Exhibit 1.1
VIRTUSA CORPORATION
___________ Shares of Common Stock, par value $0.01 per share
Underwriting Agreement
_____________, 2007
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇ and Company, LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
As Representatives of
the several Underwriters listed in
Schedule I hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Virtusa Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives") and ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("JPMSI") is acting as
book-running manager, an aggregate of __________ shares of Common Stock, par
value $0.01 per share, of the Company (the "Underwritten Shares") and, at the
option of the Underwriters, up to an additional ________ shares of Common Stock,
par value $0.01 per share, of the Company, and the stockholders of the Company
named in Schedule II hereto (the "Selling Stockholders") propose to sell, at the
option of the Underwriters, up to an additional ________ shares of Common Stock,
par value $0.01 per share, of the Company. The aggregate of _______ additional
shares to be sold by the Company and the Selling Stockholders at the option of
the Underwriters are referred to herein as the "Option Shares." The Underwritten
Shares and the Option Shares are herein referred to as the "Shares." The shares
of Common Stock of the Company to be outstanding after giving effect to the sale
of the Shares are herein referred to as the "Stock."
The Company and the Selling Stockholders hereby confirm their agreement
with the several Underwriters concerning the purchase and sale of the Shares, as
follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement (File No.
333-141952) including a prospectus, relating to the Shares. Such registration
statement, as amended at the time it becomes effective, including the
information, if any, deemed pursuant to Rule 430A under the Securities Act to be
part of the registration statement at the time of its effectiveness ("Rule 430
Information"), is referred to herein as the
"Registration Statement;" and as used herein, the term "Preliminary Prospectus"
means each prospectus included in such registration statement (and any
amendments thereto) before it becomes effective, any prospectus filed with the
Commission pursuant to Rule 424(a) under the Securities Act and the prospectus
included in the Registration Statement at the time of its effectiveness that
omits Rule 430 Information, and the term "Prospectus" means the prospectus in
the form first used (or made available upon request of purchasers pursuant to
Rule 173 under the Securities Act) in connection with confirmation of sales of
the Shares. If the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement. Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Registration Statement and the Prospectus.
At or prior to the time when sales of the Shares were first made (the "Time
of Sale"), the Company had prepared the following information (collectively with
the pricing information set forth on Annex A hereto, the "Time of Sale
Information"): a Preliminary Prospectus dated _____________, 2007, and each
"free-writing prospectus" (as defined pursuant to Rule 405 under the Securities
Act), including information to be conveyed orally, listed on Annex A hereto.
2. Purchase of the Shares by the Underwriters. (a) The Company agrees to
issue and sell the Underwritten Shares to the several Underwriters as provided
in this Agreement, and each Underwriter, on the basis of the representations,
warranties and agreements set forth herein and subject to the conditions set
forth herein, agrees, severally and not jointly, to purchase from the Company
the respective number of Underwritten Shares set forth opposite such
Underwriter's name in Schedule I hereto at a price per share (the "Purchase
Price") of $________.
In addition, the Company as to _______ of the Option Shares and each of the
Selling Stockholders as and to the extent indicated in Schedule II hereto,
agree, severally and not jointly, to issue and sell the Option Shares to the
several Underwriters as provided in this Agreement, and the Underwriters, on the
basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, shall have the option to purchase,
severally and not jointly, from the Company and each of the Selling Stockholders
the Option Shares at the Purchase Price.
If any Option Shares are to be purchased, the number of Option Shares to be
purchased by each Underwriter shall be the number of Option Shares which bears
the same ratio to the aggregate number of Option Shares being purchased as the
number of Underwritten Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number increased as set forth in Section 12 hereof)
bears to the aggregate number of Underwritten Shares being purchased from the
Company by the several Underwriters, subject, however, to such adjustments to
eliminate any fractional Shares as the Representatives in their sole discretion
shall make. Any such election to purchase Option Shares shall be made in
proportion to the maximum number of Option Shares to be sold by the Company and
each Selling Stockholder as set forth in Schedule II hereto.
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The Underwriters may exercise the option to purchase the Option Shares at
any time in whole, or from time to time in part, on or before the thirtieth day
following the date of this Agreement, by written notice from the Representatives
to the Company and the Attorneys-in-Fact (as defined below). Such notice shall
set forth the aggregate number of Option Shares as to which the option is being
exercised and the date and time when the Option Shares are to be delivered and
paid for which may be the same date and time as the Closing Date (as hereinafter
defined) but shall not be earlier than the Closing Date nor later than the tenth
full business day (as hereinafter defined) after the date of such notice (unless
such time and date are postponed in accordance with the provisions of Section 12
hereof). Any such notice shall be given at least two business days prior to the
date and time of delivery specified therein. In the event of a partial exercise
of the option to purchase the Option Shares, the Underwriters shall first
purchase Option Shares from the Selling Stockholders on a pro rata basis until
all Option Shares to be sold by the Selling Stockholders have been purchased
before purchasing Option Shares to be sold by the Company.
(b) The Company and the Selling Stockholders understand that the
Underwriters intend to make a public offering of the Shares as soon after the
effectiveness of this Agreement as in the judgment of the Representatives is
advisable, and initially to offer the Shares on the terms set forth in the Time
of Sale Information and the Prospectus. The Company and the Selling Stockholders
acknowledge and agree that the Underwriters may offer and sell Shares to or
through any affiliate of an Underwriter and that any such affiliate may offer
and sell Shares purchased by it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately
available funds to the respective accounts specified to the Representatives by
the Company in the case of the Underwritten Shares and any Option Shares to be
sold by the Company and by the Attorneys-in-Fact in the case of any Option
Shares to be sold by the Selling Stockholders, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at
10:00 A.M. Boston time on _____________, 2007, or at such other time or place on
the same or such other date, not later than the fifth business day thereafter,
as the Representatives and the Company may agree upon in writing or, in the case
of the Option Shares, on the date and at the time and place specified by the
Representatives in the written notice of the Underwriters' election to purchase
such Option Shares. The time and date of such payment for the Underwritten
Shares is referred to herein as the "Closing Date" and the time and date for
such payment for the Option Shares, if other than the Closing Date, is herein
referred to as the "Additional Closing Date."
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date in definitive form registered in such
names and in such denominations as the Representatives shall request in writing
not later than two full business days prior to the Closing Date or the
Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the sale of the Shares duly paid by the Company or the Selling
Stockholders, as the case may be. The certificates, if any, for the Shares will
be made available for inspection and packaging by the Representatives at the
office of JPMSI set forth above not later than 1:00 P.M., New York City
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time, on the business day prior to the Closing Date or the Additional Closing
Date, as the case may be.
(d) The Company and the Selling Stockholders acknowledge and agree that the
Underwriters are acting solely in the capacity of an arm's length contractual
counterparty to the Company and the Selling Stockholders with respect to the
offering of Shares contemplated hereby (including in connection with determining
the terms of the offering) and not as a financial advisor or a fiduciary to, or
an agent of, the Company, the Selling Stockholders or any other person.
Additionally, neither the Representatives nor any other Underwriter is advising
the Company, the Selling Stockholders or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction. The Company
and the Selling Stockholders shall consult with their own advisors concerning
such matters and shall be responsible for making their own independent
investigation and appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the Company or the
Selling Stockholders with respect thereto. Any review by the Underwriters of the
Company, the transactions contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of the Underwriters and
shall not be on behalf of the Company or the Selling Stockholders.
3. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) Preliminary Prospectus. 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, complied in all material
respects with the Securities Act and did not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance upon and
in conformity with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives expressly for
use in any Preliminary Prospectus.
(b) Time of Sale Information. The Time of Sale Information, at the Time of
Sale did not, and at the Closing Date and as of the Additional Closing Date, as
the case may be, will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided that the Company makes no representation and warranty with respect to
any statements or omissions made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in such Time of
Sale Information. No statement of material fact included in the Prospectus has
been omitted from the Time of Sale Information and no statement of material fact
included in the Time of Sale Information that is required to be included in the
Prospectus has been omitted therefrom.
