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EXHIBIT 1.01
Dated ____________, 1998
HNC SOFTWARE INC.
__% CONVERTIBLE SUBORDINATED NOTES DUE 2003
UNDERWRITING AGREEMENT
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$90,000,000
HNC SOFTWARE INC.
___% Convertible Subordinated Notes due 2003
UNDERWRITING AGREEMENT
___________, 1998
To:
DEUTSCHE XXXXXX XXXXXXXX INC.
and the other Representatives
named in Schedule I hereto
of the several Underwriters
named in Schedule II hereto
c/o Deutsche Xxxxxx Xxxxxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
HNC Software, Inc., a Delaware corporation (the "Company"), hereby
confirms its agreement with the several underwriters named in Schedule II hereto
(the "Underwriters"), for whom you have been duly authorized to act as
representatives (the one or more firms acting in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be references to the
Underwriters.
Section 1. Underwriting. Subject to the terms and conditions contained herein:
(a) The Company proposes to issue and sell to the several Underwriters
an aggregate of $90,000,000 principal amount of ___% Convertible Subordinated
Notes due 2003 (the "Firm Notes"). The Company also proposes to issue and sell
to the several Underwriters not more than an aggregate of an additional
$10,000,000 principal amount of ___% Convertible Subordinated Notes due 2003
(the "Option Notes"), if requested by the Representatives as provided in Section
2(b) hereof. The Firm Notes and the Option Notes are sometimes collectively
referred to herein as the "Notes". The Notes are to be issued under an Indenture
dated as of __________, 1998 (the "Indenture") by and between the Company and
State Street Bank and Trust Company of California, N.A., as trustee (the
"Trustee"), pursuant to which the Notes will be convertible at the option of the
holders thereof into the Company's Common Stock, par value $0.001 per share (the
"Common Stock"). The Notes and the shares of Common Stock into which the Notes
are convertible are herein collectively called the "Securities."
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(b) Upon your authorization of the release of the Firm Notes, the
Underwriters propose to make a public offering (the "Offering") of the Firm
Notes upon the terms set forth in the Prospectus (as defined below) as soon
after the Registration Statement (as defined below) and this Agreement have
become effective as in the Representatives' sole judgment is advisable. As used
in this Agreement, the term "Effective Date" shall mean each date that the
registration statement and any post-effective amendment or amendments thereto
became or become effective; the term "Original Registration Statement" means the
registration statement referred to in Section 5(a)(i) below, as amended at the
time when it was or is declared effective, including incorporated documents,
financial schedules and exhibits thereto, including any Rule 430A Information
(as defined below) deemed to be included therein at the Effective Date as
provided by Rule 430A and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date (as defined below), also means such
registration statement as so amended; the term "Rule 430A Information" means
information permitted to be omitted from the Original Registration Statement
when it becomes effective pursuant to Rule 430A; the term "Rule 462(b)
Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Securities Act") (including the Registration Statement and any Preliminary
Prospectus (as defined below) or Prospectus incorporated therein at the time
such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule 462(b)
Registration Statement (but in any case excludes the Statement of Eligibility
and Qualification of the Trustee on Form T-1); the term "Basic Prospectus" shall
mean the prospectus referred to in Section 5(a)(i) below contained in the
Registration Statement at the Effective Date including, in the case of a Rule
430A Offering (as defined below), any Preliminary Prospectus; the term
"Preliminary Prospectus" means the preliminary prospectus supplement to the
Basic Prospectus used prior to the filing of the Prospectus; the term
"Prospectus" means:
(i) if the Company relies on Rule 434 under the Securities Act,
the Term Sheet (as defined below) relating to the Securities that is first filed
pursuant to Rule 424(b) under the Securities Act, together with the Preliminary
Prospectus identified therein that such Term Sheet supplements;
(ii) the prospectus supplement to the Basic Prospectus first
filed with the Commission pursuant to Rule 424(b) under the Securities Act,
together with the Basic Prospectus;
(iii) if, in the case of a Rule 430A Offering, no prospectus
supplement is required to be filed pursuant to Rule 424(b) under the Securities
Act, the form of final prospectus supplement to the Basic Prospectus, including
the Basic Prospectus, included in the Registration Statement at the Effective
Date; or
(iv) for purposes of the representations and warranties in
Section 5 hereof, if the prospectus is not in existence, the Basic Prospectus
and the most recent Preliminary Prospectus, if any.
"Rule 415", "Rule 424" and "Rule 430A" refer to such rules or regulations under
the Securities Act, and the term "Term Sheet" means any term sheet that
satisfies the requirements of Rule 434 under the Securities Act. Any reference
herein to the Registration Statement, the Basic Prospectus, 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
which were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the Effective Date of the Registration Statement
or the issue date of the Basic Prospectus, any Preliminary Prospectus or the
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the filing of any document under the Exchange Act after
the Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Prospectus or the Prospectus, as the case may be,
deemed to be
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incorporated therein by reference. A "Rule 430A Offering" means an offering of
securities which is intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and 430A,
all information (other than Rule 430A Information) with respect to the
securities so offered must be included in such registration statement at the
effective date thereof. A "Rule 415 Offering" means an offering of securities
pursuant to Rule 415 which does not commence promptly after the effective date
of a registration statement, with the result that only information required
pursuant to Rule 415 need be included in such registration statement at the
effective date thereof with respect to the securities so offered. Whether the
offering of the Notes is a Rule 430A Offering or a Rule 415 Offering shall be
set forth in Schedule I hereto.
(c) For purposes of this Agreement, all references to the Registration
Statement, any Preliminary Prospectus, the Prospectus, the Term Sheet or the
Basic Prospectus, or any amendment or supplement to any of the foregoing shall
be deemed to include the copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("XXXXX").
Section 2. Purchase and Closing. (a) On the basis of the representations,
warranties, agreements and covenants herein contained and subject to the terms
and conditions herein set forth, the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters, severally and not jointly,
agrees to purchase from the Company, at the purchase price of ___% of the
principal amount thereof, less accrued interest since _________, 1998, if any
(the "Purchase Price"), the principal amount of Firm Notes set forth opposite
the name of such Underwriter in Schedule II hereto. Firm Notes shall be
registered by State Street Bank and Trust Company of California, N.A., in the
name of the nominee of the Depository Trust Company ("DTC"), Cede & Co. ("Cede &
Co."), and credited to the accounts of such of its participants as the
Representatives shall request, upon notice to the Company at least 48 hours
prior to the First Closing Date (as defined below), with any transfer taxes
payable in connection with the transfer of the Firm Notes to the Underwriters
duly paid, against payment by or on behalf of the Underwriters to the account of
the Company of the aggregate Purchase Price therefor by wire transfer in
immediately available funds. Delivery of and payment for the Firm Notes shall be
made at the office of, on the date and at the time specified in Schedule I
hereto, or at such other place, time or date as the Representatives and the
Company may agree upon. Such time and date of delivery against payment are
herein referred to as the "First Closing Date", and the implementation of all
the actions described in this Section 2(a) is herein referred to as the "First
Closing".
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Notes as contemplated by the Prospectus,
the Company hereby grants to the several Underwriters an option to purchase,
severally and not jointly, the Option Notes. The purchase price to be paid for
any Option Notes shall be the same as the Purchase Price for the Firm Notes set
forth above in paragraph (a) of this Section 2. The option granted hereby may be
exercised as to all or any part of the Option Notes from time to time within
thirty (30) days after the date of the Prospectus (or, if such 30th day shall be
a Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange and the Nasdaq Stock Market's National Market (the
"Nasdaq National Market") are open for trading). The Underwriters shall not be
under any obligation to purchase any of the Option Notes prior to the exercise
of such option. The Representatives may from time to time exercise the option
granted hereby by giving notice in writing or by telephone (confirmed in
writing) to the Company setting forth the aggregate principal amount of Option
Notes as to which the several Underwriters are then exercising the option and
the date and time for delivery or registry of and payment for such Option Notes.
