by the Company with all of the provisions of this Agreement and the consummation
of the transactions herein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is
5.
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the Articles of Incorporation or Bylaws of the Company or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the Company
of the transactions contemplated by this Agreement, except the registration
under the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws or the by-laws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and distribution of
the Shares by the Underwriters;
(L) There are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened to which the
Company or any of its subsidiaries is or may be a party or of which property
owned or leased by the Company or any of its subsidiaries is or may be the
subject, or related to environmental or discrimination matters, which actions,
suits or proceedings, would, if determined adversely to the Company or its
subsidiaries individually or in the aggregate, prevent or adversely affect the
transactions contemplated by this Agreement or result in a material adverse
change in the business, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken as a whole; no
labor disturbance by the employees of the Company or any of its subsidiaries
exists or, to the knowledge of the Company, is imminent which might be expected
to materially adversely affect such business, management, financial position,
shareholders' equity or results of operations; and neither the Company nor any
of its subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body;
(M) The Company and its subsidiaries possess all licenses, certificates,
authorizations or permits issued by the appropriate governmental or regulatory
agencies or authorities that are necessary to enable them to own, lease and
operate their respective properties and to carry on their respective businesses
as presently conducted and which are material to the Company and its
subsidiaries, and neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of any such
license, certificate, authority or permit which, singly or in the aggregate if
the subject of an unfavorable decision, would be expected to materially and
adversely affect the business, management, financial position, shareholders'
equity or results of operations of the Company and its subsidiaries taken as a
whole;
6.
(N) Ernst & Young LLP, who have certified certain financial statements of
the Company, are independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder;
(O) The consolidated financial statements and schedules of the Company,
and the related notes thereto, included in the Registration Statement and the
Prospectus present fairly the financial position of the Company and its
subsidiaries as of the respective dates of such financial statements and
schedules, and the results of operations and cash flows of the Company and its
subsidiaries for the respective periods covered thereby; such statements,
schedules and related notes have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis as certified by the
independent public accountants named in paragraph (n) above; no other financial
statements or schedules are required to be included in the Registration
Statement; and the selected financial data set forth in the Prospectus under the
captions "Capitalization" and "Selected Consolidated Financial Data" fairly
present the information set forth therein on the basis stated in the
Registration Statement;
(P) Except as disclosed in or specifically contemplated by the Prospectus,
the Company and its subsidiaries have sufficient trademarks, trade names, patent
rights, copyrights, licenses, approvals and governmental authorizations to
conduct their business as now conducted; the Company has no knowledge of any
material infringement by the Company of trademark, trade name rights, patent
rights, copyrights, licenses, trade secret or other similar rights of others;
and there is no claim being made against the Company regarding trademark, trade
name, patent, copyright, license, trade secret or other infringement which could
have a material adverse effect on the business, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(Q) The Company and each of its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have paid all
taxes shown as due thereon; and the Company has no knowledge of any tax
deficiency which has been or might be asserted or threatened against the Company
or any of its subsidiaries which could materially and adversely affect the
business, management, financial position, shareholders' equity or results of
operation of the Company and its subsidiaries, taken as a whole;
(R) The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an investment company, as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(S) Each of the Company and its subsidiaries maintains insurance of the
types and in the amounts which it deems adequate for its business, including,
but not limited to,
7.
insurance covering real and personal property owned or leased by the Company and
its subsidiaries against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full force
and effect;
(T) Neither the Company nor any of its subsidiaries has at any time during
the last five 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 foreign, 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;
(U) The Company has not taken and will not take, directly or indirectly
through any of its directors, officers or controlling persons, any action which
is designed to or which has constituted or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares;
(V) The Company has filed a registration statement pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
to register the Common Stock, has filed an application to list the Common Stock
on the Nasdaq National Market and has received notification that the listing has
been approved, subject to notice of issuance of the Shares;
(W) The Company does not know of any claims for services in the nature of
a finder's fee, brokerage fee or otherwise with respect to this offering for
which the Company or any of the Underwriters may be responsible.
2. REPRESENTATIONS OF THE SELLING SHAREHOLDERS. Each of the Selling
Shareholders, severally and not jointly, represents and warrants to, and agrees
with, each of the Underwriters that:
(A) All consents, approvals, authorizations and orders necessary for the
execution and delivery by such Selling Shareholder of this Agreement and the
Power-of-Attorney and Custody Agreement (collectively, the "Custody Agreement")
hereinafter referred to, and for the sale and delivery of the Shares to be sold
by such Selling Shareholder hereunder, have been obtained; and such Selling
Shareholder has full right, power and authority to enter into this Agreement and
the Custody Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder hereunder;
(B) This Agreement and the Custody Agreement have each been duly
authorized, executed and delivered by such Selling Shareholder and each such
document constitutes a valid and binding obligation of such Selling Shareholder,
enforceable in accordance with its terms;
8.
