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EXHIBIT 1.1
1,775,000 SHARES
VERITY, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
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August _, ▇▇▇▇
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SOUNDVIEW TECHNOLOGY GROUP, INC.
As Representatives of the several Underwriters
c/o ▇▇ ▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Madames:
1. INTRODUCTORY. Verity, Inc., a Delaware corporation (the "Company"), and
the selling stockholders named in Schedule B hereto (the "Selling Stockholders")
propose to sell, pursuant to the terms of this Agreement, to the several
underwriters named in Schedule A hereto (the "Underwriters," or, each, an
"Underwriter"), an aggregate of 1,775,000 shares of Common Stock $.001 par value
(the "Common Stock") of the Company. The aggregate of 1,775,000 shares so
proposed to be sold is hereinafter referred to as the "Firm Stock". The Company
also proposes to sell to the Underwriters, upon the terms and conditions set
forth in Section 3 hereof, up to an additional 266,250 shares of Common Stock
(the "Optional Stock"). The Firm Stock and the Optional Stock are hereinafter
collectively referred to as the "Stock." ▇▇ ▇▇▇▇▇ Securities Corporation ("▇▇
▇▇▇▇▇"), Banc of America Securities LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and SoundView
Technology Group, Inc. are acting as representatives of the several Underwriters
and in such capacity are hereinafter referred to as the "Representatives." For
purposes herein, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ are referred to as "Selling Officers."
2. (I) REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
OFFICERS. The Company represents and warrants to, and agrees with, and each
Selling Officer, to his actual knowledge without independent investigation,
severally and not jointly, represents and warrants to, and agrees with, the
several Underwriters that:
a. A registration statement on Form S-3 (File No. 333-82525), as
amended by Amendments Nos. 1 and 2 thereto (the "Initial Registration
Statement") in respect of the Stock has been filed with the Securities and
Exchange Commission (the "Commission"); the Initial Registration Statement and
any post-effective amendment thereto, excluding exhibits thereto but
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including all documents incorporated by reference in the prospectus contained
therein, have been delivered to you for each of the other Underwriters and have
been declared effective by the Commission in such form as so amended; other than
a registration statement, if any, increasing the size of the offering (a "Rule
462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the Commission thereunder, which
will become effective upon filing; no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or threatened by
the Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the Rules and
Regulations, is hereinafter called a "Preliminary Prospectus"); the various
parts of the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including (i) the
information contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act and deemed by virtue of Rule
430A under the Securities Act to be part of the Initial Registration Statement
at the time it was declared effective and (ii) the documents incorporated by
reference in the prospectus contained in the Initial Registration Statement at
the time such part of the Initial Registration Statement became effective, each
as amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any, became
or hereafter becomes effective, are hereinafter collectively called the
"Registration Statements"; and such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Securities Act, is hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as
of the date of such Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as the
case may be; and any reference to any amendment to the Registration Statements
shall be deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date
of the Initial Registration Statement that is incorporated by reference in the
Registration Statements. No document has been or will be prepared or distributed
in reliance on Rule 434 under the Securities Act. No order preventing or
suspending the use of any Preliminary Prospectus has been issued by the
Commission.
b. The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or supplements
to either of the Registration Statements or the Prospectus, when they become
effective or are filed with the Commission, as the case may be, will conform) in
all material respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable effective date (as
to the Registration Statements and any amendment thereto) and as of the
applicable filing date (as to the Prospectus
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and any amendment or supplement thereto) contain any 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; provided, however,
that the foregoing representations and warranties shall not apply to information
contained in or omitted from the Registration Statements or the Prospectus or
any such amendment or supplement thereto in reliance upon, and in conformity
with, written information furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein.
c. The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained any 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; and any
further documents so filed and incorporated by reference in the Prospectus, when
such documents become effective or are filed with Commission, as the case may
be, will conform in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain any 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.
d. The Company and each of its subsidiaries (as defined in Section 14)
have been duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign corporations
in each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and have
all power and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged, except where the failure to
so qualify or have such power or authority would not have, singularly or in the
aggregate, a material adverse effect on the condition (financial or otherwise),
results of operations or business of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"). The Company owns or controls, directly or
indirectly, only the following corporations, associations or other entities:
________.
e. This Agreement has been duly authorized executed and delivered by
the Company.
f. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company,
including the Stock, have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof contained in the
Prospectus.
g. All the outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued, are fully paid and
nonassessable and, except to the extent set forth in the Prospectus, are owned
by the Company directly or indirectly through one or more wholly-owned
subsidiaries, free and clear of any claim, lien, encumbrance, security interest,
restriction upon voting or transfer or any other claim of any third party.
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h. The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets, except in each case which
conflict, violation or breach would not reasonably be expected to have a
Material Adverse Effect.
i. Except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act, applicable state securities laws and
rules and regulations of the National Association of Securities Dealers, Inc.
("NASD") in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
j. To the Company's knowledge, PricewaterhouseCoopers LLP, who have
expressed their opinions on the audited financial statements and related
schedules included or incorporated by reference in the Registration Statements
and the Prospectus are independent public accountants as required by the
Securities Act and the Rules and Regulations.
k. The financial statements, together with the related notes and
schedules, included or incorporated by reference in the Prospectus and in each
Registration Statement fairly present the financial position and the results of
operations and changes in financial position of the Company and its consolidated
subsidiaries at the respective dates or for the respective periods therein
specified. Such statements and related notes and schedules have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis except as may be set forth in the Prospectus.
l. Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or as would not,
either singularly or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and, since such date, there has not been any material change in
the capital stock or long-term debt of the Company or any of its subsidiaries or
any material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus.
