1
EXHIBIT 1.1
▇▇▇▇ AND ▇▇▇▇
DRAFT OF 9/27/96
___________ Shares
GEOTEL COMMUNICATIONS CORPORATION
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
October ____, 1996
Alex. ▇▇▇▇▇ & Sons Incorporated
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.C.
As Representatives of the
Several Underwriters
c/o Alex. ▇▇▇▇▇ & Sons Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
GeoTel Communications Corporation, a Delaware corporation (the
"Company"), proposes to sell to the several underwriters (the
"Underwriters") named in Schedule I hereto for whom you are acting as
representatives (the "Representatives") an aggregate of ___________
shares of the Company's Common Stock, $.01 par value (the "Firm
Shares"). The respective amounts of the Firm Shares to be so purchased
by the several Underwriters are set forth opposite their names in
Schedule I hereto. The Company and certain shareholders of the Company
(the "Selling Shareholders") also propose to sell at the Underwriters'
option an aggregate of up to __________ additional shares of the
Company's Common Stock (the "Option Shares") as set forth below. The
maximum number of Option Shares to be sold by the Company and the
Selling Shareholders are set forth opposite their names on Schedule II
hereto. The Company and the Selling Shareholders are sometimes referred
to herein collectively as the "Sellers."
As the Representatives, you have advised the Company and the
Selling Shareholders (a) that you are authorized to enter into this
Agreement on behalf of the several Underwriters, and (b) that the
several Underwriters are willing, acting severally and not jointly, to
purchase the numbers of Firm Shares set forth opposite their respective
names in Schedule I, plus their pro rata portion of the Option Shares
if you elect to exercise the over-allotment option in whole or in part
for the accounts of the
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several Underwriters. The Firm Shares and the Option Shares
(to the extent the aforementioned option is exercised) are herein
collectively called the "Shares."
In consideration of the mutual agreements contained herein and of
the interests of the parties in the transactions contemplated hereby,
the parties hereto agree as follows:
1. Representations and Warranties of the Company and the
Selling Shareholders.
(a) The Company represents and warrants as follows:
(i) A registration statement on Form S-1 (File No.
333-______) with respect to the Shares has been carefully prepared
by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the Rules and
Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been
filed with the Commission. Copies of such registration statement,
including any amendments thereto, the preliminary prospectuses
(meeting the requirements of the Rules and Regulations) contained
therein and the exhibits, financial statements and schedules, as
finally amended and revised, have heretofore been delivered by the
Company to you. Such registration statement, together with any
registration statement filed by the Company pursuant to Rule
462(b) of the Act, herein referred to as the "Registration
Statement," which shall be deemed to include all information
omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, has been declared effective by the
Commission under the Act and no post-effective amendment to the
Registration Statement has been filed as of the date of this
Agreement. For purposes of this Agreement, the term "Prospectus"
means (a) the form of prospectus first filed with the Commission
pursuant to Rule 424(b) or (b) the last preliminary prospectus
included in the Registration Statement filed prior to the time it
becomes effective or filed pursuant to Rule 424(a) under the Act
that is delivered by the Company to the Underwriters for delivery
to purchasers of the Shares, together with the term sheet or
abbreviated term sheet filed with the Commission pursuant to Rule
424(b)(7) under the Act. Each preliminary prospectus included in
the Registration Statement prior to the time it becomes effective
is herein referred to as a "Preliminary Prospectus."
(ii) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own or
lease its properties and conduct its
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business as described in the Registration Statement. The Company
is duly qualified to transact business in all jurisdictions in
which the conduct of its business requires such qualification.
There is no corporation, partnership, joint venture or other
entity in which the Company has, directly or indirectly, any
equity interest.
(iii) The outstanding shares of Common Stock of the
Company, including all shares to be sold by the Selling
Shareholders, have been duly authorized and validly issued and are
fully paid and non-assessable; the portion of the Shares to be
issued and sold by the Company have been duly authorized and when
issued and paid for as contemplated herein will be validly issued,
fully paid and non-assessable; and no preemptive rights of
shareholders exist with respect to any of the Shares or the issue
and sale thereof. Neither the filing of the Registration Statement
nor the offering or sale of the Shares as contemplated by this
Agreement gives rise to any rights, other than those which have
been waived or satisfied, for or relating to the registration of
any shares of Common Stock.
(iv) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. All of the
Shares conform to the description thereof contained in the
Registration Statement. The form of certificates for the Shares
conforms to the corporate law of the jurisdiction of the Company's
incorporation.
(v) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed
offering of the Shares nor instituted proceedings for that
purpose. The Registration Statement contains, and the Prospectus
and any amendments or supplements thereto will contain, all
statements which are required to be stated therein by, and in all
respects conform or will conform, as the case may be, to the
requirements of, the Act and the Rules and Regulations. The
Registration Statement and any amendment thereto do not contain,
and will not contain, any untrue statement of a material fact and
do not omit, and will not omit, to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus and any amendments and
supplements thereto do not contain, and will not contain, any
untrue statement of material fact and do not omit, and will not
omit, to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from the
Registration Statement or the Prospectus, or any such
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amendment or supplement, in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for use
in the preparation thereof.
(vi) The financial statements of the Company, together
with related notes and schedules as set forth in the Registration
Statement, present fairly the financial position and the results
of operations and cash flows of the Company at the indicated dates
and for the indicated periods. Such financial statements and
related schedules have been prepared in accordance with generally
accepted accounting principles, consistently applied throughout
the periods involved, and all adjustments necessary for a fair
presentation of results for such periods have been made. The
summary financial and statistical data included in the
Registration Statement presents fairly the information shown
therein and such data has been compiled on a basis consistent with
the financial statements presented therein and the books and
records of the Company.
(vii) Each of Coopers & ▇▇▇▇▇▇▇ L.L.C. and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, who have certified certain of the financial
statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the
Act and the Rules and Regulations.
(viii) There is no action, suit, claim or proceeding
pending or, to the knowledge of the Company, threatened against
the Company before any court or administrative agency or otherwise
which if determined adversely to the Company might result in any
material adverse change in the earnings, business, management,
properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company or prevent the consummation
of the transactions contemplated hereby, except as set forth in
the Registration Statement.
