Draft dated 3/27/00
GLOBECOMM SYSTEMS INC.
2,000,000 Shares of Common Stock*
(no par value per share)
UNDERWRITING AGREEMENT
New York, New York
_______________ __, 2000
ING Barings LLC
▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin
As Representatives of the several Underwriters
c/o ING Barings LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Globecomm Systems Inc, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several underwriters named in Schedule I hereto (the "Underwriters") for
whom you are acting as representatives (the "Representatives") an aggregate of
2,000,000 shares (the "Firm Shares") of its common stock, $0.001 par value per
share (the "Common Stock"). In addition, subject to Section 15 hereof for the
sole purpose of covering over-allotments in connection with the sale of the Firm
Shares, the Company has granted to the Underwriters an option to purchase up to
an additional 190,000 shares of Common Stock and the Selling Stockholders named
in Schedule II hereto (the "Selling Shareholders") have severally granted to the
Underwriters an option to purchase up to an additional 110,000 shares of Common
Stock, each Selling Stockholder selling up to the amount set forth opposite such
Selling Stockholder's name on Schedule II, all as provided in Section 2. The
additional 190,000 shares of Common Stock to be sold by the Company and the
110,000 shares of Common Stock to be sold by the Selling Stockholders pursuant
to such option are collectively called the "Option Shares;" the number of Firm
Shares and Option Shares shall not exceed an aggregate of 2,300,000
-------------------------
*Plus an option to purchase from the Company and Selling Shareholders up to an
additional 300,000 shares of Common Stock to cover over-allotments.
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shares of Common Stock. The Firm Shares and the Option Shares are collectively
referred to as the "Shares."
1. Representations and Warranties of the Company. The Company represent and
warrant to and agree with each of the Underwriters that:
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3 (No.
333-30808), for the registration of the Shares under the Securities Act of 1933,
as amended (the "Act"). Such registration statement, including the prospectus,
financial statements and schedules, exhibits and all other documents filed as a
part thereof, as amended through the time of effectiveness of the registration
statement, including all documents incorporated or deemed to be incorporated by
reference therein and any information deemed to be a part thereof as of the time
of effectiveness pursuant to Rule 430A or Rule 434 of the Rules and Regulations
of the Commission under the Act (the "Regulations") or the Securities Exchange
Act of 1934 and the rules and regulations promulgated thereunder (the "Exchange
Act"), is herein called the "Registration Statement." Any registration statement
filed by the Company pursuant to Rule 462(b) under the Act is herein called the
"Rule 462(b) Registration Statement", and from and after the date and time of
filing of the Rule 462(b) Registration Statement the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The prospectus,
in the form first filed with the Commission pursuant to Rule 424(b) of the
Regulations or filed as part of the Registration Statement at the time of
effectiveness if no Rule 424(b) or Rule 434 filing is required, is herein called
the "Prospectus." The term "preliminary prospectus" as used herein means a
preliminary prospectus as described in Rule 430A of the Regulations; provided,
however, if the Company has, with the consent of ING Barings LLC, elected to
rely upon Rule 434 under the Act, the term "Prospectus" shall mean the Company's
prospectus subject to completion (each, a "preliminary prospectus") dated March
10, 2000 (such preliminary prospectus is herein called the "Rule 434 preliminary
prospectus"). All references in this Agreement to the Registration Statement,
the Rule 462(b) Registration Statement, a preliminary prospectus, the Prospectus
or any amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("▇▇▇▇▇"). All references in this Agreement to
financial statements and schedules and other information which is "contained,"
"included" or "stated" in the Registration Statement or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include the filing of any document under the Exchange Act which is or
is deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be.
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(b) Each preliminary prospectus and the Prospectus, if filed by
electronic transmission pursuant to ▇▇▇▇▇ (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of
the Shares. At the time of the effectiveness of the Registration Statement or
the effectiveness of any Rule 462(b) Registration Statement and any
post-effective amendment thereto, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b) or Rule 434 of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the Commission and at
the Closing Date and the Additional Closing Date, if any (as defined in Section
2), the Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied and will comply in all material respects with the
applicable provisions of the Act and the Regulations, did not and will not
contain an untrue statement of a material fact and did not and will not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. When any related preliminary
prospectus was first filed with the Commission (whether filed as part of the
Registration Statement for the registration of the Shares or any amendment
thereto or pursuant to Rule 424(a) of the Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and did not contain an untrue statement of a material fact and
did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. No
representation and warranty is made in this subsection (b), however, with
respect to any information contained in or omitted from the Registration
Statement or the Prospectus or any related preliminary prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information relating to the Underwriters furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use in connection with
the preparation thereof. If Rule 434 is used, the Company will comply with the
requirements of Rule 434.
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
full power and authority to own, lease and operate its properties and engage in
the business in which it is engaged or in which it proposes to engage as
described in the Registration Statement, the preliminary prospectus and the
Prospectus. The Company is duly registered and qualified to do business as a
foreign corporation in good standing in each jurisdiction where the character,
location, ownership or leasing of its properties (owned, leased or licensed) or
the nature or conduct of its business requires such registration or
qualification.
(d) The Company has no subsidiaries (as defined in the Regulations),
other than NetSat Express, Inc. and Globecomm Systems Europe Limited (the
"Subsidiaries"), which are consolidated subsidiaries of the Company for
financial reporting purposes. The Company does not own or control, directly
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or indirectly, any shares of stock or any other equity or long-term
debt securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association, or other entity other than the
Subsidiaries and those companies listed on Schedule III. All the outstanding
shares of capital stock of the Subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and are free and
clear of any security interest, pledge, claim (legal or equitable), lien,
charge, equity, mortgage, encumbrance or other restriction (each a "Lien"),
shareholders' agreements, voting trusts or defects of title. The equity
ownership of the Subsidiaries is set forth on Schedule III. Each of the
Subsidiaries has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of organization, with full
power and authority to own, lease and operate its properties and conduct the
business in which it is engaged or in which it proposes to engage. Each of the
Subsidiaries is duly registered and qualified as a foreign corporation in good
standing in each jurisdiction where the character, location, ownership or
leasing of its properties or the nature or conduct of its business requires such
registration or qualification. Neither of the Subsidiaries is currently
prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on its capital stock, from repaying to the
Company any loans or advances to it from the Company or from transferring any of
its property or assets to the Company or any other subsidiary of the Company.
(e) Ernst & Young LLP, the accountants who have expressed their
opinion with respect to the consolidated financial statements (including the
related notes and supporting schedules) of the Company and the Subsidiaries
filed with Commission as a part of the Registration Statement, the preliminary
prospectus and the Prospectus, are, with respect to the Company and the
Subsidiaries, independent public accountants as required by the Act and the
Regulations and the Exchange Act.
(f) The Company has an authorized capitalization as of December 31,
1999 as set forth in the Registration Statement, the preliminary prospectus and
the Prospectus and there has been no material change in its capitalization since
that date. All outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws and were not
issued in violation of any preemptive right, resale right, right of first
refusal or similar right. The authorized and outstanding capital stock of the
Company conforms to the description thereof contained in the Registration
Statement, the preliminary prospectus and the Prospectus (and such description
correctly states the substance of the provisions of the instruments defining the
capital stock of the Company). Except as described in the Registration
Statement, the preliminary prospectus and the Prospectus, there are no
authorized or outstanding rights (including, without limitation, preemptive
rights, co-sale rights, resale rights, rights of first refusal or similar
rights), warrants or options to acquire, or instruments convertible into or
exercisable or exchangeable for, any share of capital stock or other equity
interest or ownership interest in the Company or the Subsidiaries or any
contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any capital stock or other equity interest or
ownership
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interest in the Company or the Subsidiaries or any such convertible or
exercisable or exchangeable securities or instruments or any such rights,
warrants or options. The Shares to be issued pursuant to this Agreement will not
be issued in violation of any preemptive right, co-sale right, resale right,
right of first refusal or similar right. The description of the Company' s stock
option, stock bonus and other stock plans or arrangements, and the options or
other rights granted thereunder, set forth in the Registration Statement, the
preliminary prospectus and the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights. The Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and, when issued and delivered to
and paid for by the Underwriters pursuant to this Agreement, will be validly
issued, fully paid and nonassessable. The Shares to be purchased by the
Underwriters from the Selling Stockholders, when issued, were validly issued,
fully paid and nonassessable. Good title to the Shares will be transferred to
the Underwriters free and clear of any Liens and the certificates representing
the Shares will be in valid and sufficient form.
(g) There is (i) no action, suit, proceeding or investigation before
or by any court, arbitrator or governmental agency, body or official, domestic
or foreign, pending, or, to the Company's or Subsidiaries' knowledge, threatened
or contemplated, as to which the Company or the Subsidiaries will be a party or
as to which the business, assets or property of the Company or the Subsidiaries
are or will be subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency, body or official, and
(iii) no injunction, restraining order or order of any nature that has been
issued by a federal or state court or foreign court of competent jurisdiction to
which the Company or the Subsidiaries are or will be subject or affecting the
business, assets or property of the Company or the Subsidiaries, that could (in
the case of clauses (i), (ii) and (iii)), individually or in the aggregate,
whether or not arising from transactions in the ordinary course of business,
result in a material adverse effect on or affecting the business, operations,
assets, properties, condition (financial or other), stockholders' equity,
prospects or results of operations (a "Material Adverse Effect") of the Company
and its subsidiaries taken as a whole, be required to be disclosed in the
Registration Statement, the preliminary prospectus or the Prospectus or
adversely affect the ability of the Company to perform its obligations under
this Agreement or be otherwise important in the context of the sale of the
Shares. There are no legal or administrative proceedings, statutes, Contracts or
documents concerning the Company or the Subsidiaries of a character that would
be required to be described in or filed as an exhibit to a registration
statement on Form S-3 under the Act that are not described or filed, as
required, in the Registration Statement, the preliminary prospectus and the
Prospectus.
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(h) The consolidated financial statements of the Company, together
with the related notes thereto, which are a part of the Registration Statement,
the preliminary prospectus and the Prospectus, present fairly the consolidated
financial position and the consolidated results of operations, changes in
stockholders' equity and changes in cash flows of the Company as of the
respective dates and for the respective periods specified therein. All of such
financial statements and related notes have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved and comply as to form with the applicable
accounting requirements included in Regulation S-X under the Act. The supporting
schedules, the "Summary Consolidated Financial Data," the "Selected Historical
Financial Data" and the tables included in the Registration Statement, the
preliminary prospectus and the Prospectus fairly present the information
purported to be shown thereby at the respective dates thereof and for the
respective periods covered thereby and have been presented on a basis consistent
with that of the audited consolidated financial statements therein. No other
financial statements or supporting schedules are required by the Act or
Regulation S-X to be included therein.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement, the preliminary prospectus and the
Prospectus, there has not been (i) any loss or adverse change, or any
development which may result in a loss or adverse change, in or affecting the
business, properties, management, assets, prospects, stockholders' equity,
operations, condition (financial or other), or results of operations of the
Company and its subsidiaries taken as a whole, (ii) any transaction entered into
by the Company or any of the Subsidiaries, except transactions in the ordinary
course of business; (iii) any obligation, direct or contingent, incurred by the
Company or any of the Subsidiaries which is material to the Company and the
Subsidiaries taken as a whole, except for liabilities or obligations which are
reflected in the Registration Statement, the preliminary prospectus and the
Prospectus, (iv) any change in the capital stock or outstanding indebtedness of
the Company, or (v) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company, which in any case described in clauses
(i), (ii), (iii), (iv) or (v) above, could, individually or in the aggregate,
have a Material Adverse Effect on the Company and its subsidiaries taken as a
whole or adversely affect the ability of the Company to perform its obligations
under this Agreement or be otherwise important in the context of the sale of the
Shares.
