1
Exhibit 1.0
[ ] Shares of Common Stock
ServiceWare Technologies, Inc.
UNDERWRITING AGREEMENT
[ ], 2000
BEAR, XXXXXXX & CO. INC.
XX XXXXX SECURITIES CORPORATION
WIT SOUNDVIEW CORPORATION
X.X. XXXXXXXXX, TOWBIN, L.P.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
ServiceWare Technologies, Inc., a corporation organized and
existing under the laws of the State of Delaware (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
several underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 4,500,000 shares (the "Firm Shares") of its common stock, $0.01 par
value per share (the "Common Stock"), and, for the sole purpose of covering
over-allotments in connection with the sale of the Firm Shares, at the option of
the Underwriters, up to an additional 675,000 shares (the "Additional Shares")
of Common Stock. The Firm Shares and any Additional Shares purchased by the
Underwriters are referred to herein as the "Shares." The Shares are more fully
described in the Registration Statement referred to below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and may have
filed an amendment or amendments thereto, on Form S-1 No. 333 33818, for the
registration of the Shares under the Securities Act of 1933, as amended (the
"Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of the Rules
and Regulations of the Commission under the Act (the "Regulations"), is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the Regulations is herein called the "462(b) Registration
Statement," and after such filing, the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The prospectus, in the form
first filed with the Commission pursuant to Rule 424(b) of the Regulations or
filed as part of the Registration Statement at the time of effectiveness if no
Rule 424(b) or Rule 434 filing is required, is herein called the "Prospectus."
The term "preliminary prospectus" as used herein
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means a preliminary prospectus as described in Rule 430 of the Regulations.
Neither the Commission nor the Blue Sky or securities authority of any
jurisdiction has issued a stop order suspending the effectiveness of the
Registration Statement, preventing or suspending the use of any preliminary
prospectus, the Prospectus, the Registration Statement or any amendment or
supplement thereto, refusing to permit the effectiveness of the Registration
Statement or suspending the registration or qualification of the Shares, nor, to
the Company's knowledge, has any of such authorities instituted or threatened to
institute any proceedings with respect to a stop order.
(b) At the respective time of the effectiveness of
the Registration Statement or any 462(b) Registration Statement or the
effectiveness of any post-effective amendment to the Registration Statement,
when the Prospectus is first filed with the Commission pursuant to Rule 424(b)
or Rule 434 of the Regulations, when any supplement to or amendment of the
Prospectus is filed with the Commission and at the Closing Date and the
Additional Closing Date, if any (as hereinafter respectively defined), the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto (including any prospectus wrapper) complied or will comply
in all material respects with the applicable provisions of the Act and the
Regulations and do not or will not contain an untrue statement of a material
fact and do not or will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein (i) in the
case of the Registration Statement, not misleading and (ii) in the case of the
Prospectus, in light of the circumstances under which they were made, not
misleading, and the Prospectus, any preliminary prospectus and any supplement
thereto or prospectus wrapper prepared in connection therewith, at their
respective times of issuance and at the Closing Date, complied and will comply
in all material respects with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus and such preliminary prospectus, as
amended or supplemented, if applicable, are distributed in connection with the
offer and sale of the Directed Shares (as hereinafter defined). When any related
preliminary prospectus was first filed with the Commission (whether filed as
part of the registration statement for the registration of the Shares or any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and when any
amendment thereof or supplement thereto was first filed with the Commission,
such preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and did not contain an untrue statement of a material fact and
did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein in light of the circumstances
under which they were made not misleading. No representation and warranty is
made in this subsection (b), however, with respect to any information contained
in or omitted from the Registration Statement or the Prospectus or any related
preliminary prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through you as herein stated
expressly for use in connection with the preparation thereof. If Rule 434 is
used, the Company will comply with the requirements of Rule 434.
(c) Ernst & Young LLP who have certified the
financial statements and supporting schedules included in the Registration
Statement, are independent public accountants as required by the Act and the
Regulations.
(d) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
set forth in the Registration Statement and the Prospectus, there has been no
material adverse change or any development involving a prospective material
adverse change in the business, prospects, properties, operations, condition
(financial or other) or results of operations of the Company and its
subsidiaries taken as a whole, including but not limited to relationships with
customers and suppliers of the Company, whether or not arising from transactions
in the ordinary course of business, and since the date of the latest balance
sheet presented in the Registration Statement and the Prospectus, neither the
Company nor any of its subsidiaries has incurred or undertaken any liabilities
or obligations, direct or contingent, which are material to the Company and its
subsidiaries taken as a whole, except for liabilities or obligations which are
reflected in the Registration Statement and the Prospectus.
(e) This Agreement and the transactions contemplated
herein have been duly and validly authorized by the Company, and this Agreement
has been duly and validly executed and delivered by the Company.
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(f) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) or Repayment Event (as hereinafter
defined) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any agreement, instrument, franchise, license or
permit to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or their respective properties or assets
may be bound or (ii) violate or conflict with (A) any provision of the
certificate of incorporation or by-laws of the Company or any of its
subsidiaries or (B) any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court or
any public, governmental or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective properties or
assets is required for the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby, including the
issuance, sale and delivery of the Shares to be issued, sold and delivered by
the Company hereunder, except the registration under the Act of the Shares and
such consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company.
(g) All of the outstanding shares of capital stock of
the Company have been duly and validly authorized and issued, are fully paid and
nonassessable, and none of such shares was issued in violation of or is now
subject to any preemptive or similar rights. The Shares have been duly
authorized for issuance and sale to the Underwriters pursuant to this Agreement
and, when issued, delivered and sold in accordance with this Agreement, will be
duly and validly issued and outstanding, fully paid and nonassessable and will
not have been issued in violation of or be subject to any preemptive or similar
rights, and no holder of Shares will be subject to personal liability by reasons
of being such a holder. The Company had, at [ ], 2000, an authorized and
outstanding capitalization as set forth in the Registration Statement and the
Prospectus. The authorized capital stock of the Company, including the Firm
Shares and the Additional Shares, conforms to the description thereof contained
in the Registration Statement and the Prospectus. Except as disclosed in the
Registration Statement and the Prospectus, there are no outstanding options,
warrants or other rights calling for the issuance of, and no commitments,
obligations, plans or arrangements to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable for capital stock of
the Company. The outstanding stock options relating to the Common Stock have
been duly authorized and validly issued and conform to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(h) Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. Each of the Company and its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in good
standing which will not in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole. Each of the Company and its
subsidiaries has all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses and
permits (collectively, "Governmental Licenses") of and from all public,
regulatory or governmental agencies and bodies, to own, lease and operate its
properties and conduct its business as now being conducted and as described in
the Registration Statement and the Prospectus, each such Governmental License is
valid and in full force and effect, and no such Governmental License contains a
materially burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus, and the Company has not received any notice of
proceedings relating to the revocation of any such Governmental Licenses. The
Company does not own any capital stock or any other interests in any other
corporation or entity other than ServiceWare, Ltd., which is wholly owned by the
Company.