(ix) The Company has good and marketable title to all of
the properties and assets reflected in the financial statements
(or as described in the Registration Statement) hereinabove
described, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such financial
statements (or as described in the Registration Statement) or
which are not material in amount. The Company occupies its leased
properties under valid and binding leases conforming to the
description thereof set forth in the Registration Statement.
(x) The Company has filed all federal, state, local and
foreign income tax returns which has been required to be filed and
has paid all taxes indicated by said returns
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and all assessments received by it to the extent that such taxes
have become due. All tax liabilities have been adequately provided
for in the financial statements of the Company.
(xi) Since the respective dates as of which information
is given in the Registration Statement, as it may be amended or
supplemented, there has not been any material adverse change or
any development involving a prospective material adverse change in
or affecting the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or
prospects of the Company, whether or not occurring in the ordinary
course of business, and there has not been any material
transaction entered into or any material transaction that is
probable of being entered into by the Company, other than
transactions in the ordinary course of business and changes and
transactions described in the Registration Statement, as it may be
amended or supplemented. The Company does not have any material
contingent obligations which are not disclosed in the Company's
financial statements which are included in the Registration
Statement.
(xii) The Company is not and with the giving of notice
or lapse of time, or both, will not be in violation of or in
default under its Certificate of Incorporation or By-laws or under
any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it or any of its
properties is bound and which default is of material significance
in respect of the business, management, properties, assets,
rights, operations, condition (financial or otherwise) or
prospects of the Company. The execution and delivery of this
Agreement and the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which
the Company is a party, or of the Certificate of Incorporation or
By-laws of the Company or any order, rule or regulation applicable
to the Company of any court or of any regulatory body or
administrative agency or other governmental body having
jurisdiction.
(xiii) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection
with the execution and delivery by the Company of this Agreement
and the consummation of the transactions herein contemplated
(except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or such
additional
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steps as may be necessary to qualify the Shares for public
offering by the Underwriters under state securities or Blue Sky
laws) has been obtained or made and is in full force and effect.
(xiv) The Company holds all material licenses,
certificates and permits from governmental authorities which are
necessary to the conduct of its business; and the Company has not
infringed any patents, patent rights, trade names, trademarks or
copyrights, which infringement is material to the business of the
Company. The Company knows of no material infringement by others
of patents, patent rights, trade names, trademarks or copyrights
owned by or licensed to the Company.
(xv) Neither the Company, nor to the Company's best
knowledge, any of its affiliates, has taken or may take, directly
or indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the
shares of Common Stock to facilitate the sale or resale of the
Shares.
(xvi) The Company is not, and after giving effect to the
issuance of the Shares hereunder will not be, an "investment
company" within the meaning of such term under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations of the Commission thereunder.
(xvii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with management's
general or specific authorization; (B) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is
compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xviii) The Company carries, or is covered by, insurance
in such amounts and covering such risks as is adequate for the
conduct of its business and the value of its properties and as is
customary for companies engaged in similar industries.
(xix) The Company confirms as of the date hereof
that it is in compliance with all provisions of Section 1 of
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Laws of Florida, Chapter 92-198, An Act Relating to Disclosure of
doing Business with Cuba, and the Company further agrees that if
it commences engaging in business with the government of Cuba or
with any person or affiliate located in Cuba after the date the
Registration Statement becomes or has become effective with the
Commission or with the Florida Department of Banking and Finance
(the "Department"), whichever date is later, or if the information
reported or incorporated by reference in the Prospectus, if any,
concerning the Company's business with Cuba or with any person or
affiliate located in Cuba changes in any material way, the Company
will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(xx) The Company owns or possesses adequate licenses or
other rights to use all patents, patent applications, trademarks,
trademark applications, service marks, service ▇▇▇▇ applications,
trade names, copyrights, trade secrets and know-how or other
information (collectively "Intellectual Property") described in
the Prospectus as owned or used by it or which is necessary for
the conduct of its business as now conducted or proposed to be
conducted as described in the Prospectus. To the best of the
Company's knowledge, none of the Company's products, services or
Intellectual Property infringes or conflicts with the rights or
claims of others. The Company is not aware of any infringement of
any of the Company's Intellectual Property rights by any third
party which could have a material adverse effect on the business
or financial condition of the Company.
(xxi) Except as otherwise set forth in the Prospectus,
there are no material legal, governmental, regulatory or
administrative proceedings pending to which the Company is a party
or to which any of its property is subject and, to the best of the
Company's knowledge, no such proceedings are threatened or
contemplated.
(xxii) No contract or document of a character required
to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement is not so
described or filed as required.
(b) Each of the Selling Shareholders severally
represents and warrants as follows:
(i) Such Selling Shareholder now has and at any Option
Closing Date (as such date is hereinafter defined) will have good
and marketable title to any Option Shares to be sold by such
Selling Shareholder, free and clear of any
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liens, encumbrances, equities and claims, and full right, power
and authority to effect the sale and delivery of such Option
Shares; and upon the delivery of and payment for such Option
Shares pursuant to this Agreement, the Underwriters will acquire
good and marketable title thereto, free and clear of any liens,
encumbrances, equities and claims.
(ii) Such Selling Shareholder has full right, power and
authority to execute and deliver this Agreement and the Power of
Attorney and Custodian Agreement referred to below and to perform
such Selling Shareholder's obligations under such documents. The
execution and delivery of this Agreement, the Power of Attorney
and the Custodian Agreement, the consummation by such Selling
Shareholder of the transactions herein and therein contemplated
and the fulfillment by such Selling Shareholder of the terms
hereof and thereof will not require any consent, approval,
authorization or order of or declaration or filing with any court,
regulatory body, administrative agency or other governmental body
(except as may be required under the Act, state securities laws or
Blue Sky laws) and will not result in a breach of any of the terms
and provisions of, or constitute a default under, organizational
documents of such Selling Shareholder, if not an individual, or
any indenture, mortgage, deed of trust or other agreement or
instrument to which such Selling Shareholder is a party, or of any
order, rule or regulation applicable to such Selling Shareholder
of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction.