(C) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the sale of the Shares by such Selling Shareholder or the
consummation by such Selling Shareholder of the transactions on its part
contemplated by this Agreement and the Custody Agreement, except such as have
been obtained under the Act or the rules and regulations thereunder and such as
may be required under state securities or Blue Sky laws or the by-laws and rules
of the NASD in connection with the purchase and distribution by the Underwriters
of the Shares;
(D) The sale of the Shares to be sold by such Selling Shareholder
hereunder and the performance by such Selling Shareholder of this Agreement and
the Custody Agreement and the consummation of the transactions contemplated
hereby and thereby will not result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, any material indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to which such
Selling Shareholder is a party or by which such Selling Shareholder or any of
its properties is bound or affected, or violate or conflict with any material
judgment, ruling, decree, order, statute, Rule or regulation of any court or
other governmental agency or body applicable to such Selling Shareholder;
(E) Such Selling Shareholder has, and at the First Time of Delivery (as
defined in Section 5 hereof) will have, good and valid title to the Shares to be
sold by such Selling Shareholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares and payment
therefor pursuant hereto, good and valid title to such Shares, fee and clear of
all liens, encumbrances, equities or claims, will pass to each of the several
Underwriters who have purchased such Shares in good faith and without notice of
any such lien, encumbrance, equity or claim or any other adverse claim within
the meaning of Section 8-302 of the Massachusetts Uniform Commercial Code;
(F) Such Selling Shareholder has the authority to and has executed and
delivered a lock-up agreement in the form attached hereto as Annex II;
(G) Such Selling Shareholder has not taken and will not at any time take,
directly or indirectly, any action designed, or which might reasonably be
expected, to cause or result in, or which will constitute, stabilization of the
price of shares of Common Stock to facilitate the sale or resale of any of the
Shares;
(H) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity with
written information furnished to the Company by such Selling Shareholder
expressly for use therein, such Preliminary
9.
Prospectus and the Registration Statement did, and the Prospectus and any
further amendments or supplements to the Registration Statement and the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and not contain 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; and
(I) Such Selling Shareholders has reviewed the Registration Statement and
Prospectus and, although such Selling Shareholder has not conducted any further
investigation or independently verified the accuracy or completeness of the
information contained therein, nothing has come to the attention of such Selling
Shareholder that would lead such Selling Shareholder to believe that on the
Effective Date, the Registration Statement contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading or
that, as of its date, the Prospectus contained and, at each Time of Delivery,
contains any untrue statement of a material fact or omitted or omits to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated, such Selling Shareholder
agrees to deliver to you prior to or at the Closing Date a properly completed
and executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu thereof).
Each Selling Shareholder represents and warrants that a certificate in
negotiable form representing all of the Shares to be sold by such Selling
Shareholder has been placed in custody under the Custody Agreement, in the form
heretofore furnished to you, duly executed and delivered by such Selling
Shareholder to the Custodian (as defined in the Custody Agreement), and that
such Selling Shareholder has duly executed and delivered a power-of-attorney, in
the form heretofore furnished to you and included in the Custody Agreement (the
"Power-of-Attorney"), appointing ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and each
of them, as such Selling Shareholder's attorney-in-fact (the "Attorneys-in-
Fact") with authority to execute and deliver this Agreement on behalf of such
Selling Shareholder, to determine (subject to the provisions of the Custody
Agreement) the purchase price to be paid by the Underwriters to such Selling
Shareholder as provided in Section 3 hereof, to authorize the delivery of the
Shares to be sold by such Selling Shareholder hereunder and otherwise to act on
behalf of such Selling Shareholder in
10.
connection with the transactions contemplated by this Agreement and the Custody
Agreement.