(j) The Company and the Subsidiaries have good and marketable title to
all properties and assets described in the Registration Statement, the
preliminary prospectus and the Prospectus as being owned by them, free and clear
of Liens, except Liens for taxes not yet due and payable. The Company and the
Subsidiaries have valid and enforceable leases for the properties leased by
them, the Company and the Subsidiaries enjoy peaceful and undisturbed possession
under all such leases with such exceptions as do not materially interfere with
the use thereof made by the Company and the Subsidiaries, and
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such leases conform in all material respects to the descriptions
thereof, if any, set forth in the Registration Statement, the preliminary
prospectus and the Prospectus. The Company and the Subsidiaries, own, lease or
otherwise have rights to use all properties and assets as are important to their
respective operations as now conducted and as proposed to be conducted.
(k) The Company and the Subsidiaries have all requisite power and
authority, and all licenses, certificates, approvals, consents, concessions,
qualifications, orders, registrations, authorizations and permits from all
federal, state, foreign and other governmental and regulatory agencies, bodies
and authorities ("Permits") that are material to the conduct of the business of
the Company and the Subsidiaries as such business is currently conducted. The
Company reasonably believes that it will be able to obtain Permits that are
material to the conduct of the business of the Company and the Subsidiaries as
such business is proposed to be conducted as described in the Registration
Statement, the preliminary prospectus and the Prospectus. All such Permits are
valid and in full force and effect (and there is no proceeding pending or, to
the best knowledge of the Company, threatened which may cause any such Permit to
be withdrawn, canceled, suspended or not renewed). The Company and the
Subsidiaries are not in violation of, or in default under, and have fulfilled
and performed all their obligations with respect to such Permits. No event has
occurred which allows or would allow revocation or termination of any such
Permit or result in any material impairment of the rights of the holder of any
such Permit except as could not, individually or in the aggregate, have a
Material Adverse Effect on the Company and its subsidiaries taken as a whole.
The Contracts (as defined below) to which the Company or the Subsidiaries are a
party are valid and binding agreements, enforceable against the Company and the
Subsidiaries in accordance with their terms and, to the best of the Company's
knowledge, the other contracting party or parties thereto are not in material
breach or default under any of such Contracts.
(l) The Company and the Subsidiaries are not (i) in violation of their
respective certificates of incorporation, as amended, or bylaws, as amended or
(ii) in breach of or default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, franchise, joint venture, deed of trust, bond, note, lease,
Permit or other agreement or instrument to which the Company or the Subsidiaries
are a party or by which the Company or the Subsidiaries may be bound or to which
any of the property or assets of the Company or the Subsidiaries are subject
(each a "Contract"), or in violation of any law, order, rule, regulation, writ,
injunction or decree of any court or governmental agency, body or authority,
except in the case of this clause (ii) for such breaches, defaults or violations
that could not, individually or in the aggregate, have a Material Adverse Effect
on the Company and its subsidiaries taken as a whole or adversely affect the
ability of the Company to perform its obligations under this Agreement or be
otherwise important in the context of the sale of the Shares.
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(m) The Company and the Subsidiaries own, possess or license or have
other rights to use all patents, patent applications, trademarks, trademark
applications, service marks, service ▇▇▇▇ applications, tradenames, inventions,
copyrights, manufacturing processes, formulae, trade secrets, know-how,
franchises, and other unpatented and/or unpatentable proprietary or confidential
information, collaborative research agreements, systems or procedures and
material intangible property and assets (collectively, "Intellectual Property")
necessary to the conduct of their business as currently conducted. The Company
reasonably believes that the Company and the Subsidiaries will be able to own or
possess adequate licenses or other rights to use all Intellectual Property
necessary to the conduct of their business as proposed to be conducted as
described in the Registration Statement, the preliminary prospectus and the
Prospectus. The Company has no knowledge that it lacks or will be unable to
obtain any rights or licenses to use any of such Intellectual Property. The
Registration Statement, the preliminary prospectus and the Prospectus fairly and
accurately describe the Company's rights with respect to Intellectual Property.
Neither the Company nor the Subsidiaries have received any notice of, and
otherwise has any knowledge of, any infringement or of conflict with asserted
rights or claims of others with respect to any Intellectual Property and the
Company is unaware of any fact which could form a reasonable basis for any such
claim.
(n) The Company has no knowledge of the existence of patents or patent
applications owned by third parties that may have a Material Adverse Effect on
the Company and its subsidiaries taken as a whole or adversely affect the
ability of the Company to perform its obligations under this Agreement or be
otherwise important in the context of the sale of the Shares.
(o) The Company is the sole and exclusive owner of all right, title
and interest in the United States registered trademarks and service marks set
forth on Part I of Annex A (collectively, "Registered Marks"). The Company has
applied for the United States trademarks and service marks set forth on Part II
of Annex A (collectively, "Applied Marks"). The Company has not allowed any
Applied Marks or Registered Marks to be abandoned, canceled, or to lapse. The
Company has no knowledge of claims, actions, or proceedings, pending or
threatened, challenging the validity of any of the Registered Marks or the
registration of any Applied Marks.
(p) The Company has no knowledge of the existence of trademarks or
service marks, or trademark or service ▇▇▇▇ applications, owned by third parties
that may have, individually or in the aggregate, a Material Adverse Effect on
the Company and its subsidiaries taken as a whole or adversely affect the
ability of the Company to perform its obligations under this Agreement or
otherwise be important in the context of the sale of the Shares.
(q) The Company has registered with Network Solutions, Inc. the
Internet domain name ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, and has administrative control
8
over such domain name. The Company has no knowledge of a registered trademark
held by a third party that may be used to prevent the Company from using this
domain name.
(r) The Company has taken all economically reasonable steps to secure,
protect, and maintain Registered Marks, Applied Marks, and the Internet domain
names.
(s) The Company and the Subsidiaries have filed on a timely basis with
the appropriate taxing authorities (or have received an extension for filing
with respect to) all necessary federal, state and foreign income and franchise
tax returns, reports and other information required to be filed by them. Each
such tax return, report or other information was, when filed, accurate and
complete. The Company and the Subsidiaries have duly paid, or have made adequate
charges, accruals and reserves in the financial statements for, all such taxes
required to be paid by them and any other assessment, fine or penalty levied
against them, for all periods as to which the tax liability of the Company or
the Subsidiaries has not been finally determined, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as could not have, individually or in the aggregate, a Material Adverse Effect
on the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business. No tax deficiency has been
or, to the best of the Company's knowledge, might be asserted or contemplated
against the Company or the Subsidiaries.
(t) The Company and the Subsidiaries are insured by recognized,
financially sound and reputable institutions with policies in such amounts and
with such deductibles and covering such risks as are generally deemed adequate
and customary for their business including, but not limited to, policies
covering real and personal property owned or leased by the Company and the
Subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes, general liability and directors and officers liability, all of
which insurance is in full force and effect. The Company has no reason to
believe that it or the Subsidiaries will not be able to (i) renew its existing
insurance coverage as and when such policies expire or (ii) obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a Material
Adverse Effect on the Company and its subsidiaries taken as a whole or adversely
affect the ability of the Company to perform its obligations under this
Agreement or be otherwise important in the context of the sale of the Shares.
Neither of the Company nor the Subsidiaries has been denied any insurance
coverage which it has sought or for which it has applied.
(u) Neither the Company nor any of the Subsidiaries is involved in any
labor dispute, disturbance, lockout, slowdown or stoppage of employees, and, to
the best knowledge of the Company, no such dispute or disturbance is threatened
or imminent. The Company is not aware of any existing or imminent
9
labor disturbance by the employees of any of its principal suppliers,
subassemblers, value added resellers, subcontractors, original equipment
manufacturers, authorized dealers or international distributors that could
result in a Material Adverse Effect on the Company and the Subsidiaries taken as
a whole or adversely affect the ability of the Company to perform its
obligations under this Agreement or be otherwise important in the context of the
sale of the Shares.
(v) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws (as defined below) on the business,
operations and properties of the Company and the Subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws, or any Permit, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that the Company and the Subsidiaries (i) are in compliance with all
applicable foreign, United States federal, state and local environmental laws,
rules, regulations, treaties, statutes and codes relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), except in those cases
in which the failure to obtain Permits or the failure to comply could not,
individually or in the aggregate, have a Material Adverse Effect on the Company
and its subsidiaries taken as a whole, (ii) have received all Permits required
of them under applicable Environmental Laws to conduct their business as
currently conducted, except in those cases in which the failure to obtain
Permits or the failure to comply could not, individually or in the aggregate,
have a Material Adverse Effect on the Company and its subsidiaries taken as a
whole, (iii) are in compliance with all terms and conditions of any such Permit,
except in those cases in which the failure to obtain Permits or the failure to
comply could not, individually or in the aggregate, have a Material Adverse
Effect on the Company and its subsidiaries taken as a whole, and (iv) 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. No action, proceeding, revocation
proceeding, writ, injunction or claim is pending or to the Company's knowledge
threatened relating to the Environmental Laws or the Company's or the
Subsidiaries' activities involving Hazardous Materials. "Hazardous Materials"
means any material or substance (i) that is prohibited or regulated by any
Environmental Law or (ii) that has been designated or regulated by any
governmental body or authority as radioactive, toxic, hazardous or otherwise a
danger to health, reproduction or the environment. Neither the Company nor the
Subsidiaries has been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended.
(w) Neither the Company nor any of the Subsidiaries has engaged in the
generation, use, manufacture, transportation or storage of any Hazardous
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Materials on any of the Company's or the Subsidiaries' properties or former
properties. To the Company's best knowledge, no Hazardous Materials have been
treated or disposed of on any of the Company's or the Subsidiaries' properties
or on properties formerly owned or leased by the Company or the Subsidiaries
during the time of such ownership or lease, except in compliance with
Environmental Laws.
(x) No payments or inducements have been made or given, directly or
indirectly, to any federal or local official or candidate for, any federal or
state office in the United States or foreign offices by the Company or the
Subsidiaries, by any of their officers, or directors or, to the best knowledge
of the Company, by any of their employees or agents or, to the best knowledge of
the Company, by any other person in connection with any opportunity, Contract,
Permit, certificate, consent, order, approval, waiver or other authorization
relating to the business of the Company or the Subsidiaries, except for such
payments or inducements as were lawful under applicable written laws, rules and
regulations. Neither the Company nor any of the Subsidiaries, nor any director,
officer nor, to the best knowledge of the Company, any agent, employee or other
person associated with or acting on behalf of the Company or the Subsidiaries,
(i) has 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 government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe,
unlawful rebate, payoff, influence payment, kickback or other unlawful payment
in connection with the business of the Company or the Subsidiaries.
(y) Neither the Company nor any of the Subsidiaries has any liability
for any prohibited transaction (within the meaning of Section 4975(c) of the
Internal Revenue Code of 1986, as amended (the "Code") or Part 4 of Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) (or
an accumulated funding deficiency within the meaning of Section 412 of the Code
or Section 302 of ERISA) or any complete or partial withdrawal liability (within
the meaning of Section 4201 of ERISA), with respect to any pension, profit
sharing or other plan which is subject to ERISA, to which the Company and the
Subsidiaries make or ever have made a contribution and in which any employee of
the Company and Subsidiaries are or has ever been a participant. With respect to
such plans, the Company and the Subsidiaries are in compliance in all material
respects with all applicable provisions of ERISA.
(z) The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization, (ii) transactions are appropriately recorded to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, (iv) the
11
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences and (v) assets are properly accounted for and safeguarded against
loss from unauthorized use. The Company has not received from its independent
public accountants a letter describing or been informed by them of, a
substantial or material deficiency in the Company's internal accounting controls
in connection with their audit of the Company's financial statements included in
the Registration Statement, the preliminary prospectus and the Prospectus.
(aa) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company or the Subsidiaries to or for the benefit of any of
the officers or directors or shareholders of the Company or the Subsidiaries or
any of the members of the families of any of them, except as disclosed in the
Registration Statement, the preliminary prospectus and the Prospectus.
