3,600,000 Shares
TELETECH HOLDINGS, INC.
COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT
October __, 1996
October __, 1996
Morgan Stanley & Co. Incorporated
Alex. Brown & Sons Incorporated
Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Morgan Stanley & Co. International Limited
Alex. Brown & Sons Incorporated
Smith Barney Inc.
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E 14 4 Q A
England
Dear Sirs:
Kenneth D. Tuchman ("Tuchman"), Rod Dammeyer ("Dammeyer"), Stuart Sloan
("Sloan"), Richard Weingarten ("Weingarten"), Joseph D. Livingston
("Livingston"), William Pate ("Pate"), Sheli Rosenberg ("Rosenberg"), Don
Liebentritt ("Liebentritt"), the Zell General Partnership, Inc. (the "Zell
Partnership") and the other stockholders of TeleTech Holdings, Inc., a
Delaware corporation (the "Company"), named on Schedule III attached hereto
(the stockholders named on Schedule III being hereinafter collectively
referred to as the "Selling Stockholders") severally propose to sell to the
several Underwriters (as defined below), 3,600,000 shares (the "Firm Shares")
of the Company's common stock, $.01 par value per share ("Common Stock"),
each Selling Stockholder selling the amount set forth opposite such Selling
Stockholder's name on Schedule III hereto. Dammeyer, Sloan, Weingarten,
Livingston, Pate, Rosenberg, Liebentritt and the Zell Partnership are
hereinafter sometimes collectively referred to as the "Inside Selling
Stockholders," and the Selling Stockholders that are not Inside Selling
Stockholders are hereinafter sometimes collectively referred to as the
"Outside Selling Stockholders." The Selling Stockholders that were partners
of TeleTech Investors General Partnership ("TIGP") until its dissolution on
August 6, 1996 or that received their Shares from any former partner of TIGP,
as indicated on Schedule III, are hereinafter sometimes collectively referred
to as the "TIGP Selling Stockholders," and the Selling Stockholders that are
not TIGP Selling Stockholders are hereinafter sometimes collectively referred
to as the "Non-TIGP Selling Stockholders."
It is understood that, subject to the conditions hereinafter stated,
2,880,000 Firm Shares (the "U.S. Firm Shares") will be sold to the several U.S.
Underwriters named in Schedule I hereto (the "U.S. Underwriters") in connection
with the offering and sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms
are defined in the Agreement Between U.S. and International Underwriters of even
date herewith (the "International Agreement")), and 720,000 Firm Shares (the
"International Shares") will be sold to the several International Underwriters
named in Schedule II hereto (the "International Underwriters") in connection
with the offering and sale of such International Shares outside the United
States and Canada to persons other than United States and Canadian Persons.
Morgan Stanley & Co. Incorporated, Alex. Brown & Sons Incorporated and Smith
Barney Inc. shall act as representatives (the "U.S. Representatives") of the
several U.S. Underwriters, and Morgan Stanley & Co. International Limited, Alex.
Brown & Sons Incorporated and Smith Barney Inc. shall act as representatives
(the "International Representatives") of the several International Underwriters.
The U.S. Underwriters and the International Underwriters are hereinafter
collectively referred to as the "Underwriters."
The Company also proposes to sell to the several U.S. Underwriters not more
than an additional 540,000 shares of the Company's common stock, $.01 par value
per share (the "Additional Shares"), if and to the extent that the U.S.
Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of common stock granted to the
U.S. Underwriters in Section 3 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares." The shares of
common stock, $.01 par value per share, of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "Common Stock." The Company and the Selling Stockholders are hereinafter
sometimes collectively referred to as the "Sellers."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement relating to the Shares. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons, and the international prospectus, to be used in connection
with the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the outside front
cover page. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement;" the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "Prospectus." If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to and agrees with each of the Underwriters that:
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(a) The Registration Statement has become effective, no stop order
suspending the effectiveness of the Registration Statement is in effect and
no proceedings for such purpose are pending before or, to the knowledge of
the Company, threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such part became
effective, did not contain and each such part, as amended or supplemented,
if applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii) the
Prospectus does not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 1(b) do not apply
to statements or omission in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing could not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(e) As of the Closing Date, the authorized capital stock of the
Company will conform as to legal matters to the description thereof
contained in the Prospectus.