(c) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus
and the Prospectus, the Company (including its agents and representatives, other
than the Underwriters
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in their capacity as such) has not made, used, prepared, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or refer to any
"written communication" (as defined in Rule 405 under the Securities Act) that
constitutes an offer to sell or solicitation of an offer to buy the Shares (each
such communication by the Company or its agents and representatives (other than
a communication referred to in clause (i) below) an "Issuer Free Writing
Prospectus") other than (i) any document not constituting a prospectus pursuant
to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities
Act or (ii) the documents listed on Annex A hereto and other written
communications approved in writing in advance by the Representatives. Each such
Issuer Free Writing Prospectus complied in all material respects with the
Securities Act, has been filed in accordance with the Securities Act (to the
extent required thereby) and, when taken together with the Preliminary
Prospectus accompanying, or delivered prior to delivery of, such Issuer Free
Writing Prospectus, did not, and at the Closing Date and as of the Additional
Closing Date, as the case may be, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in each such Issuer
Free Writing Prospectus in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use in any Issuer Free
Writing Prospectus.
(d) Registration Statement and Prospectus. The Registration Statement has
been declared effective by the Commission. No order suspending the effectiveness
of the Registration Statement has been issued by the Commission, and no
proceeding for that purpose or pursuant to Section 8A of the Securities Act
against the Company or related to the offering has been initiated or threatened
by the Commission; as of the applicable effective date of the Registration
Statement and any amendment thereto, the Registration Statement complied and
will comply in all material respects with the Securities Act, and did not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and as of the date of the Prospectus and any
amendment or supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement and the
Prospectus and any amendment or supplement thereto.
(e) Financial Statements. The financial statements and the related notes
thereto of the Company and its consolidated subsidiaries included in the
Registration Statement, the Time of Sale Information and the Prospectus comply
in all material respects with the applicable requirements of the Securities Act
and present fairly the financial position of the Company and its subsidiaries as
of the dates indicated and the results of their operations and the changes in
their cash flows for the periods specified; such financial statements have been
prepared in
5
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby, except in the case of unaudited
financial statements, which are subject to normal year-end adjustments and do
not contain certain footnotes as permitted by the applicable rules of the
Commission, and any supporting schedules included in the Registration Statement
present fairly the information required to be stated therein; and the other
financial information of the Company included in the Registration Statement, the
Time of Sale Information and the Prospectus has been derived from the accounting
records of the Company and its subsidiaries and presents fairly the information
shown thereby.
(f) No Material Adverse Change. Since the date of the most recent financial
statements of the Company included in the Registration Statement, the Time of
Sale Information and the Prospectus, except in each case as otherwise disclosed
in the Registration Statement, the Time of Sale Information and the Prospectus,
(i) there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries except for the issuance of shares of Stock
upon the exercise of outstanding options under employee incentive plans
described in the Registration Statement, the Time of Sale Information and the
Prospectus, and the grant of options or rights to purchase Stock under such
plans, or any dividend or distribution of any kind declared, set aside for
payment, paid or made by the Company on any class of capital stock, or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, properties, management, financial
position, stockholders' equity, results of operations or prospects of the
Company and its subsidiaries taken as a whole; (ii) neither the Company nor any
of its subsidiaries has entered into any transaction or agreement that is
material to the Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to the Company
and its subsidiaries taken as a whole; and (iii) neither the Company nor any of
its subsidiaries has sustained 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 disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority.
(g) Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, be reasonably expected to have a material adverse effect on the
business, properties, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"). The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21.1 to the Registration Statement.
(h) Capitalization. As of March 31, 2007, the Company had an authorized
capitalization as set forth in the Registration Statement, the Time of Sale
Information and the Prospectus under the subheading "Actual" under the heading
"Capitalization"; all the outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-
6
assessable, have been issued in compliance with federal and state securities
laws (except as otherwise disclosed in the Registration Statement, the Time of
Sale Information and the Prospectus), and are not subject to any preemptive or
similar rights; except as described in or expressly contemplated by the Time of
Sale Information and the Prospectus, there are no outstanding rights (including,
without limitation, preemptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital stock or
other equity interest in the Company or any of its subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any capital stock of the Company or any such
subsidiary, any such convertible or exchangeable securities or any such rights,
warrants or options; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Registration Statement, the
Time of Sale Information and the Prospectus; and all the outstanding shares of
capital stock or other equity interests of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
(except, in the case of any foreign subsidiary, for directors' qualifying shares
and except as otherwise described in the Registration Statement, the Time of
Sale Information and the Prospectus) and are owned directly or indirectly by the
Company, free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party.
(i) Due Authorization. The Company has full right, power and authority to
execute and deliver this Agreement and to perform its obligations hereunder; and
all action required to be taken for the due and proper authorization, execution
and delivery by it of this Agreement and the consummation by it of the
transactions contemplated hereby has been duly and validly taken.
(j) Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(k) The Shares. The Shares to be issued and sold by the Company hereunder
have been duly authorized by the Company and, when issued and delivered and paid
for as provided herein, will be duly and validly issued and will be fully paid
and non-assessable and will conform to the descriptions thereof in the Time of
Sale Information and the Prospectus; and the issuance of the Shares is not
subject to any preemptive or similar rights.
(l) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject; or
(iii) in violation of any applicable law or statute or any judgment, order, rule
or regulation of any court or arbitrator or governmental or regulatory authority
having jurisdiction over the Company or any of its subsidiaries, except, in the
case of clauses (ii) and (iii) above, for any such default or violation that
would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect.
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(m) No Conflicts. The execution, delivery and performance by the Company of
this Agreement, the issuance and sale of the Underwritten Shares and the Option
Shares to be sold by the Company and the consummation of the transactions
contemplated by this Agreement will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Company or any of its
subsidiaries or (iii) result in the violation of any applicable law or statute
or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority having jurisdiction over the Company or any
of its subsidiaries.
(n) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company of this Agreement, the issuance and sale of the Underwritten
Shares and the Option Shares to be sold by the Company and the consummation of
the transactions contemplated by this Agreement, except for the registration of
the Shares under the Securities Act and such consents, approvals,
authorizations, orders and registrations or qualifications as have already been
obtained or made or as may be required by the rules and regulations of the
National Association of Securities Dealers, Inc. or the NASDAQ Stock Market Inc.
or under applicable state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(o) Legal Proceedings. Except as described in the Registration Statement,
the Time of Sale Information and the Prospectus, there are no legal,
governmental or regulatory investigations, actions, suits or proceedings pending
to which the Company or any of its subsidiaries is or may be a party or to which
any property of the Company or any of its subsidiaries is or may be the subject
that, individually or in the aggregate, if determined adversely to the Company
or any of its subsidiaries, could reasonably be expected to have a Material
Adverse Effect or materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; to the knowledge of the Company,
no such investigations, actions, suits or proceedings are threatened or
contemplated by any governmental or regulatory authority or threatened by
others; and (i) there are no current or pending legal, governmental or
regulatory actions, suits or proceedings that are required under the Securities
Act to be described in the Registration Statement that are not so described in
the Registration Statement, the Time of Sale Information and the Prospectus and
(ii) there are no statutes, regulations or contracts or other documents that are
required under the Securities Act to be filed as exhibits to the Registration
Statement or described in the Registration Statement or the Prospectus that are
not so filed as exhibits to the Registration Statement or described in the
Registration Statement, the Time of Sale Information and the Prospectus.
(p) Independent Accountants. KPMG LLP, who have certified certain financial
statements of the Company and its subsidiaries, are an independent registered
public accounting
8
firm with respect to the Company and its subsidiaries within the applicable
rules and regulations adopted by the Commission and the Public Accounting
Oversight Board (United States) and as required by the Securities Act.
(q) Title to Real and Personal Property. The Company and its subsidiaries
have good and marketable title in fee simple (in the case of real property) to,
or have valid rights to lease or otherwise use, all items of real and personal
property that are material to the respective businesses of the Company and its
subsidiaries, in each case free and clear of all liens, encumbrances, claims and
defects and imperfections of title except those that (i) do not materially
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries, (ii) could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect or (iii) are
described in the Registration Statement, the Time of Sale Information and the
Prospectus.