(bb) No consent, approval, registration, authorization, filing,
qualification, Permit or order of or with any court or supervisory, regulatory,
administrative or governmental agency, body or authority, arbitrator or others
(including securityholders) is required in connection with the execution and
delivery of this Agreement, the issuance, sale or delivery of the Shares to be
issued, sold and delivered by the Company and the Selling Stockholders
hereunder, or the consummation of any other of the transactions contemplated
herein or the fulfillment of the terms hereof, except the registration under the
Act of the Shares and such consents, approvals, registrations, authorizations,
filings, qualifications, Permits or orders, as may be required under the state
securities or "blue sky" laws or the bylaws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") or as have been obtained
and which are in full force and effect in connection with the offer, purchase
and distribution by the Underwriters of the Shares.
(cc) The execution, delivery and performance by the Company and the
Selling Stockholders of this Agreement and the issuance and sale of the Shares
and the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action. Neither the issuance, offer, sale
or delivery of the Shares, the execution, delivery and performance by the
Company and the Selling Stockholders of this Agreement nor the compliance by the
Company and the Selling Stockholders with all the provisions hereof nor the
consummation of the transactions contemplated hereby (i) conflicts with or will
conflict with, or constitutes or will constitute a breach or violation of or a
default under (or an event that, with notice or lapse of time or both, would
constitute such a breach, violation or default), or results in or will result in
the imposition of a Lien upon any property or assets of the Company or the
Subsidiaries under, any of the terms or provisions of the certificate of
incorporation or by-laws or other organizational or constitutive documents of
the Company or any of the Subsidiaries, nor (ii) conflicts with or will conflict
with or
12
constitutes or will constitute a breach or violation of, or a default
under (or an event that with notice or the lapse of time or both would
constitute a default) or the loss of any material benefit under, or the
termination of, or results in or will result in the creation or imposition of
any Lien upon any property or assets of the Company or the Subsidiaries pursuant
to, any Contract, nor (iii) violates or conflicts with or will violate or
conflict with any law, statute, rule or regulation applicable to the Company or
the Subsidiaries or any judgment, decree or order applicable to the Company or
the Subsidiaries of any court or supervisory, regulatory, administrative or
governmental agency, body or authority, or arbitrator having jurisdiction over
the Company or the Subsidiaries or any of their respective properties or assets.
(dd) The Company has full power and authority to enter into this
Agreement and to perform the transactions contemplated hereby. This Agreement
and the transactions contemplated herein have been duly and validly authorized,
executed and delivered by the Company and this Agreement constitutes the legal,
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be limited
by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other
laws now or hereafter in effect relating to or affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and except to the
extent that the provisions of Section 6 hereof may be limited by applicable
federal or state securities laws or unenforceable as against public policy.
(ee) The Company has duly and validly authorized the issuance and sale
of the Shares to be purchased from the Company. The description of the Shares in
the Registration Statement, the preliminary prospectus and the Prospectus is
accurate in all material respects.
(ff) The Company, is not now, and as a result of the offer and sale of
the Shares in the manner contemplated in this Agreement, the Registration
Statement, the preliminary prospectus and the Prospectus and the application of
the net proceeds of such sale as described in the Registration Statement, the
preliminary prospectus and the Prospectus, will not be, an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended (the "Investment Company Act"), without taking account of any
exemption arising out of the number or type of holders of the Company's
securities.
(gg) The Company has not incurred any liability for a fee, commission,
or other compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement other than the
discount contemplated hereby, except as disclosed to the Underwriters.
13
(hh) Neither the Company nor the Subsidiaries nor, to the Company's
best knowledge, any of its or their officers, directors or affiliates (as
defined in Rule 501(b) of Regulation D ("Regulation D") under the Act) has taken
or will take, directly or indirectly, any action designed to cause or to result
in or that has constituted, or might reasonably be expected to cause or result
in or constitute, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(ii) The Company has not distributed and will not distribute prior to
the later of (A) the Additional Closing Date and (B) the completion of the
distribution of the Shares by the Underwriters and dealers, any offering
material (including, without limitation, content on its Web site, if any, that
may be deemed to be offering material) in connection with the offering and sale
of the Shares other than the preliminary prospectus and the Prospectus.
(jj) There are no holders of securities of the Company which by reason
of the filing of the Registration Statement or otherwise in connection with the
sale of the Shares contemplated hereby, have the right to request or demand that
the Company register under the Act any of their securities in connection with
the Registration Statement, except for such rights as have been duly waived or
for which the time period for such holders to provide request due to the filing
of the Registration Statement has expired.
(kk) There is no tax, duty, levy, impost, deduction, charge or
withholding imposed by any political subdivision or taxing authority by virtue
of the execution, delivery, performance or enforcement, or to ensure the
legality, validity or admissibility into evidence, of this Agreement, and
neither is it necessary that the Shares be submitted to, or filed or recorded
with, any court or other authority to ensure such legality, validity,
enforceability or admissibility into evidence. There are no transfer taxes or
other similar fees or charges under federal law or the laws of any state, or any
political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance and sale by the Company
of the Shares.
(ll) All necessary actions, authorizations, conditions and things
required to be taken, given, fulfilled and done by the Company and the
Subsidiaries on or prior to the date of this Agreement, have been, or on the
Closing Date or the Additional Closing Date, if any, will have been taken,
given, fulfilled and done in connection with (i) the issue of the Prospectus,
(ii) the execution and delivery of this Agreement, (iii) the execution, delivery
and issuance of the Shares, (iv) the compliance with all provisions of this
Agreement to be performed or complied with by such date.
(mm) There are no Y2K issues related to the Company, or the
Subsidiaries, that (i) are of a character required to be described or referred
to in the Registration Statement or Prospectus or any Incorporated Document by
the
14
Act or by the Exchange Act or the rules and regulations of the Commission
thereunder which have not been accurately described in the Registration
Statement or Prospectus or any Incorporated Document or (ii) might reasonably be
expected to have a Material Adverse Effect on the Company and the Subsidiaries
taken as a whole.
(nn) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to you was or will be, when made, inaccurate,
untrue or incorrect.
(oo) The Shares are registered pursuant to Section 12(g) of the
Exchange Act and are quoted on the Nasdaq National Market, and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Shares under the Exchange Act or causing the Shares not to
be quoted on the Nasdaq National Market, nor has the Company received any
notification of the foregoing.
(pp) Except as described in the Registration Statement, the
preliminary prospectus and the Prospectus, the Company has not sold or issued
any shares of capital stock within the six month period preceding the date of
the Prospectus, all of which sales and issuances were made in compliance with
the Act and the Regulations.
(qq) Each officer, director and each beneficial owner of five or more
percent of the outstanding issued share capital of the Company has agreed to
sign an agreement substantially in the form attached hereto as Exhibit A (the
"Lock-up Agreements"). The Company has provided to counsel for the Underwriters
a complete and accurate list of all securityholders of the Company and the
number and type of securities held by each securityholder. The Company also has
provided to counsel for the Underwriters true, accurate and complete copies of
all of the Lock-up Agreements presently in effect or effected hereby. The
Company will give "no transfer" instructions to its transfer agent and registrar
with respect to such securities on the Closing Date.
(rr) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the Exchange Act, and, when read together with the other
information in the Prospectus, at the time the Registration Statement and any
amendments thereto become effective and at the Closing Date and the Additional
Closing Date, as the case may be, will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they sere
made, not misleading.
15
(ss) The Company has filed all reports required to be filed pursuant
to the Act and the Exchange Act.
(tt) The Company has satisfied the conditions for the use of Form S-3,
as set forth in the general instructions thereto, with respect to the
Registration Statement.
Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
1A. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder represents, warrants and covenants to each Underwriter as
follows:
(a) Each Selling Stockholder has deposited with the
American Stock Transfer & Trust Company as custodian (the "Custodian")
the Shares to sold by such Selling Stockholder pursuant to a custody
agreement signed by such Selling Stockholder and the Custodian (the
"Custody Agreement"). Each of the (i) Custody Agreement and (ii) Power
of Attorney appointing certain individuals named therein as such
Selling Stockholder's attorneys-in-fact (each, an "Attorney-in-Fact")
to the extent set forth therein relating to the transactions
contemplated hereby and by the Prospectus (the "Power of Attorney") has
been duly authorized, executed and delivered by such Selling
Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as rights
to indemnification thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general
equitable principles. Each Selling Stockholder agrees that the Shares
to be sold by such Selling Stockholder on deposit with the Custodian
are subject to the interests of the Underwriters, that the arrangements
made for such custody are to that extent irrevocable, and that the
obligations of such Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement or in the Custody
Agreement, by any act of the Selling Stockholder, by operation of law,
by death or incapacity of such Selling Stockholder or by the occurrence
of any other event. If such Selling Stockholder should die or become
incapacitated, or if any other event should occur before the delivery
of the Shares to be sold by such Selling Stockholder hereunder, the
documents evidencing the Shares to be sold by such Selling Stockholder
then on deposit with the Custodian shall be delivered by the Custodian
in accordance with the terms and conditions of this Agreement as if
such death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice thereof.
(b) Such Selling Stockholder is the lawful owner of
the Shares to be sold by such Selling Stockholder hereunder and upon
sale and delivery of, and payment for, such Shares, as provided herein,
such Selling Stockholder will
16
convey good and marketable title to such Shares to the Underwriters,
free and clear of all Liens.
(c) Such Selling Stockholder has, and on the Closing
Date and the Additional Closing Date will have, good and valid title to
all of the Shares which may be sold by such Selling Stockholder
pursuant to this Agreement on such date and the legal right and power,
to enter into this Agreement, the Custody Agreement and the Power of
Attorney, to sell, transfer and deliver all of the Shares which may be
sold by such Selling Stockholder pursuant to this Agreement and to
comply with its other obligations hereunder and thereunder.
(d) No consent, approval, registration,
authorization, filing, qualification, Permit or order of or with any
court or supervisory, regulatory, administrative or governmental
agency, body or authority, arbitrator or others (including
securityholders) is required in connection with the execution and
delivery of this Agreement by such Selling Stockholder, the sale or
delivery of the Shares to be sold and delivered hereunder, or the
consummation of any of the transactions contemplated herein or the
fulfillment of the terms hereof, except the registration under the Act
of the Shares and such consents, approvals, registrations,
authorizations, filings, qualifications, Permits or orders, as may be
required under the state securities or "blue sky" laws or the bylaws
and rules of the NASD or as have been obtained and which are in full
force and effect in connection with the offer, purchase and
distribution by the Underwriters of the Shares.
(e) Neither the issuance, offer, sale or delivery of
the Shares, the execution, delivery and performance by such Selling
Stockholder of this Agreement nor the compliance by such Selling
Stockholder with all the provisions hereof nor the consummation of the
transactions contemplated hereby (i) conflicts with or will conflict
with, or constitutes or will constitute a breach or violation of or a
default under (or an event that, with notice or lapse of time or both,
would constitute such a breach, violation or default), or results in or
will result in the imposition of a Lien upon any property or assets of
such Selling Stockholder under any law nor (ii) conflicts with or will
conflict with or constitutes or will constitute a breach or violation
of, or a default under (or an event that with notice or the lapse of
time or both would constitute a default) or the loss of any material
benefit under, or the termination of, or results in or will result in
the creation or imposition of any Lien upon any property or assets of
such Selling Stockholder pursuant to, any Contract, nor (iii) violates
or conflicts with or will violate or conflict with any law, statute,
rule or regulation applicable to such Selling Stockholder or any
judgment, decree or order applicable to such Selling Stockholder of any
court or supervisory, regulatory, administrative or governmental
agency, body or authority, or arbitrator having jurisdiction over such
Selling Stockholder or any of its properties or assets.
(f) Such Selling Stockholder has full power and
authority and the legal capacity to enter into this Agreement and to
perform the transactions
17
contemplated hereby. This Agreement and the transactions contemplated
herein have been duly and validly executed and delivered by such
Selling Stockholder and this Agreement constitutes the legal, valid
and binding agreement of such Selling Stockholder, enforceable against
such Selling Stockholder in accordance with its terms, except as the
enforceability thereof may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other laws now or hereafter
in effect relating to or affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and
except to the extent that the provisions of Section 6 hereof may be
limited by applicable federal or state securities laws or
unenforceable as against public policy.