(i) All of the outstanding capital stock of, or other
ownership interests in, the Company's subsidiaries are owned by the Company,
free and clear of any security interest, claim, lien, limitation on
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voting rights or encumbrance; and all such securities have been duly and validly
authorized and issued, are fully paid and nonassessable, and none of such
securities was issued in violation of any preemptive or similar rights.
(j) Neither the Company nor any of its subsidiaries
is (i) in violation of its charter or by-laws, as the case may be, or in breach
of any of the terms or provisions of or in default (or would be in default with
notice or lapse of time or both) in the performance or observance of any
material obligation, agreement, covenant or condition contained in any bond,
debenture, note or other evidence of indebtedness or in any material contract,
indenture, mortgage, deed of trust, loan or credit agreement, lease, joint
venture or other agreement or instrument to which the Company or such subsidiary
is a party or by which any of its properties may be bound, which breach,
violation, default or defaults would have individually or in the aggregate a
material adverse effect on the Company and its subsidiaries taken as a whole or
(ii) in violation of any law, order, rule, regulation, writ, injunction,
judgment or decree of any court or governmental agency or body, the violation of
which would have individually or in the aggregate a material adverse effect on
the Company and its subsidiaries taken as a whole.
(k) Except as described in the Prospectus, there is
no litigation or governmental proceeding to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is subject or which is pending or, to the knowledge of the Company,
contemplated against the Company or any of its subsidiaries which might result
in any material adverse change or any development involving a material adverse
change in the business, prospects, properties, operations, condition (financial
or other) or results of operations of the Company and its subsidiaries taken as
a whole or which is required to be disclosed in the Registration Statement and
the Prospectus.
(l) Neither the Company nor any of its directors,
officers or affiliates (as defined in the Regulations) has taken or will take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(m) The financial statements included in the
Registration Statement and the Prospectus, including the notes thereto and
supporting schedules, present fairly the consolidated financial position of the
Company as of the dates indicated and the results of its operations for the
periods specified; except as otherwise stated in the Registration Statement,
said financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis; and the
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein; and the selected financial data and
the summary financial information included in the Registration Statement and the
Prospectus present fairly the information shown therein and have been compiled
on a basis consistent with that of the financial statements included in the
Registration Statement and the Prospectus.
(n) Each of the Company and its subsidiaries has
filed all federal, state, local and foreign tax returns that have been required
to be filed and has paid all taxes shown thereon and all assessments received by
it to the extent that such taxes have become due and are not being contested in
good faith. There is no tax deficiency that has been or might reasonably be
expected to be asserted or threatened against the Company or any of its
subsidiaries.
(o) Each of the Company and its subsidiaries has good
and marketable title to all personal property owned by it, in each case free and
clear of all liens, encumbrances and defects except such as are described or
referred to in the Prospectus or such as do not materially affect the value 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. Any real property and buildings
held under lease by the Company or any of its subsidiaries are held under valid,
existing 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.
(p) Each of the Company and its subsidiaries owns or
possesses valid and enforceable licenses or other rights to use all inventions,
patents, patent applications, trademarks, service marks, trade names,
copyrights, technology, software, databases, Internet domain names, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), proprietary techniques
(including processes and substances) and other intellectual property rights
necessary to conduct the
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business now conducted or presently contemplated to be conducted by the Company
or such subsidiary as described in the Registration Statement and the Prospectus
(collectively, "Intellectual Property"), free and clear of all liens, claims and
encumbrances. Each of the Company and its subsidiaries has taken all reasonable
steps to protect, maintain and safeguard the Intellectual Property for which
improper or unauthorized disclosure would impair its value or validity and has
executed appropriate nondisclosure and confidentiality agreements and made
appropriate filings and registrations in connection with the foregoing; other
than as described in the Registration Statement and the Prospectus: (i) there
are no third parties who have any rights in the Intellectual Property that could
preclude the Company or any of its subsidiaries from conducting its business as
currently conducted or as presently contemplated to be conducted as described in
the Registration Statement and the Prospectus; (ii) there are no pending or, to
the Company's knowledge, threatened action, suits, proceedings, investigations
or claims by others challenging the rights of the Company or any of its
subsidiaries or (if the Intellectual Property is licensed) the licensor thereof
of any Intellectual Property owned or licensed to the Company or any of its
subsidiaries; (iii) neither the Company nor any of its subsidiaries nor (if the
Intellectual Property is licensed), to the Company's knowledge, the licensor
thereof has infringed, or has received any notice of infringement of or conflict
with, any rights of others with respect to the Intellectual Property; and (iv)
there is, to the knowledge of the Company, no dispute between it or any of its
subsidiaries and any licensor with respect to any Intellectual Property. True
and correct copies of all material licenses and other material agreements
between the Company or any of its subsidiaries and any third party relating to
the Intellectual Property, and all amendments thereof and supplements thereto,
have been provided to the Underwriters. Further, nothing has come to the
attention of the Company that leads the Company to believe, with respect to any
pending applications for registration of Intellectual Property, that such
applications will not eventuate in registered Intellectual Property, or that any
registrations issued, or to be issued in respect of any such Intellectual
Property applications, will not be valid or will not afford the Company or any
of its subsidiaries reasonable protection with respect to the subject matter
thereof.
(q) No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries or affiliates, on the
one hand, and the directors, officers, stockholders, customers or suppliers of
the Company or any of its subsidiaries, on the other hand, that is required by
the Act to be described in the Registration Statement and the Prospectus that is
not so described.
(r) The Common Stock (including the Shares) is
registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and has been approved for quotation on the Nasdaq
National Market ("Nasdaq"), subject only to official notice of issuance. The
Company has taken no action designed to delist or terminate the registration of,
or likely to have the effect of delisting or terminating the registration of,
the Common Stock under the Exchange Act or from Nasdaq, nor has the Company
received any notification that the Commission or Nasdaq is contemplating
terminating such registration or listing.
(s) Except as have been waived in writing, no holder
of securities of the Company has any rights to the registration of securities of
the Company because of the filing of the Registration Statement or otherwise in
connection with the sale of the Shares contemplated hereby.
(t) Neither the Company nor any of its subsidiaries
is, nor upon consummation of the transactions contemplated hereby will be,
subject to registration as an "investment company" or an entity "controlled" by
an "investment company" under the Investment Company Act of 1940, as amended.
(u) There are no existing or, to the knowledge of the
Company, threatened labor disputes with any employees of the Company or any of
its subsidiaries that are likely in the aggregate to have a material adverse
effect on the Company or such subsidiary.