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m. Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, singularly or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, might have a Material
Adverse Effect or would prevent or adversely affect the ability of the Company
to perform its obligations under this Agreement; and to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
n. Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws, (ii) is in default in any respect, and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject or (iii) is in violation in any
respect of any law, ordinance, governmental rule, regulation or court decree to
which it or its property or assets may be subject, except any violations or
defaults which, singularly or in the aggregate, would not have a Material
Adverse Effect.
o. The Company and each of its subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate state, federal or foreign
regulatory agencies or bodies which are necessary or desirable for the ownership
of their respective properties or the conduct of their respective businesses as
described in the Prospectus except where any failures to possess or make the
same, singularly or in the aggregate, would not have a Material Adverse Effect,
and the Company has not received notification of any revocation or modification
of any such license, authorization or permit and has no reason to believe that
any such license, certificate, authorization or permit will not be renewed.
p. Neither the Company nor any of its subsidiaries is or, after giving
effect to the offering of the Stock and the application of the proceeds thereof
as described in the Prospectus, will become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
q. Neither the Company nor any of its officers, directors or affiliates
has taken or will take, directly or indirectly, any action designed or intended
to stabilize or manipulate the price of any security of the Company, or which
caused or resulted in, or which might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any security
of the Company.
r. The Company and its subsidiaries own or possess the right to use all
patents, trademarks, trademark registrations, service marks, service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade secrets and
rights described in the Prospectus as being owned by them for the conduct of
their respective businesses, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company and
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its subsidiaries with respect to the foregoing. The Company's business as now
conducted and as proposed to be conducted does not and will not, to the
knowledge of the Company, infringe or conflict with any patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses or other
intellectual property or franchise right of any person. Except as described in
the Prospectus, no claim has been made against the Company alleging the
infringement by the Company of any patent, trademark, service ▇▇▇▇, trade name,
copyright, trade secret, license in or other intellectual property right or
franchise right of any person.
s. The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use, all
items of real or personal property which are material to the business of the
Company and its subsidiaries taken as a whole, in each case free and clear of
all liens, encumbrances, claims and defects that may result in a Material
Adverse Effect.
t. No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is imminent
which might be expected to have a Material Adverse Effect. The Company is not
aware that any key employee or significant group of employees of the Company or
any subsidiary plans to terminate employment with the Company or any such
subsidiary.
u. No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the
"Code")), or "accumulated funding deficiency" (as defined in Section 302 of
ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred with respect to any employee benefit plan
which could have a Material Adverse Effect; each employee benefit plan is in
compliance in all material respects with applicable law, including ERISA and the
Code; the Company has not incurred and does not expect to incur liability under
Title IV of ERISA with respect to the termination of, or withdrawal from, any
"pension plan"; and each "pension plan" (as defined in ERISA) for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which could cause the loss of
such qualification.
v. There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of toxic
or other wastes or other hazardous substances by, due to, or caused by the
Company or any of its subsidiaries (or, to the best of the Company's knowledge,
any other entity for whose acts or omissions the Company or any of its
subsidiaries is or may be liable) upon any of the property now or previously
owned or leased by the Company or any of its subsidiaries, or upon any other
property, in violation of any statute or any ordinance, rule, regulation, order,
judgment, decree or permit or which would, under any statute or any ordinance,
rule (including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or liability which
would not have, singularly or in the aggregate with all such violations and
liabilities, a Material Adverse
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Effect; there has been no disposal, discharge, emission or other release of any
kind onto such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to which the
Company or any of its subsidiaries have knowledge, except for any such disposal,
discharge, emission, or other release of any kind which would not have,
singularly or in the aggregate with all such discharges and other releases, a
Material Adverse Effect.
w. The Company and its subsidiaries each (i) have filed all necessary
federal, state and foreign income and franchise tax returns, (ii) have paid all
federal state, local and foreign taxes due and payable for which it is liable,
and (iii) do not have any tax deficiency or claims outstanding or assessed or,
to the best of the Company's knowledge, proposed against it which could
reasonably be expected to have a Material Adverse Effect.
x. The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar businesses in similar
industries.
y. The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
z. The minute books of the Company and each of its subsidiaries have
been made available to the Underwriters and counsel for the Underwriters, and
such books (i) contain a complete summary of all meetings and actions of the
directors and stockholders of the Company and each of its subsidiaries since the
time of its respective incorporation through the date of the latest meeting and
action, and (ii) accurately in all material respects reflect all transactions
referred to in such minutes.
aa. There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be described
in the Prospectus or to be filed as an exhibit to the Registration Statements
which is not described or filed therein as required; and all descriptions of any
such franchises, leases, contracts, agreements or documents contained in the
Registration Statements fairly present the material required to be described
therein.
bb. No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus and which is not so described.
cc. No person or entity has the right to require registration of shares
of Common Stock or other securities of the Company because of the filing or
effectiveness of the Registration
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Statements or otherwise, except for persons and entities who have expressly
waived such right or who have been given proper notice and have failed to
exercise such right within the time or times required under the terms and
conditions of such right.
dd. Neither the Company nor any of its subsidiaries owns any "margin
securities" as that term is defined in Regulations G and U of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"), and none
of the proceeds of the sale of the Stock will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin security, for the purpose
of reducing or retiring any indebtedness which was originally incurred to
purchase or carry any margin security or for any other purpose which might cause
any of the Securities to be considered a "purpose credit" within the meanings of
Regulation G, T, U or X of the Federal Reserve Board.
ee. Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person that would give rise to a
valid claim against the Company or the Underwriters for a brokerage commission,
finder's fee or like payment in connection with the offering and sale of the
Stock.
ff. No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in the
Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
gg. Other than as described in the Prospectus, the Company has reviewed
its operations and that of its subsidiaries and any third parties with which the
Company or any of its subsidiaries has a material relationship to evaluate the
extent to which the business or operations of the Company or any of its
subsidiaries will be affected by the Year 2000 Problem. As a result of such
review and other than as described in the Prospectus, the Company has no reason
to believe, and does not believe, that the Year 2000 Problem will have a
Material Adverse Effect. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval, retransmission or
other utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
hh. The Stock is listed on The Nasdaq Stock Market's National Market
System.