Any such date of delivery or registry shall be determined by the Representatives
but shall not be earlier than two business days or later than five business days
after such exercise of the option unless otherwise agreed to by the Company and
the Representatives and, in any event, shall not be earlier than the First
Closing Date. The time and date set forth in such notice, or such other time or
date as the Representatives and the Company may agree upon, is herein called an
"Option Closing Date" and
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the implementation of all the actions described in this Section 2(b) is herein
referred to as the "Option Closing". As used in this Agreement, the term
"Closing Date" means either the First Closing Date or any Option Closing Date,
as applicable, and the term "Closing" means either the First Closing or any
Option Closing, as applicable. If the option is exercised as to all or any
portion of the Option Notes, then the Option Notes shall be delivered or, if
such Option Notes are to be held through DTC, such Option Notes shall be
registered and credited, on the related Option Closing Date in the same manner,
and upon the same terms and conditions, set forth in paragraph (a) of this
Section 2, except that reference therein to the Firm Notes and the First Closing
Date shall be deemed, for purposes of this paragraph (b), to refer to such
Option Notes and Option Closing Date, respectively. Upon exercise of the option
as provided herein, the Company shall become obligated to sell to each of the
several Underwriters, and, on the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, each of the Underwriters (severally and not
jointly) shall become obligated to purchase from the Company, that number of
Option Notes as to which the several Underwriters are then exercising the
option, as the number of Firm Notes such Underwriter is obligated to purchase is
to the aggregate number of Firm Notes, as adjusted by the Representatives in
such manner as they deem advisable to avoid fractional notes.
(c) The Company hereby acknowledges that the payment of monies pursuant
to Section 2(a) or 2(b) hereof (a "Payment") by or on behalf of the Underwriters
of the aggregate Purchase Price for any Notes does not constitute closing of a
purchase and sale of the Notes. Only execution and delivery, by facsimile or
otherwise, of a receipt for Notes by the Underwriters indicates completion of
the closing of a purchase of the Notes. Furthermore, in the event that the
Underwriters make a Payment to the Company prior to the completion of the
closing of a purchase of Notes, the Company hereby acknowledges that until the
Underwriters execute and deliver such receipt for the Notes, the Company will
not be entitled to the Payment and shall return the Payment to the Underwriters
as soon as practicable (by wire transfer of same-day funds) upon demand. In the
event that the closing of a purchase of Notes is not completed and the Payment
is not returned by the Company to the Underwriters on the same day the Payment
was received by the Company, the Company agrees to pay to the Underwriters in
respect of each day the Payment is not returned to any one of them, in same-day
funds, interest on the amount of such Payment not returned by such party in an
amount representing the Underwriters' cost of financing as reasonably determined
by the Representatives.
(d) It is understood that any of you, individually and not as one of the
Representatives, may (but shall not be obligated to) make Payment on behalf of
any Underwriter or Underwriters for any of the Notes to be purchased by such
Underwriter or Underwriters. No such Payment shall relieve such Underwriter or
Underwriters from any of its or their obligations hereunder.
Section 3. Covenants.
(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,
if not effective at the time of execution of this Agreement, and any amendments
thereto, to become effective as promptly as possible. If required, the Company
will file the Prospectus or any Term Sheet that constitutes a part thereof and
any amendment or supplement thereto with the Commission in the manner and within
the time period required by Rule 424(b) under the Securities Act. During any
time when a prospectus relating to the Notes is required to be delivered under
the Securities Act, the Company (x) will comply with all requirements imposed
upon it by the Securities Act and the rules and regulations of the Commission
thereunder to the extent necessary to permit
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the continuance of sales of or dealings in the Notes in accordance with the
provisions hereof and of the Prospectus, as then amended or supplemented, and
(y) will not, prior to the earlier of the date upon which the over-allotment
option is fully exercised or the date thirty (30) days after the date of
Prospectus, file with the Commission the Basic Prospectus, Term Sheet or any
amendment or supplement to such Basic Prospectus (including the Prospectus or
any Preliminary Prospectus), any amendment or supplement to such Term Sheet, any
amendment to the Registration Statement (including the amendment referred to in
the second sentence of Section 5(a)(i)) or any Rule 462(b) Registration
Statement unless the Representatives previously have been advised of, and
furnished with a copy within a reasonable period of time prior to, the proposed
filing and the Representatives shall have given their consent to such filing
which consent shall not be unreasonably withheld. The Company will prepare and
file with the Commission, in accordance with the rules and regulations of the
Commission, promptly upon request by the Representatives or counsel for the
Underwriters, any amendments to the Registration Statement or amendments or
supplements to the Prospectus that may be necessary or advisable in connection
with the distribution of the Notes by the several Underwriters. The Company will
advise the Representatives, promptly after receiving notice thereof, of the time
when the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus or Term Sheet or any amendment or
supplement thereto has been filed and will provide evidence satisfactory to the
Representatives of each such filing or effectiveness.
(B) without charge, provide (x) to the Representatives and to
counsel for the Underwriters, an executed and a conformed copy of the Original
Registration Statement and each amendment thereto or any Rule 462(b)
Registration Statement (in each case including exhibits thereto), (y) to each
other Underwriter, a conformed copy of the Original Registration Statement and
each amendment thereto or any Rule 462(b) Registration Statement (in each case
without exhibits thereto), and (z) so long as a prospectus relating to the Notes
is required to be delivered under the Securities Act, as many copies of each
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto
as the Representatives may reasonably request. Without limiting the application
of clause (z) of the preceding sentence, the Company, not later than (I) 9:00
A.M., New York City time, on the business day following the date of
determination of the public offering price, if such determination occurred at or
prior to 12:00 noon, New York City time, on such date or (II) 6:00 P.M., New
York City time, on the business day following the date of determination of the
public offering price, if such determination occurred after 12:00 noon, New York
City time, on such date, will deliver to the Underwriters, without charge, as
many copies of the Prospectus and any amendment or supplement thereto as the
Representatives may reasonably request for purposes of confirming orders that
are expected to settle on the First Closing Date. The copies of each Original
Registration Statement, 462(b) Registration Statement, Preliminary Prospectus,
Term Sheet and Prospectus, and any amendments to the foregoing documents, shall
be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(C) advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (w) the issuance by the Commission of
any stop order suspending the effectiveness of the Original Registration
Statement or any amendment thereto or any Rule 462(b) Registration Statement or
any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, (x) the suspension of the
qualification of the Notes for offering or sale in any jurisdiction, (y) the
institution, threatening or contemplation of any proceeding for any purpose
identified in the preceding clause (w) or (x), or (z) any request made by the
Commission for amending the Original Registration Statement or any Rule 462(b)
Registration Statement, for amending or supplementing the Prospectus or for
additional information. The Company will use its best efforts to prevent the
issuance of any such stop order and, if any such stop order is issued, to obtain
the withdrawal thereof as promptly as possible.
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(ii) The Company will endeavor in good faith, in cooperation with
the Representatives, to arrange for the qualification of the Notes for offering
and sale in each jurisdiction as the Representatives shall reasonably designate
including, but not limited to, pursuant to applicable state securities ("Blue
Sky") laws of certain states of the United States of America or other U.S.
jurisdictions, and the Company shall use its best reasonable efforts to maintain
such qualifications in effect for so long as may be necessary in order to
complete the placement of the Notes; provided, however, that the Company shall
not be obliged to file any general consent to service of process or to qualify
as a foreign corporation or as a securities dealer in any jurisdiction or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.
(iii) If, at any time prior to the final date when a prospectus
relating to the Notes required to be delivered under the Securities Act, any
event occurs as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
for any other reason it shall be necessary at any time to amend the Registration
Statement or amend or supplement the Prospectus to comply with the Securities
Act or the rules or regulations of the Commission thereunder or applicable law,
the Company will promptly notify the Representatives thereof and will promptly,
at its own expense: (x) prepare and file with the Commission an amendment to the
Registration Statement or amendment or supplement to the Prospectus which will
correct such statement or omission or effect such compliance; and (y) supply any
amended Registration Statement or amended or supplemented Prospectus to the
Underwriters in such quantities as the Underwriters may reasonably request.
(iv) The Company will make generally available to the Company's
security holders and to the Representatives as soon as practicable an earnings
statement that satisfies the provisions of Section 11(a) of the Securities Act,
including Rule 158 thereunder.