(v) Each of the Company and its subsidiaries is
conducting its business in compliance in all material respects with all
applicable federal, state and local laws, rules and regulations of the
jurisdictions in which it is conducting its business.
(w) Each of the Company and its subsidiaries (i) is
in compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to
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conduct its business and (iii) is in compliance with all terms and conditions of
any such permit, license or approval, except where such noncompliance or failure
to comply with the terms and conditions of, or failure to receive, such permits,
licenses or approvals will not in the aggregate have a material adverse effect
on the Company and its subsidiaries taken as a whole.
(x) Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Securities Act of 1974, as
amended ("ERISA"), that is maintained, administered or contributed to by the
Company or any of its subsidiaries for employees or former employees of the
Company or any of its subsidiaries has been maintained in compliance with its
respective terms and the requirements of any applicable statutes, orders, rules
and regulations, including but not limited to ERISA and the Internal Revenue
Code of 1986, as amended (the "Code"). No prohibited transaction, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with
respect to any such plan, excluding transactions effected pursuant to a
statutory or administrative exemption. For each such plan that is subject to the
funding rules of Section 412 of the Code or Section 302 of ERISA, no
"accumulated funding deficiency," as defined in Section 412 of the Code, has
been incurred, whether or not waived, and the fair market value of the assets of
each such plan (excluding for these purposes accrued but unpaid contributions)
exceeded the present value of all benefits accrued under such plan determined
using reasonable actuarial assumptions.
(y) Neither the Company nor any of its subsidiaries
nor, to the best knowledge of the Company, any of their respective officers,
directors, partners, employees, agents or affiliates or any other person acting
on behalf of the Company or any of its subsidiaries has, directly or indirectly,
given or agreed to give any money, gift or similar benefit to any customer,
supplier, employee or agent of a customer or supplier, official or employee of
any governmental agency (domestic or foreign), instrumentality of any government
(domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is or may be in a position to help or
hinder the business of the Company or any of its subsidiaries (or assist the
Company or any of its subsidiaries in connection with any actual or proposed
transaction), which (i) might subject the Company or any of its subsidiaries to
any damage or penalty in any civil, criminal or governmental litigation or
proceeding (domestic or foreign), (ii) if not given in the past, might have had
a material adverse effect on the Company and its subsidiaries taken as a whole
or (iii) if not continued in the future, might have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(z) Each of the Company and its subsidiaries maintain
a system of internal accounting controls that, taken as a whole, is sufficient
to provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(aa) Each of the Company and its subsidiaries
maintain insurance of the types and in the amounts generally deemed adequate for
its and its subsidiaries' businesses, including, without limitation, insurance
coverage for real and personal property owned or leased by it against theft,
damage, destruction, acts of vandalism and all other material risks customarily
insured against, all of which insurance is in full force and effect. The Company
has no reason to believe that it will not be able to renew, for itself and its
subsidiaries, 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.
(bb) The statistical and market-related data included
in the Registration Statement and the Prospectus are derived from sources which
the Company reasonably and in good faith believes to be accurate, reasonable and
reliable, and such data agree with the sources from which they were derived.
(cc) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company and any other person
that would give rise to a valid claim against the Company or any of the
Underwriters for a brokerage commission, finder's fee or like payment in
connection with the issuance, purchase and sale of the Shares.
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(dd) The statements (including the assumptions
described therein) included in the Prospectus (i) are within the coverage of
Rule 175(b) under the Securities Act to the extent such data constitute forward
looking statements as defined in Rule 175(c) and (ii) were made by the Company
with a reasonable basis and reflect the Company's good faith estimate of the
matters described therein.
(ee) There are no contracts or documents which are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits thereto which have not been so described and filed as
required.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters, and
the Underwriters, severally and not jointly, agree to purchase from the Company,
at a purchase price per share of $[ ], the number of Firm Shares set forth
opposite the respective names of the Underwriters in Schedule I hereto plus any
additional number of Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery
of certificates for, the Shares shall be made at the offices of Xxxx, Xxxxxxxx
Xxxxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by you and the Company, at 9:00 A.M. (New
York time) on the third or fourth Business Day, as permitted under Rule 15c6-1
under the Exchange Act, unless postponed in accordance with the provisions of
Section 9 hereof, following the date of the effectiveness of the Registration
Statement (or, if the Company has elected to rely upon Rule 430A of the
Regulations, the third or fourth business day (as permitted under Rule 15c6-1
under the 0000 Xxx) after the determination of the initial public offering price
of the Shares), or such other time not later than ten Business Days after such
date as shall be agreed upon by you and the Company (such time and date of
payment and delivery being herein called the "Closing Date"). As used herein,
the term "Business Day" means any day other than a day on which banks are
permitted or required to be closed in New York, New York. Payment shall be made
to the Company by wire transfer in same day funds, against delivery to you at
the offices of Xxxx, Xxxxxxxx Xxxxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or such other location as may be mutually acceptable, for the
respective accounts of the Underwriters of certificates for the Shares to be
purchased by them. Certificates for the Shares shall be registered in such name
or names and in such authorized denominations as you may request in writing at
least two full Business Days prior to the Closing Date. The Company will permit
you to examine and package such certificates for delivery at least one full
Business Day prior to the Closing Date.
(c) In addition, the Company hereby grants to the
Underwriters the option to purchase up to 675,000 Additional Shares at the same
purchase price per share to be paid by the Underwriters to the Company for the
Firm Shares as set forth in this Section 2, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option may
be exercised at any time, or from time to time, in whole or in part, on or
before the 30th day following the date of the Prospectus, by written notice by
you to the Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised and the date and
time, as reasonably determined by you, when the Additional Shares are to be
delivered (such date and time being herein sometimes referred to as the
"Additional Closing Date"); provided, however, that the Additional Closing Date
shall not be earlier than the Closing Date or earlier than the second full
Business Day after the date on which the option shall have been exercised nor
later than the eighth full Business Day after the date on which the option shall
have been exercised (unless such time and date are postponed in accordance with
the provisions of Section 9 hereof). Certificates for the Additional Shares
shall be registered in such name or names and in such authorized denominations
as you may request in writing at least two full Business Days prior to the
Additional Closing Date. The Company will permit you to examine and package such
certificates for delivery at least one full Business Day prior to the Additional
Closing Date.
The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same ratio to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto (or such number
increased as set forth in Section 9
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hereof) bears to [ ], subject, however, to such adjustments to eliminate
any fractional shares as you in your sole discretion shall make.
Payment of the purchase price for the Additional Shares shall
be made to the Company by wire transfer in same day funds at the offices of
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or such other location as may be mutually acceptable, upon delivery of
the certificates for the Additional Shares to you for the respective accounts of
the Underwriters.
3. Offering.
(a) Upon your authorization of the release of the
Firm Shares, the Underwriters propose to offer the Shares for sale to the public
upon the terms set forth in the Prospectus.