(r) Intellectual Property Rights. Except as described in the Registration
Statement, the Time of Sale Information and the Prospectus, the Company and its
subsidiaries own or possess the right to use and operate under all material
patents, patent rights, inventions, trademarks, service marks, trade names,
trademark registrations, copyrights, domain names, licenses, approvals, trade
secrets, technology, know-how and other intellectual property and similar
rights, including registrations and applications for registration thereof
(collectively, "Intellectual Property Rights"), necessary or material to the
conduct of their respective businesses and the expected expiration of any such
Intellectual Property Rights would not, individually or in the aggregate, have a
Material Adverse Effect. Except as described in the Registration Statement, the
Time of Sale Information and the Prospectus, (A) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's or any subsidiary's rights in or to, or the violation
of any of the terms of, any of their Intellectual Property Rights; (B) there is
no pending or, to the Company's knowledge, threatened action, suit, proceeding
or claim by others that the Company or any subsidiary infringes, misappropriates
or otherwise violates or conflicts with any Intellectual Property Rights or
other proprietary rights of others; and (C) none of the Intellectual Property
Rights used by the Company or its subsidiaries in their businesses has been
obtained or is being used by the Company or its subsidiaries in violation of any
contractual obligation binding on the Company or any of its subsidiaries or in
violation of the rights of any persons, except in each case covered by clauses
(A) through (C) such as would not, if determined adversely to the Company or any
of its subsidiaries, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect. The Company's and its subsidiaries' rights to
use and operate under such Intellectual Property Rights shall not be affected,
altered, curtailed or terminated as a result of the consummation of the
transactions contemplated hereby.
(s) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on the one hand,
and the directors, officers, stockholders, customers or suppliers of the Company
or any of its subsidiaries, on the other, that is required by the Securities Act
to be described in the Registration Statement and the Prospectus and that is not
so described in such documents and in the Time of Sale Information.
(t) Investment Company Act. The Company is not and, after giving effect to
the offering and sale of the Shares to be sold by the Company hereunder and the
application of the
9
proceeds thereof as described in the Registration Statement, the Time of Sale
Information and the Prospectus, will not be required to register as an
"investment company" or an entity "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, "Investment Company
Act").
(u) Taxes. Except as described in the Registration Statement, the Time of
Sale Information and the Prospectus, the Company and its subsidiaries have filed
all federal, state, local and foreign tax returns required to be filed through
the date hereof and paid all taxes shown as due thereon; and except as otherwise
disclosed in the Registration Statement, the Time of Sale Information and the
Prospectus, there is no material tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company or any of its
subsidiaries or any of their respective properties or assets.
(v) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in the Registration Statement, the Time of
Sale Information and the Prospectus, except where the failure to possess or make
the same would not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect; and except as described in the Registration
Statement, the Time of Sale Information and the Prospectus, neither the Company
nor any of its subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or authorization or has
any reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course.
(w) No Labor Disputes. No labor disturbance by or dispute with employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is contemplated or threatened, and the Company is not aware of any
existing or imminent labor disturbance by, or dispute with, the employees of any
of its or its subsidiaries' principal suppliers, contractors or customers,
except as would not be reasonably expected to have a Material Adverse Effect.
(x) Compliance With Environmental Laws. (i) The Company and its
subsidiaries (x) are in compliance with any and all applicable federal, state,
local and foreign laws, rules, regulations, requirements, decisions and orders
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"); (y) have received and are in compliance
with all permits, licenses, certificates or other authorizations or approvals
required of them under applicable Environmental Laws to conduct their respective
businesses; and (z) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, and (ii)
there are no costs or liabilities associated with Environmental Laws of or
relating to the Company or its subsidiaries, except in the case of each of
(x)(i)(x) and (x)(i)(y) above, for any such failure to comply, or failure to
receive required permits, licenses or approvals, or cost or liability, as would
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.
10
(y) Compliance With ERISA. Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and its affiliates has been maintained in all material respects in
compliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the "Code"); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the
Code, has occurred with respect to any such plan excluding transactions effected
pursuant to a statutory or administrative exemption; and for each such plan that
is subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, no "accumulated funding deficiency" as defined in Section 412 of the Code
has been incurred, whether or not waived, and the fair market value of the
assets of each such plan (excluding for these purposes accrued but unpaid
contributions) exceeds the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions.
(z) Disclosure Controls. The Company and its subsidiaries maintain an
effective system of "disclosure controls and procedures" (as defined in Rule
13a-15(e) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Exchange Act"))
that is designed to ensure that information required to be disclosed by the
Company in reports that will file or submit under the Exchange Act will be
recorded, processed, summarized and reported within the time periods specified
in the Commission's rules and forms, including controls and procedures designed
to ensure that such information will be accumulated and communicated to the
Company's management as appropriate to allow timely decisions regarding required
disclosure.
(aa) Accounting Controls. The Company and its subsidiaries maintain systems
of "internal control over financial reporting" (as defined in Rule 13a-15(f) of
the Exchange Act) that comply with the requirements of the Exchange Act and have
been designed by, or under the supervision of, their respective principal
executive and principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, including,
but not limited to internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as disclosed in the
Registration Statement, the Time of Sale Information and the Prospectus, there
are no material weaknesses in the Company's internal controls.
(bb) Insurance. The Company and its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, including
business interruption insurance, which insurance is in amounts and insures
against such losses and risks as are adequate to protect the Company and its
subsidiaries and their respective businesses; and neither the Company
11
nor any of its subsidiaries has (i) received notice from any insurer or agent of
such insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance, or (ii) any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.
(cc) No Unlawful Payments. Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations promulgated thereunder; or (iv) made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(dd) Compliance with Money Laundering Laws. The operations of the Company
and its subsidiaries are and have been conducted at all times in compliance in
all material respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, and any applicable money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws"), and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(ee) Compliance with OFAC. None of the Company, any of its subsidiaries or,
to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury ("OFAC"); and the Company will not directly or
indirectly use the proceeds of the offering of the Shares to be sold by the
Company hereunder, or lend, contribute or otherwise make available such proceeds
to any subsidiary, joint venture partner or other person or entity, for the
purpose of financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
(ff) No Restrictions on Subsidiaries. Except as disclosed in the
Registration Statement, the Time of Sale Information and the Prospectus, no
subsidiary of the Company is currently prohibited, directly or indirectly, under
any agreement or other instrument to which it is a party or is subject, from
paying any dividends to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
subsidiary's properties or assets to the Company or any other subsidiary of the
Company.
(gg) No Broker's Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Company or any
of its subsidiaries or any Underwriter for a
12
brokerage commission, finder's fee or like payment in connection with the
offering and sale of the Shares.
(hh) No Registration Rights. Except as described in the Registration
Statement, the Time of Sale Information and the Prospectus, no person has the
right to require the Company or any of its subsidiaries to register any
securities for sale under the Securities Act by reason of the filing of the
Registration Statement with the Commission or the sale of the Shares.
(ii) No Stabilization. The Company has not taken, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares in violation of
applicable law.
(jj) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Registration Statement, the Time of Sale Information and
the Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(kk) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included in the Registration Statement, the Time of Sale
Information and the Prospectus is not based on or derived from sources that are
reliable and accurate in all material respects.
(ll) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. There is and has been no failure on the part of
the Company, any of its subsidiaries or any of the Company's directors or
officers, in their capacities as such, to comply with any applicable provision
of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated in
connection therewith (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act"), including Section 402 related
to loans.
(mm) Off-Balance Sheet Arrangements. There are no transactions,
arrangements or other relationships between or among the Company, its
subsidiaries, any of its affiliates and any unconsolidated entity, including,
but not limited to, any structured finance, special purpose or limited purpose
entity that could reasonably be expected to materially affect the Company's
liquidity or the availability of or requirements for its capital resources that
are required to be described in the Registration Statement, the Time of Sale
Information and the Prospectus and that have not been described as required.
(nn) Status under the Securities Act. The Company is not an "ineligible
issuer" as defined under the Securities Act, in each case at the times specified
in the Securities Act in connection with the offering of the Shares.