(v) The Company will not, and will not allow any majority-owned
subsidiary (each a "Subsidiary" and collectively, the "Subsidiaries") to
publicly announce any intention to, and will not itself, and will not allow any
Subsidiary to, without the prior written consent of Deutsche Xxxxxx Xxxxxxxx
Inc., on behalf of the Underwriters, (i) offer, pledge, sell, offer to sell,
contract to sell, sell any option or contract to purchase, purchase any option
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into, or exercisable or exchangeable for, Common Stock,
or (ii) enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the shares of Common
Stock or securities convertible into, or exercisable or exchangeable for, shares
of Common Stock (whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of shares of Common Stock or such other
securities, in cash or otherwise), for a period beginning from the date hereof
and continuing to and including the date which is the number of days after the
date hereof specified in Schedule I hereto, except (v) shares of Common Stock
issuable upon conversion of the Notes, (w) shares of Common Stock issued by the
Company pursuant to the Underwriting Agreement referenced in the last sentence
of Section 7, (x) shares of Common Stock (or any securities exercisable for,
convertible into or exchangeable for shares of Common Stock) issued or issuable
pursuant to any employee benefit plans, qualified and non qualified stock option
plans or other employee compensation plans which are disclosed in the
Prospectus, (y) shares of Common Stock that may be issued to shareholders of
Practical Control Systems Technologies, Inc. or Financial Technologies, Inc. and
(z) shares of Common Stock (or any securities convertible into or exchangeable
for shares of Common Stock) issued by the Company in connection with any other
acquisition, joint venture, strategic partnership or similar strategic
arrangement, provided that the recipient of such shares or convertible
securities, at or prior to such issuance,
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agrees to be bound by the transfer restrictions described above with respect to
such shares of Common Stock or convertible securities.
(vi) Neither the Company nor any of its affiliates, nor any
person acting on behalf of any of them will, directly or indirectly, (i) take
any action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Notes or (ii) (x) sell, bid for, purchase, or pay anyone any compensation for
soliciting purchases of, the Notes or (y) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(vii) The Company shall obtain the agreements described in
Section 7(f) hereof prior to the First Closing Date.
(viii) If at any time during the period prior to the First
Closing Date, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in the Representatives' reasonable
judgment the market price of the Notes has been or is likely to be materially
affected (regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after notice
from the Representatives advising the Company to the effect set forth above,
forthwith prepare, consult with the Representatives concerning the substance of,
and disseminate a press release responding to or commenting on such rumor,
publication or event or other public statement, that is reasonably satisfactory
to the Representatives.
(ix) If the Company elects to rely on Rule 462(b), the Company
shall both file the Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 promulgated under the Securities Act by the earlier of (i) 10:00 p.m. New
York City time on the date of this Agreement and (ii) the time confirmations are
sent or given, as specified by Rule 462(b)(2) under the Securities Act.
(x) The Company will use all reasonable efforts to ensure that
the Common Stock remains included for quotation on the Nasdaq National Market,
or is included for quotation on the New York Stock Exchange or the American
Stock Exchange, for a period of five years following the First Closing Date (and
that the shares of Common Stock issuable upon conversion of the Notes are so
included).
Section 4. Expenses.
(a) The Company shall bear and pay all costs and expenses incurred
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 9 hereof, including: (i) the fees and expenses of
its counsel, accountants and any other experts or advisors retained by the
Company; (ii) fees and expenses incurred in connection with the registration of
the Securities under the Securities Act and the preparation and filing of the
Registration Statement, the Prospectus and all amendments and supplements
thereto; (iii) the printing and distribution of the Prospectus and any
Preliminary Prospectus and the printing and production of all other documents
connected with the Offering (including this Agreement and any other related
agreements); (iv) expenses related to the qualification of the Securities under
the state securities or Blue Sky laws, including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any Blue Sky memoranda; (v) the filing fees
and expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc. (the "NASD"), including the
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fees and disbursements of counsel for the Underwriters in connection therewith;
(vi) all arrangements relating to the preparation, issuance and delivery of the
Securities, including the costs and charges of the Trustee and any transfer
agent, conversion agent, registrar or depository with respect to the Securities;
and (vii) the costs and expenses of travel, lodging and meals of the Company's
employees in connection with associated with the "roadshow" and any other
meetings with prospective investors in the Securities (other than as shall have
been specifically approved by the Representatives to be paid for by the
Underwriters). Subject to the provisions of Section 10, the Underwriters agree
to pay, whether or not the transactions contemplated hereby are consummated or
this Agreement is terminated, all costs and expenses incident to the performance
of obligations under this Agreement not payable by the Company pursuant to the
preceding sentence, including, without limitation, all costs associated with the
"roadshow" (other than as set forth in clause (viii) above) and the fees and
disbursements of counsel to the Underwriters.
Section 5. Representations And Warranties.
(a) As a condition of the obligation of the Underwriters to underwrite
and pay for the Notes, the Company represents and warrants to, and agrees with,
each of the several Underwriters as follows:
REGISTRATION STATEMENT AND PROSPECTUS
(i) If the Offering is a Rule 415 Offering (as specified in
Schedule I hereto), paragraph (x) below is applicable and, if the Offering is a
Rule 430A Offering (as so specified), paragraph (y) below is applicable.
(x) The Company meets the requirements for use of Form S-3
under the Securities Act and has filed with the Commission the Original
Registration Statement (the file number of which is set forth in Schedule I
hereto) on such Form, including a Basic Prospectus, for registration under the
Act of the offering and sale of the Notes one or more amendments to such
Registration Statement may have been so filed, and the Company may have used a
Preliminary Prospectus. Such Registration Statement, as so amended, has become
effective. The Offering is a Rule 415 Offering and, although the Basic
Prospectus may not include all the information with respect to the Notes, and
the offering thereof required by the Securities Act and the rules thereunder to
be included in the Prospectus, the Basic Prospectus includes all such
information required by the Securities Act and the rules thereunder to be
included therein as of the Effective Date. After the execution of this
Agreement, the Company will file with the Commission pursuant to Rules 415 and
424(b)(2) or (5) a final supplement to the form of prospectus included in such
Registration Statement relating to the Notes and the offering thereof, with such
information as is required or permitted by the Securities Act and as has been
provided to and approved by the Representatives prior to the date hereof or, to
the extent not completed at the date hereof, containing only such specific
additional information and other changes (beyond that contained in the Basic
Prospectus and any Preliminary Prospectus) as the Company has advised you, prior
to the date hereof, will be included or made therein. The Company may also file
a Rule 462(b) Registration Statement with the Commission for the purpose of
registering certain additional Notes, which registration shall be effective upon
filing with the Commission.
(y) The Company meets the requirements for the use of Form
S-3 under the Securities Act and has filed with the Commission the Original
Registration Statement (the file number of which is set forth in Schedule I
hereto) on such Form, including a Basic Prospectus, for registration under the
Securities Act of the offering and sale of the Notes, and one or more amendments
to such Registration Statement, including a Preliminary Prospectus, may have
been so filed. After the execution of this Agreement,
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the Company will file with the Commission either (I) if such Registration
Statement, as it may have been amended, has been declared by the Commission to
be effective under the Securities Act, either (A) if the Company relies on Rule
434 under the Securities Act, a Term Sheet relating to the Notes that shall
identify the Preliminary Prospectus that it supplements containing such
information as is required or permitted by Rules 434, 430A and 424(b) under the
Securities Act or (B) if the Company does not rely on Rule 434 under the
Securities Act, a prospectus in the form most recently included in an amendment
to such Registration Statement (or, if no such amendment shall have been filed,
in such Registration Statement), with such changes or insertions as are required
by Rule 430A under the Securities Act or permitted by Rule 424(b) under the
Securities Act, and in the case of either clause (A) or (B) of this sentence, as
have been provided to and approved by the Representatives prior to the execution
of this Agreement, or (II) if such Registration Statement, as it may have been
amended, has not been declared by the Commission to be effective under the
Securities Act, an amendment to such Registration Statement, including the form
of final prospectus supplement to the Basic Prospectus, a copy of which
amendment has been furnished to and approved by the Representatives prior to the
execution of this Agreement or, to the extent not completed at the date hereof,
containing only such specific additional information and other changes (beyond
that contained in the Basic Prospectus and any Preliminary Prospectus) as the
Company has advised you, prior to the date hereof, will be included or made
therein. The Company may also file a Rule 462(b) Registration Statement with the
Commission for the purpose of registering certain additional Notes, which
registration shall be effective upon filing with the Commission.