(f) The shares of Common Stock outstanding prior to the issuance of
the Shares by the Company (including the Shares to be sold by the Selling
Stockholders) have been duly authorized and are validly issued, fully paid
and non-assessable.
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(g) The Additional Shares which the Company proposes to sell
hereunder have been duly authorized and, if and when issued and delivered
in accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Additional Shares
will not be subject to any preemptive or similar rights.
(h) This Agreement has been duly authorized, executed and delivered
by the Company.
(i) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene
any provision of applicable law or the certificate of incorporation or by-
laws of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the rules and regulations
of the Commission thereunder.
(m) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
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(n) The Company and its subsidiaries are (i) 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) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) The Company has complied with all provisions of Section 517.075
Florida Statutes relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba.
(p) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement, except in each case as described in the Prospectus.
(q) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company and
its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (iii) there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company and its consolidated subsidiaries, except in each case as described
in or contemplated by the Prospectus.
(r) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the
Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and facilities held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries, in each
case except as described in or contemplated by the Prospectus.
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(s) The Company and it subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names currently
employed by them in connection with the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
any of the foregoing which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken
as a whole.
(t) No material labor dispute with the employees of the Company or
any of its subsidiaries exists, except as described in or contemplated by
the Prospectus, or, to the knowledge of the Company, is imminent.
(u) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its subsidiaries are
engaged; neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any
such subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the condition, financial or otherwise, or the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
(v) The Company and its subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus.
(w) The Company and each of its subsidiaries maintain a system of
internal accounting controls 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
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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.
(x) The Lock-Up Agreements (as defined in Section 6(h)) executed by
the Company's officers and directors in connection with the Company's
initial public offering are, and on the Closing Date will be, in full force
and effect.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each of
the Selling Stockholders, severally and not jointly, represents and warrants to
and agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by or on
behalf of such Selling Stockholder.
(b) The execution and delivery by such Selling Stockholder of, and
the performance of such Selling Stockholder of its obligations under, this
Agreement, the Custody Agreement signed by such Selling Stockholder and
American Stock Transfer & Trust Company, as Custodian, relating to the
deposit of the Shares to be sold by such Selling Stockholder (the "Custody
Agreement"), and the Power of Attorney appointing certain individuals as
such Selling Stockholder's attorneys-in-fact to the extent set forth
therein, relating to the transactions contemplated hereby and by the
Registration Statement (the "Power of Attorney"), will not contravene any
provision of applicable law, the articles or certificate of incorporation
or by-laws of such Selling Stockholder (if such Selling Stockholder is a
corporation), the operating agreement of such Selling Stockholder (if such
Selling Stockholder is a limited liability company), the partnership
agreement of such Selling Stockholder (if such Selling Stockholder is a
partnership), or the trust agreement of such Selling Stockholder (if such
Selling Stockholder is a trust), or any other agreement or instrument
binding upon such Selling Stockholder or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over such
Selling Stockholder, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for the
performance by such Selling Stockholder of its obligations under this
Agreement or the Custody Agreement or Power of Attorney of such Selling
Stockholder, except such as may be required by the federal securities laws
of the United States or the Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(c) Such Selling Stockholder has, and on the Closing Date will have,
valid title to the Shares to be sold by such Selling Stockholder; and such
Selling Stockholder has, and on the Closing Date will have, the legal right
and power, and all authorization and approval required by law, to enter
into this Agreement, the Custody Agreement and the Power of Attorney and to
sell, transfer and deliver the Shares to be sold by such Selling
Stockholder; provided, however, that such Selling Stockholder makes no
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representation with respect to authorization or approval required under the
federal securities laws of the United States or the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares.
(d) The Custody Agreement and the Power of Attorney have been duly
authorized, executed and delivered by such Selling Stockholder and are
valid and binding agreements of such Selling Stockholder.
(e) Assuming the Underwriters purchase such Shares for value, in good
faith and without notice of any adverse claim, delivery of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement will pass title
to such Shares free and clear of any security interests, claims, liens,
equities and other encumbrances.
2A. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF TUCHMAN. Tuchman
represents and warrants to and agrees with each of the underwriters that (i) the
Registration Statement, when it became effective, did not contain and, as
amended or supplemented, if applicable, will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and (ii) the
Prospectus does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 2A do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through you, or information relating to any other Selling Stockholder furnished
to the Company in writing by such Selling Stockholder, expressly for use
therein.