4. Representations and Warranties of the Selling Stockholders. Each of the
Selling Stockholders, severally and not jointly, represents and warrants to each
Underwriter and the Company that:
(a) Required Consents; Authority. All consents, approvals,
authorizations and orders necessary for the execution and delivery by such
Selling Stockholder of this Agreement
13
and the Irrevocable Power of Attorney (the "Power of Attorney") and the Custody
Agreement (the "Custody Agreement") hereinafter referred to, and for the sale
and delivery of the Shares to be sold by such Selling Stockholder hereunder,
have been obtained; and such Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody
Agreement and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Stockholder hereunder; this Agreement, the Power of Attorney and
the Custody Agreement have each been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder.
(b) No Conflicts. The execution, delivery and performance by or on
behalf of such Selling Stockholder of this Agreement, the Power of Attorney and
the Custody Agreement, the sale of the Shares to be sold by such Selling
Stockholder and the consummation by such Selling Stockholder of the transactions
herein and therein contemplated will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of such Selling Stockholder pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of such Selling
Stockholder is subject, or (ii) result in the violation of any applicable law or
statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority having jurisdiction over such Selling
Stockholder, except, in each case, for any such conflict, breach, violation or
default that would not, individually or in the aggregate, have a material
adverse effect on such Selling Stockholder's ability to consummate the
transactions contemplated by this Agreement.
(c) Title to Shares. Such Selling Stockholder has good and valid title
to the Shares to be sold at the Closing Date or the Additional Closing Date, as
the case may be, by such Selling Stockholder hereunder, free and clear of all
liens, encumbrances, equities or adverse claims; such Selling Stockholder will
have, immediately prior to the Closing Date or the Additional Closing Date, as
the case may be, good and valid title to the Shares to be sold at the Closing
Date or the Additional Closing Date, as the case may be, by such Selling
Stockholder, free and clear of all liens, encumbrances, equities or adverse
claims; and, upon delivery of the certificates representing such Shares and
payment therefor pursuant hereto, good and valid title to such Shares, free and
clear of all liens, encumbrances, equities or adverse claims, will pass to the
several Underwriters.
(d) No Stabilization. Such Selling Stockholder has not taken and will
not take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in any stabilization or manipulation
of the price of the Shares in violation of applicable law.
(e) Time of Sale Information. The Time of Sale Information, at the
Time of Sale did not, and at the Closing Date and as of the Additional Closing
Date, as the case may be, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that such Selling Stockholder makes no representation and
14
warranty with respect to any statements or omissions made in reliance upon and
in conformity with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives expressly for
use in such Time of Sale Information; and provided, further, that the
representations and warranties given in this paragraph by each Selling
Stockholder named in Schedule II.B. (each, a "Non-Management Selling
Stockholder" and, collectively, the "Non-Management Selling Stockholders"),
apply only to statements or omissions in the Time of Sale Information made in
reliance upon and in conformity with information relating to such Non-Management
Selling Stockholder furnished to the Company or the Underwriters in writing by
or on behalf of such Non-Management Selling Stockholder expressly for use
therein.
(f) Issuer Free Writing Prospectus. Other than the Preliminary
Prospectus and the Prospectus, such Selling Stockholder (including its agents
and representatives, other than the Underwriters in their capacity as such) has
not made, used, prepared, authorized, approved or referred to and will not
prepare, make, use, authorize, approve or refer to any Issuer Free Writing
Prospectus, other than (i) any document not constituting a prospectus pursuant
to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities
Act or (ii) the documents listed on Annex A hereto and other written
communications approved in writing in advance by the Company and the
Representatives.
(g) Registration Statement and Prospectus. As of the applicable
effective date of the Registration Statement and any amendment thereto, the
Registration Statement complied and will comply in all material respects with
the Securities Act, and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and as of the
date of the Prospectus and any amendment or supplement thereto and as of the
Closing Date and as of the Additional Closing Date, as the case may be, the
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that such Selling Stockholder makes no representation and warranty with respect
to any statements or omissions made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in the
Registration Statement and the Prospectus and any amendment or supplement
thereto; and provided, further, that the representations and warranties given in
this paragraph by each Non-Management Selling Stockholder apply only to
statements or omissions in the Registration Statement and the Prospectus and any
amendment or supplement thereto made in reliance upon and in conformity with
information relating to such Non-Management Selling Stockholder furnished to the
Company or the Underwriters in writing by or on behalf of such Non-Management
Selling Stockholder expressly for use therein.
(h) Material Information. As of the date hereof, as of the Closing
Date and as of the Additional Closing Date, as the case may be, the sale of the
Shares by such Selling Stockholder is not and will not be prompted by any
material information concerning the Company which is not set forth in the
Registration Statement, the Time of Sale Information or the Prospectus.
15
Each of the Selling Stockholders represents and warrants that
certificates in negotiable form representing all of the Shares to be sold by
such Selling Stockholders hereunder have been placed in custody under a Custody
Agreement relating to such Shares, in the form heretofore furnished to you, duly
executed and delivered by such Selling Stockholder to the Company, as custodian
(the "Custodian"), and that such Selling Stockholder has duly executed and
delivered Powers of Attorney, in the form heretofore furnished to you,
appointing the person or persons indicated in Schedule II hereto, and each of
them, as such Selling Stockholder's Attorneys-in-Fact (the "Attorneys-in-Fact"
or any one of them the "Attorney-in Fact") with authority to execute and deliver
this Agreement on behalf of such Selling Stockholder, to determine the purchase
price to be paid by the Underwriters to the Selling Stockholders as provided
herein, to authorize the delivery of the Shares to be sold by such Selling
Stockholder hereunder and otherwise to act on behalf of such Selling Stockholder
in connection with the transactions contemplated by this Agreement and the
Custody Agreement.
Each of the Selling Stockholders specifically agrees that the Shares
represented by the certificates held in custody for such Selling Stockholder
under the Custody Agreement, are subject to the interests of the Underwriters
hereunder, and that the arrangements made by such Selling Stockholder for such
custody, and the appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable. Each
of the Selling Stockholders specifically agrees that the obligations of such
Selling Stockholder hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling Stockholder, 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 in the case of a
partnership, corporation, limited liability company or similar organization, by
the dissolution or liquidation of such partnership, corporation, limited
liability company or similar organization, or by the occurrence of any other
event. If any individual Selling Stockholder or any such executor or trustee
should die or become incapacitated, or if any such estate or trust should be
terminated, or if any such partnership, corporation, limited liability company
or similar organization should be dissolved or liquidated, or if any other such
event should occur, before the delivery of the Shares hereunder, certificates
representing such Shares shall be delivered by or on behalf of such Selling
Stockholder in accordance with the terms and conditions of this Agreement and
the Custody Agreement, and actions taken by the Attorneys-in-Fact pursuant to
the Powers of Attorney shall be as valid as if such death, incapacity,
termination, dissolution, liquidation 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, liquidation or other event.
5. Further Agreements of the Company. The Company covenants and agrees with
each Underwriter that:
(a) Required Filings. The Company will file the Prospectus with the
Commission within the time periods specified by Rule 424(b) and Rule 430A under
the Securities Act and will file any Issuer Free Writing Prospectus to the
extent required by Rule 433 under the Securities Act; and the Company will
furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the
extent not previously delivered) to the Underwriters in New York City as soon as
practicable but in no event later than 10:00 A.M., New York City time, on the
16
second business day next succeeding the date of this Agreement in such
quantities as the Representatives may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, (i) to
the Representatives, two signed copies of the Registration Statement as
originally filed and each amendment thereto, in each case including all exhibits
and consents filed therewith; and (ii) to each Underwriter (A) a conformed copy
of the Registration Statement as originally filed and each amendment thereto
(without exhibits) and (B) during the Prospectus Delivery Period (as defined
below), as many copies of the Prospectus (including all amendments and
supplements thereto) and each Issuer Free Writing Prospectus as the
Representatives may reasonably request. As used herein, the term "Prospectus
Delivery Period" means such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered (or
required to be delivered but for Rule 172 under the Securities Act) in
connection with sales of the Shares by any Underwriter or dealer.