(iii) Such Selling Shareholder has not taken and will
not take, directly or indirectly, any action designed to, or which
has constituted, or which might reasonably be expected to cause or
result in the stabilization or manipulation of the price of the
Common Stock of the Company and, other than as permitted by the
Act, the Selling Shareholder will not distribute any prospectus or
other offering material in connection with the offering of the
Shares.
(iv) Without having undertaken to determine
independently the accuracy or completeness of either the
representations and warranties of the Company contained herein or
the information contained in the Registration Statement, such
Selling Shareholder has no reason to believe that the
representations and warranties of the Company contained in this
Section 1 are not true and correct, is familiar with the
Registration Statement and has no knowledge of any material fact,
condition or information not disclosed in the Registration
Statement which has adversely affected or may adversely affect the
business of the
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Company; and the sale of any Option Shares by such Selling
Shareholder pursuant hereto is not prompted by any information
concerning the Company which is not set forth in the Registration
Statement. The information pertaining to such Selling Shareholder
under the caption "Principal and Selling Stockholders" in the
Prospectus is complete and accurate in all material respects.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein
set forth, the Company agrees to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at a
price of $_____ per share, the number of Firm Shares set forth
opposite the name of each Underwriter in Schedule I hereof,
subject to adjustment in accordance with Section 9 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be
made in New York Clearing House funds by certified or bank
cashier's checks drawn to the order of the Company against
delivery of certificates therefor to the Representatives for the
several accounts of the Underwriters. Such payment and delivery
are to be made at the offices of Alex. ▇▇▇▇▇ & Sons Incorporated,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at 10:00 a.m.,
Baltimore time, on the third business day after the date of this
Agreement or at such other time and date not later than five
business days thereafter as you and the Company shall agree upon,
such time and date being herein referred to as the "Closing Date."
(As used herein, "business day" means a day on which the New York
Stock Exchange is open for trading and on which banks in New York
are open for business and not permitted by law or executive order
to be closed.) The certificates for the Firm Shares will be
delivered in such denominations and in such registrations as the
Representatives request in writing not later than the second full
business day prior to the Closing Date, and will be made available
for inspection by the Representatives at least one business day
prior to the Closing Date.
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Company and the Selling
Shareholders listed on Schedule II hereto hereby grant an option
to the several Underwriters to purchase the Option Shares at the
price per share as set forth in the first paragraph of this
Section 2. The maximum number of Option Shares to be sold by the
Company and such Selling Shareholders is set forth opposite their
respective names on Schedule II hereto. The option granted hereby
may be
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exercised in whole or in part by giving written notice (i) at any
time before the Closing Date and (ii) only once thereafter within
30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company and
the Custodian setting forth the number of Option Shares as to
which the several Underwriters are exercising the option, the
names and denominations in which the Option Shares are to be
registered and the time and date at which such certificates are to
be delivered. If the option granted hereby is exercised in part,
the respective number of Option Shares to be sold by the Company
and each of the Selling Shareholders listed in Schedule II hereto
shall be determined on a pro rata basis in accordance with the
percentages set forth opposite their names on Schedule II hereto,
adjusted by you in such manner as to avoid fractional shares. The
time and date at which certificates for Option Shares are to be
delivered shall be determined by the Representatives but shall not
be earlier than three nor later than 10 full business days after
the exercise of such option, nor in any event prior to the Closing
Date (such time and date being herein referred to as the "Option
Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall
set the Closing Date as the Option Closing Date. The number of
Option Shares to be purchased by each Underwriter shall be in the
same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such
Underwriter bears to the total number of Firm Shares, adjusted by
you in such manner as to avoid fractional shares. The option with
respect to the Option Shares granted hereunder may be exercised
only to cover over-allotments in the sale of the Firm Shares by
the Underwriters. You, as Representatives of the several
Underwriters, may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to the
Company. To the extent, if any, that the option is exercised,
payment for the Option Shares shall be made on the Option Closing
Date in New York Clearing House funds by certified or bank
cashier's check drawn to the order of the Company for the Option
Shares to be sold by it and to the order of " , as Custodian" for
the Option Shares to be sold by the Selling Shareholders listed on
Schedule II against delivery of certificates therefor at the
offices of Alex. ▇▇▇▇▇ & Sons Incorporated, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
(d) Certificates in negotiable form for the total number of
the Option Shares to be sold hereunder by the Selling Shareholders
have been placed in custody with ___________________ as custodian
(the "Custodian") pursuant to the Custodian Agreement executed by
each Selling Shareholder for delivery of any Option Shares to be
sold
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hereunder by the Selling Shareholders. Each of the Selling
Shareholders specifically agrees that any Option Shares
represented by the certificates held in custody for the Selling
Shareholders under the Custodian Agreement are subject to the
interests of the Underwriters hereunder, that the arrangements
made by the Selling Shareholders for such custody are to that
extent irrevocable, and that the obligations of the Selling
Shareholders hereunder shall not be terminable by any act or deed
of the Selling Shareholders (or by any other person, firm or
corporation including the Company, the Custodian or the
Underwriters) or by operation of law (including the death of an
individual Selling Shareholder or the dissolution of a corporate
Selling Shareholder) or by the occurrence of any other event or
events, except as set forth in the Custodian Agreement. If any
such event should occur prior to the delivery to the Underwriters
of the Option Shares hereunder, certificates for the Option Shares
shall be delivered by the Custodian in accordance with the terms
and conditions of this Agreement as if such event has not
occurred. The Custodian is authorized to receive and acknowledge
receipt of the proceeds of sale of the Option Shares held by it
against delivery of such Option Shares.
3. Offering by the Underwriters.
It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representatives
deem it advisable to do so. The Firm Shares are to be initially
offered to the public at the initial public offering price set
forth in the Prospectus. The Representatives may from time to time
thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are
purchased pursuant to Section 2 hereof, the Underwriters will
offer them to the public on the foregoing terms.