2B. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE INSIDE SELLING
STOCKHOLDERS. Each of the Inside Selling Stockholders, severally and not
jointly, represents and warrants to and agrees with each of the Underwriters
that (i) such parts of the Registration Statement as specifically refer to such
Inside Selling Stockholder and, to the actual knowledge of such Inside Selling
Stockholder, all other parts of the Registration Statement, when the
Registration Statement became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and (ii) such parts of the
Prospectus as specifically refer to such Inside Selling Stockholder and, to the
actual knowledge of such Inside Selling Stockholder, all other parts of the
Prospectus do not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 2B do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein. For purposes of this Section 2B and
Section 9(a), the "actual knowledge of the Zell Partnership" means the actual
knowledge of Samuel Zell.
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2C. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE OUTSIDE SELLING
STOCKHOLDERS. Each of the Outside Selling Stockholders, severally and not
jointly, represents and warrants to and agrees with each of the Underwriters
that (i) such parts of the Registration Statement as specifically refer to such
Outside Selling Stockholder, when the Registration Statement became effective,
did not contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (ii) such parts of the Prospectus as specifically refer to such
Outside Selling Stockholder do not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
3. AGREEMENTS TO SELL AND PURCHASE. Each Selling Stockholder, severally
and not jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agree, severally
and not jointly, to purchase from such Selling Stockholder at $__________ a
share (the "Purchase Price") the number of Firm Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Firm Shares to be sold by such Selling
Stockholder as the number of Firm Shares set forth in Schedules I and II hereto
opposite the name of such Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 540,000
Additional Shares at the Purchase Price. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date written notice of an election to purchase
Additional Shares is given. If the U.S. Representatives, on behalf of the U.S.
Underwriters, elect to exercise such option, the U.S. Representatives shall so
notify the Company in writing not later than 30 days after the date of this
Agreement which notice shall specify the number of Additional Shares to be
purchased by the U.S. Underwriters and the date on which such Additional Shares
are to be purchased. Additional Shares may be purchased as provided in Section
5 hereof solely for the purpose of covering overallotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each U.S. Underwriter agrees, severally and not jointly, to purchase
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as the U.S. Representatives may determine) that bears the same
proportion to the total number of Additional Shares to be purchased as the
number of U.S. Firm Shares set forth in Schedule I hereto opposite the name of
such U.S. Underwriter bears to the total number of U.S. Firm Shares. The
Additional Shares to be purchased by the U.S. Underwriters hereunder and the
U.S. Firm Shares are hereinafter collectively referred to as the "U.S. Shares."
Each Seller hereby agrees that, without the prior written consent of Morgan
Stanley & Co. Incorporated, it will not, during the period ending January 27,
1997, (i) offer, pledge, sell,
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contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
(whether such shares of Common Stock or any such securities are now owned or
hereafter acquired), or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Shares to be sold hereunder, (B) the issuance by the Company of shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on July 31, 1996 of which the Underwriters have been
advised in writing, or (C) the grant by the Company of options pursuant to the
TeleTech Holdings, Inc. Stock Plan and the TeleTech Holdings, Inc. Directors
Stock Option Plan (collectively, the "Plans"), as the Plans are described in the
Prospectus. In addition, each Selling Stockholder, agrees that, without the
prior written consent of Morgan Stanley & Co. Incorporated, it will not, during
the period ending January 27, 1997, make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
4. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at U.S.
$__________ a share (the "Public Offering Price") and to certain dealers
selected by you at a price that represents a concession not in excess of U.S.
$__________ a share under the Public Offering Price, and that any Underwriter
may allow, and such dealers may reallow, a concession, not in excess of U.S.
$__________ a share, to any Underwriter or to certain other dealers.
Each U.S. Underwriter hereby makes to, and with, the Company and the
Selling Stockholders the representations and agreements of such U.S. Underwriter
contained in the fifth and sixth paragraphs of Article III of the International
Agreement. Each International Underwriter hereby makes to and with the Company
and the Selling Stockholders the representations and agreements of such
International Underwriter contained in the seventh, eighth, ninth and tenth
paragraphs of Article III of the International Agreement.