Each Selling Shareholders specifically agrees that the Shares represented
by the certificates held in custody for such Selling Shareholder under the
Custody Agreement are subject to the interests of the Underwriters hereunder,
and that the arrangements made by such Selling Shareholder for such custody, and
the appointment by such Selling Shareholder of the Attorneys-in-Fact by the
Power-of-Attorney, are to that extent irrevocable. Each Selling Shareholders
specifically agrees that the obligations of such Selling Shareholder hereunder
shall not be terminated by operation of law, whether by the death or incapacity
of such Selling Shareholder or, in the case of an estate or trust, by the death
or incapacity of any executor or trustee or the termination of such estate or
trust, or by the occurrence of any other event. If such Selling Shareholder or
any such executor or trustee should die or become incapacitated, or if any such
estate or trust should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates representing the
Shares to be sold by such Selling Shareholder shall be delivered by or on behalf
of such Selling Shareholder in accordance with the terms and conditions of this
Agreement and of the Custody Agreement, and actions taken by the Attorneys-in-
Fact pursuant to the Power-of-Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred, regardless
of whether or not the Custodian, the Attorneys-in-Fact, or any of them, shall
have received notice of such death, incapacity, termination, dissolution or
other event.
3. SHARES SUBJECT TO SALE. (a) On the basis of the representations,
warranties and agreements of the Company and the Selling Shareholders contained
herein, and subject to the terms and conditions of this Agreement, (i) the
Company agrees to issue and sell the Company Firm Shares to the several
Underwriters, (ii) each of the Selling Shareholders agree, severally and not
jointly, to sell the Selling Shareholders Firm Shares to the several
Underwriters, and (iii) each of the Underwriters agrees, severally and not
jointly, to purchase from the Company and the Selling Shareholders, at a
purchase price per share of $ , the respective number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Firm Shares by a fraction, the numerator of which is the
aggregate number of Firm Shares to be purchased by such Underwriter as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the aggregate number of Firm Shares to be purchased by all the
Underwriters and (b) in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Shares as provided below, (i) the
Company agrees to issue and sell the Company Optional Shares to the several
Underwriters, and (ii) each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 3, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares)
11.
determined by multiplying such number of Optional Shares by a fraction the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of the Optional Shares which all of the Underwriters are entitled to
purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 510,000 Optional Shares at the purchase price per share set
forth in the paragraph above, for the sole purpose of covering overallotments in
the sale of the Firm Shares. Any such election to purchase Optional Shares may
be exercised by written notice from you to the Company, given within a period of
30 calendar days after the date of this Agreement and setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery or, unless you, and the Company
otherwise agree in writing, earlier than two or later than three business days
after the date of such notice.
4. OFFERING. Upon the authorization by you of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Prospectus.
5. CLOSING. Certificates in definitive form for the Shares to be purchased by
each Underwriter hereunder, and in such denominations and registered in such
names as ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. may request upon at least forty-eight
hours' prior notice to the Company, shall be delivered by or on behalf of the
Company and the Selling Shareholders to you for the account of such Underwriter,
against payment by such Underwriter or on its behalf of the purchase price
therefor by certified or official bank check or checks, payable to the order of
the Company and the Custodian on behalf of the Selling Shareholders,
respectively, in New York Clearing House funds, all at the office of ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The time
and date of such delivery and payment shall be, with respect to the Firm Shares,
9:30 a.m., Boston time, on __________, 1997 or such other time and date as you
and the Company may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., Boston time, on the date specified by you in the written
notice given by you of the Underwriters' election to purchase such Optional
Shares, or at such other time and date as you and the Company may agree upon in
writing. Such time and date for delivery of the Firm Shares is herein called
the "First Time of Delivery," such time and date for delivery of the Optional
Shares, if not the First Time of Delivery, is herein called the "Second Time of
Delivery," and each such time and date for delivery is herein called a "Time of
Delivery." Such certificates will be made available for checking and packaging
at least twenty-four hours prior to each Time of Delivery at such location as
you may specify.
12.
6. COVENANTS OF THE COMPANY. The Company agrees with each of the
Underwriters:
(A) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus which shall be
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when the Registration
Statement, or any amendment thereto, has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you copies thereof; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus, of
the suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its withdrawal;
(B) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(C) To furnish the Underwriters with copies of the Prospectus in such
quantities as you may from time to time reasonably request, and, if the delivery
of a prospectus is required at any time prior to the expiration of nine months
after the time of issuance of the Prospectus in connection with the offering or
sale of the Shares and if at such time any events shall have occurred as a
result of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus in order to comply
with the Act, to notify you and upon your request to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as you
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which
13.