(II) REPRESENTATIONS AND WARRANTIES AND AGREEMENTS OF THE SELLING
STOCKHOLDERS. Each Selling Stockholder, severally and not jointly, represents
and warrants to, and agrees with, the several Underwriters that such Selling
Stockholder:
a. Upon the exercise of each Selling Stockholder's options and
immediately prior to the First Closing Date (as defined in Section 3 hereof),
the Selling Stockholder will have good and valid title to the shares of Stock to
be sold by the Selling Stockholder hereunder on such date, free and clear of all
liens, encumbrances, equities or claims; and upon delivery of such shares and
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payment therefor pursuant hereto, good and valid title to such shares, free and
clear of all liens, encumbrances, equities or claims, will pass to the several
Underwriters.
b. Has duly and irrevocably executed and delivered a power of attorney,
in substantially the form heretofore delivered by the Representatives (the
"Power of Attorney"), appointing ▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and each
of them, as attorney-in-fact (the "Attorneys-in-fact") with authority to execute
and deliver this Agreement on behalf of such Selling Stockholder, to authorize
the delivery of the shares of Stock to be sold by such Selling Stockholder
hereunder and otherwise to act on behalf of such Selling Stockholder in
connection with the transactions contemplated by this Agreement.
c. Has duly and irrevocably executed and delivered a custody agreement,
in substantially the form heretofore delivered by the Representatives (the
"Custody Agreement"), with Boston EquiServe as custodian (the "Custodian"),
pursuant to which certificates in negotiable form for the shares of Stock to be
sold by such Selling Stockholder hereunder have been placed in custody for
delivery under this Agreement.
d. Has full right, power and authority to enter into this Agreement,
the Power of Attorney and the Custody Agreement; the execution, delivery and
performance of this Agreement, the Power of Attorney and the Custody Agreement
by such Selling Stockholder and the consummation by such Selling Stockholder of
the transactions contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Selling Stockholder is
a party or by which the Selling Stockholder is bound or to which any of the
property or assets of the Selling Stockholder is subject, nor will such actions
result in any violation of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder; and, except
for the registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act, applicable state securities laws and by the NASD in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Power of Attorney or the Custody
Agreement by such Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby and thereby.
3. PURCHASE SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and each Selling Stockholders
agree, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Stockholder, that number of shares of Firm Stock (rounded up or
down, as determined by ▇▇ ▇▇▇▇▇ in its discretion, in order to avoid fractions)
obtained by multiplying 1,500,000 shares of Firm Stock in the case of the
Company and the number of shares of Firm Stock set forth opposite the name of
such Selling Stockholder in
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Schedule B hereto, in the case of a Selling Stockholder, in each case by a
fraction, the numerator of which is the number of shares of Firm Stock set forth
opposite the name of such Underwriter in Schedule A hereto and the denominator
of which is the total number of shares of Firm Stock.
The purchase price per share to be paid by the Underwriters to the
Company and the Selling Stockholders for the Stock will be $_____ per share (the
"Purchase Price").
The Company and the Selling Stockholders will deliver the Firm Stock to
the Representatives for the respective accounts of the several Underwriters (in
the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York time, on the second full
business day preceding the First Closing Date (as defined below)) against
payment of the aggregate Purchase Price therefor by wire transfer to an account
at a bank designated to ▇▇ ▇▇▇▇▇ by the Company, payable to the order of the
Company and Boston EquiServe as Custodian for the Selling Stockholders, all at
the offices of ▇▇▇▇▇▇ Godward LLP, Five Palo Alto Square, Fourth Floor, ▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇. Time shall be of the essence, and delivery of
the Firm Shares at the time and place specified pursuant to this Agreement is a
further condition of the obligations of each Underwriter hereunder. The time and
date of the delivery and closing shall be at 10:00 A.M., New York time, on
______________, 1999, in accordance with Rule 15c6-1 of the Exchange Act. The
time and date of such payment and delivery are herein referred to as the "First
Closing Date." The First Closing Date and the location of delivery of, and the
form of payment for, the Firm Stock may be varied by agreement among the
Company, the Selling Stockholders and ▇▇ ▇▇▇▇▇.
The Company and the Selling Stockholders shall make the certificates
for the Stock available to the Representatives for examination on behalf of the
Underwriters in New York, New York at least twenty-four hours prior to the First
Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company agrees to sell to the Underwriters the number of shares of Optional
Stock specified in the written notice by ▇▇ ▇▇▇▇▇ described below and the
Underwriters agree, severally and not jointly, to purchase such shares of
Optional Stock. The option granted hereby may be exercised as to all or any part
of the Optional Stock at any time, but only once, not more than thirty (30) days
subsequent to the date of this Agreement. No Optional Stock shall be sold and
delivered unless the Firm Stock previously has been, or simultaneously is, sold
and delivered. The right to purchase the Optional Stock or any portion thereof
may be surrendered and terminated at any time upon notice by ▇▇ ▇▇▇▇▇ to the
Company.
The option granted hereby may be exercised by written notice given to
the Company by ▇▇ ▇▇▇▇▇ setting forth the number of shares of the Optional Stock
to be purchased by the Underwriters and the date and time for delivery of and
payment for the Optional Stock. The date and time for delivery of and payment
for the Optional Stock (which may be the First Closing
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Date, but not earlier) is herein called the "Option Closing Date" and shall in
no event be earlier than two (2) business days nor later than five (5) business
days after written notice is given. (The Option Closing Date and the First
Closing Date are herein called the "Closing Dates.")
The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Company given at
or prior to 12:00 Noon, New York time, on the second full business day preceding
the Option Closing Date) against payment of the aggregate Purchase Price
therefor in federal (same day) funds by wire transfer to an account at a bank
designated to ▇▇ ▇▇▇▇▇ by the Company at the offices of ▇▇▇▇▇▇ Godward LLP, Five
Palo Alto Square, Fourth Floor, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligations of each Underwriter
hereunder. The Company shall make the certificates for the Optional Stock
available to the Representatives for examination on behalf of the Underwriters
in New York, New York not later than 10:00 A.M., New York Time, on the business
day preceding the Option Closing Date. The Option Closing Date and the location
of delivery of, and the form of payment for, the Optional Stock may be varied by
agreement between the Company and ▇▇ ▇▇▇▇▇.