(g) Such Selling Stockholder has not taken or will
take, directly or indirectly, any action designed to cause or to result
in or that has constituted, or might reasonably be expected to cause or
result in or constitute, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(h) Such Selling Stockholder has not distributed and
will not distribute prior to the later of (A) the Additional Closing
Date and (B) the completion of the distribution of the Shares by the
Underwriters and dealers, any offering material (including, without
limitation, content on the Company's Web site, if any, that may be
deemed to be offering material) in connection with the offering and
sale of the Shares other than the preliminary prospectus and the
Prospectus.
(i) Such Selling Stockholder does not have any
registration or other similar rights to have any equity or debt
securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement,
except for such rights as are described in the Prospectus.
(j) Such Selling Stockholder does not have, or has
waived prior to the date hereof, any preemptive right, co-sale right or
right of first refusal or other similar right to purchase any of the
Shares that are to be sold by the Company or any of the other Selling
Stockholders to the Underwriters pursuant to this Agreement and such
Selling Stockholder does not own any warrants, options or similar
rights to acquire, and does not have any right or arrangement to
acquire, any capital stock, right, warrants, options or other
securities from the Company, other than those described in the
Registration Statement and the Prospectus.
(k) All information furnished by or on behalf of such
Selling Stockholder in writing expressly for use in the Registration
Statement and Prospectus is, and on the Closing Date and the Additional
Closing Date will be, true, correct, and complete in all material
respects, and does not, and on the
18
Closing Date and the Additional Closing Date will not, contain any
untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading. Such Selling
Stockholder confirms as accurate the number of Shares set forth
opposite such Selling Stockholder's name in the Prospectus under the
caption "Principal and Selling Stockholders" (both prior to and after
giving effect to the sale of the Shares).
(l) There are no transfer taxes or other similar fees
or charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement by the Selling Stockholders of
the Shares.
(m) Such Selling Stockholder has no reason to believe
that the representations and warranties of the Company contained in
Section 1 hereof are not true and correct, is familiar with the
Registration Statement and the Prospectus and has no knowledge of any
material fact, condition or information not disclosed in the
Registration Statement or the Prospectus which has had or may result in
a Material Adverse Effect on the Company, whether or not arising from
transactions in the ordinary course of business of the Company and its
Subsidiaries, and is not prompted to sell the Shares to be sold by such
Selling Stockholder by any information concerning the Company which is
not set forth in the Registration Statement and the Prospectus.
Any certificate signed by or on behalf of any Selling
Stockholder and delivered to the Representatives or to counsel for the
Underwriters shall be deemed to be a representation and warranty by such Selling
Stockholder to each Underwriter as to the matters covered therein.
2. Purchase, Sale and Delivery of the Shares.
(a) The Company agrees to issue and sell to the
several Underwriters the Firm Shares upon the terms herein set forth.
On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions
herein set forth, the Underwriters, severally and not jointly, agree to
purchase from the Company, at a purchase price per share of $[ ], the
number of Firm Shares set forth opposite the respective names of the
Underwriters in Schedule I hereto plus an additional number of Firm
Shares which such Underwriter may become obligated to purchase pursuant
to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery
of, the Firm Shares and the Option Shares (if the option provided for
in Section 2(c) below shall have been exercised on or before the third
full business day prior to the Closing Date) shall be made at the
offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇, ▇▇▇▇▇ or at such other place as shall be agreed upon by ING Barings
LLC and the Company, at 10:00 A.M. on the third full business day (as
permitted under Rule 15c6-1 under the Exchange Act) (unless
19
postponed in accordance with the provisions of Section 9 hereof)
following the date of the effectiveness of the Registration Statement
(or, if the Company has elected to rely upon Rule 430A of the
Regulations, the third or fourth full business day (as permitted under
Rule 15c6-1 under the Exchange Act) after the determination of the
public offering price of the Firm Shares), or such other time not later
than five business days after such date as shall be agreed upon by you
and the Company (such time and date of payment and delivery being
herein called the "Closing Date"); provided, however, that if the
Company has not made available to the Underwriters copies of the
Prospectus in such quantities and at such places requested by the
Underwriters, no later than 5:00 p.m. on the business day following the
execution of this Agreement, ING Barings LLC may, in its sole
discretion, postpone the Closing Date until no later than two full
business days following the delivery of such copies of the Prospectus.
Payment shall be made to the Company by wire transfer in immediately
available funds to the order of the Company, against delivery to you
for the respective accounts of the Underwriters of the Firm Shares to
be purchased by them. The Company shall deliver, or cause to be
delivered, a credit representing the Firm Shares to an account or
accounts at The Depository Trust Company, as designated by ING Barings
LLC for the accounts of ING Barings LLC and the several Underwriters on
the Closing Date, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price
therefor. Certificates for the Firm Shares shall be registered in such
name or names and in such authorized denominations as you may request
on or before noon on the business day prior to the Closing Date. The
Company will permit you to examine and package such certificates at or
before noon on the business day prior to the Closing Date. ("Business
day" shall mean any day other than a Saturday, Sunday or a legal
holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.)
(c) In addition, the Company and the Selling
Stockholders hereby grant to the Underwriters the option to purchase,
severally and not jointly, up to 300,000 Option Shares at the same
purchase price per share to be paid by the Underwriters to the Company
for the Firm Shares as set forth in this Section 2, for the sole
purpose of covering over-allotments in the sale of Firm Shares by the
Underwriters. This option may be exercised from time to time and at any
time, in whole or in part, on or before the thirtieth day following the
date of the Prospectus, by written notice from ING Barings LLC to the
Company and the Selling Stockholders. Such notice shall set forth the
aggregate number of Option Shares as to which the option is being
exercised and the date and time, as reasonably determined by ING
Barings LLC, when the Option Shares are to be delivered (such date and
time being herein sometimes referred to as the "Additional Closing
Date"); provided, however, that the Additional Closing Date shall not
be earlier than the Closing Date or earlier than the second full
business day after the date on which the option shall have been
exercised nor later than the fifth full business day after the date on
which the option shall have been exercised (unless such time and date
are postponed in accordance with the provisions of Section 9 hereof).
The Company and the Selling Stockholders
20
shall deliver, or cause to be delivered, a credit representing the
Option Shares to an account or accounts at The Depository Trust
Company, as designated by ING Barings LLC for the accounts of ING
Barings LLC and the several Underwriters on the Additional Closing
Date, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor.
Certificates for the Option Shares shall be registered in such name or
names and in such authorized denominations as ING Barings LLC may
request at or before noon on the business day prior to the Additional
Closing Date. The Company will permit you to examine and package such
certificates for delivery at or before noon on the business day prior
to the Additional Closing Date.
The number of Option Shares to be sold to each
Underwriter shall be the number which bears the same ratio to the
aggregate number of Option Shares being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I
hereto (or such number increased as set forth in Section 9 hereof)
bears to the total number of Firm Shares being purchased from the
Company, subject, however, to such adjustments to eliminate any
fractional shares as ING Barings LLC in its sole discretion shall make.
The number of Option Shares to be sold by the Company and the Selling
Stockholders shall be the number which bears the same ratio to the
aggregate number of Option Shares being purchased as the number of
Option Shares set forth opposite the name of such Selling Stockholder
in Schedule I hereto, or, in the case of the Company, set forth in the
introductory paragraph of this Agreement (or such number increased as
set forth in Section 9 hereof) bears to the total number of Option
Shares, subject, however, to such adjustments to eliminate any
fractional shares as ING Barings LLC in its sole discretion shall make.
Payment for the Option Shares to be sold by the
Company shall be made by wire transfer in immediately available funds
to the order of the Company as noted above. Payment for the Option
Shares to be sold by each Selling Stockholder shall be made to the
Selling Stockholder by wire transfer in immediate available funds to
the order of the Custodian, against delivery to you for the respective
accounts of the Underwriters of the Option Shares to be purchased by
them. Payment for the Option Shares shall be made at the offices of
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP or such other location as may be
mutually acceptable, upon delivery of the Option Shares to you for the
respective accounts of the Underwriters.
Should any Selling Stockholder default in the
delivery of any Option Shares to be delivered by it hereunder the
Company shall deliver newly-issued shares of Common Stock to the
Underwriters in such defaulted amount.
Each Selling Stockholder hereby agrees that (i) it
will pay all stock transfer taxes, stamp duties and other similar
taxes, if any, payable upon the sale or delivery of the Shares to be
sold by such Selling Stockholder to the several Underwriters, or
otherwise in connection with the performance of such
21
Selling Stockholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the
proceeds to such Selling Stockholder hereunder and to hold such amounts
for the account of such Selling Stockholder with the Custodian under
the Custody Agreement.
(d) Time shall be of the essence and delivery at the
time and place specified in this Agreement is a further condition to
the obligations of the Underwriters.
3. Offering. It is understood that the several Underwriters
propose to offer the Shares for sale to the public upon the terms set forth in
the Prospectus.
4. Covenants of the Company. The Company covenants and agrees
with each Underwriter that:
(a) If the Registration Statement has not been
declared effective at the time of the execution of this Agreement, the
Company will use commercially reasonable best efforts to cause the
Registration Statement and any amendments thereto to become effective
as promptly as possible. If Rule 430A is used or the filing of the
Prospectus is otherwise required under Rule 424(b) or Rule 434, the
Company will file the Prospectus (properly completed if Rule 430A has
been used) pursuant to Rule 424(b) or Rule 434 within the prescribed
time period and will provide evidence satisfactory to you of such
timely filing. If the Company elects to rely on Rule 434, the Company
will prepare and file a term sheet that complies with the requirements
of Rule 434. If the Company elects to rely on Rule 462(b) under the
Act, the Company shall file a Rule 462(b) Registration Statement with
the Commission in compliance with Rule 462(b) under the Act prior to
the time confirmations are sent or given, as specified by Rule
462(b)(2) under the Act, and shall pay the applicable fees in
accordance with Rule 111 under the Act.
The Company will notify you immediately (and, if
requested by you, will confirm such notice in writing) (i) when the
Registration Statement and any amendments thereto become effective,
(ii) of any request by the Commission for any amendment of or
supplement to the Registration Statement, any preliminary prospectus or
the Prospectus or for additional information, (iii) of the mailing or
the delivery to the Commission for filing of any amendment of or
supplement to the Registration Statement or the Prospectus, (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto or of the initiation, or the threatening, of any
proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for
sale in any jurisdiction or the initiation or threatening of any
proceeding for that purpose. If a stop order or suspension of
qualification is proposed at any time, the Company will use its
commercially reasonable best efforts to prevent the issuance of any
such stop order and, if issued, to obtain the lifting thereof as soon
as possible.
22
The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to, any preliminary prospectus or the
Prospectus (including the prospectus required to be filed pursuant to
Rule 424(b) or Rule 434) that differs from the prospectus on file at
the time of the effectiveness of the Registration Statement before or
after the effective date of the Registration Statement to which you
shall reasonably object in writing after being timely furnished in
advance a copy thereof.
(b) If at any time when a prospectus relating to the
Shares is required to be delivered under the Act by an Underwriter or
dealer any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would, in the judgment of
ING Barings LLC, counsel to the Underwriters or the Company, include an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, not misleading or if it shall be necessary at any time to
amend or supplement the Registration Statement, the preliminary
prospectus or the Prospectus to comply with any law, the Company
promptly will notify ING Barings LLC and prepare and file with the
Commission and furnish at its own expense to the Underwriters and
dealers, an appropriate amendment or supplement (in form and substance
satisfactory to ING Barings LLC) which will correct such untrue
statement or omission or so that the Registration Statement, any
preliminary prospectus and the Prospectus will comply with the law and
will use its best efforts to have any amendment to the Registration
Statement declared effective as soon as possible. If at any time during
the ninety (90) day period after the Registration Statement becomes
effective, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in the opinion of ING Barings
LLC the market price of the Shares has been or is likely to be
materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus), the
Company will, after notice from ING Barings LLC advising the Company to
the effect set forth above, forthwith prepare, consult with ING Barings
LLC concerning the substance of and disseminate a press release or
other public statement, reasonably satisfactory to ING Barings LLC,
responding to or commenting on such rumor, publication or event.