will correct such statement or omission or effect such compliance, and in case
any Underwriter is required to deliver a prospectus in connection with sales of
any of the Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to prepare
and deliver to such Underwriter as many copies as you may request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(D) To make generally available to its securityholders as soon as
practicable, but in any event not later than fifteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earning statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including at the option of the Company Rule 158
under the Act);
(E) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of any securities of the Company
which are substantially similar to the Shares, without your prior written
consent other than (i) the sale of the Shares to be sold by the Company
hereunder; (ii) the Company's issuance of options under its option plans in
amounts not in excess of the amount shown as available for future grant in the
Prospectus and (iii) shares of capital stock issued in connection with the
acquisition by the Company of the assets or capital stock of another person or
entity, whether directly, through merger or consolidation or otherwise, if the
terms of such issuance provide that such shares of capital stock shall not be
resold for a period of 180 days following the date of the Prospectus; provided,
however, that the Company shall not release any party from such resale
restriction without your prior written consent;
(F) During a period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to grant (i)
incentive stock options to purchase shares of Common Stock at a price less than
the fair market value of the Common Stock at the time of grant or (ii)
nonstatutory stock options to purchase shares of Common Stock at a price less
than 85% the fair market value of the Common Stock at the time of grant ;
(G) To furnish to its shareholders as soon as practicable after the end of
each fiscal year ending after the date of this Agreement an annual report
(including a balance sheet and statements of income, shareholders' equity and
cash flow of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
14.
(H) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders generally, and
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission, the Nasdaq
National Market or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you may from
time to time reasonably request (such financial statements to be on a combined
or consolidated basis to the extent the accounts of the Company and its
subsidiaries are combined or consolidated in reports furnished to its
shareholders generally or to the Commission);
(I) To use the net proceeds acquired by it from the sale of the Shares in
the manner specified in the Prospectus under the caption "Use of Proceeds" and
in a manner such that the Company will not become an "investment company" as
that term is defined in the Investment Company Act;
(J) To report the use of proceeds from the sale of the Shares in
accordance with Rule 463 of the Act;
(K) Not to accelerate the vesting of any option issued under any stock
option plan such that any such option may be exercised within 180 days from the
date of the Prospectus.
7. COVENANTS OF THE SELLING SHAREHOLDERS. Each of the Selling Shareholders
agree to pay or cause to be paid all taxes, if any, on the transfer and sale of
the Shares to be sold by such Selling Shareholder hereunder and the fees and
expenses, if any, of counsel and accountants retained by such Selling
Shareholder. The Company agrees with the Selling Shareholders to pay all costs
and expenses incident to the performance of the obligations of the Selling
Shareholders under this Agreement (except as set forth above), including, but
not limited to, all expenses incident to the delivery of the certificates for
the Shares to be sold by the Selling Shareholders, the costs and expenses
incident to the preparation, printing and filing of the Registration Statement
(including all exhibits thereto) and the Prospectus and any amendments or
supplements thereto, the expenses of qualifying the Shares to be sold by the
Selling Shareholders under the state securities or Blue Sky laws, all filing
fees and the reasonable fees and expenses of counsel for the Underwriters
payable in connection with the review of the offering of the Shares by the NASD,
and the cost of furnishing to the Underwriters the required copies of the
Registration Statement and Prospectus and any amendments or supplements thereto;
provided that each Selling Shareholder agrees to pay or cause to be paid its pro
rata share (based on the percentage which the number of Shares sold by such
Selling Shareholder bears to the total number of Shares sold) of all
underwriting discounts and commissions.
15.
8. EXPENSES. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memoranda and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offer and sale under state securities laws as provided in Section
6(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (iv) the filing fees and the reasonable fees and expenses of
counsel to the Underwriters incident to securing any required review by the NASD
of the terms of the sale of the Shares; (v) the cost of preparing stock
certificates; (vi) the cost and charges of any transfer agent or registrar; and
(vii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section 8,
Section 10 and Section 13 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Shares by them, and any advertising expenses connected with
any offers they may make.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder, as to the Shares to be delivered at each Time of
Delivery, shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of the Company and the
Selling Shareholders herein are, at and as of such Time of Delivery, true and
correct, the condition that the Company and the Selling Shareholders shall each
have performed all of their respective obligations hereunder theretofore to be
performed, and the following additional conditions:
(A) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 6(a) hereof;
no stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to your reasonable satisfaction;
(B) ▇▇▇▇▇▇ Godward LLP, counsel to the Underwriters, shall have furnished
to you such opinion or opinions, dated such Time of Delivery, with respect to
this Agreement, the Registration Statement, the Prospectus, and other related
matters as you
16.
may reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(C) ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(I) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of California,
with corporate power and authority to own its properties and conduct its
business as described in the Registration Statement and Prospectus;
(II) The Company has an authorized capitalization as set forth in the
Prospectus under the caption "Description of Capital Stock." All of the issued
shares of capital stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and, to the best of such counsel's
knowledge, were not issued in violation of any preemptive right, registration
right, right of first refusal or other similar right to subscribe for or
purchase any securities which have not been waived. The Shares have been duly
authorized and when issued and paid for as contemplated by this Agreement will
be validly issued, fully paid and non-assessable and will conform in all
material respects to the description of the Class B Common Stock contained in
the Prospectus under the caption "Description of Capital Stock";
(III) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
other jurisdiction within the United States in which it owns or leases
properties, or conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of failure to be so
qualified in any such jurisdiction (such counsel being entitled to rely in
respect of the opinion in this clause upon certificates of public officials and
in respect of matters of fact upon certificates of officers of the Company,
provided that such counsel provide you with copies of such certificates and
shall state that they believe that both you and they are justified in relying
upon such certificates);
(IV) Each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of organization; and all of the issued shares of capital stock of
each such subsidiary have been duly and validly authorized and issued, are fully
paid and non-assessable, and are owned directly by the Company, to our
knowledge, free and clear of all liens, encumbrances, equities or claims (such
counsel being entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such opinions and certificates);
17.
(V) To the best of such counsel's knowledge, neither the Company
nor any of its subsidiaries is infringing or otherwise violating any trademarks,
trade names, patents, mask works, copyrights, licenses, trade secrets or other
intellectual property rights of others, and to the best of such counsel's
knowledge there are no infringements by others of any of the Company's or any of
its subsidiaries' trademarks, trade names, patents, mask works, copyrights,
licenses, trade secrets or other intellectual property rights which in the
judgment of such counsel could affect materially the use thereof by the Company
or any of its subsidiaries; and
(VI) To the best of such counsel's knowledge, the Company and each
of its subsidiaries owns or possesses sufficient licenses or other rights to use
all trademarks, trade names, patents, mask works, copyrights, licenses, trade
secrets or other intellectual property rights necessary to conduct the business
now being or proposed to be conducted by the Company and its subsidiaries as
described in the Prospectus.
(VII) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings, actions
or suits pending or threatened to which the Company or any of its subsidiaries
is or may be a party or of which property owned or leased by the Company or any
of its subsidiaries is or may be the subject, or related to environmental or
discrimination matters, which actions, suits or proceedings, might, individually
or in the aggregate, prevent or adversely affect the transactions contemplated
by this Agreement or result in a material adverse change in or affecting the
general affairs, management, financial position, shareholders' equity or results
of operations of the Company; no labor disturbance by the employees of the
Company or any of its subsidiaries exists or is imminent which might be expected
to affect adversely such general affairs, management, financial position,
shareholders' equity or results of operations; and neither the Company nor any
of its subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or governmental body;
(VIII) The Company has full corporate power and authority to enter
into this Agreement and this Agreement has been duly authorized, executed and
delivered by the Company;
(IX) The issuance and sale of the Shares being delivered at such
Time of Delivery by the Company and the performance by the Company of its
obligations under this Agreement and the consummation of the transactions herein
contemplated will not (i) result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed as an exhibit to
the Registration Statement to which the Company is a party or by which the
Company or any of its subsidiaries is a party or to which the Company or any of
its subsidiaries is bound or to which any of the property or assets of
18.
the Company or any of its subsidiaries is subject, (ii) violate the provisions
of the Articles of Incorporation or Bylaws of the Company or (iii) violate any
statute or any order, rule or regulation of the State of California or the
United States (except that such counsel need express no opinion as to state
securities or Blue Sky laws or as to compliance with the antifraud provisions of
federal and state securities laws);
(X) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issuance and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Shares registration of the Class B Common
Stock under the Exchange Act, and such consents, approval, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws or the bylaws and rules of the NASD in connection with the
purchase and distribution of the Shares by the Underwriters;
(XI) To the best of such counsel's knowledge, there are no
contracts or other documents required to be described in the Registration
Statement or to be filed as exhibits to the Registration Statement by the Act or
by the rules and regulations thereunder which have not been described or filed
as required;
(XII) The statements under the captions "Management - Stock Option
Plans", "Description of Capital Stock" and "Shares Eligible for Future Sale" in
the Prospectus, insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries and fairly and
correctly present, in all material respects, the information called for with
respect to such documents and matters (provided, however, that such counsel may
rely on representations of the Company with respect to the factual matters
contained in such statements, and provided further that such counsel shall state
that nothing has come to the attention of such counsel which leads them to
believe that such representations are not true and correct in all material
respects);
(XIII) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company" as defined in the Investment Company Act;
(XIV) The Shares have been authorized for inclusion on the Nasdaq
National Market, subject to notice of issuance; and
(XV) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such Time of
Delivery (other than the financial statements, including the notes and schedules
thereto, or any other financial or accounting information as set forth or
referred to therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Act and the rules
and regulations thereunder;
19.