(c) Amendments, Supplements and Issuer Free Writing Prospectuses. Before
preparing, using, authorizing, approving, referring to or filing any Issuer Free
Writing Prospectus, and before filing any amendment or supplement to the
Registration Statement or the Prospectus, the Company will furnish to the
Representatives and counsel for the Underwriters a copy of the proposed Issuer
Free Writing Prospectus, amendment or supplement for review and will not
prepare, use, authorize, approve, refer to or file any such Issuer Free Writing
Prospectus or file any such proposed amendment or supplement to which the
Representatives reasonably object.
(d) Notice to the Representatives. The Company will advise the
Representatives promptly, and confirm such advice in writing, (i) when the
Registration Statement has become effective; (ii) when any amendment to the
Registration Statement has been filed or becomes effective; (iii) when any
supplement to the Prospectus or any Issuer Free Writing Prospectus or any
amendment to the Prospectus has been filed; (iv) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or the receipt of any comments from the Commission
relating to the Registration Statement or any other request by the Commission
for any additional information; (v) of the issuance by the Commission of any
order suspending the effectiveness of the Registration Statement or preventing
or suspending the use of any Preliminary Prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose or pursuant to
Section 8A of the Securities Act; (vi) of the occurrence of any event within the
Prospectus Delivery Period as a result of which the Prospectus, the Time of Sale
Information or any Issuer Free Writing Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing when the Prospectus, the Time of Sale
Information or any such Issuer Free Writing Prospectus is delivered to a
purchaser, not misleading; and (vii) of the receipt by the Company of any notice
with respect to any suspension of the qualification of the Shares for offer and
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and the Company will use its best efforts to prevent the issuance
of any such order suspending the effectiveness of the Registration Statement,
preventing or suspending the use of
17
any Preliminary Prospectus or the Prospectus or suspending any such
qualification of the Shares and, if any such order is issued, will obtain as
soon as possible the withdrawal thereof.
(e) Ongoing Compliance. (i) If during the Prospectus Delivery Period (A)
any event shall occur or condition shall exist 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 in order to make the
statements therein, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, not misleading or (B) it is necessary to
amend or supplement the Prospectus to comply with law, the Company will
immediately notify the Underwriters thereof and forthwith prepare and, subject
to paragraph (c) above, file with the Commission and furnish to the Underwriters
and to such dealers as the Representatives may designate, such amendments or
supplements to the Prospectus as may be necessary so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus will comply with law and (ii) if at any
time prior to the Closing Date (A) any event shall occur or condition shall
exist as a result of which the Time of Sale Information as then amended or
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances, not misleading or (B) it is necessary to amend
or supplement the Time of Sale Information to comply with law, the Company will
immediately notify the Underwriters thereof and forthwith prepare and, subject
to paragraph (c) above, file with the Commission (to the extent required) and
furnish to the Underwriters and to such dealers as the Representatives may
designate, such amendments or supplements to the Time of Sale Information as may
be necessary so that the statements in the Time of Sale Information as so
amended or supplemented will not, in the light of the circumstances, be
misleading or so that the Time of Sale Information will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and will continue such qualifications
in effect so long as required for distribution of the Shares; provided that the
Company shall not be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally available to its
security holders and the Representatives as soon as practicable an earning
statement that satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder covering a period of at
least twelve months beginning with the first fiscal quarter of the Company
occurring after the "effective date" (as defined in Rule 158) of the
Registration Statement.
(h) Clear Market.
18
(i) For a period of 180 days after the date of the Prospectus, the
Company will not (A) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of Stock or any
securities convertible into or exercisable or exchangeable for Stock or (B)
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Stock, whether any such
transaction described in clause (A) or (B) above is to be settled by delivery of
Stock or such other securities, in cash or otherwise, without the prior written
consent of JPMSI, on behalf of the Representatives, other than (1) the offer and
sale of the Shares, (2) the grant of options or other rights to purchase shares
of Stock under existing employee incentive plans, (3) the issuance of any shares
of Stock issued upon the exercise of options or other rights granted under
existing employee incentive plans, and (4) the issuance of shares of Stock upon
the conversion or exchange of convertible or exchangeable securities outstanding
at the date of this Agreement. Notwithstanding the foregoing, if (y) during the
last 17 days of the 180-day restricted period, the Company issues an earnings
release or material news or a material event relating to the Company occurs; or
(z) prior to the expiration of the 180-day restricted period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions imposed by
this Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.
(ii) For a period of 180 days after the date of the Prospectus, the
Company will use its commercially reasonable efforts to cause each holder of
options or other rights, including without limitation stock appreciation rights,
granted under employee incentive plans not to (A) offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of Stock or any securities convertible into or exercisable or
exchangeable for Stock or (B) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Stock, whether any such transaction described in clause (A) or (B) above is
to be settled by delivery of Stock or such other securities, in cash or
otherwise, without the prior written consent of JPMSI, on behalf of the
Representatives. Notwithstanding the foregoing, if (y) during the last 17 days
of the 180-day restricted period, the Company issues an earnings release or
material news or a material event relating to the Company occurs; or (z) prior
to the expiration of the 180-day restricted period, the Company announces that
it will release earnings results during the 16-day period beginning on the last
day of the 180-day period, the Company will use its best efforts to cause the
restrictions set forth in this subsection to continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Shares being sold by the Company as described in the Registration
Statement, the Time of Sale Information and the Prospectus under the heading
"Use of Proceeds."
19
(j) No Stabilization. The Company will not take, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares in violation of
applicable law.
(k) Exchange Listing. The Company will use its best efforts to list,
subject to notice of issuance, the Shares on the NASDAQ Global Market.
(l) Reports. Until the second anniversary of the effective date of the
Registration Statement, to the extent not otherwise available on ▇▇▇▇▇ (as
defined in Regulation S-T of the Commission), the Company will furnish to the
Representatives, as soon as they are available, copies of all reports or other
communications (financial or other) furnished to holders of the Shares, and
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange or automatic quotation system.
(m) Record Retention. The Company will, pursuant to reasonable procedures
developed in good faith, retain copies of each Issuer Free Writing Prospectus
that is not filed with the Commission in accordance with Rule 433 under the
Securities Act.
(n) Filings. The Company will file with the Commission such reports as may
be required by Rule 463 under the Securities Act.
6. Further Agreements of the Selling Stockholders. Each of the Selling
Stockholders, severally and not jointly, covenants and agrees with each
Underwriter that:
(a) Clear Market. Such Selling Stockholder will abide by the terms of a
"lock-up" agreement in the form of Exhibit A hereto, an executed copy of which
has been previously delivered to the Underwriters.
(b) Tax Form. It will deliver to the Representatives prior to or at the
Closing Date or the Additional Closing Date, as the case may be, a properly
completed and executed U.S. Treasury Department Form W-9 (or other applicable
form or statement specified by the Treasury Department regulations in lieu
thereof) in order to facilitate the Underwriters' documentation of their
compliance with the reporting and withholding provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 with respect to the transactions herein
contemplated.
7. Certain Agreements of the Underwriters. Each Underwriter hereby
represents and agrees that:
(a) It has not and will not use, authorize use of, refer to, or participate
in the planning for use of, any "free writing prospectus," as defined in Rule
405 under the Securities Act (which term includes use of any written information
furnished to the Commission by the Company and not incorporated by reference
into the Registration Statement and any press release issued by the Company)
other than (i) a free writing prospectus that contains no "issuer information"
(as defined in Rule 433(h)(2) under the Securities Act) that was not included
(including through incorporation by reference) in the Preliminary Prospectus or
a previously filed Issuer Free
20
Writing Prospectus, (ii) any Issuer Free Writing Prospectus listed on Annex A or
prepared pursuant to Section 5(c) above, or (iii) any free writing prospectus
prepared by such Underwriter and approved by the Company in advance in writing
(each such free writing prospectus referred to in clauses (i) or (iii), an
"Underwriter Free Writing Prospectus").
(b) It has not and will not distribute any Underwriter Free Writing
Prospectus referred to in clause (a)(i) in a manner reasonably designed to lead
to its broad unrestricted dissemination.