(b) The Company and the Underwriters hereby agree
that up to [ ] percent [ ]% of the Firm Shares to be purchased by the
Underwriters (the "Directed Shares") shall be reserved for sale by the
Underwriters to certain eligible employees of, and certain persons designated
by, the Company (the "Directed Shares Purchasers") as part of the distribution
of the Shares by the Underwriters, subject to the terms of this Agreement, the
applicable rules, regulations and interpretations of the National Association of
Securities Dealers, Inc. and all other applicable laws, rules and regulations,
provided, however, that under no circumstances will Bear, Xxxxxxx & Co. Inc. or
any other Underwriter be liable to the Company or to any of the Directed Shares
Purchasers for any action taken or omitted in good faith in connection with
transactions effected with regard to the Directed Shares Purchasers. To the
extent that such Directed Shares are not orally confirmed for purchase by such
persons by the end of the first day after the date of this Agreement, such
Directed Shares will be offered to the public as part of the offering
contemplated hereby.
4. Covenants of the Company. The Company covenants and agrees
with the Underwriters that:
(a) If the Registration Statement has not yet been
declared effective, the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective as
promptly as possible, and if Rule 430A is used or the filing of the Prospectus
is otherwise required under Rule 424(b) or Rule 434, the Company will file the
Prospectus (properly completed if Rule 430A has been used) pursuant to Rule
424(b) or Rule 434 within the prescribed time period and will provide evidence
satisfactory to you of such timely filing. If the Company elects to rely on Rule
434, the Company will prepare and file a term sheet that complies with the
requirements of Rule 434.
The Company will notify you immediately (and, if
requested by you, will confirm such notice in writing) (i) when the Registration
Statement and any amendments thereto become effective, (ii) of any request by
the Commission for any amendment of or supplement to the Registration Statement
or the Prospectus or for any additional information, (iii) of the mailing or the
delivery to the Commission for filing of any amendment of or supplement to the
Registration Statement or the Prospectus, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or of the initiation, or the threatening,
of any proceedings therefor, (v) of the receipt of any comments from the
Commission and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement,
make any filing under Rule 462(b) of the Regulations or file any amendment of or
supplement to the Prospectus (including the prospectus required to be filed
pursuant to Rule 424(b) or Rule 434 of the Regulations) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement to
which you shall reasonably object in writing after being timely furnished in
advance a copy thereof.
(b) The Company will comply with the Act and the
Regulations so as to permit the completion of the distribution of the Shares as
contemplated in this Agreement and the Prospectus. If at any time when a
prospectus relating to the Shares is required to be delivered under the Act any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Underwriters or the Company, include
an untrue statement of a material fact or omit to state any material fact
required to be stated
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therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall be
necessary at any time to amend or supplement the Prospectus or Registration
Statement to comply with the Act or the Regulations, the Company will notify you
promptly and prepare and file with the Commission an appropriate amendment or
supplement (in form and substance satisfactory to you) which will correct such
statement or omission and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to you four
signed copies of the Registration Statement, including exhibits and all
amendments thereto, and signed copies of all consents, and the Company will
promptly deliver to each of the Underwriters such number of copies of any
preliminary prospectus, the Prospectus, the Registration Statement and all
amendments of and supplements to such documents, if any, as you may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the Act.
(d) The Company will endeavor in good faith, in
cooperation with you, at or prior to the time of effectiveness of the
Registration Statement, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares in such
jurisdictions as you may designate and to maintain such qualification in effect
for so long as required for the distribution thereof; except that in no event
shall the Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process.
(e) The Company will make generally available (within
the meaning of Section 11(a) of the Act) to its security holders and to you as
soon as practicable, but not later than 45 days after the end of its fiscal
quarter in which the first anniversary date of the effective date of the
Registration Statement occurs, an earning statement (in form complying with the
provisions of Rule 158 of the Regulations) covering a period of at least twelve
consecutive months beginning after the effective date of the Registration
Statement.
(f) During the period of 180 days from the date of
the Prospectus, the Company will not directly or indirectly, without the prior
written consent of Bear, Xxxxxxx & Co. Inc., issue, sell, offer, agree to sell,
grant any option or contract for the sale of, pledge, make any short sale of,
maintain any short position with respect to, establish or maintain a "put
equivalent position" (within the meaning of Rule 16a-1(h) under the Exchange
Act) with respect to, enter into any swap, derivative transaction or other
arrangement (whether any such transaction is to be settled by delivery of Common
Stock, other securities, cash or other consideration) that transfers to another,
in whole or in part, any of the economic consequences of ownership, or otherwise
dispose of any shares of capital stock of the Company (or any securities
convertible into, exercisable for or exchangeable for capital stock of the
Company or interest therein or any capital stock of any of the Company's
subsidiaries), and the Company has obtained or will obtain the undertaking of
each of its officers, directors, option holders and each beneficial owner of
capital stock of the Company, as listed on Schedule II attached hereto, not to
engage in any of the aforementioned transactions on their own behalf, other than
(i) the Company's sale of Shares hereunder (ii) the Company's issuance of shares
of Common Stock and options to purchase Common Stock under any stock plan
described in the Prospectus and (iii) the Company's issuance of shares of Common
Stock upon the exercise of any currently outstanding warrant or the automatic
conversion of any class of securities outstanding on the date hereof and
disclosed in the Prospectus. The Company agrees not to waive any undertaking
obtained pursuant to this paragraph.
(g) During a period of three years from the effective
date of the Registration Statement, the Company will furnish to you copies of
(i) all reports to its stockholders and (ii) all reports, financial statements
and proxy or information statements filed by the Company with the Commission or
any national securities exchange. The Company, during the period when the
Prospectus is required to be delivered under the Act, will file all documents
required to be filed with the Commission pursuant to the Exchange Act within the
time periods required by the Exchange Act and the rules and regulations of the
Commission thereunder.
(h) The Company will apply the proceeds from the sale
of the Shares as set forth under "Use of Proceeds" in the Prospectus and report
such use of proceeds as may be required pursuant to Rule 463 of the Regulations.
(i) The Company will use its best efforts to cause
the Shares to be quoted on the Nasdaq National Market and to maintain such
quotation so long as any of the Shares are outstanding.
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(j) The Company hereby agrees that it will ensure
that the Directed Shares are restricted as required by the National Association
of Securities Dealers, Inc. or the National Association of Securities Dealers,
Inc. rules from sale, transfer, assignment, pledge or hypothecation for a period
of three months following the date of this Agreement. The Underwriters will
notify the Company as to which persons will need to be so restricted. At the
request of the Underwriters, the Company will direct the transfer agent to place
a stop transfer restriction upon such securities for such a period of time.