The several Underwriters propose to offer the Stock for sale upon the
terms and conditions set forth in the Prospectus.
4. (I) FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that:
a. The Company will: prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and file such Rule 462(b)
Registration Statement with the Commission on the date hereof; prepare the
Prospectus in a form approved by the Representatives and file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the second
business day following the execution and delivery of this Agreement; make no
further amendment or any supplement to the Registration Statements or to the
Prospectus prior to the Option Closing Date to which the Representatives shall
reasonably object by notice to the Company after a reasonable period to review;
advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to either Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended Prospectus
has been filed and will: furnish the Representatives with copies thereof; file
promptly all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Stock; advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, of the suspension of the qualification of the Stock for offering
or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statements or the Prospectus or for additional
information;
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and, in the event of the issuance of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, use promptly its best efforts to obtain its
withdrawal.
b. The Company will furnish promptly to each of the Representatives and
to counsel for the Underwriters a signed copy of each of the Registration
Statements as originally filed with the Commission, and each amendment thereto
filed with the Commission, including all consents and exhibits filed therewith.
c. The Company will deliver promptly to the Representatives in New York
City such number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statements as
originally filed with the Commission and each amendment thereto (in each case
excluding exhibits), (ii) each Preliminary Prospectus, (iii) the Prospectus (not
later than 10:00 A.M., New York time, of the second business day following the
execution and delivery of this Agreement) and any amended or supplemented
Prospectus (not later than 10:00 A.M., New York City time, on the second
business day following the date of such amendment or supplement) and (iv) any
document incorporated by reference in the Prospectus (excluding exhibits
thereto).
d. The Company will make generally available to its stockholders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Securities Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations (including, at the option of the Company, Rule
158).
e. The Company will promptly take from time to time such actions as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may designate and to continue such qualifications in effect for
so long as required for the distribution of the Stock; provided that the Company
and its subsidiaries shall not be obligated to qualify as foreign corporations
in any jurisdiction in which they are not so qualified or to file a general
consent to service of process in any jurisdiction;
f. During the period of two years from the date hereof, the Company
will deliver to the Representatives and, upon request, to each of the other
Underwriters, (i) as soon as they are available, copies of all reports or other
communications furnished to shareholders and (i) as soon as they are available,
copies of any reports and financial statements furnished or filed with the
Commission pursuant to the Exchange Act or any national securities exchange or
automatic quotation system on which the Stock is listed or quoted.
g. The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock for a period of 90 days from the date of the Prospectus without the prior
written consent of ▇▇ ▇▇▇▇▇ other than: (i) the Company's sale
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of the Stock hereunder; (ii) the sale of the Company's stock pursuant to the
exercise of stock options granted prior to the date of the Prospectus under the
Company's stock option plans; and (iii) the sale of stock pursuant to the
Company's employee stock purchase plan after the date of the Prospectus or
pursuant to the exercise of stock options granted after the date of the
Prospectus under the Company's stock option plans; provided however that such
stockholders will agree not to dispose of their shares for a period of 90 days
from the date of the Prospectus. The Company will cause each officer, director
and shareholder listed in Schedule C to furnish to the Representatives, prior to
the First Closing Date, a letter, substantially in the form of Exhibit I hereto,
pursuant to which each such person shall agree not to directly or indirectly
offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of
any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days from the date of the
Prospectus, without the prior written consent of ▇▇ ▇▇▇▇▇.
h. The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Stock under the Securities Act.
i. Prior to each of the Closing Dates the Company will furnish to the
Representatives, as soon as they have been prepared, copies of any unaudited
interim consolidated financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing in the
Registration Statement and the Prospectus.
j. Prior to each of the Closing Dates, the Company will not issue any
press release or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or otherwise,
or earnings, business affairs or business prospects (except for routine oral
marketing communications in the ordinary course of business and consistent with
the past practices of the Company and of which the Representatives are
notified), without the prior written consent of the Representatives, unless in
the judgment of the Company and its counsel, and after notification to the
Representatives, such press release or communication is required by law.
k. In connection with the offering of the Stock, until ▇▇ ▇▇▇▇▇ shall
have notified the Company of the completion of the resale of the Stock, the
Company will not, and will cause its affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to, either alone or with one or more
other persons, bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial interest, any Stock, or attempt to induce
any person to purchase any Stock; and not to, and to cause its affiliated
purchasers not to, make bids or purchases for the purpose of creating actual, or
apparent, active trading in or of raising the price of the Stock.
l. The Company will not take any action prior to the Closing Date which
would require the Prospectus to be amended or supplemented pursuant to Section
4(b).
m. The Company will apply the net proceeds from the sale of the Stock
as set forth in the Prospectus under the heading "Use of Proceeds."
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(II) FURTHER AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder, severally and not jointly, agrees with the several Underwriters
that:
a. They will not to directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock other than the sale of the Stock hereunder for a period of 90 days from
the date of the Prospectus, without the prior written consent of ▇▇ ▇▇▇▇▇.
b. The shares of Stock to be issued at the exercise of the options
immediately prior to the Closing Date and listed in the Custody Agreement are
for the benefit of and coupled with and subject to the interests of the
Underwriters and the other Selling Stockholders, and that the arrangement for
such custody and the appointment of the Attorneys-in-fact are irrevocable; that
the obligations of such Selling Stockholder hereunder shall not be terminated by
operation of law, whether by the death or incapacity, liquidation or
distribution of such Selling Stockholder, or any other event, that if such
Selling Stockholder should die or become incapacitated or is liquidated or
dissolved or any other event occurs, before the delivery of the Stock hereunder,
certificates for the Stock to be sold by such Selling Stockholder shall be
delivered on behalf of such Selling Stockholder in accordance with the terms and
conditions of this Agreement and the Custody Agreement, and action taken by the
Attorneys-in-fact or any of them under the Power of Attorney shall be as valid
as if such death, incapacity, liquidation or dissolution or other event had not
occurred, whether or not the Custodian, the Attorneys-in-fact or any of them
shall have notice of such death, incapacity, liquidation or dissolution or other
event.