(c) As soon as practicable after the end of its
fiscal quarter in which the first anniversary date of the effective
date of the Registration Statement occurs, the Company will make
generally available (within the meaning of Section 11(a) of the Act) to
its securityholders and to you an earnings statement or statements of
the Company which will satisfy the provisions of Section 11(a) of the
Act and Rule 158 of the Regulations, covering a period of at least
twelve consecutive months beginning after the effective date of the
Registration Statement; and will, during the period of five years from
the date of the Prospectus, make generally available (within the
meaning of Section 11(a) of the Act) to its securityholders as soon as
practicable after the end of each fiscal year, an annual report
(including a balance sheet and statements of financial condition,
operations, cash flows and changes in stockholders' equity of the
23
Company, certified by the Company's independent public accountants)
and, as soon as practicable after the end of each of the first three
quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), consolidated
summary financial information of the Company for such quarter in
reasonable detail.
(d) The Company will furnish without charge to you
and counsel to the Underwriters five (5) complete signed copies of the
Registration Statement (including exhibits thereto), and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as, in the opinion of counsel to the
Underwriters, delivery of a prospectus by an Underwriter or dealer may
be required by the Act, as many copies of each preliminary prospectus
and the Prospectus and any amendment or supplement thereto (including
any documents incorporated or deemed incorporated by reference therein)
as you may request.
(e) The Company will arrange for the qualification
of the Shares for sale under the laws of such jurisdictions (both
national and foreign) as ING Barings LLC may designate and will make
such applications, file such documents and furnish such information as
may be required for that purpose and will maintain such qualifications
in effect for so long as required for the distribution of the Shares;
provided, however, that in no event shall the Company be required to
qualify to do business in any such jurisdiction in which it is not
already qualified or to file a general consent to service of process in
any jurisdiction in which it is not now so required, other than in
respect of suits arising out of the offering or sale of the Shares. The
Company will, from time to time, prepare and file such statements,
reports and other documents, as are or may be required to continue such
qualifications in effect for so long a period as ING Barings LLC may
request for the distribution of the Shares. The Company will cooperate
with ING Barings LLC and counsel to the Underwriters in connection with
the filings required to be made by ING Barings LLC with the NASD and
will pay the fee of the NASD in connection with its review of the
offering of the Shares and will use commercially reasonable best
efforts to maintain quotation of its shares on the Nasdaq National
Market System.
(f) During the period of five years from the
effective date of the Registration Statement, the Company will furnish
to you and, upon request, to each of the several Underwriters, without
charge, copies of, in such quantities as you or the Underwriters may
request from time to time, (i) as soon as available, all reports or
other communications (financial or other) furnished generally by the
Company to its securityholders, (ii) as soon as practicable after the
end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash
flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; and (iii) as soon
as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form
24
10-Q, Current Report on Form 8-K or other report filed by the Company
with the Commission, the NASD, any other supervisory, regulatory,
administrative or governmental agency, body or authority whether
pursuant to the Exchange Act or otherwise or any national securities
exchange or system on which any class of securities of the Company is
listed or quoted.
(g) For a period of 120 days from the date of the
Prospectus (the "Lock-Up Period"), without the prior written consent of
ING Barings LLC, each of the Company, its executive officers, directors
and each beneficial owner of five or more percent of the outstanding
issued share capital of the Company (other than in respect of those
Shares sold hereunder by the Selling Shareholders) shall not, directly
or indirectly: (1) issue, offer for sale, contract to sell, sell,
pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any shares of
Common Stock or securities convertible into, exercisable or
exchangeable for, or represent the right to receive, Common Stock or
sell or grant options, rights or warrants with respect to any shares of
Common Stock or any of the foregoing or announce the offering of or
register for sale any of the foregoing or any outstanding shares of
Common Stock; provided however, that the Company may grant options and
issue and sell Common Stock pursuant to any directors' and employees'
stock plan, stock ownership plan or dividend reinvestment plan of the
Company in effect at the effective date of the Registration Statement
and which are described in the Prospectus and the Company may issue
Common Stock issuable upon the conversion of securities or the exercise
of warrants or other rights to receive stock outstanding on the
effective date of the Registration Statement so long as none of the
shares held by a person subject to the foregoing lock-up provisions may
be transferred during the Lock-Up Period and the Company shall enter
stop transfer instructions with its transfer agent and registrar
against any such transfer; or (2) enter into any swap, repurchase
agreement, pledge, transfer or other transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock or other securities, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise. Notwithstanding the foregoing, (i) gifts or (ii) transfers
to (A) immediate family of those persons subject to the foregoing
lock-up provisions or (B) a trust or partnership the beneficiaries and
sole partners of which are members of the immediate family of those
persons subject to the foregoing lock-up provisions shall not be
prohibited by this provision if the donee or transferee agrees in
writing to be bound by the foregoing. In addition, during such period,
the Company also agrees not to file any registration statement (other
than a Form S-8 registration statement filed in connection with shares
of Common Stock received under a Company directors' and employees'
stock plan, stock ownership plan, employment agreement or dividend
reinvestment plan) with respect to the registration of any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock without the prior written consent of ING
Barings LLC.
25
(h) During the period when, in the opinion of
counsel to the Underwriters, the delivery of a Prospectus by an
Underwriter or dealer may be required by the Act, the Company will
comply, at its own expense, with all requirements imposed upon it by
the Commission, the Act and the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder, so far as
necessary to permit the continuance of sales of or dealing in the
Shares during such period in accordance with the provisions hereof and
the Prospectus. In addition, during such period the Company shall file,
on a timely basis, with the Commission and the Nasdaq National Market
all reports and documents required to be filed under the Exchange Act.
(i) Each of the Company and the Subsidiaries will
conduct its business in compliance with all applicable laws, rules,
regulations, decisions, directives and orders. The Company will do and
perform all things required or necessary to be done and performed under
this Agreement by the Company on or prior to the Closing Date and to
comply or cause to be satisfied, to the extent such are within its
control, the conditions precedent to the several obligations of the
Underwriters specified in Section 8 hereof.
(j) Neither the Company nor any of its affiliates
(as defined in Regulation D under the Act), will take, directly or
indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to cause, result in,
or constitute, under the Exchange Act, or otherwise, stabilization or
manipulation of the price of the shares of Common Stock of the Company
to facilitate the offering and distribution of the Shares or any other
action prohibited by Regulation M under the Exchange Act.
(k) The Company will apply the net proceeds from the
offering and sale of the Shares to be sold by the Company in the manner
set forth in the Prospectus under "Use of Proceeds."
(l) The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Shares.
(m) The Company shall cause to be prepared and
delivered, at its expense, within one business day from the date
hereof, to the Underwriters an "electronic Prospectus" to be used by
the Underwriters in connection with the offering and sale of the
Shares. As used herein, the term "electronic Prospectus" means a form
of Prospectus, and any amendment or supplement thereto, that meets each
of the following conditions: (i) it shall be encoded in an electronic
format, satisfactory to you, that may be transmitted electronically by
the Underwriters to offerees and purchasers of the Shares for at least
during the period when, in the opinion of counsel to the Underwriters,
the Prospectus is required to be delivered under the Act; (ii) it shall
disclose the same information as the paper Prospectus and Prospectus
filed pursuant to ▇▇▇▇▇, except to the extent that graphic and image
material cannot be disseminated electronically, in which case such
graphic and image material shall be replaced in the electronic
26
Prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be
in or convertible into a paper format or an electronic format,
satisfactory to you, that will allow investors to store and have
continuously ready access to the Prospectus at any future time, without
charge to investors (other than any fee charged for subscription to the
system as a whole and for on-line time). The Company hereby confirms
that it has included or will include in the Prospectus filed pursuant
to ▇▇▇▇▇ or otherwise with the Commission and in the Registration
Statement at the effective date of the Registration Statement an
undertaking that, upon receipt of a request by an investor or his or
her representative during the period when, in the opinion of counsel to
the Underwriters, delivery of a Prospectus by an Underwriter or dealer
may be required by the Act, the Company shall transmit or cause to be
transmitted promptly, without charge, a paper copy of the Prospectus.
4A. Covenants of the Selling Stockholders. Each Selling
Stockholder further covenants and agrees with each Underwriter:
(a) During the Lock-Up Period, without the prior
written consent of ING Barings LLC, such Selling Stockholder (other
than in respect of those Shares sold hereunder) shall not, directly or
indirectly: (1) offer for sale, contract to sell, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into, exercisable or exchangeable for, or
represent the right to receive, Common Stock or sell or grant options,
rights or warrants with respect to any shares of Common Stock or any of
the foregoing or announce the offering of or register for sale any of
the foregoing or any outstanding shares of Common Stock; or (2) enter
into any swap, repurchase agreement, pledge, transfer or other
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common Stock
or other securities, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise. Notwithstanding the foregoing, (i)
gifts or (ii) transfers to (A) immediate family of those persons
subject to the foregoing lock-up provisions or (B) a trust or
partnership the beneficiaries and sole partners of which are members of
the immediate family of those persons subject to the foregoing lock-up
provisions shall not be prohibited by this provision if the donee or
transferee agrees in writing to be bound by the foregoing. In addition,
during such period, such Selling Stockholder also agrees not to make
any demand for, or exercise any right with respect to, the registration
of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock without the prior written
consent of ING Barings LLC.
(b) Such Selling Stockholder shall deliver to the
Representatives prior to the Closing Date a properly completed and
executed United States Treasury Department Form W-8 (if the Selling
Stockholder is a
27
non-United States person) or Form W-9 (if the Selling Stockholder is
a United States Person).
(c) If, at any time prior to the date on which the
distribution of the Shares are contemplated herein and in the
prospectus has been completed, as determined by the Representatives,
such Selling Stockholder has knowledge of the occurrence of any event
as a result of which the Prospectus or the Registration Statement, in
each case as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, not misleading, such Selling
Stockholder will promptly notify the Company and the Representatives.
5. Payment of Expenses. (a) Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company and the Selling Stockholders, jointly and severally, agree to pay in
such proportions as they may agree among themselves or reimburse ING Barings LLC
if paid by the Underwriters, all costs, fees and expenses incident to the
performance of the obligations of the Company and the Selling Shareholders under
this Agreement, including but not limited to costs, fees and expenses of or
relating to (i) the preparation by the Company, printing and filing of the
Registration Statement and exhibits to it, each preliminary prospectus, the
Prospectus and any amendment or supplement to the Registration Statement or the
Prospectus (including, without limitation, the fees and expenses of the
Company's counsel, accountants and other advisors), (ii) the preparation and
delivery of certificates representing the Shares, (iii) the printing of this
Agreement and Underwriter's Questionnaires, Underwriter's Powers of Attorney,
Blue Sky Memoranda, Master Agreements Among Underwriters and Master Selling
Agreements, and all other documents relating to the public offering of the
Shares (including those documents supplied to the Underwriters in quantities as
hereinabove stated) and furnishing (including costs of shipping and mailing)
such copies of the Registration Statement, the Prospectus and any preliminary
prospectus, and all exhibits, schedules, consents, certificates of experts,
amendments and supplements thereto, as may be requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold, (iv) including the Shares on the Nasdaq National
Market, (v) any filings required to be made with, and the review by, the NASD
and the fees, disbursements and other charges of the Underwriters' counsel in
connection therewith, (vi) the registration or qualification (or obtaining
exemptions from such registration or qualification) of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 4(e), including the fees, disbursements and other charges of
the Underwriters' counsel in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (vii) the
issuance, transfer and delivery of the Shares to the Underwriters, including any
issue, transfer, stamp or other taxes payable thereon, (viii) the transfer agent
or registrar for the Shares, (ix) all costs and expenses incident to the
preparation and undertaking of "road show" preparations to be made to
prospective investors, and (x) all other fees, costs and expenses referred to in
Part II of the Registration Statement.