(c) It has not and will not, without the prior written consent of the
Company, use any free writing prospectus that contains the final terms of the
Shares unless such terms have previously been included in a free writing
prospectus filed with the Commission; provided that the Underwriters may convey
the information set forth on Annex A hereto without the consent of the Company.
(d) It is not subject to any pending proceeding under Section 8A of the
Securities Act with respect to the offering (and will promptly notify the
Company if any such proceeding against it is initiated during the Prospectus
Delivery Period).
(e) It will, pursuant to reasonable procedures developed in good faith,
retain copies of each free writing prospectus used or referred to by it, in
accordance with Rule 433 under the Securities Act.
8. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Underwritten Shares on the Closing Date or the
Option Shares on the Additional Closing Date, as the case may be, as provided
herein is subject to the performance by the Company and each of the Selling
Stockholders of their respective covenants and other obligations hereunder and
to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceeding for such purpose or pursuant to Section 8A of the Securities Act
shall be pending before or threatened by the Commission; the Prospectus and each
Issuer Free Writing Prospectus shall have been timely filed with the Commission
under the Securities Act (in the case of an Issuer Free Writing Prospectus, to
the extent required by Rule 433 under the Securities Act) and in accordance with
Section 5(a) hereof; and all requests by the Commission for additional
information shall have been complied with to the reasonable satisfaction of the
Representatives.
(b) Representations and Warranties. The respective representations and
warranties of the Company and the Selling Stockholders contained herein shall be
true and correct on the date hereof and on and as of the Closing Date or the
Additional Closing Date, as the case may be; and the statements of the Company
and its officers and each of the Selling Stockholders made in any certificates
delivered pursuant to this Agreement shall be true and correct on and as of the
Closing Date or the Additional Closing Date, as the case may be.
21
(c) No Downgrade. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded any
securities or preferred stock of or guaranteed by the Company or any of its
subsidiaries by any "nationally recognized statistical rating organization," as
such term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act and (ii) no such organization shall have publicly announced that
it has under surveillance or review, or has changed its outlook with respect to,
its rating of any securities or preferred stock of or guaranteed by the Company
or any of its subsidiaries (other than an announcement with positive
implications of a possible upgrading).
(d) No Material Adverse Change. No event or condition of a type described
in Section 3(f) hereof shall have occurred or shall exist, which event or
condition is not described in the Time of Sale Information (excluding any
amendment or supplement thereto) and the Prospectus (excluding any amendment or
supplement thereto) and the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Shares on the Closing Date or the Additional
Closing Date, as the case may be, on the terms and in the manner contemplated by
this Agreement, the Time of Sale Information and the Prospectus.
(e) Officers' Certificate. The Representatives shall have received on and
as of the Closing Date or the Additional Closing Date, as the case may be, (i) a
certificate of the chief executive officer and the chief financial officer of
the Company (1) confirming that such officers have carefully reviewed the
Registration Statement, the Time of Sale Information and the Prospectus and, to
the knowledge of such officers, the representations set forth in Sections 3(b)
and 3(d) hereof are true and correct, (2) confirming that the other
representations and warranties of the Company in this Agreement are true and
correct and that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date and (3) to the effect set forth in paragraphs (a), (c) and (d)
above and (ii) a certificate of the Selling Stockholders, in form and substance
reasonably satisfactory to the Representatives, confirming that the
representations and warranties of the Selling Stockholders in this Agreement are
true and correct and that the such Selling Stockholders have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Date or Additional Closing Date,
as the case may be.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date
or the Additional Closing Date, as the case may be, KPMG LLP shall have
furnished to the Representatives, at the request of the Company, letters, dated
the respective dates of delivery thereof and addressed to the Underwriters, in
form and substance reasonably satisfactory to the Representatives, containing
statements and information of the type customarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement, the Time
of Sale Information and the Prospectus; provided that the letter delivered on
the Closing Date or the Additional Closing Date, as the case may be, shall use a
"cut-off" date no more than three business days prior to such Closing Date or
such Additional Closing Date, as the case may be.
(g) Opinion of Counsel for the Company. ▇▇▇▇▇▇▇ Procter LLP, counsel for
the Company, shall have furnished to the Representatives, at the request of the
Company, their
22
written opinion, dated the Closing Date or the Additional Closing Date, as the
case may be, and addressed to the Underwriters, to the effect set forth in Annex
B hereto.
(h) Opinion of Special Indian Counsel for the Company. ALMT Legal, special
Indian counsel for the Company, shall have furnished to the Representatives, at
the request of the Company, their written opinion, dated the Closing Date or the
Additional Closing Date, as the case may be, and addressed to the Underwriters,
to the effect set forth in Annex C hereto.
(i) Opinion of Special Sri Lankan Counsel for the Company. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Associates, special Sri Lankan counsel for the Company, shall have furnished to
the Representatives, at the request of the Company, their written opinion, dated
the Closing Date or the Additional Closing Date, as the case may be, and
addressed to the Underwriters, to the effect set forth in Annex D hereto.
(j) Opinion of Special U.K. Counsel for the Company. Eversheds LLP, special
U.K. counsel for the Company, shall have furnished to the Representatives, at
the request of the Company, their written opinion, dated the Closing Date or the
Additional Closing Date, as the case may be, and addressed to the Underwriters,
to the effect set forth in Annex E hereto.
(k) Opinion of Counsel for the Selling Stockholders. ▇▇▇▇▇▇▇ Procter LLP,
special counsel for the Selling Stockholders, shall have furnished to the
Representatives, at the request of the Selling Stockholders, their written
opinion, dated the Closing Date or the Additional Closing Date, as the case may
be, and addressed to the Underwriters, to the effect set forth in Annex F
hereto.
(l) Opinion of Counsel for the Underwriters. The Representatives shall have
received on and as of the Closing Date or the Additional Closing Date, as the
case may be, an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, counsel
for the Underwriters, with respect to such matters as the Representatives may
reasonably request, and such counsel shall have received such documents and
information as they may reasonably request to enable them to pass upon such
matters.
(m) No Legal Impediment to Sale. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date or the Additional Closing Date, as the case may be,
prevent the sale of the Shares; and no injunction or order of any federal, state
or foreign court shall have been issued that would, as of the Closing Date or
the Additional Closing Date, as the case may be, prevent the sale of the Shares.
(n) Good Standing. The Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, satisfactory
evidence of the good standing of the Company and its subsidiaries in their
respective jurisdictions of organization and their good standing as foreign
entities in such other jurisdictions as the Representatives may reasonably
request, in each case in writing or any standard form of telecommunication from
the appropriate governmental or regulatory authorities of such jurisdictions.
23
(o) Exchange Listing. The Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved for
listing on the NASDAQ Global Market, subject to official notice of issuance.
(p) Lock-up Agreements. The "lock-up" agreements, each substantially in the
form of Exhibit A hereto, between you and certain stockholders (including all of
the Selling Stockholders), option holders, warrant holders, officers and
directors of the Company relating to sales and certain other dispositions of
shares of Stock or certain other securities, delivered to you on or before the
date hereof, shall be in full force and effect on the Closing Date or Additional
Closing Date, as the case may be.
(q) Additional Documents. On or prior to the Closing Date or the Additional
Closing Date, as the case may be, the Company and the Selling Stockholders shall
have furnished to the Representatives such further certificates and documents as
the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
9. Indemnification and Contribution.
(a) Indemnification of the Underwriters by the Company. The Company agrees
to indemnify and hold harmless each Underwriter, its affiliates, directors and
officers and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, legal fees and other expenses incurred in connection with
any suit, action or proceeding or any claim asserted, as such fees and expenses
are incurred), joint or several, that arise out of, or are based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, not misleading, (ii) or any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto), any Issuer Free Writing Prospectus or any Time
of Sale Information (including any Time of Sale Information that has
subsequently been amended), or caused by any omission or alleged omission to
state therein a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading, in
each case except insofar as such losses, claims, damages or liabilities arise
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in paragraph (c)
below.