5. PAYMENT AND DELIVERY. Payment for the Firm Shares to be sold by each
Selling Stockholder shall be made to such Selling Stockholder in Federal or
other funds immediately available in New York City against delivery of such Firm
Shares for the respective accounts of the several Underwriters at 10:00 A.M.,
New York City time, on __________, 1996, or at such other time on the same or
such other date, not later than __________, 1996, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to
as the "Closing Date."
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Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 A.M., New York City time, on the date specified in the notice described in
Section 3 or on such other date, in any event not later than, __________, 1996,
as shall be designated in writing by the U.S. Representatives. The time and
date of such payment are hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than two full business days prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Selling Stockholders to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date hereunder are subject to the condition that the Registration
Statement shall have become effective not later than 4:00 p.m. (New York time)
on the date hereof.
The several obligations of the Underwriters hereunder are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus; and
(ii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review of a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g) (2)
under the Securities Act.
11
(b) The Underwriters shall have received on the Closing Date (x) a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in clause (ii) of Section 6(a) above
and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date and
that the Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date, and (y) a certificate of each Selling Stockholder
to the effect that the representations and warranties of such Selling
Stockholder contained in this Agreement are true and correct as of the
Closing Date and that such Selling Stockholder has complied with all of the
agreements and satisfied all of the conditions on its part to be performed
or satisfied hereunder on or before the Closing Date.
The executive officer signing and delivering the certificate for the
Company may rely upon the best of his knowledge as to proceedings
threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Neal, Gerber & Eisenberg, counsel for the Company and (for
purposes of such opinion and certain other deliveries to the Underwriters)
the Non-TIGP Selling Stockholders, dated the Closing Date, to the effect
that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and, to the knowledge of such counsel, is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries taken as a whole;
(ii) each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and, to the knowledge of such counsel, is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries
taken as a whole;
(iii) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
12
(iv) the shares of Common Stock outstanding immediately prior to
the issuance of the Shares by the Company (including the Shares to be
sold by the Selling Stockholders) have been duly authorized and are
validly issued, fully paid and non-assessable;
(v) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and non-
assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material to the Company
and its subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment or decree of any governmental body,
agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Shares
by the U.S. Underwriters;
(viii) the statements (A) in the Prospectus under the captions
"Description of Capital Stock," and "Shares Eligible for Future Sale"
and, "Underwriters" and (B) in the Registration Statement in Items 14
and 15, in each case insofar as such statements constitute summaries
of the legal matters, documents or proceedings referred to therein and
in the case of the statements under the caption "Underwriters" only
insofar as such statements relate to this Agreement, fairly present
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to
therein;
(ix) after due inquiry, such counsel does not know of any legal
or governmental proceeding pending or threatened to which the Company
or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
13
Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as
required;
(x) the Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended;
(xi) to the knowledge of such counsel, the Company and TeleTech
Telecommunications, Inc., TeleTech Teleservices, Inc. and Access 24
Service Corporation Pty Limited ("Access 24") (A) are in compliance
with any and all applicable Environmental Laws, (B) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (C) are
in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(xii) this Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Non-TIGP Selling
Stockholders;
(xiii) the execution and delivery by each Non-TIGP Selling
Stockholder of, and the performance by such Non-TIGP Selling
Stockholder of its obligations under, this Agreement and the Custody
Agreement and Powers of Attorney of such Non-TIGP Selling Stockholder
will not contravene any provision of applicable law, or the articles
or certificate of incorporation or by-laws of such Non-TIGP Selling
Stockholder (if such Non-TIGP Selling Stockholder is a corporation),
the partnership agreement of such Non-TIGP Selling Stockholder (if
such Non-TIGP Selling Stockholder is a partnership), the operating
agreement of such Non-TIGP Selling Stockholder (if such Non-TIGP
Selling Stockholder is a limited liability company), the trust
agreement of such Non-TIGP Selling Stockholder (if such Non-TIGP
Selling Stockholder is a trust) or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon such Non-