Such counsel shall also state that they have participated in discussion
with your representatives and those of the Company, and while they have not
independently verified and are not passing upon and do not assume the
responsibility for, the accuracy, fairness or completeness of the statements
contained in the Registration Statement or the Prospectus, nothing has come to
such counsel's attention which gives them reason to believe that, as of its
effective date, the Registration Statement or any further amendment thereto made
by the Company prior to such Time of Delivery (other than the financial
statements, including the notes and schedules thereto, or any other financial or
accounting information as set forth or referred to therein, as to which such
counsel need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of its date,
the Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial statements,
including the notes and schedules thereto, or any other financial or accounting
information as set forth or referred to therein, as to which such counsel need
express no opinion) contained an 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 or that, as of such
Time of Delivery, either the Registration Statement or the Prospectus or any
further amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements, including the notes and
schedules thereto, or any other financial or accounting information as set forth
or referred to therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and they do not know of any
amendment to the Registration Statement required to be filed which is not filed
as required.
Such counsel shall also include a statement in such opinion as to the
matters set forth in this paragraph. The Registration Statement has become
effective under the Act. To the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued by
the Commission nor has any proceeding been instituted or contemplated for that
purpose under the Act. The Prospectus has been filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations under the Act within the
time period required thereby.
(D) ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the Selling Shareholders,
shall have furnished to you their written opinion, dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(I) This Agreement and the Custody Agreement have been duly
authorized, executed and delivered by or on behalf of each of the Selling
Shareholders; the Custodian has been duly and validly authorized to act as the
custodian of the Shares to
20.
be sold by each such Selling Shareholder; the performance of this Agreement and
the Custody Agreement and the consummation of the transactions therein
contemplated by the Selling Shareholders do not, to the knowledge of such
counsel, violate or conflict with any judgment, ruling, decree, order, statute,
rule or regulation of any court or other governmental agency or body applicable
to any Selling Shareholder (except that such counsel need express no opinion as
to state securities or Blue Sky laws or as to compliance with the antifraud
provisions of federal and state securities laws);
To such counsel's knowledge, no consent, approval, authorization or
order of, or any filing or declaration with, any court or governmental agency or
body is required for consummation by the Selling Shareholders of the
transactions on their part contemplated by this Agreement and the Custody
Agreement, except such as have been made or obtained under the Act and as may be
required under state securities or Blue Sky laws or the by-laws and rules of the
NASD in connection with the purchase and distribution by the Underwriters of the
Shares (as to which such counsel need express no opinion) and such as have been
obtained or made under the Act or the rules and regulations thereunder;
(II) Immediately prior to the date hereof, based solely on the
examination of the Company's stock record books and a certificate from each
Selling Stockholder, each Selling Shareholder was the sole registered owner of
the Shares to be sold by the Selling Shareholder on the date hereof; upon
registration of the Shares to be sold by the Selling Shareholder in the names of
the Underwriters in the stock records of the Company, assuming the Underwriters
purchased such Shares in good faith and without notice of any adverse claim
within the meaning of the applicable Uniform Commercial Code, the Underwriters
will have acquired the Shares free of any adverse claim, any lien in favor of
the Company and any restrictions on transfer imposed by the Company; and
(III) Each of this Agreement and the Custody Agreement is a valid and
binding agreement of each Selling Shareholder, constitutes a valid and binding
obligation of each Selling Shareholder and is enforceable against each Selling
Shareholder 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 and limitations on the availability of equitable remedies.
(E) At 10:00 a.m., Boston time, on the effective date of the Registration
Statement and the effective date of the most recently filed post-effective
amendment to the Registration Statement and also at each Time of Delivery, Ernst
& Young LLP shall have furnished to you a letter or letters, dated the
respective date of delivery thereof, in form and substance satisfactory to you,
to the effect set forth in Annex 1 hereto;
21.