(b) Indemnification of the Underwriters by the Selling Stockholders. Each
of the Selling Stockholders severally in proportion to the number of Shares to
be sold by such Selling
24
Stockholder hereunder agrees to indemnify and hold harmless each Underwriter,
its affiliates, directors and officers and each person, if any, who controls
such Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the indemnity set forth in
paragraph (a) above, in each case except insofar as such losses, claims, damages
or liabilities arise out of, or are based upon, any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus (or any amendment or supplement thereto),
any Issuer Free Writing Prospectus or any Time of Sale Information, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in paragraph (c)
below; and further in each case to the extent, but only to the extent, that such
losses, claims, damages or liabilities arise out of, or are based upon, any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to any Selling
Stockholder furnished to the Company in writing by such Selling Stockholder
expressly for use in the Registration Statement, the Prospectus (or any
amendment or supplement thereto), any Issuer Free Writing Prospectus or any Time
of Sale Information. The liability of each Selling Stockholder under the
indemnity agreement contained in this paragraph shall be limited to an amount
equal to (i) the number of Shares sold by such Selling Stockholder under this
Agreement multiplied by (ii) the Purchase Price (minus the related underwriting
discounts and commissions).
(c) Indemnification of the Company and the Selling Stockholders. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, its directors, its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act and each of the
Selling Stockholders to the same extent as the indemnity set forth in paragraph
(a) above, but only with respect to any losses, claims, damages or liabilities
that arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to such Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus (or any amendment or supplement thereto),
any Issuer Free Writing Prospectus or any Time of Sale Information (including
any Time of Sale Information that has subsequently been amended), it being
understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus furnished on
behalf of each Underwriter: the concession and reallowance figures and the
information regarding discretionary sales appearing in the third paragraph under
the caption "Underwriting," the information regarding Internet distributions
contained in the seventh paragraph under the caption "Underwriting" and the
information contained in the twelfth, thirteenth and fourteenth paragraphs
describing stabilizing activities and passive market making under the caption
"Underwriting."
(d) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to the preceding paragraphs of this Section 9 above, such person (the
"Indemnified Person") shall promptly notify
25
the person against whom such indemnification may be sought (the "Indemnifying
Person") in writing; provided that the failure to notify the Indemnifying Person
shall not relieve it from any liability that it may have under this Section 9
except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it
from any liability that it may have to an Indemnified Person otherwise than
under this Section 9. If any such proceeding shall be brought or asserted
against an Indemnified Person and it shall have notified the Indemnifying Person
thereof, the Indemnifying Person shall be entitled to participate therein and,
to the extent it wishes, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Person (who shall not, without the consent of
the Indemnified Person, be counsel to the Indemnifying Person) to represent the
Indemnified Person in such proceeding and shall pay the fees and expenses of
such counsel related to such proceeding, as incurred. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary or (ii) the Indemnifying Person has failed
within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person. It is understood and agreed that the Indemnifying Person
shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be paid or reimbursed as they are incurred. Any
such separate firm for any Underwriter, its affiliates, directors and officers
and any control persons of such Underwriter shall be designated in writing by
JPMSI, any such separate firm for the Company, its directors, its officers who
signed the Registration Statement and any control persons of the Company shall
be designated in writing by the Company and any separate firm for the Selling
Stockholders shall be designated in writing by the Attorney-in-Fact. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested that an Indemnifying
Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by the Indemnifying
Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.
(e) Contribution. If the indemnification provided for in paragraphs (a),
(b) and (c) above is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims,
26
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraph, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders, on the one hand, and the Underwriters, on the other, from
the offering of the Shares or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) but also the relative
fault of the Company and the Selling Stockholders, on the one hand, and the
Underwriters, on the other, in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Selling Stockholders, on the one hand, and the Underwriters, on the
other, shall be deemed to be in the same respective proportions as the net
proceeds (before deducting expenses) received by the Company and the Selling
Stockholders, as the case may be, from the sale of the Shares and the total
underwriting discounts and commissions received by the Underwriters in
connection therewith, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate offering price of the Shares. The relative
fault of the Company and the Selling Stockholders, on the one hand, and the
Underwriters, on the other, 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 and the Selling Stockholders or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(f) Limitation on Liability. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Selling Stockholders or the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (e) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (e) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with any such action or claim.
Notwithstanding the provisions of this Section 9, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total underwriting discounts and commissions received by such
Underwriter with respect to the offering of the Shares exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 9 are several in proportion
to their respective purchase obligations hereunder and not joint. The liability
of each Selling Stockholder under the contribution agreement contained in this
paragraph is several in proportion to the respective number of Shares such
Selling Stockholder has sold hereunder and shall be limited to an amount equal
to (i) the number of Shares sold by such Selling Stockholder under this
Agreement multiplied by (ii) the Purchase Price (minus the related underwriting
discounts and commissions).
27
(g) Non-Exclusive Remedies. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in equity.
10. Effectiveness of Agreement. This Agreement shall become effective upon
the execution and delivery hereof by the parties hereto.
11. Termination. This Agreement may be terminated in the absolute
discretion of the Representatives, by notice to the Company and the Selling
Stockholders, if after the execution and delivery of this Agreement and prior to
the Closing Date or, in the case of the Option Shares, prior to the Additional
Closing Date (a) trading generally shall have been suspended or materially
limited on or by any of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ Stock Market or the National Association of Securities
Dealers, Inc.; (b) trading of any securities issued or guaranteed by the Company
shall have been suspended on any exchange or in any over-the-counter market; (c)
a general moratorium on commercial banking activities shall have been declared
by federal or New York State authorities; (d) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis, either within or outside the United States, that, in the
judgment of the Representatives, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, on the terms and in the manner contemplated by this Agreement, the Time of
Sale Information and the Prospectus; or (e) the representation in Section 3(b)
is incorrect in any respect.
12. Defaulting Underwriter. (a) If, on the Closing Date or the Additional
Closing Date, as the case may be, any Underwriter defaults on its obligation to
purchase the Shares that it has agreed to purchase hereunder on such date, the
non-defaulting Underwriters may in their discretion arrange for the purchase of
such Shares by other persons satisfactory to the Company and, with respect to
the Option Shares, the Selling Stockholders, on the terms contained in this
Agreement. If, within 36 hours after any such default by any Underwriter, the
non-defaulting Underwriters do not arrange for the purchase of such Shares, then
the Company and, if applicable, the Selling Stockholders, shall be entitled to a
further period of 36 hours within which to procure other persons satisfactory to
the non-defaulting Underwriters to purchase such Shares on such terms. If other
persons become obligated or agree to purchase the Shares of a defaulting
Underwriter, either the non-defaulting Underwriters or the Company and the
Selling Stockholders may postpone the Closing Date or the Additional Closing
Date, as the case may be, for up to five full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement and the Prospectus
or in any other document or arrangement, and the Company agrees to promptly
prepare any amendment or supplement to the Registration Statement and the
Prospectus that effects any such changes. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
otherwise requires, any person not listed in Schedule I hereto that, pursuant to
this Section 12, purchases Shares that a defaulting Underwriter agreed but
failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters, the Company and the
28
Selling Stockholders as provided in paragraph (a) above, the aggregate number of
Shares that remain unpurchased on the Closing Date or the Additional Closing
Date, as the case may be, does not exceed one-eleventh of the aggregate number
of Shares to be purchased on such date, then the Company (and the Selling
Stockholders in the case of Option Shares) shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares that such
Underwriter agreed to purchase hereunder on such date plus such Underwriter's
pro rata share (based on the number of Shares that such Underwriter agreed to
purchase on such date) of the Shares of such defaulting Underwriter or
Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters, the Company and the Selling Stockholders as provided in paragraph
(a) above, the aggregate number of Shares that remain unpurchased on the Closing
Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of
the aggregate amount of Shares to be purchased on such date, or if the Company
(and the Selling Stockholders in the case of Option Shares) shall not exercise
the right described in paragraph (b) above, then this Agreement or, with respect
to any Additional Closing Date, the obligation of the Underwriters to purchase
Option Shares on the Additional Closing Date, as the case may be, shall
terminate without liability on the part of the non-defaulting Underwriters. Any
termination of this Agreement pursuant to this Section 12 shall be without
liability on the part of the Company and the Selling Stockholders, except that
the Company will continue to be liable for the payment of expenses as set forth
in Section 13 hereof and except that the provisions of Section 9 hereof shall
not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company, the Selling Stockholders or any
non-defaulting Underwriter for damages caused by its default.