Should the Company release, or seek to release, from such restrictions any of
the Directed Shares, the Company agrees to reimburse the Underwriters for any
reasonable expenses (including without limitation legal expenses) they incur in
connection with such release.
(k) The Company will use its best efforts to do and
perform all things required or necessary to be done and performed under this
Agreement by the Company prior to or after the Closing Date or any Additional
Closing Date, as the case may be, and to satisfy all conditions precedent to the
delivery of the Shares.
5. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company hereunder, including those in
connection with (i) preparing, printing, duplicating, filing and distributing
the Registration Statement, as originally filed, and all amendments thereof
(including all exhibits thereto), any preliminary prospectus, the Prospectus and
any amendments or supplements thereto (including, without limitation, fees and
expenses of the Company's accountants and counsel), the underwriting documents
(including this Agreement and the Agreement Among Underwriters and the Selling
Agreement to be entered into as of the date hereof in connection with this
Agreement) and all other documents related to the public offering of the Shares
(including those supplied to the Underwriters in quantities as hereinabove
stated), (ii) the issuance, transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
qualification of the Shares under state or foreign securities or Blue Sky laws,
including the costs of printing and mailing a preliminary and final "Blue Sky
Survey" and the fees of counsel for the Underwriters and such counsel's
disbursements in relation thereto, (iv) quotation of the Shares on the Nasdaq
National Market, (v) filing fees of the Commission and the National Association
of Securities Dealers, Inc., (vi) the cost of printing certificates representing
the Shares, (vii) the cost and charges of any transfer agent or registrar and
(viii) all costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters, in connection with matters
related to the Directed Shares which are designated by the Company for sale to
certain employees of and certain persons designated by the Company.
6. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6, "Closing
Date" shall refer to the Closing Date for the Firm Shares and any Additional
Closing Date, if different, for the Additional Shares), to the absence from any
certificates, opinions, written statements or letters furnished to you or to
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP ("Underwriters' Counsel") pursuant to this
Section 6 of any misstatement or omission, to the performance by the Company of
its obligations hereunder and to the following additional conditions:
(a) The Registration Statement, including any Rule
462(b) Registration Statement, shall have become effective and all necessary
approvals of The Nasdaq Stock Market, Inc. shall have been received not later
than 5:30 P.M., New York time, on the date of this Agreement, or at such later
time and date as shall have been consented to in writing by you; if the Company
shall have elected to rely upon Rule 430A or Rule 434 of the Regulations, the
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with Section 4(a) hereof; and at or prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof shall have been issued and no proceedings
therefor shall have been initiated or threatened by the Commission.
(b) At the Closing Date, you shall have received the
opinion of Xxxxxx, Xxxxx & Bockius LLP, counsel for the Company, dated the
Closing Date, addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, to the effect that:
(i) Each of the Company and its subsidiaries
has been duly organized and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation. Each
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of the Company and its subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or
the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good
standing which will not in the aggregate have a material adverse effect
on the Company and its subsidiaries taken as a whole. Each of the
Company and its subsidiaries has all requisite corporate authority to
own, lease and operate its properties and conduct its business as now
being conducted and as described in the Registration Statement and the
Prospectus.
(ii) The Company has an authorized
capitalization as set forth in the Registration Statement and the
Prospectus; and all of the outstanding shares of capital stock of the
Company and its subsidiaries are duly and validly authorized and
issued, are fully paid and nonassessable and were not issued in
violation of or subject to any preemptive or similar rights; the Shares
to be delivered on the Closing Date have been duly and validly
authorized and, when delivered by the Company against payment therefor
in accordance with this Agreement, will be duly and validly issued,
fully paid and nonassessable and will not have been issued in violation
of or subject to any preemptive or similar rights; the Common Stock,
the Firm Shares and the Additional Shares conform to the descriptions
thereof contained in the Registration Statement and the Prospectus. The
Common Stock (including the Shares) is registered pursuant to Section
12(g) of the Exchange Act. The Shares to be sold under this Agreement
to the Underwriters have been approved for quotation on the Nasdaq
National Market.
(iii) This Agreement has been duly and
validly authorized, executed and delivered by the Company.
(iv) All of the outstanding capital stock
of, or other ownership interests in, the Company's subsidiary,
ServiceWare, Ltd., are owned by the Company, free and clear of any
security interest, claim, lien, limitation on voting rights or
encumbrance; and all such securities have been duly and validly
authorized and issued, are fully paid and nonassessable, and none of
such securities was issued in violation of any preemptive or similar
rights.
(v) There is no litigation or governmental
or other action, suit, proceeding or investigation before any court or
before or by any public, regulatory or governmental agency or body
pending or to the best of such counsel's knowledge, threatened against,
or involving the properties or businesses of, the Company or any of its
subsidiaries that is of a character required to be disclosed in the
Registration Statement and the Prospectus and has not been properly
disclosed therein.
(vi) The Company or a subsidiary of the
Company is listed in the records of the United States Patent and
Trademark Office ("PTO") as the owner of record of each of the patents,
patent applications, trademarks and trademark applications listed in
Exhibit A attached hereto (herein called the "Intellectual Property
Rights"). To such counsel's knowledge, there are no asserted claims of
any persons relating to the scope or ownership of any of the
Intellectual Property Rights, except as listed in Exhibit A hereto
there are no liens which have been filed against any of the
Intellectual Property Rights, there are no material defects of form in
the preparation or filing of the Intellectual Property Rights and none
of such Intellectual Property Rights has been finally rejected or
abandoned. Further, to such counsel's knowledge, there is no reason to
believe, with respect to any pending applications for registration of
Intellectual Property, that such applications will not eventuate in
registered Intellectual Property, or that any registrations issued, or
to be issued in respect of any such Intellectual Property applications,
will not be valid or will not afford the Company or any of its
subsidiaries reasonable protection with respect to the subject matter
thereof.
(vii) The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Company do not and will not (A) conflict
with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time,
or both, would constitute a default) or Repayment Event under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to, any agreement
that is listed on Exhibit B attached hereto, which list sets forth all
agreements which the Company has represented to us to be material to
its business, prospects, properties, operations,
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condition (financial or other) or results of operations, or (B) violate
or conflict with any provision of the certificate of incorporation or
by-laws of the Company or any of its subsidiaries, or any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Company or any of its properties or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its
properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby including the issuance, sale and delivery of the
Shares, except for (1) such as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters (as to which such counsel need express
no opinion) and (2) such as have been made or obtained under the Act or
the Exchange Act.
(viii) Neither the Company nor any of its
subsidiaries is, nor upon consummation of the transactions contemplated
hereby will be, subject to registration as an "investment company" or
an entity "controlled" by an "investment company" under the Investment
Company Act of 1940, as amended.