(ii) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission, it (x) contained all statements
required to be stated therein in accordance with, and complied in all material
respects with the requirements of, the Securities Act and the rules and
regulations of the Commission thereunder and (y) did not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (I) contained or will contain
all statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Securities
Act and the rules and regulations of the Commission thereunder and (II) did not
or 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 in the light of the circumstances under which they were made not
misleading. When the Prospectus or any Term Sheet or any amendment or supplement
to the Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or such amendment or supplement is not required to be so filed,
when the Registration Statement or the amendment thereto containing the
Prospectus or such amendment or supplement to the Prospectus was or is declared
effective) and on the Closing Date, the Prospectus, as amended or supplemented
at any such time, (A) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Securities Act and the rules and
regulations of the Commission thereunder and (B) did not or will not include any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The foregoing provisions of this paragraph
(ii) do not apply to statements or omissions made in any Preliminary Prospectus,
the Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(iii) If the Company has elected to rely on Rule 462(b) and the
Rule 462(b) Registration Statement is not effective, (x) the Company will file a
Rule 462(b) Registration Statement in compliance with,
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and that is effective upon filing pursuant to, Rule 462(b) and (y) the Company
has given irrevocable instructions for transmission of the applicable filing fee
in connection with the filing of the Rule 462(b) Registration Statement, in
compliance with Rule 111 under the Securities Act, or the Commission has
received payment of such filing fee.
(iv) The Company has not distributed and, prior to the later of
(x) any Closing Date and (y) the completion of the distribution of the Notes,
will not distribute any offering material in connection with the Offering other
than the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto.
(v) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (x) the Company and its
Subsidiaries, taken as a whole, have not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction not
in the ordinary course of business; (y) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (z) there has not been any
material change in the capital stock, short-term or long-term debt of the
Company and its Subsidiaries, taken as a whole, except in each case as described
in or contemplated by the Prospectus.
THE COMMON STOCK
(vi) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus as of the date set forth therein.
All of the issued shares of capital stock of the Company, have been duly
authorized and validly issued and are fully paid and nonassessable, have been
issued in compliance with all applicable federal and state securities laws and
were not issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase such securities. No holders of outstanding
shares of capital stock of the Company are entitled as such to any preemptive or
other rights to subscribe for any of the capital stock, and no holder of
securities of the Company has any right which has not been fully exercised or
waived to require the Company to register the offer or sale of any securities
owned by such holder under the Securities Act in the Offering contemplated by
this Agreement. The shares of Common Stock issuable upon conversion of the Notes
have been duly authorized and reserved for issuance upon conversion of the Notes
and, when issued and delivered by the Company upon such conversion, will be duly
and validly issued and fully paid and nonassessable, and no preemptive or other
rights to subscribe for any of such shares of Common Stock exist with respect
thereto. The issuance of the shares of Common Stock issuable upon conversion of
the Notes will be exempt from the registration requirements under the Securities
Act pursuant to Section 3(a)(9) of the Securities Act.
(vii) Except as disclosed in the Prospectus and except for
options granted pursuant to qualified option plans and disclosed to the
Representatives, there are no outstanding (x) securities or obligations of the
Company or any of its Subsidiaries convertible into or exchangeable for any
capital stock of the Company or any such Subsidiary, (y) warrants, rights or
options to subscribe for or purchase from the Company or any such Subsidiary any
such capital stock or any such convertible or exchangeable securities or
obligations, or (z) obligations of the Company or any such Subsidiary to issue
any shares of capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(viii) Except for the shares of capital stock of each of the
Subsidiaries owned by the Company and such Subsidiaries, neither the Company nor
any such Subsidiary owns any shares of stock or any other equity securities of
any corporation or has any equity interest in any firm, partnership, association
or other entity, except as described in or contemplated by the Prospectus.
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LISTING
(ix) The Common Stock is listed for quotation on the Nasdaq
National Market, and the Company has taken no action designed to, or likely to,
have the effect of, delisting the Common Stock for quotation on the Nasdaq
National Market.
MARKET MANIPULATION
(x) Neither the Company nor any of its affiliates, nor any person
acting on behalf of any of them has, directly or indirectly, (A) taken any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Notes, or (B) since the filing of the Original Registration Statement (I) sold,
bid for, purchased, or paid anyone any compensation for soliciting purchases of,
the Notes or (II) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
CORPORATE POWER AND AUTHORITY; THE INDENTURE AND NOTES
(xi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the law of its jurisdiction of
incorporation with full power and authority to own, lease and operate its
properties and assets and conduct its business as described in the Prospectus,
is duly qualified to transact business and is in good standing in each
jurisdiction in which its ownership, leasing or operation of its properties or
assets or the conduct of its business requires such qualification, except where
the failure to be so qualified does not amount to a material liability or
disability to the Company and its Subsidiaries, taken as a whole, and has full
power and authority to execute and perform its obligations under this Agreement;
each Subsidiary of the Company is a corporation duly incorporated and validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to transact business and is in good standing
in each jurisdiction in which its ownership, leasing or operation of its
properties or assets or the conduct of its business requires such qualification,
except where the failure to be so qualified does not amount to a material
liability or disability to the Company and its Subsidiaries, taken as a whole,
and each has full power and authority to own, lease and operate its properties
and assets and conduct its business as described in the Registration Statement
and the Prospectus; none of the Company's subsidiaries is a "significant
subsidiary" as defined in Section 1-02(w) of Regulation S-X; all of the issued
and outstanding shares of capital stock (other than statutory nominal
stockholdings) of each of the Company's Subsidiaries have been duly authorized
and are fully paid and nonassessable and except as otherwise set forth in the
Prospectus (and except Aptex Software Inc., which is __% owned by the Company),
are owned beneficially by the Company or one of its Subsidiaries free and clear
of any security interests, liens, encumbrances, equities or claims.
(xii) The execution and delivery of this Agreement and the
Indenture and the issuance and sale of the Notes and the Common Stock issuable
upon conversion of the Notes have been duly authorized by all necessary
corporate action of the Company, and this Agreement, the Indenture and the Notes
have been duly executed and delivered by the Company). This Agreement is the
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except (x) as the enforceability thereof may be
limited by bankruptcy, insolvency, federal or state fraudulent conveyance or
transfer laws, and reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles and (y) except to the extent that rights to indemnity or contribution
under this Agreement may be limited by federal and state securities laws or the
public policy underlying such laws.
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The Indenture, when executed and delivered by the Company in accordance with its
terms (assuming due authorization, execution and delivery thereof by the
Trustee) will be the valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent the
Indenture is subject to, or effected by, applicable bankruptcy, insolvency,
federal or state fraudulent conveyance or transfer laws, reorganization,
moratorium or similar laws. The Notes conform in all material respect to the
descriptions thereof in the Prospectus. When the Notes are issued, executed and
authenticated in accordance with the Indenture and paid for in accordance with
the terms of this Agreement, the Notes will be the valid and binding obligations
of the Company, enforceable against the Company in accordance with their terms,
except to the extent the Notes are subject to, or effected by, applicable
bankruptcy, insolvency, federal or state fraudulent conveyance or transfer laws,
reorganization moratorium or similar laws.
(xiii) The execution and delivery by the Company of, and
compliance by the Company with the provisions of, and performance of its
obligations under this Agreement, the Indenture and the Notes and the
consummation of the other transactions herein and therein contemplated do not
(x) require the consent, approval, authorization, registration or qualification
of or with any governmental authority, except (I) if the Company has elected to
rely on Rule 462(b) and the Rule 462(b) Registration Statement is not effective,
the registration of certain Shares pursuant to the Rule 462(b) Registration
Statement that will be effective upon filing in compliance with Rule 462 (b) and
(II) such as have been obtained or made or such as may be required by the state
securities or Blue Sky laws of the various states of the United States of
America or other U.S. jurisdictions in connection with the offer and sale of the
Notes by the Underwriters, or (y) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
(I) any indenture, mortgage, deed of trust, lease 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 or any of their respective
properties are bound, except as would not individually or in the aggregate have
a materially adverse effect on or constitute a materially adverse change in the
condition (financial or otherwise), earnings, properties, business affairs or
business prospects, net worth or results of operations of the Company or any of
its Subsidiaries, taken as a whole, or the ability of the Company to perform its
obligations under this Agreement or the Indenture, or (II) the charter documents
or by-laws of the Company or any of its Subsidiaries, or (III) any statute or
any judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to the Company or any of its
Subsidiaries.