28
(b) If this Agreement shall be terminated by the
Company or any Selling Stockholder or if for any reason the Company or
any Selling Stockholder shall fail to perform its obligations
hereunder, or if any condition to the obligations of the Underwriters
set forth in Section 8 hereof is not satisfied, or if this Agreement
shall be terminated by ING Barings LLC pursuant to Section 8, Section 9
or Section 11, or if the sale to the Underwriters of the Shares on the
Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company or any Selling Stockholder to
perform any agreement herein or to comply with any provision hereof,
the Company agrees to reimburse ING Barings LLC and the other
Underwriters (or such Underwriters as have terminated this Agreement
with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been incurred by ING Barings LLC
and the Underwriters in connection with the proposed purchase and the
offering and sale of the Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
(c) The Selling Stockholders further agree with each
Underwriter to pay (directly or by reimbursement) all fees and expenses
incident to the performance of their obligations under this Agreement
which are not otherwise specifically provided for herein, including but
not limited to (i) fees and expenses of counsel and other advisors for
such Selling Stockholders, (ii) fees and expenses of the Custodian and
(iii) expenses and taxes incident to the sale and delivery of the
Common Shares to be sold by such Selling Stockholders to the
Underwriters hereunder (which taxes, if any, may be deducted by the
Custodian under the provisions of Section 2 of this Agreement).
(d) This Section 5 shall not affect or modify any
separate, valid agreement relating to the allocation of payment of
expenses between the Company, on the one hand, and the Selling
Stockholders, on the other hand.
6. Indemnification. (a) Each of the Company and each of the Selling
Stockholders, jointly and severally, agrees to indemnify and hold harmless each
Underwriter, its directors, officers, employees, and agents and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against any and all losses, liabilities,
claims, damages, actions and expenses whatsoever, as incurred (including but not
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing, compromising or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement for
the registration of the Shares, as originally filed or any amendment thereof, or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the
29
statements therein not misleading; or (ii) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission to state therein a material fact necessary in order to make
statements therein, not misleading; or (iii) in whole or in part upon any
inaccuracy in the representations and warranties of the Company or any Selling
Stockholder contained herein; or (iv) in whole or in part upon any failure of
the Company or any Selling Stockholder to perform its obligations hereunder or
under law; or (v) any act or failure to act or any alleged act or failure to act
by an Underwriter in connection with, or relating in any manner to, the Shares
or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon any matter covered by clause (i), (ii), (iii) or (iv) above, provided
that the Company and the Selling Stockholders will not be liable under this
clause (v) to the extent that a court of competent jurisdiction shall have
determined by a final judgment that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its bad faith or willful
misconduct; provided, however, that the Company and the Selling Stockholders
will not be liable in any such case covered by clauses (i), (ii), (iii), (iv) or
(v) above to the extent but only to the extent that any such loss, liability,
claim, damage, action or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information relating to
an Underwriter furnished to the Company and the Selling Stockholders by or on
behalf of any Underwriter through you expressly for use therein; and provided,
further, that with respect to any preliminary prospectus, the foregoing
indemnity agreement shall not inure to the benefit of any Underwriter from whom
the person asserting any loss, claim, damage, liability or expense purchased
Shares, if copies of the Prospectus were timely delivered to the Underwriter
pursuant to Section 2 and a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage, liability or expense. This indemnity agreement will be in
addition to any liability which the Company and the Selling Stockholders may
otherwise have, including under this Agreement.
(b) Each Underwriter severally, and not jointly,
agrees to indemnify and hold harmless the Company, each of the
directors of the Company, each of the officers of the Company who shall
have signed the Registration Statement, the Selling Stockholders, and
each other person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any losses, liabilities, claims, damages, actions and expenses
whatsoever as incurred (including but not limited to attorneys' fees
and any and all expenses whatsoever incurred in investigating,
preparing, compromising or defending against any litigation, commenced
or threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or
other federal or state statutory law or
30
regulation, or at common law or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement for the registration of the Shares, as originally filed or
any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent,
but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein
in reliance upon and in conformity with written information relating to
an Underwriter furnished to the Company and the Selling Stockholders by
or on behalf of any Underwriter through you expressly for use therein;
provided, however, that in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which
any Underwriter may otherwise have, including under this Agreement.
Each of the Company and each of the Selling Stockholders acknowledges
that the statements set forth in the first, third and eleventh
paragraphs under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing relating to an
Underwriter by or on behalf of any Underwriter expressly for use in the
Registration Statement relating to the Shares as originally filed or in
any amendment thereof, any related preliminary prospectus or the
Prospectus or in any amendment thereof or supplement thereto, as the
case may be.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against an indemnifying party under such subsection, notify
each party against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve it from any liability or obligation which it
may have under this Section 6 or otherwise, unless the failure to
notify shall result in the forfeiture by the indemnifying party of
substantial rights and defenses, and will not in any event relieve the
indemnifying party from any obligations other than the indemnification
obligation provided in paragraph (a), or (b) above). In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent it may elect
by written notice delivered to the indemnified parties promptly after
receiving the aforesaid notice from an indemnified party, to assume the
defense thereof with counsel satisfactory to such indemnified parties.
Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own separate counsel in any such
action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party or parties unless (i) the employment of such counsel shall
31
have been authorized in writing by one of the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense
of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have
reasonably concluded that a conflict may arise between the positions of
such indemnified party or parties and of the indemnifying party or
parties in conducting the defense of any such action or that there may
be one or more legal defenses available to it or them which are
different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties
shall not have the right to direct the defense of such action on behalf
of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the indemnifying parties, it being
understood, however, that the indemnifying party or parties shall not,
in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (plus separate
local counsel, if retained by the indemnified party or parties) at any
time for all such indemnified parties. An indemnifying party shall not
be liable for any settlement of any claim or action effected without
its written consent; provided, however, that such consent was not
unreasonably withheld. Notwithstanding the foregoing, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated in this Section 6, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise
or consent is for money damages only and includes (i) an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such action, suit or proceeding and (ii) does not
include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
Any losses, claims, damages, liabilities, expenses or actions for which
an indemnified party is entitled to indemnification or contribution under this
Section 6 or under Section 7 below shall be paid by the indemnifying party to
the indemnified party as such losses, claims, damages, liabilities or expenses
are incurred, but in all cases, no later than forty-five (45) days of invoice to
the indemnifying party.
The indemnity and contribution agreements contained in this Section 6
and in Section 7 below and the representation and warranties of the Company set
forth
32
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any director, officer or employee of or person controlling any Underwriter, the
Company, its directors or officers, the Selling Stockholders or any persons
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
indemnified party, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 6 and
Section 7 below.
The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 6 and Section 7 below and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Section 6 and Section 7 below fairly allocate the risks in light of the ability
of the parties to investigate the Company and its business in order to assure
that adequate disclosure is made in the Registration Statement, the preliminary
prospectus and Prospectus as required by the Act and the Exchange Act.
7. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 6 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriters shall
severally contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company any contribution received by
the Company from persons, other than the Underwriters, who may also be liable
for contribution, including the Selling Stockholders and persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company and one or more of
the Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company, the Selling Stockholders
and the Underwriters from the offering of the Shares or, if such allocation is
not permitted by applicable law or indemnification is not available as a result
of the indemnifying party not having received notice as provided in Section 6
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters, severally, on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, 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, severally, on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and the Selling Stockholders bears to the
underwriting discounts and
33
commissions received by the Underwriters, respectively. The relative fault of
the Company and the Selling Stockholders on the one hand and of the
Underwriters, severally, 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, a Seller Stockholder or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 7, (i) in no case shall any Underwriter be liable or responsible
for any amount in excess of the underwriting discounts and commissions
applicable to the Shares purchased by such Underwriter hereunder, and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Further notwithstanding the
provisions of this Section 7 and the preceding sentence, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. For purposes of this Section 7, each
director, officer, employee and agent of an Underwriter and each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement, each
Selling Stockholder and each director of the Company shall have the same rights
to contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 7. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties, notify each party or parties from whom contribution may be sought,
but the omission to so notify such party or parties shall not relieve the party
or parties from whom contribution may be sought from any obligation it or they
may have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent,
provided that such consent was not unreasonably withheld.
The Underwriters' obligations in this Section 7 to contribute are
several in proportion to their respective underwriting obligations and not
joint. The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
8. Conditions to the Obligations of the Underwriters. The several
obligations of the Underwriters to purchase and pay for the Firm Shares and the
Option
34
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the date hereof, the Closing Date and any
Additional Closing Date, to the absence from any certificates, opinions, written
statements or letters furnished to you or to Underwriters' counsel pursuant to
this Section 8 of any misstatement or omission, to the timely performance by the
Company and the Selling Stockholders of their respective covenants and other
obligations hereunder and to each of the following additional conditions:
(a) The Registration Statement shall have become
effective not later than, if pricing pursuant to Rule 430A, 5:30 P.M.,
New York time on the date of this Agreement, and if pricing pursuant to
a pricing amendment, 12:00 P.M., New York time on the date an amendment
to the Registration Statement containing the public offering price has
been filed with the Commission, or at such later time and date as shall
have been consented to in writing by ING Barings LLC; if the Company
shall have elected to rely upon Rule 430A or Rule 434 of the
Regulations, the Prospectus shall have been filed with the Commission
in a timely fashion in accordance with Section 4(a) hereof; and, at or
prior to the Closing Date no stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment thereof
shall have been issued and no proceedings for such purpose shall have
been initiated or threatened by the Commission; no order suspending the
qualification or registration of the Shares under the securities or
Blue Sky laws of any jurisdiction shall be in effect and no proceeding
for such purpose shall be pending before or threatened or contemplated
by the authorities of any such jurisdiction; any request for additional
information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the
staff of the Commission or such authorities and to the satisfaction of
counsel to the Underwriters; after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have
been filed unless a copy thereof was first submitted to you and you did
not reasonably object thereto; and the NASD, upon review of the terms
of the public offering of the Shares, shall not have raised any
objection to the fairness or reasonableness of the underwriting terms
and arrangements.
(b) The Company shall have furnished to you the
opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company,
dated the Closing Date and the Additional Closing Date, if applicable,
addressed to the Underwriters and in form and substance satisfactory to
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, Underwriters' counsel, in the form of Exhibit
B hereto.
In addition, such opinion shall contain a statement
that such counsel has participated in conferences with officers and
representatives of the Company, representatives of the independent
public accountants for the Company and the Underwriters at which the
contents of the Prospectus and related matters were discussed and no
facts have come to the attention of such counsel which would lead such
counsel to believe that either the Registration
35
Statement at the time it became effective (including all Incorporated
Documents and all information deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A, Rule 462
or Rule 434, if applicable), or any amendment thereof made prior to the
Closing Date as of the date of such amendment, contained an untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus as of its date (or in
respect of any amendment thereof or supplement thereto made prior to
the Closing Date as of the date of such amendment or supplement) and as
of the Closing Date contained or contains an untrue statement of a
material fact or omitted or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading
(it being understood that such counsel need express no belief or
opinion with respect to the financial statements and schedules and
other financial data included therein).
In rendering such opinion, such counsel may rely (A)
as to matters involving the application of laws of any jurisdiction
other than the States of New York or Delaware or the State of Delaware,
or the United States, to the extent they deem proper and specified in
such opinion, upon the opinion of other counsel of good standing whom
they believe to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and
certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and the
Subsidiaries, provided that copies of any such statements or
certificates shall be delivered to Underwriters' counsel. The opinion
of such counsel for the Company shall state that they are so relying,
that they have no knowledge of any material misstatement or inaccuracy
in any such opinion or certificate, that the opinion of any such other
counsel is in form satisfactory to such counsel and, in their opinion,
you and they are justified in relying thereon.