(ix) The Registration Statement and the
Prospectus and any amendments thereof or supplements thereto (other
than the financial statements and schedules and other financial data
included or incorporated by reference therein, as to which no opinion
need be rendered) comply as to form in all material respects with the
requirements of the Act and the Regulations.
(x) The Registration Statement is effective
under the Act, and to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof or supplement thereto has been issued
and no proceedings therefor have been initiated or threatened by the
Commission and all filings required by Rule 424(b) of the Regulations
have been made.
(xi) To such counsel's knowledge and only as
of the dates set forth in the Registration Statement, there are no
outstanding options, warrants or other contractual rights calling for
the issuance of, and no commitments, obligations, plans or arrangements
to issue, any shares of capital stock of the Company or any security
convertible or exchangeable for capital stock of the Company, except as
disclosed in the Registration Statement and the Prospectus. The
outstanding stock options relating to the Common Stock have been duly
authorized and validly issued and conform to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(xii) The statements in the Registration
Statement and the Prospectus under the captions "Business," "Material
U.S. Tax Considerations for Non-U.S. Holders," and "Description of
Capital Stock" and in Item 15 of Part II of the Registration Statement,
insofar as such statements constitute a summary of the terms of the
Shares, legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such terms,
legal matters, documents or proceedings.
(xiii) The form of certificate used to
evidence the Common Stock complies in all material respects with all
applicable statutory requirements, with any applicable requirements of
the certificate of incorporation and by-laws of the Company and with
the requirements of The Nasdaq Stock Market, Inc.
(xiv) All descriptions in the Registration
Statement of contracts and other documents to which the Company is a
party are accurate in all material respects; to the knowledge of such
counsel, there are not franchises, contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be filed
as exhibits thereto other than those described or referred to therein
or filed or incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in all material
respects.
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(xv) The offer and sale of Series F
Preferred Stock of the Company is exempt from registration under the
Securities Act and would not be integrated with the initial public
offering of the Shares.
(xvi) In addition, such opinion shall also
contain a statement that such counsel has participated in conferences
with officers and representatives of the Company, representatives of
the independent public accountants for the Company and the Underwriters
at which the contents of the Registration Statement and the Prospectus
and related matters were discussed, and no facts have come to the
attention of such counsel which would lead such counsel to believe that
either the Registration Statement at the time it became effective
(including the information deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A(b) or Rule
434, if applicable), or any post-effective amendment thereof made prior
to the Closing Date as of the date of such post-effective amendment,
contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus as of its
date (or any post-effective amendment thereof or supplement thereto
made prior to the Closing Date as of the date of such post-effective
amendment or supplement) and as of the Closing Date contained or
contains an untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel
need express no belief or opinion with respect to the financial
statements and schedules and other financial data included or
incorporated by reference therein).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to Underwriters'
Counsel, familiar with the applicable laws; (B) as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and certificates or other written statements of officers of departments of
various jurisdictions having custody of documents regarding the corporate
existence or good standing of the Company and its subsidiaries, provided that
copies of any such statements or certificates shall be delivered to
Underwriters' Counsel. The opinion of such counsel for the Company shall state
that the opinion of any such other counsel is in form satisfactory to such
counsel and, in their opinion, you and they are justified in relying thereon.
(c) All proceedings taken in connection with the sale
of the Firm Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and the
Underwriters shall have received from said Underwriters' Counsel a favorable
opinion, dated as of the Closing Date, with respect to the issuance and sale of
the Shares, the Registration Statement and the Prospectus and such other related
matters as you may reasonably require, and the Company shall have furnished to
Underwriters' Counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(d) At the Closing Date, you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of the
Company, dated the Closing Date, to the effect that (i) the conditions set forth
in subsection (a) of this Section 6 have been satisfied, (ii) as of the date
hereof and as of the Closing Date, the representations and warranties of the
Company set forth in Section 1 hereof are accurate, (iii) as of the Closing
Date, the obligations of the Company to be performed hereunder on or prior
thereto have been duly performed and (iv) subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus,
the Company and its subsidiaries have not sustained any material loss or
interference with its 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 material adverse change, or any development involving a material adverse
change, in the business prospects, properties, operations, condition (financial
or otherwise) or results of operations of the Company and its subsidiaries taken
as a whole, except in each case as described in or contemplated by the
Prospectus.
(e) At the time this Agreement is executed and at the
Closing Date, you shall have received a letter from Ernst & Young LLP
independent public accountants for the Company, dated, respectively, as of the
date of this Agreement and as of the Closing Date addressed to the Underwriters
and in form and substance
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satisfactory to you, stating that: (i) they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
Regulations and stating that the answer to Item 10 of the Registration Statement
is correct insofar as it relates to them; (ii) in their opinion, the
consolidated financial statements and schedule of the Company and its
subsidiaries included in the Registration Statement and the Prospectus and
covered by their opinion therein comply as to form in all material respects with
the applicable accounting requirements of the Act and the applicable published
rules and regulations of the Commission thereunder; (iii) on the basis of
procedures consisting of a reading of the latest available unaudited
consolidated interim financial statements of the Company and its subsidiaries, a
reading of the minutes of meetings and consents of the stockholders and boards
of directors of the Company and its subsidiaries and the committees of such
boards subsequent to [ ], inquiries of officers and other employees of the
Company and its subsidiaries who have responsibility for financial and
accounting matters of the Company and its subsidiaries with respect to
transactions and events subsequent to [ ], a review of interim financial
information in accordance with the standards established by the American
Institute of Certified Public Accountants in Statement of Auditing Standards No.
71, Interim Financial Information, with respect to the [ ]-month period ended
[ ], 2000 and other specified procedures and inquiries to a date not more
than five days prior to the date of such letter, nothing has come to their
attention that would cause them to believe that: (A) the unaudited consolidated
financial statements and schedule of the Company and its subsidiaries presented
in the Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act and, if
applicable, the Exchange Act and the applicable published rules and regulations
of the Commission thereunder or that such unaudited financial statements are not
fairly presented in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus; (B) with
respect to the period subsequent to [ ], 2000, there were, as of the date of the
most recent available monthly consolidated financial statements of the Company
and its subsidiaries, if any, and as of a specified date not more than five days
prior to the date of such letter, any changes in the capital stock or long-term
indebtedness of the Company and its subsidiaries or any decrease in the net
current assets or stockholders' equity of the Company and its subsidiaries, in
each case as compared with the amounts shown in the most recent balance sheet
presented in the Registration Statement and the Prospectus, except for changes
or decreases which the Registration Statement and the Prospectus disclose have
occurred or may occur or which are set forth in such letter or (C) that during
the period from [ ], 2000 to the date of the most recent available monthly
consolidated financial statements of the Company and its subsidiaries, if any,
and to a specified date not more than five days prior to the date of such
letter, there was any decrease, as compared with the corresponding period in the
prior fiscal year, in total revenues, or total or per share net loss, except for
decreases which the Registration Statement and the Prospectus disclose have
occurred or may occur or which are set forth in such letter; and (iv) they have
compared specific dollar amounts, numbers of shares, percentages of revenues and
loss and other financial information pertaining to the Company and its
subsidiaries set forth in the Registration Statement and the Prospectus, which
have been specified by you prior to the date of this Agreement, to the extent
that such amounts, numbers, percentages and information may be derived from the
general accounting and financial records of the Company and its subsidiaries or
from schedules furnished by the Company, and excluding any questions requiring
an interpretation by legal counsel, with the results obtained from the
application of specified readings, inquiries, and other appropriate procedures
specified by you set forth in such letter, and found them to be in agreement.