(xiv) The Company is not, and will conduct its operations in a
manner so that it continues not to be, an "investment company" and, after giving
effect to the Offering and the application of the proceeds therefrom, will not
be an "investment company", as such term is defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
TITLE, LICENSES AND CONSENTS
(xv) The Company and each of its Subsidiaries have good and
marketable title in fee simple to all items of real property and marketable
title to all personal property owned by each of them, in each case free and
clear of any security interests, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the use of such
property and do not interfere with the use made or proposed to be made of such
property by the Company or such Subsidiary, and any real property and buildings
held under lease by the Company or any such Subsidiary are held under valid,
subsisting and enforceable leases, with such exceptions as are not material and
do not interfere with the use made or proposed to be made of such property and
buildings by the Company or such Subsidiary, in each case except as described in
or contemplated by the Prospectus.
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(xvi) Except as disclosed in the Prospectus, the Company and each
of its Subsidiaries have the right to use or can acquire on reasonable terms all
trademarks, trade names, trade secrets, service marks, inventions, patent
rights, mask works, copyrights, licenses, software code, audiovisual works,
formats, algorithms and underlying data, approvals and governmental
authorizations now used in, or which are necessary for fulfillment of their
respective obligations or the conduct of, their respective businesses as now
conducted or proposed to be conducted as described in the Prospectus; except as
discussed in the Prospectus, the expiration of any trademarks, trade names,
trade secrets, service marks, inventions, patent rights, mask works, copyrights
or licenses would not have a material adverse effect on the condition (financial
or otherwise), earnings, properties, business affairs or business prospects,
stockholders' equity, net worth or results of operations of the Company; and
neither the Company nor any of its Subsidiaries is infringing any trademark,
trade name rights, patent rights relating to patents that have issued, mask
works, copyrights, licenses, trade secret, service marks or other similar rights
of others, and there is no claim being made against the Company or any of its
Subsidiaries regarding trademark, trade name, patent, mask work, copyright,
license, trade secret or other infringement or assertion of intellectual
property rights which could have a material adverse effect on the earnings,
properties, business affairs or business prospects, stockholders' equity, net
worth or results of operations of the Company. The Company has agreements in
place with such employees, consultants or other persons or parties engaged by
the Company or any Subsidiary sufficient to enable the Company and any
subsidiary to fulfill their contractual obligations and to conduct their
respective businesses as now conducted as described in the Prospectus and
providing for the assignment to the Company of all intellectual property rights
in the work performed and the protection of the trade secrets and confidential
information of the Company, each of its Subsidiaries and of third parties.
(xvii) The Company and its Subsidiaries possess all consents,
licenses, certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
materially adverse effect on or constitute a materially adverse change in, or
constitute a development involving a prospective materially adverse effect on or
change in, the condition (financial or otherwise), earnings, properties,
business affairs or business prospects, net worth or results of operations of
the Company or any of its Subsidiaries, taken as a whole, except as described in
or contemplated by the Prospectus.
FINANCIAL STATEMENTS
(xviii) Price Waterhouse LLP, who have certified certain
financial statements of the Company and its consolidated Subsidiaries and
delivered their report with respect to the audited consolidated financial
statements and schedules included or incorporated by reference in the
Registration Statement and the Prospectus, are independent public accountants as
required by the Securities Act and the applicable rules and regulations
thereunder.
(xix) The consolidated financial statements and schedules of the
Company and its consolidated Subsidiaries included or incorporated in the
Registration Statement and the Prospectus were prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods involved (except as otherwise noted therein) and they
present fairly the consolidated financial condition of the Company as at the
dates at which they were prepared and the consolidated results of operations of
the Company in respect of the periods for which they were prepared.
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INTERNAL ACCOUNTING CONTROLS
(xx) The Company and each of its Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that
(w) transactions are executed in accordance with management's general or
specific authorizations; (x) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability; (y) access to assets is permitted only in accordance with
management's general or specific authorization; and (z) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
LITIGATION
(xxi) No legal or governmental proceedings are pending or to the
Company's knowledge threatened to which the Company or any of its Subsidiaries
is a party or to which the property of the Company or any of its Subsidiaries is
subject that are required to be described in the Registration Statement or the
Prospectus and are not described therein; and no statutes, regulations,
contracts or other documents that are required to be described or incorporated
in the Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement are not described or incorporated therein or filed as
required.
DIVIDENDS AND DISTRIBUTIONS
(xxii) Except as disclosed in the Prospectus under the caption
"Dividend Policy" or restricted by applicable law, no Subsidiary of the Company
is currently prohibited, directly or indirectly, from paying any dividends to
the Company, making any other distribution on such Subsidiary's capital stock,
repaying to the Company any loans or advances to such Subsidiary from the
Company or transferring any of such Subsidiary's property or assets to the
Company or any other Subsidiary of the Company, and the Company is not currently
prohibited, directly or indirectly, from paying any dividends or making any
other distribution on its capital stock, in each case except as described in or
contemplated by the Prospectus or prohibited by applicable law.
TAXES
(xxiii) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not have a
materially adverse effect on the Company and its Subsidiaries, taken as a whole)
and has paid all taxes required to be paid by it and any other assessment, fine
or penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently being
contested in good faith or as described in or contemplated by the Prospectus.
INSURANCE
(xxiv) The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), earnings, properties, business affairs
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or business prospects, net worth or results of operations of the Company or any
of its Subsidiaries, taken as a whole, except as described in or contemplated by
the Prospectus.
PENSION AND LABOR
(xxv) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (x) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (y) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" 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 would cause the loss of
such qualification.
(xxvi) No labor dispute with the employees of the Company or any
of its Subsidiaries exists or is threatened or imminent that could have a
materially adverse effect on or constitute a materially adverse change in, or
constitute a development involving a prospective materially adverse effect on or
change in, the condition (financial or otherwise), properties, management,
earnings, business affairs or business prospects, net worth or results of
operations of the Company or any of its Subsidiaries, taken as a whole, except
as described in or contemplated by the Prospectus.
ENVIRONMENTAL
(xxvii) Neither the Company nor any of its Subsidiaries is in
violation of any federal or state law or regulation relating to occupational
safety and health or to the storage, handling or transportation of hazardous or
toxic materials and the Company and its Subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to conduct
their respective businesses, and the Company and each such Subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate, have a materially adverse effect on or constitute a
materially adverse change in, or constitute a development involving a
prospective materially adverse effect on or change in, the condition (financial
or otherwise), earnings, properties, business affairs or business prospects, net
worth or results of operations of the Company or any of its Subsidiaries, taken
as a whole, except as described in or contemplated by the Prospectus.
OTHER AGREEMENTS
(xxviii) No default by the Company or any of its Subsidiaries
exists, and no event has occurred which, with notice or lapse of time or both,
would constitute a default in the due performance and observance of any term,
covenant or condition of any indenture, mortgage, deed of trust, lease 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 or any of their
respective properties is bound, where such default could have a material adverse
effect on the condition (financial or otherwise), properties, management,
earnings, business affairs or business prospects, net worth or results of
operations of the Company or any of its Subsidiaries, taken as a whole, or the
ability of the Company to perform its obligations under this Agreement or the
Indenture.
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ABSENCE OF MATERIALLY ADVERSE CHANGE
(xxix) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, neither the Company
nor any of its Subsidiaries has sustained any material loss or interference with
their respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has been no
materially adverse change (including, without limitation, a change in management
or control), or development involving a prospective materially adverse change,
in the condition (financial or otherwise), management, earnings, property,
business affairs or business prospects, stockholders' equity, net worth or
results of operations of the Company or any of its Subsidiaries, taken as a
whole, other than as described in or contemplated by the Prospectus (exclusive
of any amendments or supplements thereto).