It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of
the Shares in accordance with a Master Agreement Among
Underwriters entered into by you and the several other
Underwriters.
4. Covenants of the Company and the Selling Shareholders.
(a) The Company covenants and agrees with the several
Underwriters that:
(i) The Company will (A) use its best efforts to cause
the Registration Statement to become effective or, if the
procedure in Rule 430A of the Rules and Regulations is followed,
to prepare and timely file with the Commission
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under Rule 424(b) of the Rules and Regulations a Prospectus in a
form approved by the Representatives containing information
previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and
Regulations, and (B) not file any amendment to the Registration
Statement or supplement to the Prospectus of which the
Representatives shall not previously have been advised and
furnished with a copy or to which the Representatives shall have
reasonably objected in writing or which is not in compliance with
the Rules and Regulations.
(ii) The Company will advise the Representatives
promptly (A) when the Registration Statement or any post-effective
amendment thereto shall have become effective, (B) of receipt of
any comments from the Commission, (C) of any request of the
Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information,
and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
use of the Prospectus or of the institution of any proceedings for
that purpose. The Company will use its best efforts to prevent the
issuance of any such stop order preventing or suspending the use
of the Prospectus and to obtain as soon as possible the lifting
thereof, if issued.
(iii) The Company will cooperate with the
Representatives in endeavoring to qualify the Shares for sale
under the securities laws of such jurisdictions as the
Representatives may reasonably have designated in writing and will
make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in
any jurisdiction where it is not now so qualified or required to
file such a consent. The Company will, from time to time, prepare
and file such statements, reports and other documents as are or
may be required to continue such qualifications in effect for so
long a period as the Representatives may reasonably request for
distribution of the Shares.
(iv) The Company will deliver to, or upon the order of,
the Representatives, from time to time, as many copies of any
Preliminary Prospectus as the Representatives may reasonably
request. The Company will deliver to, or upon the order of, the
Representatives during the period when delivery of a Prospectus is
required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the
Representatives may reasonably request. The Company will deliver
to the Representatives, at or before the Closing Date, four signed
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copies of the Registration Statement and all amendments thereto,
including all exhibits filed therewith, and will deliver to the
Representatives such number of copies of the Registration
Statement (including such number of copies of the exhibits filed
therewith that may reasonably be requested), and of all amendments
thereto, as the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules
and Regulations, and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and
the Prospectus. If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer any
event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances
existing at the time the Prospectus is delivered to a purchaser,
not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company
promptly will either (A) prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement
to the Prospectus or (B) prepare and file with the Commission an
appropriate filing under the Exchange Act which shall be
incorporated by reference in the Prospectus, so that the
Prospectus as so amended or supplemented will not, in the light of
the circumstances when it is so delivered, be misleading, or so
that the Prospectus will comply with the law.
(vi) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in
any event not later than 15 months after the effective date of the
Registration Statement, an earning statement (which need not be
audited) in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement, which earning statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules
and Regulations and will advise you in writing when such statement
has been so made available.
(vii) The Company will, for a period of five years from the
Closing Date, deliver to the Representatives copies of annual
reports and copies of all other documents, reports and information
furnished by the Company to its shareholders or filed with any
securities exchange pursuant to the requirements of such exchange
or with the Commission
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pursuant to the Act or the Exchange Act. The Company will deliver
to the Representatives similar reports with respect to significant
subsidiaries, as that term is defined in the Rules and
Regulations, which are not consolidated in the Company's financial
statements.
(viii) No offering, sale, short sale or other disposition
of any shares of Common Stock of the Company or other securities
convertible into or exchangeable or exercisable for shares of
Common Stock or derivative of Common Stock (or agreement for such)
will be made for a period of 180 days after the date of this
Agreement, directly or indirectly, by the Company otherwise than
hereunder or with the prior written consent of Alex. ▇▇▇▇▇ & Sons
Incorporated, except that the Company may, without such consent,
issue shares upon the exercise of options outstanding on the date
of this Agreement issued pursuant to its 1995 Stock Option Plan.
The Company shall not file with the Commission any registration
statements (including without limitation any registration
statements on Form S-8 or any successor form) with respect to any
stock option, stock purchase, restricted stock or other similar
plans until at least 90 days following the date of this Agreement.
(ix) The Company will use its best efforts to have its
Common Stock authorized for inclusion on the Nasdaq National
Market.
(x) The Company has caused each officer and director and
specific shareholders of the Company to furnish to you, on or
prior to the date of this Agreement, a letter or letters, in form
and substance satisfactory to the Underwriters, pursuant to which
each such person shall agree not to offer, sell, sell short or
otherwise dispose of any shares of Common Stock of the Company or
other capital stock of the Company, or any other securities
convertible, exchangeable or exercisable for Common Stock or
derivative of Common Stock owned by such person or request the
registration for the offer or sale of any of the foregoing (or as
to which such person has the right to direct the disposition of)
for a period of 180 days after the date of this Agreement,
directly or indirectly, except with the prior written consent of
Alex. ▇▇▇▇▇ & Sons Incorporated ("Lockup Agreements").
(xi) The Company shall apply the net proceeds of its sale
of the Shares as set forth in the Prospectus and shall file such
reports with the Commission with respect to the sale of the Shares
and the application of the proceeds therefrom as may be required
in accordance with Rule 463 under the Act.
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15
(xii) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in
such a manner as would require the Company to register as an
investment company under the 1940 Act.
(xiii) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company,
a registrar for the Common Stock.
(xiv) The Company will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization
or manipulation of the price of any securities of the Company.
(b) Each of the Selling Shareholders covenants and
agrees with the several Underwriters that:
(i) No offering, sale, short sale or other disposition
of any shares of Common Stock of the Company or other capital
stock of the Company or other securities convertible,
exchangeable or exercisable for Common Stock or derivative of
Common Stock owned by the Selling Shareholder or request the
registration for the offer or sale of any of the foregoing
(or as to which the Selling Shareholder has the right to
direct the disposition of) will be made for a period of 180
days after the date of this Agreement, directly or
indirectly, by such Selling Shareholder otherwise than
hereunder or with the prior written consent of Alex.