(F) (i) Neither the Company nor any of its subsidiaries have sustained
since the date of the latest audited financial statements included in the
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, other than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capital stock (excluding the grant of stock options under the
Company's Amended and Restated 1996 Equity Incentive Plan which in any event
have not exceeded the unallocated reserve for such plan as described in the
Prospectus) or long-term debt of the Company or any change, or any development
involving a prospective change, in or affecting the business, management,
financial position, shareholders' equity or results of operations of the Company
and its subsidiaries, other than as set forth or contemplated in the Prospectus,
the effect of which, in any such case described in clause (i) or (ii), is in
your judgment so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner contemplated
in the Prospectus;
(G) On or after the date hereof there shall not have occurred any of the
following: (i) additional material governmental restrictions, not in force and
effect on the date hereof, shall have been imposed upon trading in securities
generally or minimum or maximum prices shall have been generally established on
the New York Stock Exchange or on the American Stock Exchange or in the over the
counter market by the NASD, or trading in securities generally shall have been
suspended on either such Exchange or in the over the counter market by the NASD,
or a general banking moratorium shall have been established by federal or New
York authorities, (ii) an outbreak of major hostilities or other national or
international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in your judgment, to affect adversely the marketability
of the Shares, or (iii) there shall be any action, suit or proceeding pending or
threatened, or there shall have been any development or prospective development
involving particularly the business or properties or securities of the Company
or any of its subsidiaries or the transactions contemplated by this Agreement,
which, in your judgment, has materially and adversely affect the Company's
business or earnings and make it impracticable or inadvisable to offer or sell
the Shares;
(H) The Shares to be sold by the Company at such Time of Delivery shall
have been accepted for quotation, subject to notice of issuance, on the Nasdaq
National Market;
(I) Each director, executive officer, shareholder of the Company's capital
stock (other than the Selling Shareholders) and holder of options to purchase
the Company's
22.
capital stock shall have executed and delivered to you lock-up agreements in the
form attached hereto as Annex III. Each of the Selling Shareholders shall have
executed and delivered to you lock-up agreements in the form attached hereto as
Annex II; and
(J) The Company and the Selling Shareholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
of the Company and of the Selling Shareholders, respectively, satisfactory to
you, as to the accuracy of the representations and warranties of the Company and
of the Selling Shareholders, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling Shareholders of
all of their obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request and the
Company shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections (a) and (g) of this Section, and as to such
other matters as you may reasonably request.
10. INDEMNIFICATION AND CONTRIBUTION.
(A) The Company will indemnify and hold harmless each Underwriter and each
person, if any, who controls such Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or
controlling person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement thereto
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through you
expressly for use therein.
(B) Each Selling Shareholder, severally and not jointly, will indemnify
and hold harmless each Underwriter and each person, if any, who controls such
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or controlling person may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i) a
breach of such Selling Shareholder's representations and
23.
warranties contained in Section 2, (ii) an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or (iii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, 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 any Preliminary Prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by such Selling
Stockholder expressly for use therein, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; and, provided further, that the liability of the Selling
Shareholders under the indemnity agreement in this Section 10 shall not exceed
the total initial public offering price of the Shares sold by the Selling
Shareholders under this Agreement, less underwriters' discounts.
(C) Each Underwriter will indemnify and hold harmless the Company and the
Selling Shareholders against any losses, claims, damages or liabilities to which
the Company or the Selling Shareholders may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or 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, in light of the circumstances in which they were made,
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 any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through you
expressly for use therein; and will reimburse the Company and the Selling
Shareholders for any legal or other expenses reasonably incurred by the Company
or the Selling Shareholders in connection with investigating or defending any
such action or claim as such expenses are incurred.
(D) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection to the
24.
extent prejudiced by failure to notify. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party. No indemnifying party shall be liable for
the settlement of any action or claim affected without its written consent.
(E) If the indemnification provided for in this Section 10 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (d) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Shareholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Shareholders on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company and the Selling Shareholders, respectively, bear to the total
underwriting discounts and
25.
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Shareholders on
the one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (e) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (e), 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 Selling Stockholder
shall be liable for contribution under this Section 10 in circumstances where
such Selling Stockholder would not be required to provide indemnification if
indemnification were available. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(F) The obligations of the Company and the Selling Shareholders under this
Section 10 shall be in addition to any liability which the Company and the
Selling Shareholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriter under this Section 10
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company or any Selling Shareholder within the meaning of the Act.
11. TERMINATION.
(A) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your
26.
discretion arrange for you or another party or other parties to purchase such
Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company and the Selling Shareholders shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Shares, or the Company and the Selling
Shareholders notify you that they have so arranged for the purchase of such
Shares, you or the Company and the Selling Shareholders shall have the right to
postpone such Time of Delivery for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(B) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company and the
Selling Shareholders shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(C) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company and the
Selling Shareholders shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Second
Time of Delivery, the obligations of the Underwriters to purchase and of the
Company to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Shareholders, except for the expenses to be borne by the Company and the
Selling Shareholders and the Underwriters as provided in Section 8 hereof and
the indemnity and
27.
contribution agreements in Section 10 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
12. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company and
shall survive delivery of and payment for the Shares.