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriter to pay (a)
the costs incident to the authorization, issuance, sale, preparation and
delivery of the Stock and any taxes payable in that connection; (b) the costs
incident to the Registration of the Stock under the Securities Act; (c) the
costs incident to the preparation, printing and distribution of the Registration
Statement, Preliminary Prospectus, Prospectus any amendments and exhibits
thereto or any document incorporated by reference therein the costs of
reproducing and distributing the Power of Attorney, the Custody Agreement, the
"Agreement Among Underwriters" between the Representatives and the Underwriters,
the Master Selected Dealers' Agreement, the Underwriters' Questionnaire and this
Agreement by mail, telex or other means of communications; (d) the fees and
expenses (including reasonable related fees and expenses of counsel for the
Underwriters not to exceed, together with the fees paid under subsection (f)
hereof, $10,000) incurred in connection with filings made with the National
Association of Securities Dealers; (e) any applicable listing or other fees; (f)
the fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 4(I)(e) and of preparing, printing
and distributing Blue Sky Memoranda and Legal Investment Surveys (including
reasonable related fees and expenses of counsel to the Underwriters not to
exceed, together with the fees paid under subsection (d) hereof, $10,000); (g)
all fees and expenses of the registrar and transfer agent of the Stock; and (h)
all other costs and expenses incident to the performance of the obligations of
the Company and of the Selling Stockholders under this Agreement (including,
without limitation, the fees and expenses of the Company's counsel and the
Company's independent accountants); provided that, except as otherwise provided
in this
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Section 5 and in Section 10, the Underwriters shall pay their own costs and
expenses, including the fees and expenses of their counsel, any transfer taxes
on the Stock which they may sell and the expenses of advertising any offering of
the Stock made by the Underwriters.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of
the several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the accuracy of the statements
of the Company and the Selling Stockholders made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder, and to each of the following
additional terms and conditions:
a. No stop order suspending the effectiveness of either the
Registration Statements shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the Commission, and any
request for additional information on the part of the Commission (to be included
in the Registration Statements or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representatives. The Rule
462(b) Registration Statement, if any, and the Prospectus shall have been timely
filed with the Commission in accordance with Section 4(I)(a).
b. None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the reasonable opinion of counsel for the Underwriters, is
material or omits to state any fact which, in the reasonable opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
c. All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Custody
Agreements, the Powers of Attorney, the Stock, the Registration Statement and
the Prospectus and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company and the
Selling Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters.
▇. ▇▇▇▇▇▇ Godward LLP shall have furnished to the Representatives such
counsel's written opinion, as counsel to the Company, addressed to the
Underwriters and dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Delaware, and to such
counsel's knowledge is duly qualified as a foreign corporation to do business
and is in good standing as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the conduct of its businesses requires
such qualification, and has all corporate power and authority necessary to own
or hold its properties and to conduct the businesses in which it is engaged,
except where the
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failure to so qualify or have such power or authority would not have, singularly
or in the aggregate, a Material Adverse Effect.
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the shares of Stock have been duly and validly
authorized and issued, and are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus under the caption "Description
of Capital Stock."
(iii) There are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any shares of the
Stock pursuant to the Company's certificate of incorporation or by-laws or any
agreement or other instrument filed as an exhibit to the Registration Statement
or the Company's Form 10-K incorporated by reference therein (each, a "Material
Agreement").
(iv) This Agreement has been duly authorized, executed and delivered
by the Company.
(v) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under any Material Agreement, nor will such actions result
in any violation of the certificate of incorporation or by-laws of the Company
or to such counsel's knowledge any statute, rule or regulation (except for the
securities or Blue sky laws of the various states or the Bylaws and rules of the
NASD, as to which such counsel expresses no opinion) or any order entered
against the Company of any court having jurisdiction over the Company or any of
its properties or assets.
(vi) Except for the registration of the Stock under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act, applicable state
securities laws or the NASD in connection with the purchase and distribution of
the Stock by the Underwriters, no consent, approval, authorization or order of,
or filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby.
(vii) The descriptions in the Registration Statement and Prospectus
of statutes, legal or governmental proceedings and contracts and other documents
under the captions "Risk Factors--Risks Related to this Offering--We have
implemented certain anti-takeover provisions that may prevent or delay an
acquisition of Verity that might be beneficial to our stockholders," "Certain
Transactions," and "Description of Capital Stock," fairly summarize such items
to the extent required under the Securities Act and the Rules and Regulations to
be described therein; and to the best of such counsel's knowledge, there are no
legal or governmental proceedings required to be described in the Registration
Statement or Prospectus which are not described as required, or any contracts or
other documents required to be filed as exhibits to the Registration Statement
which are not filed as required.
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(viii) The Registration Statement was declared effective under the
Securities Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and Regulations and no stop order
suspending the effectiveness of the Registration Statement has been issued and,
to the knowledge of such counsel, no proceeding for that purpose is pending or
threatened by the Commission.
(ix) The Registration Statement, as of its effective date, and the
Prospectus, as of its date, complied as to form in all material respects with
the requirements of the Securities Act and the Rules and Regulations (except for
the financial statements, related schedules, other financial information and
statistical information derived therefrom included in the Registration Statement
and Prospectus, as to which such counsel need express no opinion), and the
documents incorporated by reference in the Prospectus (except for the financial
statements, related schedules, other financial information and statistical
information derived therefrom included in the Registration Statement and
Prospectus, as to which such counsel need express no opinion), when they became
effective or were filed with the Commission complied as to form in all material
respects with the requirements of the Exchange Act and rules and regulations of
the Commission thereunder.
(x) To the best of such counsel's knowledge, no person or entity has
the right to require registration of shares of Common Stock or other securities
of the Company because of the filing or effectiveness of the Registration
Statement or otherwise, except for persons and entities who have expressly
waived such right or who have been given proper notice and have failed to
exercise such right within the time or times required under the terms and
conditions of such right.
(xi) The Company is not an "investment company" within the meaning
of the Investment Company Act and the rules and regulations of the Commission
thereunder.
(xii) This Agreement has been duly executed and delivered by or on
behalf of each Selling Stockholder.