(f) Prior to the Closing Date, the Company shall have
obtained an executed lock-up agreement substantially in the form attached as
Exhibit C hereto from each of its officers and directors, and each of its option
holders and stockholders who hold in excess of 40,000 shares of common stock or
securities convertible into an excess of 40,000 shares of common stock or any
combination thereof, preferred stock or warrants convertible into common stock,
or any combination listed above. Such officers, directors, option holders and
stockholders own the equivalent of [ ] shares in the aggregate.
(g) Prior to the Closing Date, the Company shall have
furnished to you such further information, certificates and documents as you may
reasonably request.
(h) At the Closing Date, the Shares shall have been
approved for quotation on the Nasdaq National Market.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
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Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
canceled by you at, or at any time prior to, the Closing Date, and the
obligations of the Underwriters to purchase the Additional Shares may be
canceled by you at, or at any time prior to, the Additional Closing Date. Notice
of such cancellation shall be given to the Company in writing, or by telephone,
facsimile, telex or telegraph, confirmed in writing.
7. Indemnification.
(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 Act or Section 20(a) of the Exchange Act,
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any supplement thereto or amendment thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) (A) the violation of any applicable
laws or regulations of foreign jurisdictions where Directed Shares have been
offered and (B) any untrue statement or alleged untrue statement of a material
fact included in the supplement or prospectus wrapper material distributed in
connection with the reservation and sale of the Directed Shares to eligible
employees and certain persons designated by the Company or the omission or
alleged omission therefrom of a material fact necessary to make the statements
therein, when considered in conjunction with the Prospectus or preliminary
prospectus, not misleading; provided, however, that the Company will not be
liable in any such case to the extent but only to the extent that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through you
expressly for use therein. This indemnity agreement will be in addition to any
liability which the Company or any of its subsidiaries may otherwise have,
including under this Agreement.
(b) Each Underwriter severally, and not jointly,
agrees to indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement and each other person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
you expressly for use therein; provided, however, that in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which any
Underwriter may otherwise have, including under this Agreement. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and in the table in the first paragraph and the fourth, tenth, and
fourteenth paragraphs under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of any
Underwriter expressly for use in the
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Registration Statement or in any amendment thereof, any related preliminary
prospectus or the Prospectus or in any amendment thereof or supplement thereto,
as the case may be.
(c) In connection with the offer and sale of the
Directed Shares, the Company agrees, promptly upon a request in writing, to
indemnify and hold harmless the Underwriters from and against any and all
losses, liabilities, claims, damages and expenses incurred by it as a result of
(i) the failure of the Directed Shares Purchasers to pay for and accept delivery
of the Directed Shares which, by the end of the day following the date of this
Agreement, were subject to a properly confirmed agreement to purchase such
Directed Shares or (ii) the failure of any Directed Shares Purchasers that are
also employees of the Company to purchase by the end of the first day after the
date of this Agreement any Directed Shares that were allocated to such employee
Directed Share Purchasers.
(d) Promptly after receipt by an indemnified party
under subsection (a), (b) or (c) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement of
such action (but the failure so to notify an indemnifying party shall not
relieve it from any liability which it may have under this Section 7). In case
any such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall be liable to an indemnified party for any losses,
claims, damages, liabilities and judgments by reason of settlement of any action
or claim effected without its written consent, which consent shall not be
unreasonably withheld.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company and one or more of
the Underwriters may be subject, in such proportions as are appropriate to
reflect the relative benefits received by the Company and the Underwriters from
the offering of the Shares or, if such allocation is not permitted by applicable
law, in such proportions as are appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Underwriters, respectively, shall be deemed to be in the same proportion
as (a) the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and (b) the
underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and of the Underwriters 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 and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent
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such statement or omission or any violation of the nature referred to in Section
7(a)(ii). The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 8, (i) in no case shall any Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 8 and the
preceding sentence, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. For purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 8. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default
in its or their obligation to purchase Firm Shares or Additional Shares
hereunder, and if the Firm Shares or Additional Shares with respect to which
such default relates do not (after giving effect to arrangements, if any, made
by you pursuant to subsection (b) below) exceed in the aggregate 10% of the
number of Firm Shares or Additional Shares, as the case may be, the Firm Shares
or Additional Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in the same respective proportions which the numbers
of Firm Shares set forth opposite their respective names in Schedule I hereto
bear to the aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters.
(b) In the event that such default relates to more
than 10% of the total number of Firm Shares or Additional Shares, as the case
may be, you may in your discretion arrange for yourself or for another party or
parties (including any non-defaulting Underwriter or Underwriters who so agree)
to purchase such Firm Shares or Additional Shares, as the case may be, to which
such default relates on the terms contained herein. In the event that within 5
calendar days after such a default you do not arrange for the purchase of the
Firm Shares or Additional Shares, as the case may be, to which such default
relates as provided in this Section 9, this Agreement or, in the case of a
default with respect to the Additional Shares, the obligations of the
Underwriters to purchase and of the Company to sell the Additional Shares shall
thereupon terminate, without liability on the part of the Company (except in
each case as provided in Section 5, Section 7(a) and Section 8 hereof) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(c) In the event that the Firm Shares or Additional
Shares to which such default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be, for a period not exceeding five
Business Days in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 9 with like effect as
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if it had originally been a party to this Agreement with respect to such Firm
Shares and Additional Shares, as the case may be.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Underwriters and
the Company contained in this Agreement, including the agreements contained in
Section 5 hereof, the indemnity agreements contained in Section 7 hereof and the
contribution agreements contained in Section 8 hereof, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter or any controlling person thereof or by or on behalf
of the Company, any of its officers and directors or any controlling person
thereof and shall survive delivery of and payment for the Shares to and by the
Underwriters. The representations contained in Section 1 and the agreements
contained in Sections 5, 7, 8 and 11(d) hereof shall survive the termination of
this Agreement, including termination pursuant to Section 9 or Section 11
hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the
later of (i) such time as you and the Company shall have received notification
of the effectiveness of the Registration Statement and (ii) the execution of
this Agreement. If either the initial public offering price or the purchase
price per Share has not been agreed upon prior to 5:00 P.M., New York time, on
the fifth full Business Day after the Registration Statement shall have become
effective, this Agreement shall thereupon terminate without liability to the
Company or the Underwriters except as herein expressly provided. Until this
Agreement becomes effective as aforesaid, it may be terminated by the Company by
notifying you or by you notifying the Company. Notwithstanding the foregoing,
the provisions of this Section 11 and of Sections 1, 5, 7 and 8 hereof shall at
all times be in full force and effect.