13. EXPENSES OF TERMINATION. If this Agreement shall be terminated pursuant to
Section 11 hereof, the Company or the Selling Shareholders shall not then be
under any liability to any Underwriter except as provided in Section 8 and
Section 10 hereof; but, if for any other reason this Agreement is terminated,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company and
the Selling Shareholders shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Section 8 and Section 10 hereof.
14. NOTICE. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. on behalf of you as the
Representatives; and in all dealing with any Selling Shareholders hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Shareholders made or given by any
or all of the Attorneys-in-Fact for such Selling Shareholders.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Representatives in care of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
& ▇▇▇▇, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇;
if to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: President; and if to a Selling Shareholder shall be
delivered or sent by mail, telex or facsimile transmission to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
on behalf of the Selling Shareholders at the Company; provided, however, that
any notice to an Underwriter pursuant to Section 10(d) hereof shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriter's Questionnaire or telex constituting such
Questionnaire, which address will be supplied to
28.
the Company by you on request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
15. MISCELLANEOUS.
(A) This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters and the Company and the Selling Shareholders and, to the
extent provided in Sections 10 and 12 hereof, the officers and directors of the
Company and each person who controls the Company and the Selling Shareholders or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
(B) Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
(C) This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
(D) This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company and the
Selling Shareholders for examination, upon request, but without warranty on your
part as to the authority of the signors thereof.
29.
Any person executing and delivering this Agreement as Attorney-in-Fact for
the Selling Shareholders represents by so doing that he has been duly appointed
as Attorney-in-Fact by the Selling Shareholders pursuant to a validly existing
and binding Power-of-Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
TIER TECHNOLOGIES, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE SELLING SHAREHOLDERS NAMED IN SCHEDULE
II ATTACHED HERETO
By:_______________________________________
Name:_____________________________________
Title: Attorney-in-Fact
Accepted as of the date
hereof at Boston, Massachusetts
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, INC.
By:____________________________________
(▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
on behalf of each of the
underwriters)
30.
SCHEDULE I
Number of
Optional
Total Shares to be
Number of Purchased if
Firm Maximum
Shares to be Option
Purchased Exercised
--------- ---------
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc.
Total........................
31.
SCHEDULE II
SELLING SHAREHOLDERS
32.
ANNEX I
Pursuant to Section 9(f) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements and any
supplementary financial information and schedules (and, if applicable,
prospective financial statements and/or pro forma financial information)
examined by them and included in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public Accountants
of the unaudited consolidated interim financial statements, selected
consolidated financial data, pro forma financial information, prospective
financial statements and/or condensed financial statements derived from audited
consolidated financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have been
furnished to the representatives of the Underwriters (the "Representatives");
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years;
(iv) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited consolidated financial statements and other information
referred to below, a reading of the latest available interim consolidated
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the latest
audited consolidated financial statements included in the Prospectus, inquiries
of officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believed
that:
(A) the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus do not
33.
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder, or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with the basis for the
audited consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus;
(B) any other unaudited consolidated income statement data and
consolidated balance sheet items included in the Prospectus do not agree with
the corresponding items in the unaudited consolidated financial statements from
which such data and items were derived, and any such unaudited data and items
were not determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements included
in the Prospectus;
(C) the unaudited consolidated financial statements which were not
included in the Prospectus but from which were derived any unaudited condensed
consolidated financial statements referred to in Clause (A) and any unaudited
consolidated income statement data and consolidated balance sheet items included
in the Prospectus and referred to in Clause (B) were not determined on a basis
substantially consistent with the basis for the audited consolidated financial
statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial statements
included in the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the published rules
and regulations thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the date of
such letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon conversions
of convertible securities, in each case which were outstanding on the date of
the latest financial statements included in the Prospectus) or any increase in
the combined long-term debt of the Company and its subsidiaries, or any
decreases in combined net current assets or net assets or other items specified
by the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the latest
balance sheet included in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in Clause (E) there
were any decreases in consolidated net revenues or operating profit or the total
or per share amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the Representatives,
in each case as compared with the
34.
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each case for
decreases or increases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(v) In addition to the examination referred to in their report(s) included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraphs (iii) and (iv) above,
they have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information specified by
the representatives, which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus, or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
35.
ANNEX II
FORM OF LOCK-UP AGREEMENT
FOR EXECUTION BY THE
SELLING SHAREHOLDERS
36.
ANNEX III
FORM OF LOCK-UP AGREEMENT
FOR EXECUTION BY THE COMPANY'S
OFFICERS, DIRECTORS, SHAREHOLDERS (OTHER
THAN SELLING SHAREHOLDERS) AND OPTIONHOLDERS
37.