▇▇▇▇▇ & Sons Incorporated.
(ii) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Tax
Equity and Fiscal Responsibility Act of 1982 and the Interest
and Dividend Tax Compliance Act of 1983 with respect to the
transactions herein contemplated, each of the Selling
Shareholders agrees to deliver to you prior to or at the
Closing Date a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in
lieu thereof).
(iii) Such Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in, or
that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of
any securities of the Company.
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5. Costs and Expenses.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Sellers under this
Agreement, including, without limiting the generality of the
foregoing, the following: accounting fees of the Company; the fees
and disbursements of counsel for the Company and the Selling
Shareholders; the cost of printing and delivering to, or as
requested by, the Underwriters copies of the Registration
Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Underwriters' Selling Memorandum, the Underwriters'
Invitation Letter, the Listing Application, the Custodian
Agreement and related Power of Attorney, the Blue Sky Survey and
any supplements or amendments thereto; the filing fees of the
Commission; the filing fees and expenses (including legal fees and
disbursements) incident to securing any required review by the
NASD of the terms of the sale of the Shares; the Listing Fee of
the Nasdaq National Market; and the expenses, including the fees
and disbursements of counsel for the Underwriters, incurred in
connection with the qualification of the Shares under state
securities or Blue Sky laws. To the extent, if at all, that any of
the Selling Shareholders engage special legal counsel to represent
them in connection with this offering, the fees and expenses of
such counsel shall be borne by such Selling Shareholders. Any
transfer taxes imposed on the sale of the Shares to the several
Underwriters will be paid by the Sellers pro rata. The Sellers
shall not, however, be required to pay for any of the Underwriters
expenses (other than those related to qualification under NASD
regulation and state securities or Blue Sky laws) except that, if
this Agreement shall not be consummated because the conditions in
Section 6 hereof are not satisfied, or because this Agreement is
terminated by the Representatives pursuant to Section 11 hereof,
or by reason of any failure, refusal or inability on the part of
the Company or the Selling Shareholders to perform any undertaking
or satisfy any condition of this Agreement or to comply with any
of the terms hereof on their part to be performed, unless such
failure to satisfy said condition or to comply with said terms be
due to the default or omission of any Underwriter, then the
Company shall reimburse the several Underwriters for reasonable
out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation
of performing their obligations hereunder; but the Company and the
Selling Shareholders shall not in any event be liable to any of
the several Underwriters for damages on account of loss of
anticipated profits from the sale by them of the Shares.
-16-
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6. Conditions to Obligations of the Underwriters.
The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on
the Option Closing Date are subject to the accuracy, as of the
Closing Date or the Option Closing Date, as the case may be, of
the representations and warranties of the Company and the Selling
Shareholders contained herein, and to the performance by the
Company and the Selling Shareholders of their covenants and
obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all
filings required by Rule 424 and Rule 430A of the Rules and
Regulations shall have been made, and any request of the
Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed to
the Representatives and complied with to their reasonable
satisfaction. No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have
been issued and no proceedings for that purpose shall have been
taken or, to the knowledge of the Company or the Selling
Shareholders, shall be contemplated by the Commission and no
injunction, restraining order, or order of any nature by a federal
or state court of competent jurisdiction shall have been issued as
of the Closing Date which would prevent the issuance of the
Shares.
(b) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion
of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, A Professional Corporation,
counsel for the Company and the Selling Shareholders, dated the
Closing Date or the Option Closing Date, as the case may be,
addressed to the Underwriters (and stating that it may be relied
upon by counsel to the Underwriters) to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of
the State of Delaware, with corporate power and authority to
own or lease its properties and conduct its business as
described in the Registration Statement; and the Company is
duly qualified to transact business in each of the
jurisdictions listed on Schedule III attached hereto.
(ii) The Company has authorized and outstanding capital
stock as set forth under the caption "Capitalization" in the
Prospectus; the authorized shares of the Company's Common
Stock have been duly
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authorized; the outstanding shares of the Company's Common
Stock, including the Option Shares to be sold by the Selling
Shareholders, have been duly authorized and validly issued
and are fully paid and non-assessable; all of the Shares
conform to the description thereof contained in the
Prospectus; the certificates for the Shares, assuming they
are in the form filed with the Commission, are in due and
proper form; the shares of Common Stock, including the Option
Shares, if any, to be sold by the Company pursuant to this
Agreement have been duly authorized and will be validly
issued, fully paid and non-assessable when issued and paid
for as contemplated by this Agreement; and no preemptive
rights of shareholders exist with respect to any of the
Shares or the issue or sale thereof.
(iii) Except as described in or contemplated by the
Prospectus, to the best knowledge of such counsel, there are
no outstanding securities of the Company convertible or
exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and
there are no outstanding or authorized options, warrants or
rights of any character obligating the Company to issue any
shares of its capital stock or any securities convertible or
exchangeable into or evidencing the right to purchase or
subscribe for any shares of such stock; and except as
described in the Prospectus, to the best knowledge of such
counsel, no holder of any securities of the Company or any
other person has the right, contractual or otherwise, which
has not been satisfied or effectively waived, to cause the
Company to sell or otherwise issue to them, or to permit them
to underwrite the sale of, any of the Shares or the right to
have any Common Stock or other securities of the Company
included in the Registration Statement or the right, as a
result of the filing of the Registration Statement, to
require registration under the Act of any shares of Common
Stock or other securities of the Company.
(iv) The Registration Statement has become effective
under the Act and, to the best knowledge of such counsel, no
stop order proceedings with respect thereto have been
instituted or are pending or threatened under the Act.
(v) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in all
material respects with the requirements of the Act and the
applicable Rules and Regulations thereunder (except that such
counsel need express no
-18-
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opinion as to the financial statements and related
schedules included therein).