(xiii) A Power-of-Attorney and a Custody Agreement have been duly
executed and delivered by each Selling Stockholder and constitute valid and
binding agreements of each Selling Stockholder, enforceable in accordance with
their terms, except as enforceability might have been limited by general
equitable principles, bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general equity
principles and to limitations on availability of equitable relief, and except as
to those provisions relating to indemnity or contribution as to which such
counsel expresses no opinion.
(xiv) Upon payment for, and registration of transfer of, the shares
of Stock to be sold by each Selling Stockholder under this Agreement in
accordance with the terms thereof, such shares will have been transferred to the
Underwriters free and clear of any adverse claims, assuming the Underwriters
have purchased such Stock in good faith and without notice of any adverse
claims.
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Such counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Representatives, to the effect that (x) such
counsel has acted as counsel to the Company in connection with the preparation
of the Registration Statements and (y) based on such counsel's examination of
the Registration Statements and conferences with certain officers and with
auditors for and counsel to the Company, nothing has come to such counsel's
knowledge that would lead such counsel to believe that the Registration
Statements, as of the respective effective dates, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in order 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
opinion as to the financial statements or other financial data contained in the
Registration Statement or the Prospectus.
The foregoing opinion and statement may be qualified by a statement to
the effect that such counsel has not independently verified the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and takes no responsibility therefor except to the
extent set forth in the opinion described in clause (vii) above.
e. The Representatives shall have received from ▇▇▇▇▇▇▇, Phleger &
▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to such matters as the Underwriters may reasonably
require, and the Company and the Selling Stockholders shall have furnished to
such counsel such documents as they reasonably request for enabling them to pass
upon such matters.
f. At the time of the execution of this Agreement, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, addressed to the
Underwriters and dated such date, in form and substance reasonably satisfactory
to the Representatives (i) confirming that they are independent certified public
accountants with respect to the Company and its subsidiaries within the meaning
of the Securities Act and the Rules and Regulations and (ii) stating the
conclusions and findings of such firm with respect to the financial statements
and certain financial information contained or incorporated by reference in the
Prospectus.
g. On the Closing Date, the Representatives shall have received a
letter (the "bring-down letter") from PricewaterhouseCoopers LLP addressed to
the Underwriters and dated the Closing Date confirming, as of the date of the
bring-down letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Prospectus as of a date not more than three business days prior to the
date of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by its letter
delivered to the Representatives concurrently with the execution of this
Agreement pursuant to Section 6(g).
h. The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its Chairman of the Board, its President
or a Vice President and its chief
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financial officer stating on behalf of the Company that (i) such officers have
carefully examined the Registration Statements and the Prospectus and, in their
opinion, the Registration Statements as of their respective effective dates and
the Prospectus, as of its date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) since
the effective date of the Initial Registration Statement no event has occurred
which should have been set forth in a supplement or amendment to the
Registration Statements or the Prospectus, (iii) to the best of their knowledge
after reasonable investigation, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct and the Company
has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date, and (iv)
subsequent to the date of the most recent financial statements included or
incorporated by reference in the Prospectus, there has been no material adverse
change in the financial position or results of operation of the Company and its
subsidiaries, or any material change, or any development including a prospective
material change, in or affecting the condition (financial or otherwise), results
of operations or business of the Company and its subsidiaries taken as a whole,
except as set forth in the Prospectus.
i. Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholders) shall have furnished to
the Representatives on the Closing Date a certificate, dated the such date,
signed by, or on behalf of, the Selling Stockholder stating that the
representations, warranties and agreements of the Selling Stockholder contained
herein are true and correct as of the Closing Date and that the Selling
Stockholder has complied with all agreements contained herein to be performed by
the Selling Stockholder at or prior to the Closing Date.
j. The Company and its subsidiaries taken as a whole shall not have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
(ii) since such date there shall not have been any material change in the
capital stock or long-term debt of the Company or any of its subsidiaries or any
material change, or any development involving a prospective material change, in
or affecting the business, general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is, in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the sale or delivery of the
Stock on the terms and in the manner contemplated in the Prospectus.
k. No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency or
body which would, as of the Closing Date, prevent the issuance or sale of the
Stock; and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued as of
the Closing Date which would prevent the issuance or sale of the Stock.
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l. Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such), in each case (i) through (iv) as to
make it, in the reasonable judgment of the Representatives, impracticable or
inadvisable to proceed with the sale or delivery of the Stock on the terms and
in the manner contemplated in the Prospectus.
m. The National Market System shall have approved the Stock for
inclusion, subject only to official notice of issuance.
n. ▇▇ ▇▇▇▇▇ shall have received the written agreements, substantially
in the form of Exhibit I hereto, of the officers, directors and shareholders of
the Company listed in Schedule C to this Agreement.
o. All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
a. The Company shall indemnify and hold harmless each Underwriter, its
officers, employees, representatives and agents and each person, if any, who
controls any Underwriter within the meaning of the Securities Act (collectively
the "Underwriter Indemnified Parties" and each an "Underwriter Indemnified
Party") against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which that Underwriter Indemnified Party may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus , either of the Registration Statements or the Prospectus
or in any amendment or supplement thereto or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus or in any amendment or supplement thereto a
material fact required to be stated therein or necessary to make the statements
therein not misleading and shall reimburse each Underwriter Indemnified Party on
a quarterly basis for any legal or other expenses reasonably incurred by that
Underwriter Indemnified Party in connection with investigating or preparing to
defend or defending against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the
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Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon (i) an untrue
statement or alleged untrue statement in or omission or alleged omission from
the Preliminary Prospectus, either of the Registration Statements or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for use therein,
which information the parties hereto agree is limited to the Underwriter's
Information (as defined in Section 16); and provided further that the Company
shall not be liable in any such case with respect to any Preliminary Prospectus
if at or prior to the written confirmation of the sale of such Stock a copy of
the Prospectus (or the Prospectus as amended or supplemented) was not sent or
delivered to such person making the claim and the untrue statement or omission
of a material fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented). This indemnity
agreement is not exclusive and will be in addition to any liability which the
Company might otherwise have and shall not limit any rights or remedies which
may otherwise be available at law or in equity to each Underwriter Indemnified
Party.