(c) The Company shall have furnished to the
Underwriters the opinion of Hopgood, Calimafde, ▇▇▇▇▇ & Judlowe,
Intellectual Property counsel for the Company, dated the Closing Date
(and the Additional Closing Date, if applicable), in form and substance
satisfactory to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the Underwriters.
(d) The Company shall have furnished to the
Underwriters the opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, regulatory
counsel for the Company, dated the Closing Date (and the Additional
Closing Date, if applicable), in form and substance satisfactory to
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the Underwriters.
(e) The Selling Stockholders shall have furnished to
you the opinion of ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Selling
36
Stockholders, dated the applicable Closing Date, addressed to the
Underwriters and in form and substance satisfactory to ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, Underwriters' counsel, in the form of Exhibit C hereto.
In rendering such opinion, such counsel may rely as
to questions of law not involving the laws of the United States or
States of Delaware and New York upon opinions of local counsel and as
to questions of fact upon representations or certificates of the
Selling Stockholders and of governmental officials in which case their
opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy of any material
misstatement or inaccuracy in any such opinion representation or
certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' Counsel.
(f) All corporate proceedings and other legal
matters in connection with this Agreement, the form of Registration
Statement, preliminary prospectus or Prospectus, and the registration,
authorization, issue, sale and delivery of the Shares as herein
contemplated shall be satisfactory in form and substance to you and to
Underwriters' counsel. The Underwriters shall have received from
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, Underwriters' counsel, a favorable opinion,
dated the Closing Date (and the Additional Closing Date, if
applicable), with respect to the issuance and sale of the Shares, the
Registration Statement, the Prospectus and other related matters as you
may reasonably require, and the Company and the Subsidiaries shall have
furnished to Underwriters' counsel such documents as they request for
the purpose of enabling them to pass upon the matters referred to in
this Section.
(g) At the Closing Date (and the Additional Closing
Date, if applicable) you shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Company, dated the
Closing Date (and the Additional Closing Date, if applicable), to the
effect that (i) the condition set forth in subsection (a) of this
Section 8 has been satisfied, (ii) as of the date hereof and as of the
Closing Date (and the Additional Closing Date, if applicable) all the
representations and warranties of the Company set forth in this
Agreement are accurate with the same force and effect as if made on
each of such dates, (iii) as of the Closing Date (and the Additional
Closing Date, if applicable) the agreements and obligations of the
Company to be performed hereunder on or prior thereto have been duly
performed, (iv) when the Registration Statement became effective and at
all times subsequent thereto up to the delivery of such certificate,
the Registration Statement and the Prospectus, and any amendments or
supplements thereto, contained the information required to be included
therein by the Act and the applicable rules and regulations of the
Commission thereunder, and conformed to the requirements of the Act and
the applicable rules and regulations of the Commission thereunder; the
Registration Statement and the Prospectus, and any amendments or
supplements thereto, did not and does not include any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements
37
therein not misleading; and since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in an amended or supplemented Prospectus which has not been so
set forth; and (v) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
the Company and the Subsidiaries have not sustained any material loss
or interference with their respective business or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, and there has not been any material adverse change, or any
development involving a prospective material adverse change, in the
business, management, properties, operations, prospects, condition
(financial or otherwise), or results of operations of the Company and
the Subsidiaries taken as a whole, or any transaction that is material
to the Company and its subsidiaries taken as a whole, except
transactions entered into in the ordinary course of business, or any
obligation, direct or contingent, that is material to the Company and
its subsidiaries, taken as a whole, incurred by the Company or its
subsidiaries, except obligations incurred in the ordinary course of
business, or any change in the capital stock or outstanding
indebtedness of the Company or any of its subsidiaries that is material
to the Company and its subsidiaries, taken as a whole, or any dividend
or distribution of any kind declared, paid or made on the capital stock
of the Company or any of its subsidiaries.
(h) At the time this Agreement is executed and at
the Closing Date (and the Additional Closing Date, if applicable),
Ernst & Young LLP shall have furnished to you a letter or letters,
dated respectively as of the time this Agreement is executed and as of
the Closing Date (and the Additional Closing Date, if applicable),
addressed to you and based upon the procedures described in such
letter, but carried out to a date not more than five (5) days prior to
the Closing Date or the Additional Closing Date, as the case may be,
and otherwise in form and substance satisfactory to you, confirming
that they are independent public accountants with respect to the
Company within the meaning of the Act and Regulation S-X, stating that
the answer to item 10 of the Registration Statement is correct as it
relates to them and that:
(i) in their opinion the audited
consolidated financial statements, the audited consolidated
financial statement schedules and the audited financial
statements of the Company included in the Registration
Statement and the Prospectus and reported on by them comply
in form in all material respects with the applicable
accounting requirements of the Act and the related published
rules and regulations;
(ii) on the basis of a reading of the
latest unaudited financial statements made available by the
Company and the Subsidiaries; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to
the comments set forth in such letter; a reading of the
minutes of the
38
meetings of the stockholders and the board of directors of
the Company and the Subsidiaries; and inquiries of certain
officials of the Company and the Subsidiaries who have
responsibility for financial and accounting matters of the
Company and the Subsidiaries as to transactions and events
subsequent to June 30, 1999, nothing came to their attention
which caused them to believe that:
(1) any unaudited financial
statements included in the Registration Statement
and the Prospectus do not comply as to form in all
material respects with the applicable accounting
requirements of the Act and with the published
rules and regulations of the Commission with
respect to registration statements on Form S-3; and
said unaudited financial statements are not in
conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included in the Registration Statement
and the Prospectus;
(2) with respect to the period
subsequent to December 31, 1999 there were any
changes, at a specified date not more than five
days prior to the date of the letter, in the
long-term debt of the Company and its subsidiaries
or capital stock of the Company or decreases in the
stockholders' equity of the Company, as compared
with the amounts shown on the December 31, 1999
consolidated balance sheet included in the
Registration Statement and the Prospectus or the
period from January 1, 2000 to such specified date
there were any decreases, as compared with December
31, 1999 in net revenues or income before income
taxes or in total or per share amounts of net
income of the Company and the Subsidiaries, except
in all instances for changes or decreases set forth
in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by ING Barings LLC;
(3) the information included in
the Registration Statement and Prospectus in
response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial
Information), Item 402 (Executive Compensation) and
Item 503(d) (Ratio of Earnings to Fixed Charges) is
not in conformity with the applicable disclosure
requirements of Regulation S-K; and
(4) for the period from January
1, 2000, to such specified date, there were, as
compared to the corresponding period in the
preceding year, any decrease in consolidated net
revenues or increase in excess of [ ]in the total
amount of loss from continuing operations and total
net loss in excess of
39
[ ], except in all instances for changes,
increases, or decreases that the Registration
Statement and the Prospectus discloses have
occurred or may occur.
(iii) they have performed the procedures
specified by the American Institute of Certified Public
Accountants for a review of Interim financial information as
described in Statement of Auditing Standards No. 71 ("SAS
71"), Interim Financial Information, on the unaudited
financial statements included in the Registration Statement
and the Prospectus and are providing their report as
described in SAS 71 on such financial statements; and
(iv) they have performed certain other
specified procedures as a result of which they determined
that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial
or statistical information derived from the general
accounting records of the Company and the Subsidiaries) set
forth in the Registration Statement and the Prospectus, which
have been specified by you prior to the date of such letter,
agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal
interpretation.
In addition, ING Barings LLC shall have received
from Ernst & Young LLP a letter addressed to the Company and made
available to you for the use of the Underwriters stating that their
review of the Company's system of internal accounting controls, to the
extent they deemed necessary in establishing the scope of their
examination of the Company's consolidated financial statements as of
December 31, 1999, did not disclose any weaknesses in internal controls
that they considered to be substantial or material weaknesses.
In the event that the letters to be delivered
referred to above set forth note any changes, decreases or increases in
the financial information included in the Registration Statement and
the Prospectus, it shall be a further condition to the obligations of
the Underwriters hereunder that ING Barings LLC shall have determined
in its sole judgment, that such changes, decreases or increases as are
set forth in such letters do not reflect a material adverse change in
the stockholders' equity or long-term debt of the Company as compared
with the amounts shown in the latest balance sheet of the Company
included in the Prospectus, or a material adverse change in total net
revenues or net income of the Company, in each case as compared with
the corresponding period of the prior year.
(i) Subsequent to the date this Agreement is
executed or, if earlier, the dates as of which information is given in
the Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto), there shall not have
been (i) any change or decrease specified in the letter or letters
referred to in paragraph (f) of this Section 8 or (ii)
40
any change, or any development involving a prospective change, in or
affecting the condition (financial or other), earnings, business or
properties of the Company and the Subsidiaries, whether or not arising
in the ordinary course of business, the effect of which, in any case
referred to in clause (i) or (ii) above, is, in ING Barings LLC's sole
judgment, material and adverse and that makes it impracticable or
inadvisable to proceed with the offering or delivery of the Shares as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto).
(j) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
(i) there shall not have been a material adverse change, or any
development involving a prospective material adverse change, in the
general affairs, business, prospects, properties, management, key
personnel, condition (financial or other) or results of operations of
the Company and the Subsidiaries, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in the Registration Statement and the Prospectus (or,
in the case of a prospective change, other than as contemplated by the
Registration Statement and the Prospectus), and (ii) the Company shall
not have sustained any material loss or interference with its business
or properties from fire, explosion, flood, hurricane or other casualty
or calamity, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action, order
or decree, which is not set forth in the Registration Statement and the
Prospectus, if in ING Baring LLC's judgment any such development makes
it impracticable or inadvisable to consummate the sale and delivery of
the Shares at the public offering price.
(k) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there shall have been no litigation or other proceeding instituted
against the Company or any of its officers or directors in their
capacities as such, before or by any federal, state, or local court,
commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding could have a
Material Adverse Effect on the Company and the Subsidiaries taken as a
whole.
(l) At the time of execution of this Agreement, the
Company shall have furnished to you a letter addressed to you from each
officer and director of the Company, each Selling Stockholder and each
shareholder or other person heretofore designated by you, in which each
such person agrees not to (1) offer for sale, contract to sell, sell,
pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any shares of
Common Stock or securities convertible into, exercisable or
exchangeable for, or represent the right to receive, Common Stock or
sell or grant options, rights or warrants with respect to any shares of
Common Stock or register for sale any outstanding shares of Common
Stock; or (2) enter into any swap or other derivatives
41
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common Stock
or securities, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise for a period of 120 days following the
time of execution of this Agreement without your prior written consent,
other than shares of Common Stock disposed of as gifts or transfers to
immediate family members or trusts or partnerships, the beneficiaries
and sole partners of which are immediate family members, provided that
the donee or transferee agrees in writing to be bound in the same
manner.
(m) The Shares shall be qualified for sale in such
jurisdictions as you shall have requested, each such qualification
shall be in effect and not subject to any stop order or other
proceeding on the Closing Date and the Additional Closing Date, if
applicable.
(n) The Shares shall have been approved for
inclusion on the Nasdaq National Market, subject to official notice.
(o) You shall not have advised the Company that the
Registration Statement, the preliminary prospectus or the Prospectus,
or any amendment or any supplement thereto, contains an untrue
statement of fact which, in your judgment, is material, or omits to
state a fact which, in your judgment, is material and is required to be
stated therein or necessary to make the statements therein not
misleading and the Company shall not have cured such untrue statement
of fact or omission of such statement of fact.
(p) On the Additional Closing Date, the
Representatives shall receive a written certificate executed by each
Selling Stockholder, dated as of such Additional Closing Date, to the
effect that:
(i) the representations, warranties and
covenants of such Selling Stockholder set fort in Section 1A
of this Agreement are true and correct with the same force
and effect as though expressly made by such Selling
Stockholder on and as of such Additional Closing Date; and
(ii) such Selling Stockholder has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to such
Additional Closing Date.