(xxx) No receiver or liquidator (or similar person) has been
appointed in respect of the Company or any Subsidiary of the Company or in
respect of any part of the assets of the Company or any Subsidiary of the
Company; no resolution, order of any court, regulatory body, governmental body
or otherwise, or petition or application for an order, has been passed, made or
to the Company's knowledge presented for the winding up of the Company or any
Subsidiary of the Company or for the protection of the Company or any such
Subsidiary from its creditors; and the Company has not, and no Subsidiary of the
Company has, stopped or suspended payments of its debts, become unable to pay
its debts or otherwise become insolvent.
(b) The above representations and warranties with respect to the Company
shall be deemed to be repeated at each Closing and all references therein to the
Notes and the Closing Date shall be deemed to refer to the Firm Notes or the
Option Notes and the First Closing Date or the applicable Option Closing Date,
each as applicable.
Section 6. Indemnity.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any
and all losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company in Section 5 hereof,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment thereto,
the Basic Prospectus, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, the Basic Prospectus, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto
a material fact required to be stated therein, or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading,
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and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other costs or expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Company 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 any untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement or any amendment thereto, the Basic Prospectus, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein; and provided further, that the Company will not be liable to any
Underwriter or any person controlling such Underwriter with respect to any such
untrue statement, alleged untrue statement, omission or alleged omission made in
any Preliminary Prospectus that is corrected in the Prospectus (or any amendment
or supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Notes from such Underwriter but was not sent or given a copy
of the Prospectus (as amended or supplemented) in any case where such delivery
of the Prospectus (as amended or supplemented) was required by the Securities
Act, unless such failure to deliver the Prospectus (as amended or supplemented)
was a result of noncompliance by the Company with Section 3 hereof. The
indemnity provided for in this Section 6 shall be in addition to any liability
which the Company may otherwise have. The Company will not, without the prior
written consent of the Representatives, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Representatives or any person who controls any such
Representatives is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of all
of the Underwriters and such controlling persons from all liability arising out
of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any losses, claims, damages or liabilities to which the Company or
any such director, officer or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions 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 or any amendment thereto, the Basic Prospectus,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto or (ii) the omission or the alleged omission to state in the
Registration Statement or any amendment thereto, the Basic Prospectus any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such 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 by such Underwriter through the
Representatives specifically for use therein, and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company or any such director,
officer, or controlling person in connection with investigating, defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or any action in respect thereof. The remedies provided
for in this Section 6 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity. No Underwriter will, without the prior written consent of the Company,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not the Company, any of its officers and
directors, or any controlling person is a party to such claim, action, suit or
proceeding), unless
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such settlement, compromise or consent includes an unconditional release of the
Company and such directors, officers and controlling persons from all liability
arising out of such claim, action, suit or proceeding.
(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 paragraph (a) or (b) of this Section 6, such person (for
purposes of paragraphs (c) and (d) of this Section 6, the "indemnified party")
shall, promptly after receipt by such party of notice of the commencement of
such action, notify the person against whom such indemnity may be sought (for
purposes of paragraphs (c) and (d) of this Section 6, the "indemnifying party"),
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 6. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded (based upon the advice of its
counsel) that there may be one or more legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense of any such action and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 6 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances), or (ii) the indemnifying party does not promptly
retain counsel satisfactory to the indemnified party, or (iii) the indemnifying
party has authorized in writing the employment of counsel for the indemnified
party at the expense of the indemnifying party. All fees and expenses to be
reimbursed pursuant to this paragraph (d) shall be reimbursed as they are
incurred. After such notice from the indemnifying party to such indemnified
party, the indemnifying party will not be liable for the costs and expenses of
any settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 6 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) purporting to be
covered thereby, each indemnifying party, in order to provide for just and
equitable contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect (i)
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the Offering or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the Offering
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(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to above in this paragraph (e).
Notwithstanding any other provision of this paragraph (e), no Underwriter shall
be obligated to make contributions hereunder that in the aggregate exceed the
total public offering price of the Notes purchased by such Underwriter under
this Agreement, less the aggregate amount of any damages that such Underwriter
has otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Deutsche Xxxxxx Xxxxxxxx Inc. Master Agreement Among Underwriters. For
purposes of this paragraph (d), each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, shall have the same rights to contribution as the Company.
Section 7. Conditions Precedent.
The obligations of the several Underwriters to purchase and pay for the
Notes shall be subject, in the Representatives' reasonable discretion, to (i)
the accuracy of the representations and warranties of the Company contained
herein as of the date hereof and as of each Closing Date on which the Company
proposes to sell Notes to the Underwriter, in each case, as if made on and as of
each Closing Date, (ii) the performance by the Company of its covenants and
agreements hereunder required to be performed or satisfied at or prior to the
Closing Date, and (iii) the following additional conditions:
(a) (i)If the Original Registration Statement or any amendment thereto
filed prior to the First Closing Date has not been declared effective as of the
time of execution hereof, the Original Registration Statement or such amendment
shall have been declared effective not later than 6:00 P.M. New York City time
on the date of determination of the public offering price, if such determination
occurred at or prior to 4:30 P.M. New York City time on such date, or 12:00 Noon
New York City time on the business day following the day on which the public
offering price was determined, if such determination occurred after 4:30 P.M.
New York City time on such date, and (ii) if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have been
declared effective not later than the time confirmations are sent or given as
specified by Rule 462(b)(2), or such later time and date as shall have been
consented to by the Representatives; if required, the Prospectus or any Term
Sheet that constitutes a part thereof and any amendment or supplement thereto
shall have been filed with the Commission in the manner and within the time
period required by Rule 424(b) under the Securities Act; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto shall have been issued, and no proceedings for that purpose shall have
been instituted or threatened or, to the knowledge of the Company or the
Representatives, shall be contemplated by
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the Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise).
(b) The Representatives shall have received a legal opinion dated the
Closing Date from (i) Fenwick & West LLP, counsel for the Company, with respect
to the matters set forth below execpt the first and third sentences of clause
(x), and (ii) Winthrop, Stimson, Putram & Xxxxxxx, with respect to the matters
set forth in the first and third sentences of clause (x):
(i) the Registration Statement is effective under the Securities
Act; any required filing of the Prospectus, or any Term Sheet that constitutes a
part thereof, pursuant to Rules 434 and 424(b) has been made in the manner and
within the time period required by Rules 434 and 424(b); and to its knowledge no
stop order suspending the effectiveness of the Registration Statement or any
amendment thereto has been issued and, to its knowledge, no proceedings for that
purpose are pending or threatened by the Commission;
(ii) the Original Registration Statement and each amendment
thereto, any Rule 462(b) Registration Statement and the Prospectus (in each
case, other than the financial statements and other financial and statistical
information contained therein, as to which such counsel need express no
opinion), excluding in each case the documents incorporated by reference
therein, comply as to form in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder;
(iii) the documents incorporated by reference in the Prospectus
(in each case other than the financial statements and other financial and
statistical information contained therein, as to which such counsel need express
no opinion), when they became effective or were filed with the Commission, as
the case may be, complied as to form in all material respects with the
applicable requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder;
(iv) at December 31, 1997, the Company has an authorized, issued
and outstanding capitalization as set forth in the "Capitalization" section of
the Prospectus; all of the shares of capital stock issued and outstanding prior
to the Closing Date have been duly authorized and validly issued and, assuming
payment therefor in accordance with the resolutions authorizing such issuances
or in accordance with the terms of the applicable option or warrant, as the case
may be, are fully paid and nonassessable; and none of such shares of capital
stock was issued in violation of any statutory preemptive or, to such counsel's
knowledge, other similar rights; to such counsel's knowledge, no holders of
outstanding shares of capital stock of the Company are entitled as such to any
preemptive or other rights to subscribe for any shares of capital stock; and to
such counsel's knowledge no holder of securities of the Company has any right
which has not been fully exercised or waived to require the Company to register
the offer or sale of any securities owned by such holder under the Securities
Act in the Offering contemplated by this Agreement; the shares of Common Stock
issuable upon conversion of the Notes have been duly authorized and reserved for
issuance upon conversion of the Notes and, when issued and delivered by the
Company upon such conversion, will be duly and validly issued and fully paid and
nonassessable, and no preemptive or other rights to subscribe for any of such
shares of Common Stock exists with respect thereto. The issuance of the shares
of Common Stock issuable upon conversion of the Notes will be exempt from the
registration requirements under the Securities Act pursuant to Section 3(a)(9)
of the Securities Act.