(b) You shall have the right to terminate this
Agreement at any time prior to the Closing Date or the obligations of the
Underwriters to purchase the Additional Shares at any time prior to the
Additional Closing Date, as the case may be, if (i) any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, the market for the
Company's securities or securities in general; (ii) if trading on the New York
Stock Exchange or quotations over the Nasdaq National Market shall have been
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the New
York Stock Exchange or for the Nasdaq National Market by the New York Stock
Exchange or The Nasdaq Stock Market, Inc. or by order of the Commission or any
other governmental authority having jurisdiction; or (iii) if a banking
moratorium has been declared by a state or federal authority or if any new
restriction materially adversely affecting the distribution of the Firm Shares
or the Additional Shares, as the case may be, shall have become effective; or
(iv) (A) if the United States becomes engaged in hostilities or there is an
escalation of hostilities involving the United States or there is a declaration
of a national emergency or war by the United States or (B) if there shall have
been such change in political, financial or economic conditions, if the effect
of any such event in (A) or (B) as in your judgment makes it impracticable or
inadvisable to proceed with the offering, sale and delivery of the Firm Shares
or the Additional Shares, as the case may be, on the terms contemplated by the
Prospectus.
(c) Any notice of termination pursuant to this
Section 11 shall be by telephone, facsimile, telex or telegraph, confirmed in
writing.
(d) If this Agreement shall be terminated pursuant to
any of the provisions hereof (otherwise than pursuant to (i) notification by you
as provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the Underwriters in connection herewith.
12. Notice. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, sent by facsimile, telex or telegraph
and confirmed in writing by letter, to such Underwriter c/o Bear, Xxxxxxx & Co.
Inc., Xxx Xxxxxxx Xx., 00xx Xxxxx, Xxx Xxxxxxxxx, XX 00000, Attention: [ ],
fax no. (000) 000-0000; if sent to the Company, shall be
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mailed, delivered, or sent by facsimile, telex or telegraph and confirmed in a
letter to the Company, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000, Attention: Xxxx
Xxxxxxx, President and Chief Executive Officer, fax no. (000) 000-0000, with a
copy to Morgan, Lewis, & Bockius LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxxxx Xxxxx, Esquire, fax no. (000) 000-0000.
13. Parties. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Underwriters and the Company and the
controlling persons, directors, officers, employees and agents referred to in
Sections 7 and 8, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
contained herein. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Shares from any of the Underwriters.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
15. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
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If the foregoing correctly sets forth the understanding
between you and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
SERVICEWARE TECHNOLOGIES, INC.
By: _______________________
Name:
Title:
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
XX XXXXX SECURITIES CORPORATION
WIT SOUNDVIEW CORPORATION
X.X. XXXXXXXXX, TOWBIN, L.P.
By: BEAR, XXXXXXX & CO. INC.
By: ______________________
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
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SCHEDULE I
Number of Firm
Name of Underwriter Shares to be Purchased
------------------- ----------------------
Bear, Xxxxxxx & Co. Inc.......................
XX Xxxxx Securities Corporation...............
Wit SoundView Corporation.....................
X.X. Xxxxxxxxx, Towbin, L.P...................
Total..............
SCHEDULE II
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Exhibit A
23
Exhibit B
24
Exhibit C
LOCK-UP AGREEMENT
April __, 2000
BEAR, XXXXXXX & CO., INC.
XX Xxxxx Securities Corporation
Wit SoundView Corporation
X.X. Xxxxxxxxx, Towbin
as Representatives of the several Underwriters named
in that certain Registration Statement, File No. 333-33818
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: ServiceWare Technologies, Inc.
Ladies and Gentlemen:
In consideration of and as an inducement to the several
Underwriters, for which Bear, Xxxxxxx & Co. Inc., XX Xxxxx Securities
Corporation, Wit SoundView Corporation and X.X. Xxxxxxxxx, Towbin intend to act
as Representatives, agreeing to underwrite the proposed initial public offering
(the "Offering") of shares of common stock, no par value per share (the "Common
Stock"), of ServiceWare Technologies, Inc., a corporation organized under the
laws of the State of Delaware (the "Company"), as contemplated by a registration
statement with respect to such shares filed with the Securities and Exchange
Commission on Form S-1 (Registration No. 333-33818), the undersigned hereby (i)
agrees that the undersigned will not, directly or indirectly, during a period of
180 days from the date of the final prospectus for the Offering (the "Lock-Up
Period"), without the prior written consent of Bear, Xxxxxxx & Co. Inc., issue,
sell, offer, agree to sell, grant any option or contract for the sale of,
pledge, make any short sale of, maintain any short position with respect to,
establish or maintain a "put equivalent position" (within the meaning of Rule
16a-1(h) under the Securities Exchange Act of 1934, as amended) with respect to,
enter into any swap, derivative transaction or other arrangement (whether any
such transaction is to be settled by delivery of Common Stock, other securities,
cash or other consideration) that transfers to another, in whole or in part, any
of the economic consequences of ownership, or otherwise dispose of, any shares
of capital stock of the Company (or any securities convertible into, exercisable
for or exchangeable for shares of capital stock of the Company) or interest
therein or any capital stock of any of its subsidiaries, and (ii) authorizes the
Company during the Lock-Up Period to cause the transfer agent for the Common
Stock to decline to transfer or to note stop transfer restrictions on the
transfer books and records of the Company with respect to, any shares of capital
stock of the Company and any securities convertible into, or exercisable for or
exchangeable for capital stock of the Company for which the undersigned is the
record holder and, in the case of any such shares or securities for which the
undersigned is the beneficial but not the record holder, agrees to cause the
record holder thereof to cause the transfer agent to decline to transfer or to
note stop transfer restrictions on such books and records with respect to such
shares or securities.
The undersigned further agrees, from the date hereof until the
end of the Lock-Up
25
Period, that the undersigned will not exercise and will waive his, her or its
rights, if any, to require the Company to register any shares of capital stock
of the Company beneficially owned by the undersigned.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into the agreements set forth
herein, and that, upon request, the undersigned will execute any additional
documents necessary in connection with any enforcement hereof. The obligations
of the undersigned hereunder shall be binding upon the successors, assigns and
heirs of the undersigned.
Very truly yours,
________________________
(signature)
Name:______________________
Address:___________________
___________________