(q) At least three business days prior to the date
hereof, the Company and the Selling Stockholders shall have (i)
furnished for review by the Representatives copies of the Powers of
Attorney and Custody Agreements executed by each of the Selling
Stockholders and such further information, certificates and documents
as the Representatives may reasonably request, (ii) appointed a
Custodian satisfactory to the Representatives and (iii) delivered into
the custody of the Custodian all of the Option Shares referred to on
Schedule II.
42
(r) The Company shall have furnished to you such
certificates, in addition to those specifically mentioned herein, as
you may have requested as to the accuracy and completeness at the
Closing Date and the Additional Closing Date, if applicable, of any
statement in the Registration Statement, the preliminary prospectus or
the Prospectus, as to the accuracy at the Closing Date and the
Additional Closing Date, if applicable, of the representations,
warranties and covenants of the Company herein, as to the performance
by the Company of its obligations hereunder, or as to the fulfillment
of the conditions concurrent and precedent to your obligations
hereunder.
(s) Prior to the Closing Date and the Additional
Closing Date, if applicable, the Company shall have furnished to the
Underwriters such further information and documents as you may
reasonably request.
If any of the conditions specified in this Section shall not
have been fulfilled in all respects when and as required to be satisfied, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be satisfactory in form and substance to you and counsel for
the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be terminated at, or at any time on or prior to, the Closing Date
(and Additional Closing Date, if applicable) by ING Barings LLC. Notice of such
termination shall be given to the Company promptly in writing or by telephone
confirmed in writing.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default
in its or their obligations to purchase Firm Shares or Option Shares
hereunder, and if the Firm Shares or Option Shares with respect to
which such default relates do not (after giving effect to arrangements,
if any, made by you pursuant to subsection (b) below) exceed in the
aggregate 10% of the number of Firm Shares or Option Shares, the Shares
to which the default relates shall be purchased by the non-defaulting
Underwriters in proportion to the respective proportions which the
numbers of Firm Shares set forth opposite their respective names in
Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more
than 10% of the Firm Shares or Option Shares, as the case may be, you
may in your discretion arrange for yourself or for another party or
parties (including any non-defaulting Underwriter or Underwriters who
so agree) to purchase such Firm Shares or Option Shares, as the case
may be, to which such default relates on the terms contained herein. In
the event that within 5 calendar days after such a default you do not
arrange for the purchase of the Firm Shares or Option Shares, as the
case may be, to which such default relates as provided in this Section
9, this Agreement or, in the case of a default with respect to the
Option Shares, the obligations of the Underwriters to purchase and of
the Company and the Selling Stockholders to sell the Option Shares
shall thereupon terminate, without liability
43
on the part of the Company or the Selling Stockholders with respect
thereto (except in each case as provided in Section 5, 6(a), 6(b) and 7
hereof) or the Underwriters, but nothing in this Agreement shall
relieve a defaulting Underwriter or Underwriters of its or their
liability, if any, to the other Underwriters and the Company for
damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Option
Shares to which the default relates are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or
parties as aforesaid, you or the Company shall have the right to
postpone the Closing Date or Additional Closing Date, as the case may
be, for a period not exceeding five business days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements,
and the Company agrees to file promptly any amendment or supplement to
the Registration Statement or the Prospectus which, in the opinion of
Underwriters' counsel, may thereby be made necessary or advisable. The
term "Underwriter" as used in this Agreement shall include any party
substituted under this Section 9 with like effect as if it had
originally been a party to this Agreement with respect to such Firm
Shares and Option Shares.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the
Underwriters, the Company and the Selling Stockholders contained in
this Agreement, including the agreements contained in Section 4,
Section 4A and Section 5, the indemnity agreements contained in Section
6 and the contribution agreements contained in Section 7, shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any controlling person
thereof or by or on behalf of the Company, any of its officers and
directors, the Selling Stockholders or any controlling person thereof,
and shall survive delivery of and payment for the Shares to and by the
Underwriters. The representations contained in Section 1 and Section 1A
and the agreements contained in Sections 5, 6, 7 and 11(d) hereof also
shall survive the termination of this Agreement, including termination
pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the
later of when (i) you and the Company shall have received notification
of the effectiveness of the Registration Statement or (ii) the
execution of this Agreement. If either the public offering price or the
purchase price per Share has not been agreed upon prior to 5:00 P.M.,
New York time, on the fifth full business day after the Registration
Statement shall have become effective, this Agreement shall thereupon
terminate without liability to the Company or the Underwriters except
as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you or by
you notifying the Company. Notwithstanding the foregoing, the
provisions of this Section 11 and of Sections 1, 1A, 5, 6 and 7 hereof
shall at all times be in full force and effect.
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(b) ING Barings LLC shall have the right to
terminate this Agreement at any time on or prior to the Closing Date,
or the obligations of the Underwriters to purchase the Option Shares at
any time on or prior to the Additional Closing Date, as the case may be
(but in any event prior to delivery of and payment for the Shares), if
(A) any domestic or international event or act or occurrence has
materially disrupted, or in your opinion will in the immediate future
materially disrupt, the market for the Company's securities or
securities in general; or (B) if trading on the New York Stock
Exchange, the American Stock Exchange or NASDAQ National Market shall
have been suspended, or limited, minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities
shall have been required, on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market, by the New York Stock
Exchange, the American Stock Exchange, or NASDAQ or by order of the
Commission or any other governmental authority having jurisdiction; or
(C) if a banking moratorium has been declared by a federal or New York
authority or if any new restriction materially adversely affecting the
distribution of the Firm Shares or the Option Shares, as the case may
be, shall have become effective; or (D)(i) there shall have occurred
any outbreak or escalation of hostilities or there is an outbreak or
escalation of national or international hostilities or there is a
declaration by the United States of a national emergency or war or (ii)
if there has been any crisis or calamity or any change or development
in United States' or international political, financial or economic
conditions, if the effect of any such event in (D)(i) or (D)(ii), in
the sole judgment of ING Barings LLC makes it impracticable or
inadvisable to proceed with the offering, sale and delivery of the Firm
Shares or the Option Shares, as the case may be, on the terms
contemplated by the Prospectus (exclusive of any supplement thereto) or
to enforce contracts for the sale of securities; or (E) in the sole
judgment of ING Barings LLC there shall have occurred any Material
Adverse Effect on the Company and its subsidiaries taken as a whole or
(F) the Company shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as in the sole
judgment of ING Barings LLC may interfere materially with the conduct
of the business and operations of the Company regardless of whether or
not such loss shall have been insured. Any termination pursuant to this
Section shall be without liability on the part of (a) the Company to
any Underwriter, except that the Company shall be obligated to
reimburse the expenses of ING Barings LLC and the underwriters pursuant
to Sections 5, 6 and 7 hereof, (b) any Underwriter to the Company or
(c) of any party hereto to any other party except that the provisions
of Sections 5, 6 and 7 shall at all times be effective and shall
survive such termination.
(c) Any notice of termination pursuant to this
Section 11 shall be by telephone or facsimile and confirmed in writing
by letter.
(d) If this Agreement shall be terminated pursuant
to any of the provisions hereof (otherwise than pursuant to (i)
notification by you as provided in Section 11(a) hereof or (ii) Section
9(b) or 11(b) hereof), or if the sale of the Shares provided for herein
is not consummated because any condition to the
45
obligations of the Underwriters set forth herein is not satisfied or
because of any refusal, inability or failure on the part of the Company
to perform any agreement herein or comply with any provision hereof,
the Company will, subject to demand by you, reimburse the Underwriters
for all out-of-pocket expenses (including the fees and expenses of
their counsel), incurred by the Underwriters in connection herewith.
12. Notices. Any notice or notification in any form to be
given hereunder shall be in writing and shall be delivered in person or
sent by telephone or facsimile transmission (but in the case of a
notification by telephone, with subsequent confirmation by letter or
facsimile transmission).
Any notice or notification to you shall be addressed to:
ING Barings LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Office of the General Counsel
Any notice or notification to the Company shall be addressed
to the Company at:
Globecomm Systems Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
Any notice or notification to the Selling Stockholders shall
be addressed to the Selling Stockholders at:
Globecomm Systems Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Globecomm Systems Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Any notice or notification shall (subject to confirmation when
required) take effect at the time of receipt.
13. Parties. This Agreement shall insure solely to the benefit of, and
shall be binding upon, the Underwriters and the Company and the Selling
Stockholders and the controlling persons, directors, officers, employees and
agents referred to in
46
Section 6 and 7, and their respective successors and
assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Agreement or any provision herein contained. The term "successors and assigns"
shall not include a purchaser, in its capacity as such, of Shares from any of
the Underwriters. Notwithstanding the foregoing, this Agreement and the terms
and provisions hereof are, unless otherwise specified herein, for the sole
benefit of only those persons, except that (a) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholders contained
in this Agreement shall also be deemed to be for the benefit of each Purchaser
Indemnified Party and (b) the indemnity agreement of the Underwriters contained
in Section 6 hereof shall be deemed to be for the benefit of each Company
Indemnified Party.
14. Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City and County of New York or the
courts of the State of New York in each case located in the City and County of
New York (collectively, the "Specified Courts"), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
With respect to any Related Proceeding, each party irrevocably
waives, to the fullest extent permitted by applicable law, all immunity (whether
on the basis of sovereignty or otherwise) from jurisdiction, service of process,
attachment (both before and after judgment) and execution to which it might
otherwise be entitled in the Specified Courts or any other court of competent
jurisdiction, and will not raise or claim or cause to be pleaded any such
immunity at or in respect of any such Related Proceeding or Related Judgment,
including, without limitation, any immunity pursuant to the United States
Foreign Sovereign Immunities Act of 1976, as amended.
15. Failure of One or Both of the Selling Stockholders to Sell and
Deliver Option Shares. If one or both of the Selling Stockholders shall fail to
sell and deliver to the Underwriters the Option Shares to be sold and delivered
by such Selling Stockholders at the applicable Closing Date pursuant to this
Agreement, then the Underwriters may at their option, by written notice from ING
Barings LLC to the Company and the Selling Stockholders, either (i) terminate
this Agreement without any liability on the part of any Underwriter or, except
as provided in Sections 5, 6, and 7 hereof, the Company or the Selling
Stockholders, or (ii) demand that the Company issue Option Shares in replacement
for the failed delivery or (iii) purchase the shares
47
which the Company and other Selling Stockholder have agreed to sell and deliver
in accordance with the terms hereof. If one or both of the Selling Stockholders
shall fail to sell and deliver to the Underwriters the Shares to be sold and
delivered by such Selling Stockholders pursuant to this Agreement at the
applicable Closing Date, then the Underwriters shall have the right, by written
notice from ING Barings LLC to the Company and the Selling Stockholders, to
postpone such Closing Date, but in no event for longer than seven days in order
that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
16. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
contracts made and to be performed within the State of New York. This Agreement
may be executed in one or more counterparts, and if executed in more than one
counterpart, the executed counterparts shall together constitute a single
instrument. The descriptive headings in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
Time shall be of the essence of this Agreement.
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof.
If any provision or portion of any provision of the Agreement, or the
application of any such provision or any portion thereof to any party or
circumstances, shall be held invalid or unenforceable, the remaining portion of
such provision and the remaining provisions of this agreement, and the
application of such provision or portion of such provision as is held invalid or
unenforceable to any parties or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby and such remaining
portion of such provision and the remaining provisions of this Agreement shall
continue to be valid and in full force and effect.
If the foregoing is in accordance with the Underwriters' understanding
of our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
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This Agreement may be signed in counterparts which together
shall constitute one and the same instrument.
Very truly yours,
GLOBECOMM SYSTEMS INC.
By:
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
THE SELLING STOCKHOLDERS NAMED IN
SCHEDULE II HERETO
By:
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
ING Barings LLC
By: ,
---------------------------------------------
Name:
Title:
For itself and the other several Underwriters named in Schedule I to the
foregoing Agreement.
49