(v) the Common Stock issuable upon conversion of the Notes is
listed for quotation on the Nasdaq National Market;
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(vi) the Company and each of its domestic Subsidiaries have been
duly organized and are validly existing as corporations in good standing under
the laws of their respective jurisdictions of incorporation, based solely on
certificates from public officials, such counsel confirms that the Company and
each of its domestic Subsidiaries and duly qualified to transact business in
[the list jurisdictions set forth under their respective names in the list
attached as Schedule IV]; to such counsel's knowledge the Company and each of
its domestic Subsidiaries have full corporate power and corporate authority to
own, lease and operate their respective properties and assets and conduct their
respective businesses as described in the Registration Statement and the
Prospectus, and the Company has corporate power to enter into this Agreement and
to carry out all the terms and provisions hereof to be carried out by it; all of
the issued and outstanding shares of capital stock of each of the Company's
domestic Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except as otherwise set forth in the Registration
Statement, are owned beneficially by the Company or one of its Subsidiaries free
and clear of any perfected security interests or, to the knowledge of such
counsel, any other security interests, liens, encumbrances, equities or claims;
(vii) the statements set forth under the headings "Description of
Capital Stock"; and "Underwriting" in the Prospectus, and under Item 15 in the
Registration Statement, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, have been reviewed
by such counsel and fairly present the information called for with respect to
such legal matters, documents and proceedings in all material respects as
required by the Securities Act and the Exchange Act and the respective rules and
regulations thereunder;
(viii) the execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company and this
Agreement, the Indenture and the Notes have been duly executed and delivered by
the Company;
(ix) the execution and delivery by the Company of, and compliance
by the Company with, the provisions of, and performance of its obligations
under, this Agreement, the Indenture and the Notes and the consummation of the
other transactions contemplated in this Agreement, the Indenture, the Notes and
the Registration Statement do not (x) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained or made (and specified in such
opinion) or such as may be required by the securities or Blue Sky laws of the
United States of America or any state thereof, or any foreign jurisdiction or
under the bylaws or rules of the NASD in connection with the offer and sale of
the Notes by the Underwriters, or (y) to such counsel's knowledge, conflict with
or result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, lease or
other agreement or instrument, to which the Company or any of its domestic
Subsidiaries is a party or by which the Company or any of its domestic
Subsidiaries or any of their respective properties are bound, which indenture,
mortgage, deed of trust, lease or other agreement or instrument is (or is
required to be, in accordance with applicable laws) included (or incorporated by
reference) in the Registration Statement, or any foreign jurisdiction or under
the bylaws or rules of the NASD or the charter documents or by-laws of the
Company or any of its domestic Subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental authority
or any arbitrator known to such counsel and applicable to the Company or its
domestic Subsidiaries;
(x) The Indenture, when executed and delivered by the Company in
accordance with its terms (assuming due authorization, execution and delivery
thereof by the Trustee) will be the valid and binding Agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent the Indenture is subject to, or effected by, applicable bankruptcy,
insolvency, federal or state fraudulent conveyance or transfer laws,
reorganization, moratorium or similar laws. The Notes conform in all material
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respect to the descriptions thereof in the Prospectus. When the Notes are
issued, executed and authenticated in accordance with the Indenture and paid for
in accordance with the terms of this Agreement, the Notes will be the valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent the Notes are subject to, or
effected by, applicable bankruptcy, insolvency, federal or state fraudulent
conveyance or transfer laws, reorganization moratorium or similar laws.
(xi) the Company is not an "investment company" and, after giving
effect to the Offering and the application of the proceeds therefrom, will not
be an "investment company", as such term is defined in the 1940 Act; and
(xii) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
Subsidiaries is a party or to which the property of the Company or any of its
Subsidiaries is subject that are required to be described or incorporated in the
Registration Statement or the Prospectus and are not described or incorporated
therein or any statutes, regulations, contracts or other documents that are
Required to be described or incorporated in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
described or incorporated therein or filed as required.
Such opinion shall also state such counsel has participated in
certain conferences with officers and other representatives of the Company,
representatives of the independent certified public accountants for the Company
and representatives of the Underwriters, at which conferences the contents of
the Registration Statement and the Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not assume any
responsibility for, nor has such counsel independently verified, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and Prospectus, on the basis of the foregoing, no facts have come to
such counsel's attention that have caused such counsel to believe that either
the Registration Statement, at the time such Registration Statement became
effective, or the Prospectus as of the date hereof, contained any 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
(except, in the case of both the Registration Statement and the Prospectus, for
the financial statements, notes thereto and other schedules, financial and
accounting information and statistical data contained therein, as to which such
counsel expresses no view).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company or certificates of government officials.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion. The opinions of issuer's counsel described herein shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
(c) The Representatives shall have received a legal opinion from Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for the Underwriters, dated the Closing
Date, covering the issuance and sale of the Notes, the Registration Statement
and the Prospectus, and such other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters.
(d) The Representatives shall have received from Price Waterhouse LLP
letters dated, respectively, the date hereof and the Closing Date, in form and
substance satisfactory to the Representatives, together with signed or
reproduced copies of such letters for each of the other Underwriters containing
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statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (I) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (II) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Notes as contemplated by the Registration Statement, as amended as of the date
hereof. References to the Registration Statement and the Prospectus in this
paragraph (f) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(e) The Company shall have furnished or caused to be furnished to the
Underwriters at the Closing a certificate of its President and Chief Executive
Officer and its Chief Financial Officer satisfactory to the Underwriters to the
effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Closing Date; the
Registration Statement, as amended as of the Closing Date, does not include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading, and the Prospectus, as amended or
supplemented as of the Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and the Company has performed all covenants and agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to the best
of the Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (exclusive of any
amendment or supplement thereto), neither the Company nor any of its
Subsidiaries has sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, and there has not been any materially
adverse change (including, without limitation, a change in management or
control), or development involving a prospective materially adverse change, in
the condition (financial or otherwise), management, earnings, properties,
business affairs or business prospects, stockholders' equity, net worth or
results of operations of the Company or any of its Subsidiaries, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto).
(f) The Representatives shall have received from the Company and each
person who is a director or executive officer of the Company an agreement dated
on or before the date of this Agreement to the effect that such person will not,
without the prior written consent of the Representatives during a period from
the date of this Agreement and continuing and including the date which is the
number of days after the date hereof as specified in Schedule I hereto, without
the prior written consent of the Underwriters, (i) offer, pledge, sell, offer to
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any
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shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such securities, in cash or otherwise;
provided, however, that such person may, without the prior written consent of
the Representatives on behalf of the Underwriters, transfer shares of Common
Stock or such other securities to members of such person's immediate family or
to trusts for the benefit of members of such person's immediate family or in
connection with bona fide gifts, provided that any transferee agrees to the
transfer restrictions described above.
(g) On or before the Closing Date, the Representatives and counsel for
the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Notes shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Notes, except that all references therein
to the Notes and the Closing Date shall be deemed to refer to the Firm Notes or
the Option Notes and the First Closing Date or the related Option Closing Date,
each as applicable.
The Underwriters and the Company further acknowledge and agree that it
shall be a condition precedent to the purchase and sale of the Notes
contemplated by this Agreement that on the First Closing Date the sale of
1,500,000 shares of Common Stock by the Company and certain selling stockholders
shall have been consummated, as provided in an Underwriting Agreement of even
date herewith among the Underwriters, the Company and such selling stockholders.
Section 8. Default of Underwriters.