(vi) The statements under the captions "Risk Factors --
Shares Eligible for Future Sale; Registration Rights," "Risk
Factors -- Certain Anti-Takeover Provisions Affecting
Stockholders," "Management -- Stock Plans," "Management --
Executive Incentive Program," "Management -- Limitation of
Liability; Indemnification of Directors and Officers,"
"Certain Transactions -- Certain Stock Transactions,"
"Description of Capital Stock" and "Shares Eligible for
Future Sale" in the Prospectus, insofar as such statements
constitute a summary of documents referred to therein or
matters of law, are accurate summaries and fairly and
correctly summarize and present in all material respects the
information called for with respect to such documents and
matters.
(vii) Such counsel does not know of any contracts or
documents required to be filed as exhibits to the
Registration Statement or described in the Registration
Statement or the Prospectus which are not so filed or
described as required, and such contracts and documents as
are summarized in the Registration Statement or the
Prospectus are fairly summarized in all material respects.
(viii) Such counsel knows of no material legal or
governmental proceedings pending or threatened against the
Company except as set forth in the Prospectus.
(ix) The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated do
not and will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under,
the Certificate of Incorporation or By-laws of the Company,
or any agreement or instrument listed as an Exhibit to the
Registration Statement.
(x) This Agreement has been duly authorized,
executed and delivered by the Company.
(xi) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body is necessary in
connection with the execution and delivery of this Agreement
and the consummation of the transactions herein contemplated
(other than as may be required by the NASD or as required by
state securities and Blue Sky laws, as to which such counsel
need
-19-
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express no opinion) except such as have been obtained or
made, specifying the same.
(xii) The Company is not, and will not become, as a
result of the consummation of the transactions contemplated
by this Agreement, and application of the net proceeds
therefrom as described in the Prospectus, required to
register as an investment company under the 1940 Act.
(xiii) Each of this Agreement, the Custodian Agreement
and the related Power of Attorney has been duly authorized,
executed and delivered by or on behalf of each of the Selling
Shareholders.
(xiv) Each Selling Shareholder has full legal right,
power and authority, and any approval required by law (other
than as required by state securities and Blue Sky laws, as to
which such counsel need express no opinion), to sell, assign,
transfer and deliver the portion of the Option Shares to be
sold by such Selling Shareholder under this Agreement.
(xv) The Custodian Agreement and the Power of Attorney
executed and delivered by each Selling Shareholder are valid,
binding and irrevocable instruments legally sufficient for
the purposes intended.
(xvi) The Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code)
have acquired good and marketable title to the Option Shares
being sold by each Selling Shareholder on the Option Closing
Date, free and clear of all liens, encumbrances, equities and
claims.
In rendering such opinion, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, A
Professional Corporation, may rely as to matters governed by the
laws of states other than the Commonwealth of Massachusetts, the
Delaware General Corporation Law or federal laws on local counsel
in such jurisdictions and as to the matters set forth in
subparagraphs (xiii), (xiv) and (xv) on opinions of other counsel
representing the respective Selling Shareholders, provided that in
each case ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, A Professional Corporation,
shall state that they believe that they and the Underwriters are
justified in relying on the opinions of such other counsel. In
addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the
Act (but after
-20-
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giving effect to any modifications incorporated therein pursuant
to Rule 430A under the Act) and as of the Closing Date or the
Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date,
as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to
make the statements, in the light of the circumstances under which
they are made, not misleading (except that such counsel need
express no view as to financial statements, schedules and other
financial information included therein). With respect to such
statement, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, A Professional
Corporation, may state that their belief is based upon the
procedures set forth therein, but is without independent check and
verification.
(c) The Representatives shall have received from ▇▇▇▇ and
▇▇▇▇, counsel for the Underwriters, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, substantially
to the effect specified in subparagraphs (ii), (iii), (iv) and
(xi) of paragraph (b) of this Section 6, and that the Company is a
duly organized and validly existing corporation under the laws of
the State of Delaware. In rendering such opinion, ▇▇▇▇ and ▇▇▇▇
may rely as to all matters governed other than by the laws of the
Commonwealth of Massachusetts, the Delaware General Corporation
Law or federal laws, and as to matters relating to the Selling
Shareholders, on the opinion of counsel referred to in paragraph
(b) of this Section 6. In addition to the matters set forth above,
such opinion shall also include a statement to the effect that
nothing has come to the attention of such counsel which leads them
to believe that (i) the Registration Statement, or any amendment
thereto, as of the time it became effective under the Act (but
after giving effect to any modifications incorporated therein
pursuant to Rule 430A under the Act), as of the Closing Date or
the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date,
as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact, necessary in order to
make the statements therein, in the light of the circumstances
under which they are made, not misleading (except that such
counsel need express no view as to financial statements,
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schedules and other financial information included therein). With
respect to such statement, ▇▇▇▇ and ▇▇▇▇ may state that their
belief is based upon the procedures set forth therein, but is
without independent check and verification.
(d) The Representatives shall have received at or prior to
the Closing Date from ▇▇▇▇ and ▇▇▇▇ a memorandum or summary, in
form and substance satisfactory to the Representatives, with
respect to the qualification for offering and sale by the
Underwriters of the Shares under the state securities or Blue Sky
laws of such jurisdictions as the Representatives may reasonably
have designated to the Company.
(e) You shall have received, on each of the date hereof, the
Closing Date and the Option Closing Date, as the case may be, a
letter dated the date hereof, the Closing Date or the Option
Closing Date, as the case may be, in form and substance
satisfactory to you, of each of Coopers & ▇▇▇▇▇▇▇ L.L.C. and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating that in
their opinion the financial statements and schedules examined by
them and included in the Registration Statement comply in form in
all material respects with the applicable accounting requirements
of the Act and the related published Rules and Regulations; and
containing such other statements and information as is ordinarily
included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial and
statistical information contained in the Registration Statement
and Prospectus.
(f) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a certificate
or certificates of the President and Chief Executive Officer and
the Vice President, Finance and Chief Financial Officer of the
Company to the effect that, as of the Closing Date or the Option
Closing Date, as the case may be, each of them severally
represents as follows:
(i) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Registrations Statement has been issued, and no
proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission.