b. Subject to Section 7(g) below, the Selling Stockholders (including
the Selling Officers), severally and not jointly, shall indemnify and hold
harmless each Underwriter Indemnified Party, against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which that
Underwriter Indemnified Party may become subject, under the Securities Act or
otherwise, to the extent that such loss, claim, damage, liability or action
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Prospectus, either of
the Registration Statements or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus or in any
amendment or supplement thereto a material fact required to be stated therein or
necessary to make the statements therein not misleading and shall reimburse each
Underwriter Indemnified Party on a quarterly basis for any legal or other
expenses reasonably incurred by that Underwriter Indemnified Party in connection
with investigating or preparing to defend or defending against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the obligations
of each Selling Stockholder (including the Selling Officers) under this Section
7 shall only apply with respect to any such untrue statement or alleged untrue
statement or omission or alleged omission that relates directly to (and only to
the extent it relates directly to) (A) information pertaining to such Selling
Stockholder furnished by or on behalf of such Selling Stockholder expressly for
use in any Preliminary Prospectus or the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto or (B) facts that
would constitute a breach of any representation or warranty of such Selling
Stockholder set forth in Section 2(I) (if a Selling Officer) or Section 2(II);
provided further that the Selling Stockholders (including the Selling Officers)
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement in or omission or alleged omission from the
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for use therein, which information the parties
hereto agree is limited to
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the Underwriter's Information; and provided further that the Selling
Stockholders (including the Selling Officers) shall not be liable in any such
case with respect to any Preliminary Prospectus if at or prior to the written
confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
making the claim and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as amended or supplemented). Subject to Section 7(g) below, this
indemnity agreement is not exclusive and will be in addition to any liability
which the Selling Stockholders (including the Selling Officers) might otherwise
have and shall not limit any rights or remedies which may otherwise be available
at law or in equity to each Underwriter Indemnified Party.
c. Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company its officers, employees, representatives and agents,
each of its directors and each person, if any, who controls the Company within
the meaning of the Securities Act (collectively the "Company Indemnified
Parties" and each a "Company Indemnified Party") and the Selling Stockholders,
their respective officers, employees, representatives and agents and each
person, if any, who controls the Selling Stockholders within the meaning of the
Securities Act (collectively, the "Stockholder Indemnified Parties" and each a
"Stockholder Indemnified Party"), against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company
Indemnified Parties or the Selling Stockholder Indemnified Parties may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus, either of the Registration Statements or the Prospectus
or in any amendment or supplement thereto or (ii) 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, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of that Underwriter specifically for use therein, and shall reimburse the
Company Indemnified Parties and the Selling Stockholder Indemnified Parties on a
quarterly basis for any legal or other expenses reasonably incurred by such
parties in connection with investigating or preparing to defend or defending
against or appearing as third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided that
the parties hereto hereby agree that such written information provided by the
Underwriters consists solely of the Underwriter's Information. This indemnity
agreement is not exclusive and will be in addition to any liability which the
Underwriters might otherwise have and shall not limit any rights or remedies
which may otherwise be available at law or in equity to the Company Indemnified
Parties and Selling Stockholder Indemnified Parties.
d. Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 7, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability
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23
which it may have under this Section 7 except to the extent it has been
materially prejudiced by such failure; and, provided, further, that the failure
to notify the indemnifying party shall not relieve it from any liability which
it may have to an indemnified party otherwise than under this Section 7. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ 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 unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party 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 reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties, which firm shall be designated in writing by ▇▇ ▇▇▇▇▇, if the
indemnified parties under this Section 7 consist of any Underwriter Indemnified
Party, or by the Company if the indemnified parties under this Section 7 consist
of any Company Indemnified Parties or Stockholder Indemnified Parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 7(a), 7(b) and 7(c), shall use all reasonable efforts to cooperate with
the indemnifying party in the defense of any such action or claim. Subject to
the provisions of Section 7(e) below, no indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment.
e. If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section 7(a) or,
7(b) or 7(c), then (subject to Section 7(g) below) each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company
and the Selling Stockholders
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24
on the one hand and the Underwriters on the other from the offering of the
Stock, or if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Selling Stockholders on the one hand and the Underwriters on
the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Stock purchased under this
Agreement (before deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters with respect to the Stock purchased under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Selling Stockholders on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission; provided that the parties hereto agree that the written information
furnished to the Company through the Representatives by or on behalf of the
Underwriters for use in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus consists solely of the Underwriter's Information.
The Company, the Selling Stockholders and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 7(e) were to
be 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 into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
7(e) shall be deemed to include, for purposes of this Section 7(e), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(e), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public were offered to the public less
the amount of any damages which such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
f. The Underwriters' obligations to contribute as provided in this
Section 7(e) are several in proportion to their respective underwriting
obligations and not joint.
g. The aggregate liability of each of the Selling Stockholders
(including the Selling Officers) under the indemnity, contribution and
reimbursement agreements contained in the provisions of this Section 7 and under
the representations and warranties contained in Section 2(I) hereof (for the
Selling Officers) and Section 2(II) hereof for the Selling Stockholders (whether
or not a Selling Officer) shall be limited to an amount equal to the respective
proceeds
24
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received by such Selling Stockholder (whether or not a Selling Officer) from the
sale to the Underwriters of his Stock in the public offering. In addition, no
Selling Stockholder (including no Selling Officer) shall be liable under the
indemnity, contribution and reimbursement agreements of this Section 7 unless
and until the Underwriters have made written demand on the Company for payment
under such Section which shall not have been paid by the Company within 60 days
after receipt of such demand. The Company, the Selling Stockholders (including
the Selling Officers) may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective amounts of
such liability for which they each shall be responsible.
8. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by ▇▇ ▇▇▇▇▇ by notice given to and received by the Company and the
Selling Stockholders prior to delivery of and payment for Firm Stock if, prior
to that time, the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement.