If, at the First Closing, any one or more of the Underwriters shall fail
or refuse to purchase Notes that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Notes which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is ten
percent or less of the aggregate number of the Notes to be purchased on such
date, the other Underwriters may make arrangements satisfactory to the
Representatives for the purchase of such Notes by other persons (who may include
one or more of the non-defaulting Underwriters, including the Representatives),
but if no such arrangements are made by the First Closing Date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Notes set forth opposite their respective names in Schedule II hereto bears
to the aggregate number of Firm Notes set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Notes which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, at the
First Closing, any Underwriter or Underwriters shall fail or refuse to purchase
Firm Notes and the aggregate number of Firm Notes with respect to which such
default occurs is more than ten per cent of the aggregate number of Firm Notes
to be purchased, and arrangements satisfactory to the Representatives and the
Company for the purchase of such Firm Notes are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any
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non-defaulting Underwriter or the Company. In any such case either the
Representatives or the Company shall have the right to postpone the Closing, but
in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, at any Option Closing, any
Underwriter or Underwriters shall fail or refuse to purchase Option Notes, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase Option Notes or (ii) purchase not less than the
number of Option Notes that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. As used in this Agreement,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section 8. Any action taken under this Section 8 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
Section 9. Termination.
This Agreement shall be subject to termination in the sole discretion of
the Representatives by notice to the Company given prior to any Closing Date in
the event that the Company shall have failed, refused or been unable to perform
all obligations and satisfy all conditions on its part to be performed or
satisfied hereunder at the Closing or prior thereto or, if at or prior to any
Closing Date, (a) trading in securities generally on the New York Stock Exchange
or the Nasdaq National Market shall have been suspended or materially limited or
minimum or maximum prices shall have been established by or on, as the case may
be, the Commission or the New York Stock Exchange or the Nasdaq National Market;
(b) trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market; (c) a general moratorium on
commercial banking activities shall have been declared by either Federal or New
York State authorities; (d) there shall have occurred (i) an outbreak or
escalation of hostilities between the United States and any foreign power, (ii)
an outbreak or escalation of any other insurrection or armed conflict involving
the United States, or (iii) any other calamity or crisis or materially adverse
change in general economic, political or financial conditions having an effect
on the U.S. financial markets that, in the reasonable judgment of the
Representatives, in the case of clauses (d)(i), (d)(ii) and (d)(iii), makes it
impractical or inadvisable to proceed with the public offering or the delivery
of the Notes as contemplated by the Registration Statement, as amended as of the
date hereof; or (e) the Company or any of its Subsidiaries shall have, in the
reasonable judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, or there shall
have been any materially adverse change (including, without limitation, a change
in management or control), or constitute a development involving a prospective
materially adverse change, in the condition (financial or otherwise),
management, earnings, properties, business affairs or business prospects,
stockholders' equity, net worth or results of operations of the Company or any
of its Subsidiaries, except in each case as described in or contemplated by the
Prospectus (exclusive of any amendment or supplement thereto). Termination of
this Agreement pursuant to this Section 9 shall be without liability of any
party to any other party except for the liability of the Company in relation to
expenses as provided in Sections 4 and 10 hereof, the indemnity provided in
Section 6 hereof and any liability arising before or in relation to such
termination.
Section 10. Reimbursement of Expenses.
If the sale of the Notes provided for herein is not consummated because
any condition to the obligations of the Underwriters set forth in Section 7
hereof is not satisfied or because of any termination pursuant to Section 9
hereof (other than by reason of a default by any of the Underwriters), the
Company shall reimburse the Underwriters, severally upon demand, for all
out-of-pocket expenses (including fees and
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disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Notes.
Section 11. Information Supplied by Underwriters.
The statements set forth in the last paragraph on the front cover page
and in the third and last three paragraphs under the heading "Underwriting" in
any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Section 5(a)(ii) and Section 6 hereof. The Underwriters confirm that such
statements (to such extent) are correct.
Section 12. Notices.
In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by the Representatives. Any notice or notification in any form to be given
under this Agreement may be delivered in person or sent by telex, facsimile or
telephone (subject in the case of a communication by telephone to confirmation
by telex or facsimile) addressed to:
in the case of the Company:
HNC Software Inc.
0000 Xxxxxxxxxxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: President
in the case of the Underwriters:
Deutsche Xxxxxx Xxxxxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Equity Syndicate Desk
Section 13. Miscellaneous.
(a) Time shall be of the essence of this Agreement.
(b) The headings herein are inserted for convenience of reference only
and are not intended to be part of, or to affect, the meaning or interpretation
of this Agreement.
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(c) For purposes of this Agreement, (a) "business day" means any day on
which the New York Stock Exchange is open for trading, and (b) "subsidiary" has
the meaning set forth in Rule 405 under the Securities Act.
(d) This Agreement may be executed in any number of counterparts, all of
which, taken together, shall constitute one and the same Agreement and any party
may enter into this Agreement by executing a counterpart.
(e) This Agreement shall inure to the benefit of and shall be binding
upon the several Underwriters, the Company and their respective successors and
legal representatives, and nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any 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 (i) the indemnities of the
Company contained in Section 6 hereof shall also be for the benefit of any
person or persons who control any Underwriter within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act and (ii) the indemnities
of the Underwriters contained in Section 6 hereof shall also be for the benefit
of the directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons who control the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act. No purchaser of Notes from any Underwriter shall be deemed a successor
because of such purchase.
(f) The respective representations, warranties, agreements, covenants,
indemnities and other statements of the Company, its officers and the several
Underwriters set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, any Underwriter or any controlling person referred to
in Section 6 hereof and (ii) delivery of and payment for the Notes. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 4, 6 and 10 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.
Section 14. Severability.
It is the desire and intent of the parties that the provisions of this
Agreement be enforced to the fullest extent permissible under the law and public
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any provision of this Agreement would be held in
any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 15. Governing Law.
The validity and interpretation of this Agreement, and the terms and
conditions set forth herein, shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to any provisions
relating to conflicts of laws.
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If the foregoing is in accordance with your understanding, please sign
and return to us ten (10) counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in the Deutsche
Xxxxxx Xxxxxxxx Inc. Master Agreement Among Underwriters, the form of which
shall be submitted to the Company for examination upon request, but without
warranty on your part as to the authority of the signers thereof.
Very truly yours,
HNC SOFTWARE INC.
By:______________________________________
President and Chief Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date
specified in Schedule I hereto.
DEUTSCHE XXXXXX XXXXXXXX INC.
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXX XXXXXX INC.
By: DEUTSCHE XXXXXX XXXXXXXX INC.
By: ____________________________
Name: __________________________
Title: _________________________
By: ____________________________
Name: __________________________
Title: _________________________
For themselves and on behalf of the other several Underwriters, if any, named in
Schedule II to the foregoing Agreement.
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30
SCHEDULE I
Underwriting Agreement dated: ___________ __, 1998
Other Representatives: BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxx Xxxxxx Inc.
Type of Offering: ___% Convertible Subordinated Notes due 2003
Purchase Price of Notes:
Purchase price per Note: ___% of principal amount plus accrued interest, if
any, from ___________, 1998.
Closing Date, Time and Location: _____________ __, 1998, at the offices of
Fenwick & West LLP, Two Xxxx Xxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx, 00000.
Registration Statement No. 333-____
Number of days referred to in Section 3(a)(v): 90
Number of days referred to in Section 7(f): 90
Modification of items to be covered by the letter from Price Waterhouse LLP
delivered pursuant to Section 7(d) at the Closing Date:
31
SCHEDULE II
The Underwriters
UNDERWRITER UNDERWRITING COMMITMENT
----------- -----------------------
Deutsche Xxxxxx Xxxxxxxx Inc. __________________
BancAmerica Xxxxxxxxx Xxxxxxxx __________________
Xxxxx Xxxxxx Inc. __________________
32
SCHEDULE III
Listing of all States in which HNC and Subsidiaries do Business
HNC Software Inc.
Arizona
California
Connecticut
Delaware
Florida
Georgia
Illinois
Minnesota
Maryland
Nebraska
New York
North Carolina
Ohio
Pennsylvania
Texas
Utah
Xxxxxxxx
Xxxxxxxxxx
CompReview, Inc.
California
Texas
Retek Information Systems, Inc.
Minnesota
Texas
Illinois
Georgia
Indiana
Massachusetts
Pennsylvania
California
33
Risk Data Corporation
California
Arizona
Colorado
Minnesota
New York
Virginia
Aptex Software Inc.
California
Texas
Massachusetts