(ii) He does not know of any litigation instituted or
threatened against the Company of a character required to be
disclosed in the Registration Statement which is not so
disclosed; he does not know
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of any material contract required to be filed as an exhibit
to the Registration Statement which is not so filed; and the
representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the Closing Date
or the Option Closing Date, as the case may be.
(iii) All filings required to have been made pursuant to
Rules 424 or 430A under the Act have been made.
(iv) He has carefully examined the Registration
Statement and the Prospectus and, in his opinion, as of the
effective date of the Registration Statement, the statements
contained in the Registration Statement were true and
correct, and such Registration Statement and Prospectus did
not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading, and since the effective date of the
Registration Statement, no event has occurred which should
have been set forth in a supplement to or an amendment of the
Prospectus which has not been so set forth in such supplement
or amendment.
(v) Since the respective dates as of which information
is given in the Registration Statement and Prospectus, there
has not been any material adverse change or any development
involving a prospective material adverse change in or
affecting the condition, financial or otherwise, of the
Company or the earnings, business, management, properties,
assets, rights, operations, condition (financial or
otherwise) or prospects of the Company, whether or not
arising in the ordinary course of business.
(g) The Company and, in the case of any Option Closing, the
Selling Shareholders shall have furnished to the Representatives
such further certificates and documents confirming the
representations and warranties, covenants and conditions contained
herein and related matters as the Representatives may reasonably
have requested.
(h) The Firm Shares and Option Shares, if any, shall have
been approved for designation upon notice of issuance on the
Nasdaq National Market.
(i) The Lockup Agreements described in Section 4(a)(x) shall
be in full force and effect.
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The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof
only if they are in all material respects satisfactory to the
Representatives and to ▇▇▇▇ and ▇▇▇▇, counsel for the
Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, the obligations of the
Underwriters hereunder may be terminated by the Representatives by
notifying the Company and the Selling Shareholders of such
termination in writing or by telegram at or prior to the Closing
Date or the Option Closing Date, as the case may be. In such
event, the Selling Shareholders, the Company and the Underwriters
shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 8 hereof).
7. Conditions to the Obligations of the Sellers.
The obligations of the Sellers to sell and deliver the
portion of the Shares required to be delivered as and when
specified in this Agreement are subject to the conditions that at
the Closing Date or the Option Closing Date, as the case may be,
no stop order suspending the effectiveness of the Registration
Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. Indemnification.
(a) The Company and the Selling Shareholders, jointly and
severally, agree to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the
meaning of the Act, against any losses, claims, damages or
liabilities to which such Underwriter or any such controlling
person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto,
or (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, in the light of the
circumstances under which they were made; and will reimburse each
Underwriter and each such controlling person upon demand for any
legal or other expenses reasonably incurred by such Underwriter
and each such controlling person in connection with investigating
or defending any such loss, claim, damage, liability, action or
proceeding or in responding to a subpoena or governmental
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25
inquiry related to the offering of the Shares, whether or not such
Underwriter or controlling person is a party to any such action or
proceeding; provided, however, that the Company and the Selling
Shareholders will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement, or
omission or alleged omission, made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof.
In no event, however, shall the liability of any Selling
Shareholder for indemnification under this Section 8(a) exceed the
proceeds received by such Selling Shareholder from the
Underwriters in the offering. This indemnity agreement will be in
addition to any liability which the Company or the Selling
Shareholders may otherwise have.
(b) Each Underwriter severally and not jointly will indemnify
and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement, the Selling
Shareholders and each person, if any, who controls the Company or
the Selling Shareholders within the meaning of the Act, against
any losses, claims, damages or liabilities to which the Company or
any such director, officer, Selling Shareholder or controlling
person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse any
legal or other expenses reasonably incurred by the Company or any
such director, officer, Selling Shareholder or controlling person
in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however,
that each Underwriter will be liable in each case to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in
the Registration Statement, any Preliminary Prospectus, the
Prospectus or such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by
or through the Representatives
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specifically for use in the preparation thereof. This indemnity
agreement will be in addition to any liability which such
Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to this Section 8, such
person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section
8(a) or (b) shall be available to any party who shall fail to give
notice as provided in this Section 8(c) if the party to whom
notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the
failure to give such notice, but the failure to give such notice
shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for
contribution or otherwise than on account of the provisions of
Section 8(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory
to such indemnified party and shall pay as incurred (or within 30
days of presentation) the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred the fees and expenses of
the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) the named parties to
any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them, or (iii) the indemnifying party shall have failed to
assume the defense and employ counsel acceptable to the
indemnified party within a reasonable period of time after notice
of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for
all such indemnified parties. Such firm shall be designated in
writing by you in the case of parties indemnified pursuant to
Section 8(a) and by the Company and the Selling Shareholders in
the case of parties
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indemnified pursuant to Section 8(b). The indemnifying party shall
not be liable for any settlement of any proceeding effected
without its written consent but, if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. In
addition, the indemnifying party will not, without the prior
written consent of the indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened
claim, action or proceeding of which indemnification may be sought
hereunder (whether or not any indemnified party is an actual or
potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out
of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative
fault of the Company and the Selling Shareholders on the one hand
and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by
the Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the
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omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Shareholders on
the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contributions
pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above
in this Section 8(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) referred to above
in this Section 8(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 8(d), (i) no
Underwriter shall be required to contribute any amount in excess
of the underwriting discounts and commissions applicable to the
Shares purchased by such Underwriter, (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation, and (iii) no
Selling Shareholder shall be required to contribute any amount in
excess of the proceeds received by such Selling Shareholder from
the Underwriters in the offering. The Underwriters' obligations in
this Section 8(d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be
sought under this Section 8 hereby consents to the jurisdiction of
any court having jurisdiction over any other contributing party,
agrees that process issuing from such court may be served upon him
or it by any other contributing party and consents to the service
of such process and agrees that any other contributing party may
join him or it as an additional defendant in any such proceeding
in which such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 8 shall be paid by the
indemnifying party to the indemnified party
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as such losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements contained in
this Section 8 and the representations and warranties of the
Company and the Selling Shareholders set forth in this Agreement
shall remain operative and in full force and effect, regardless of
(i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors
or officers or any persons controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii)
any termination of this Agreement. A successor to any Underwriter,
or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in
this Section 8.