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) this Agreement shall
have been terminated pursuant to Section 8 or 10, or (b) due to the failure of
the Company or any Selling Stockholder to perform its obligations under this
Agreement, the Company shall reimburse the Underwriters for the fees and
expenses of their counsel and for such other out-of-pocket expenses as shall
have been reasonably incurred by them in connection with this Agreement and the
proposed purchase of the Stock, and upon demand, the Company shall pay the full
amount thereof to the ▇▇ ▇▇▇▇▇. If this Agreement is terminated pursuant to
Section 10 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
10. SUBSTITUTION OF UNDERWRITERS
a. If any Underwriter or Underwriters shall default in its or their
obligations to purchase shares of Stock hereunder and the aggregate number of
shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed ten percent (10%) of the total number of shares
underwritten, the other Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the shares which such
defaulting Underwriter or Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters shall so default and the aggregate number of shares
with respect to which such default or defaults occur is more than ten percent
(10%) of the total number of shares underwritten and arrangements satisfactory
to the Representatives and the Company for the purchase of such shares by other
persons are not made within forty-eight (48) hours after such default, this
Agreement shall terminate.
b. If the remaining Underwriters or substituted Underwriters are
required hereby or agree to take up all or part of the shares of Stock of a
defaulting Underwriter or Underwriters as provided in this Section 10, (i) the
Company and the Selling Stockholders shall have the right to postpone the
Closing Dates for a period of not more than five (5) full business days in order
that the Company and the Selling Stockholders may effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or
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26
arrangements, and the Company agrees promptly to file any amendments to the
Registration Statement or supplements to the Prospectus which may thereby be
made necessary, and (ii) the respective numbers of shares to be purchased by the
remaining Underwriters or substituted Underwriters shall be taken as the basis
of their underwriting obligation for all purposes of this Agreement. Nothing
herein contained shall relieve any defaulting Underwriter of its liability to
the Company, the Selling Stockholders or the other Underwriters for damages
occasioned by its default hereunder. Any termination of this Agreement pursuant
to this Section 10 shall be without liability on the part of any non-defaulting
Underwriter, the Selling Stockholders or the Company, except expenses to be paid
or reimbursed pursuant to Sections 5 and 9 and except the provisions of Section
7 shall not terminate and shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the several Underwriters, the
Company and the Selling Stockholders and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the persons mentioned in the preceding sentence any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Company and the Selling Stockholders contained in this Agreement shall also be
for the benefit of the Underwriter Indemnified Parties, and the indemnities of
the several Underwriters shall also be for the benefit of the Company
Indemnified Parties and the Selling Stockholder Indemnified Parties.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Selling
Stockholders, the Company or any person controlling any of them and shall
survive delivery of and payment for the Stock.
13. NOTICES. All statements, requests, notices and agreements hereunder
shall be in writing, and:
a. if to the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission to SG Securities Corporation, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
(Fax: (▇▇▇) ▇▇▇-▇▇▇▇) and copies to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Fax: (▇▇▇) ▇▇▇-▇▇▇▇);
b. if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Verity, Inc., Attention: ▇▇▇▇ ▇▇▇▇▇ (Fax: (408)
▇▇▇-▇▇▇▇);
c. if to any Selling Stockholders, shall be delivered or sent by mail,
telex or facsimile transmission to such Selling Stockholder at the address set
forth on Schedule B hereto; provided, however, that any notice to an Underwriter
pursuant to Section 7 shall be delivered or sent by
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mail, telex or facsimile transmission to such Underwriter at its address set
forth in its acceptance telex to the Representatives, which address will be
supplied to any other party hereto by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof.
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a)
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Rules and Regulations.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Underwriters' Information consists
solely of the following information in the Prospectus: (i) the last paragraph on
the front cover page concerning the terms of the offering by the Underwriters;
and (ii) the statements and information contained in the first paragraph, the
table following the first paragraph and the second, third, seventh and eighth
paragraphs under the heading "Underwriting."
17. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement,
you will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by the Representatives will be binding on all the
Underwriters; and any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all the Selling Stockholders.
18. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
19. GENERAL. 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. In this Agreement, the masculine, feminine and neuter
genders and the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will
not affect the construction or interpretation of this Agreement. This Agreement
may be amended or modified, and the observance of any term of this Agreement may
be waived, only by a writing signed by the Company, the Selling Stockholders and
the Representatives.
20. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Any person executing and delivering this Agreement as Attorney-in-fact
for the Selling Stockholders represents by so doing that he or she has been duly
appointed as Attorney-in-fact
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by such Selling Stockholder pursuant to a validly existing and binding Power of
Attorney which authorizes such Attorney-in-fact to take such action.
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If the foregoing is in accordance with your understanding of the
agreement between the Company, the Selling Stockholders and the several
Underwriters, kindly indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
VERITY, INC.
By:________________________________________
Name:
Title:
SELLING STOCKHOLDERS
LISTED IN SCHEDULE B
By: [Attorney-in-fact]
By:________________________________________
[Attorney-in-fact]
Acting on their own behalf and on behalf
of the Selling Stockholders listed in
Schedule B.
Accepted as of the date first above written:
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SOUNDVIEW TECHNOLOGY GROUP, INC.
Acting on their own behalf and as
Representatives of several Underwriters
referred to in the foregoing Agreement.
By: ▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
By:________________________________________
Name:
Title:
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SCHEDULE A
Number of Firm Number of
Shares to be Optional Shares
Name Purchased to be Purchased
---- -------------- ---------------
▇▇ ▇▇▇▇▇ Securities Corporation __________ __________
Banc of America Securities LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SoundView Technology Group, Inc.
---------- ----------
Total
========== ==========
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SCHEDULE B
Number of
Number of Optional
Firm Shares to Shares to
Selling Stockholders be Sold be Sold
-------------------- -------------- ---------
▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
-------------- ---------
Total
============== =========
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SCHEDULE C
List of officers, directors and shareholders subject to Section 4(g)
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇ ▇. ▇▇▇▇▇
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33
EXHIBIT I
Lock-Up Agreement
33