13. Payment of Expenses. (a) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
will pay or cause to be paid all costs and expenses incident to the performance
of its obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the
Shares and any taxes payable in that connection; (ii) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, any
Time of Sale Information and the Prospectus (including all exhibits, amendments
and supplements thereto) and the distribution thereof; (iii) the costs of
reproducing and distributing this Agreement; (iv) the fees and expenses of the
Company's counsel and independent accountants; (v) the fees and expenses
incurred in connection with the registration or qualification and determination
of eligibility for investment of the Shares under the laws of such jurisdictions
as the Representatives may designate and the preparation, printing and
distribution of a Blue Sky Memorandum (including the related fees and expenses
of counsel for the Underwriters not to exceed $10,000); (vi) the cost of
preparing stock certificates; (vii) the costs and charges of any transfer agent
and any registrar; (viii) all expenses and application fees incurred in
connection with any filing with, and clearance of the offering by, the National
Association of Securities Dealers, Inc.; (ix) all expenses incurred by the
Company in connection with any "road show" presentation to potential investors;
and (x) all expenses and application fees related to the listing of the Shares
on the NASDAQ Global Market. It is
29
understood, however, that except as provided in this Section 13 and Section 9
hereto, 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
owned by them and any advertising expenses connected with any offers they may
make. Furthermore, all expenses associated with chartering any aircraft in
connection with the offering shall be borne 50% by the Company and 50% by the
Underwriters.
(b) If (i) this Agreement is terminated pursuant to Section 11, (ii) the
Company or the Selling Stockholders for any reason fail to tender the Shares for
delivery to the Underwriters or (iii) the Underwriters decline to purchase the
Shares for any reason permitted under this Agreement, the Company agrees to
reimburse the Underwriters for all out-of-pocket costs and expenses (including
the fees and expenses of their counsel) reasonably incurred by the Underwriters
in connection with this Agreement and the offering contemplated hereby.
14. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto, and their respective
successors and the officers and directors and any controlling persons referred
to in Section 9 hereof. Nothing in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor
merely by reason of such purchase.
15. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Selling
Stockholders and the Underwriters contained in this Agreement or made by or on
behalf of the Company, the Selling Stockholders or the Underwriters pursuant to
this Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Shares and shall remain in full force and
effect, regardless of any termination of this Agreement or any investigation
made by or on behalf of the Company, the Selling Stockholders or the
Underwriters.
16. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term "affiliate" has the meaning set forth in
Rule 405 under the Securities Act; (b) the term "business day" means any day
other than a day on which banks are permitted or required to be closed in New
York City; and (c) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act.
17. Miscellaneous. (a) Authority of JPMSI. Any action by the
Representatives or the Underwriters hereunder may be taken by JPMSI on behalf of
the Representatives and the Underwriters, and any such action taken by JPMSI
shall be binding upon the Representatives and the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Underwriters
shall be given to the Representatives c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax: ▇▇▇-▇▇▇-▇▇▇▇); Attention: Equity
Syndicate Desk. Notices to the Company shall be given to it at Virtusa
30
Corporation, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax:
▇▇▇-▇▇▇-▇▇▇▇); Attention: Chief Executive Officer. Notices to the Selling
Stockholders shall be given ▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ Place, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax: ▇▇▇-▇▇▇-▇▇▇▇); Attention: ▇▇▇▇ ▇. ▇▇▇▇
III, Esq.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
(f) Headings. The headings herein are included for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
31
If the foregoing is in accordance with your understanding, please indicate
your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
VIRTUSA CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SELLING STOCKHOLDERS
By:
------------------------------------
Name:
----------------------------------
As Attorney-in-Fact acting on behalf of
each of the Selling Stockholders named
in Schedule II to this Agreement
Accepted: , 2007
----------
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
For itself and on behalf of the other
Representatives and the several
Underwriters listed in Schedule I
hereto.
By:
---------------------------------
Authorized Signatory
32
Schedule I
Underwriter Number of Shares
----------- ----------------
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇ and Company, LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
33
Schedule II
Selling Stockholders* Number of Option Shares
--------------------- -----------------------
A. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Total
----------
* ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇, and each of them
acting singly, are Attorneys-in-Fact for all of the Selling Stockholders.
34
Annex A
A. TIME OF SALE INFORMATION
[list each Issuer Free Writing Prospectus to be included in the Time of
Sale Information]
B. PRICING INFORMATION PROVIDED ORALLY BY UNDERWRITERS
35
Annex B
[Form of Opinion of ▇▇▇▇▇▇▇ Procter LLP]
Annex C
[Form of Opinion of ALMT Legal]
Annex D
[Form of Opinion of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Associates]
Annex E
[Form of Opinion of Eversheds LLP]
Annex F
[Form of Opinion of ▇▇▇▇▇▇▇ Procter LLP]
36
Exhibit A
LOCK-UP AGREEMENT
_____________, 2007
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇ AND COMPANY, LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
As Representatives of
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Virtusa Corporation --- Initial Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several
Underwriters propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with Virtusa Corporation, a Delaware corporation (the "Company"),
providing for the public offering (the "Public Offering") by the several
Underwriters named in Schedule I to the Underwriting Agreement (the
"Underwriters"), of shares of common stock of the Company (the "Securities").
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Underwriting Agreement.
In consideration of the Underwriters' agreement to purchase and make the
Public Offering of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of
the Underwriters, the undersigned will not, during the period ending 180 days
after the date of the prospectus relating to the Public Offering (the
"Prospectus"), (1) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock,
$0.01 per share par value, of the Company (the "Common Stock") or any securities
convertible into or exercisable or exchangeable for Common Stock (including
without limitation, Common Stock which may be issued upon exercise of a stock
option or warrant) or
2
(2) enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the Public Offering, provided that no filing under Section 16(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall
be required or shall be voluntarily made in connection with subsequent sales of
Common Stock or other securities acquired in such open market transactions, (b)
transfers as a bona fide gift, (c) dispositions to any trust, family limited
partnership or family limited liability company for the direct or indirect
benefit of the undersigned and/or the immediate family of the undersigned, or
(d) distributions to limited partners, members or stockholders of the
undersigned; provided that in the case of any transfer, disposition or
distribution pursuant to clause (b), (c) or (d), (i) each donee, transferee or
distributee shall sign and deliver a lock up letter substantially in the form of
this Letter Agreement and (ii) no filing under Section 16(a) of the Exchange
Act, reporting a reduction in beneficial ownership of shares of Common Stock,
shall be required or shall be voluntarily made during the restricted period
referred to in the foregoing sentence.
In addition, the undersigned agrees that, without the prior written consent
of ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of the Underwriters, it will not,
during the period ending 180 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock. Notwithstanding the foregoing, if (1) during the last 17 days
of the 180-day restricted period, the Company issues an earnings release or
material news or a material event relating to the Company occurs; or (2) prior
to the expiration of the 180-day restricted period, the Company announces that
it will release earnings results during the 16-day period beginning on the last
day of the 180-day period, the restrictions imposed by this Letter Agreement
shall continue to apply until the expiration of the 18-day period beginning on
the issuance of the earnings release or the occurrence of the material news or
material event. In addition, the restrictions imposed by this Letter Agreement
shall not apply to the sale of Securities by the undersigned pursuant to the
Underwriting Agreement.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if (i) the Underwriting Agreement does
not become effective, (ii) the Company notifies ▇.▇. ▇▇▇▇▇▇ Securities Inc. in
writing that it does not intend to proceed with the Public Offering, (iii) the
registration statement filed in connection with the Public Offering is
withdrawn, or (iv) the Underwriting Agreement (other than the provisions
3
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released from all obligations under this Letter Agreement.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon
this Letter Agreement.
This Letter Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
[NAME OF STOCKHOLDER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
4