9. Default by Underwriters.
If on the Closing Date or the Option Closing Date, as the
case may be, any Underwriter shall fail to purchase and pay for
the portion of the Shares which such Underwriter has agreed to
purchase and pay for on such date (otherwise than by reason of any
default on the part of the Company or a Selling Shareholder), you,
as Representatives of the Underwriters, shall use your reasonable
efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company
and the Selling Shareholders such amounts as may be agreed upon
and upon the terms set forth herein, the Firm Shares or Option
Shares, as the case may be, which the defaulting Underwriter or
Underwriters failed to purchase. If during such 36 hours you, as
such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option
Shares, as the case may be, agreed to be purchased by the
defaulting Underwriter or Underwriters, then (a) if the aggregate
number of shares with respect to which such default shall occur
does not exceed 10% of the Firm Shares or Option Shares, as the
case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of
Firm Shares or Option Shares, as the case may be, which they are
obligated to purchase hereunder, to purchase the Firm Shares or
Option Shares, as the case may be, which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the
aggregate number of shares of Firm Shares or Option Shares, as the
case may be, with respect to which such default shall occur
exceeds 10% of the Firm Shares or Option Shares, as the case may
be, covered hereby, the Company and the Selling Shareholders or
you as the Representatives of the Underwriters will have the
right, by written notice given within the next 36-hour period to
the parties to this Agreement, to terminate this Agreement
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without liability on the part of the non-defaulting Underwriters
or of the Company or of the Selling Shareholders except to the
extent provided in Section 8 hereof. In the event of a default by
any Underwriter or Underwriters, as set forth in this Section 9,
the Closing Date or Option Closing Date, as the case may be, may
be postponed for such period, not exceeding seven days, as you, as
Representatives, may determine in order that the required changes
in the Registration Statement or in the Prospectus or in any other
documents or arrangements may be effected. The term "Underwriter"
includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Notices.
All communications hereunder shall be in writing and,
except as otherwise provided herein, will be mailed,
delivered, telecopied or telegraphed and confirmed as
follows: if to the Underwriters, to Alex. ▇▇▇▇▇ & Sons
Incorporated, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr., with a copy to
Alex. ▇▇▇▇▇ & Sons Incorporated, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel; and
if to the Company or the Selling Shareholders, to:
GeoTel Communications Corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
11. Termination.
This Agreement may be terminated by you by notice to the
Sellers as follows:
(a) at any time prior to the earlier of (i) the time
the Shares are released by you for sale by notice to the
Underwriters, or (ii) 11:30 a.m. on the first business day
following the date of this Agreement;
(b) at any time prior to the Closing Date if any of the
following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, any material adverse change or any development
involving a prospective material adverse change in or affecting
the condition, financial or otherwise, of the Company or the
earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the
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Company, whether or not arising in the ordinary course of
business, (ii) any outbreak or escalation of hostilities or
declaration of war or national emergency or other national or
international calamity or crisis or change in economic or
political conditions if the effect of such outbreak, escalation,
declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable
judgment, make it impracticable to market the Shares or to enforce
contracts for the sale of the Shares, (iii) suspension of trading
in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market or
limitation on prices (other than limitations on hours or numbers
of days of trading) for securities on any such exchange or market,
(iv) the enactment, publication, decree or other promulgation of
any statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and
adversely affects or may materially and adversely affect the
business or operations of the Company, (v) declaration of a
banking moratorium by United States or New York State authorities,
(vi) the suspension of trading of the Company's Common Stock by
the Commission on the Nasdaq National Market, or (vii) the taking
of any action by any governmental body or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a
material adverse effect on the securities markets in the United
States; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. Successors.
This Agreement has been and is made solely for the benefit of
the Underwriters, the Company and the Selling Shareholders and
their respective successors, executors, administrators, heirs and
assigns, and the officers, directors and controlling persons
referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign merely because
of such purchase.
13. Information Provided by Underwriters.
The Company, the Selling Shareholders and the Underwriters
acknowledge and agree that the only information furnished or to be
furnished by any Underwriter to the Company for inclusion in any
Preliminary Prospectus, Prospectus or the Registration Statement
consists of the information set forth in the last paragraph on the
front cover page (insofar as such information relates to the
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Underwriters), legends required by Item 502(d) of Regulation S-K
under the Act and the information under the caption "Underwriting"
in the Prospectus.
14. Miscellaneous.
The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full
force and effect regardless of (a) any termination of this
Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers, and (c) delivery of and
payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
If the foregoing letter is in accordance with your understanding
of our agreement, please sign and return to us the enclosed duplicates
hereof, whereupon it will become a binding agreement among the Selling
Shareholders, the Company and the several Underwriters in accordance
with its terms.
Any person executing and delivering this Agreement as
Attorney-in-Fact for a Selling Shareholder represents by so doing that
he has been duly appointed as Attorney-in-Fact by such Selling
Shareholder pursuant to a validly existing and binding Power of
Attorney which authorizes such Attorney-in-Fact to take such action.
Very truly yours,
GEOTEL COMMUNICATIONS CORPORATION
By____________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
SELLING SHAREHOLDERS LISTED ON SCHEDULE II
By_________________________________
, Attorney-in-Fact
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The foregoing Underwriting Agreement is hereby confirmed and accepted
as of the date first above written.
ALEX. ▇▇▇▇▇ & SONS INCORPORATED
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.C.
As Representatives of the several
Underwriters listed on Schedule I
By: Alex. ▇▇▇▇▇ & Sons Incorporated
By:
Authorized Officer
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SCHEDULE I
Schedule Of Underwriters
Number of Firm Shares
Underwriter to be Purchased
Alex. ▇▇▇▇▇ & Sons Incorporated
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.C.
---------
Total
35
SCHEDULE II
Schedule of Option Shares
Maximum Number Percentage of
of Option Shares Total Number of
Name of Seller to be Sold Option Shares
------- ---
Total 100%
36
SCHEDULE III
Foreign Qualifications