TIGP Selling Stockholder or, to the best of such counsel's knowledge,
any judgment, order or decree of any governmental body, agency or
court having jurisdiction over such Non-TIGP Selling Stockholder, and
no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance
by such Non-TIGP Selling Stockholder of its obligations under this
Agreement or the Custody Agreement or Power of Attorney of such Non-
TIGP Selling Stockholder, except such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares;
14
(xiv) each of the Non-TIGP Selling Stockholders is the sole
registered owner of the Shares to be sold by such Non-TIGP Selling
Stockholder and has the legal right and power, and all authorization
and approval required by law, to enter into this Agreement and the
Custody Agreement and Power of Attorney of such Non-TIGP Selling
Stockholder and to sell, transfer and deliver the Shares to be sold by
such Non-TIGP Selling Stockholder;
(xv) the Custody Agreement and the Power of Attorney of each Non-
TIGP Selling Stockholder have been duly authorized, executed and
delivered by such Non-TIGP Selling Stockholder and are valid and
binding agreements of such Non-TIGP Selling Stockholder;
(xvi) assuming the Underwriters purchase such Shares for value, in
good faith and without notice of any adverse claim, upon delivery of
the Shares to be sold by each Non-TIGP Selling Stockholder pursuant to
this Agreement, the Underwriters will acquire all of the rights of
such Non-TIGP Selling Stockholder in such Shares free and clear of any
security interests, claims, liens, equities and other encumbrances;
and
(xvii) such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial and statistical data included therein as
to which such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the rules and
regulations of the Commission thereunder, (B) believes that (except
for financial statements and schedules and other financial and
statistical data as to which such counsel need not express any
opinion) the Registration Statement and the Prospectus included
therein, at the time the Registration Statement became effective, did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (C) has no reason to believe
that (except for financial statements and schedules and other
financial and statistical data as to which such counsel need not
express any belief) the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(d) The Underwriters shall have received on the Closing Date an
opinion of Rosenberg & Liebentritt PC, counsel for the TIGP Selling
Stockholders, dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of each of the TIGP Selling Stockholders;
15
(ii) the execution and delivery by each TIGP Selling Stockholder
of, and the performance by such TIGP Selling Stockholder of its
obligations under, this Agreement and the Custody Agreement and Powers
of Attorney of such TIGP Selling Stockholder will not contravene any
provision of applicable law, or the articles or certificate of
incorporation or bylaws of such TIGP Selling Stockholder (if such TIGP
Selling Stockholder is a corporation), the partnership agreement of
such TIGP Selling Stockholder (if such TIGP Selling Stockholder is a
partnership), the operating agreement of such TIGP Selling Stockholder
(if such TIGP Selling Stockholder is a limited liability company), the
trust agreement of such TIGP Selling Stockholder (if such TIGP Selling
Stockholder) is a trust), or, to the best of such counsel's knowledge,
any agreement or other instrument binding upon such TIGP Selling
Stockholder or, to the best of such counsel's knowledge, any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such TIGP Selling Stockholder, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by such
TIGP Selling Stockholder of its obligations under this Agreement or
the Custody Agreement or Power of Attorney of such TIGP Selling
Stockholder, except such as may be required by the federal securities
laws of the United States or the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares;
(iii) Each of the TIGP Selling Stockholder is the sole registered
owner of the Shares to be sold by such TIGP Selling Stockholder and
has the legal right and power, and all authorization and approval
required by law, to enter into this Agreement and the Custody
Agreement and Power of Attorney of such TIGP Selling Stockholder and
to sell, transfer and deliver the Shares to be sold by such TIGP
Selling Stockholder; provided, however, that such counsel need not
opine as to authorization or approval required under the federal
securities laws of the United States or the securities or Blue Sky
laws of the various states in connection with the offer and sale of
the Shares;
(iv) the Custody Agreement and the Power of Attorney of each TIGP
Selling Stockholder have been duly authorized, executed and delivered
by such TIGP Selling Stockholder and are valid and binding agreements
of such TIGP Selling Stockholder;
(v) assuming the Underwriters purchase such Shares for value, in
good faith and without notice of any adverse claim, upon delivery of
the Shares to be sold by such TIGP Selling Stockholder pursuant to
this Agreement, the Underwriters will acquire all of the rights of
such TIGP Selling Stockholder in such Shares free and clear of any
security interests, claims, liens, equities and other encumbrances
created by, through or under such TIGP Selling Stockholder; and
16
(vi) such counsel (A) has no reason to believe that (except for
financial statements and schedules and other financial and statistical
data as to which such counsel need not express any belief) such parts
of the Registration Statement as specifically refer to the TIGP
Selling Stockholders and such parts of the Prospectus included therein
as specifically refer to the TIGP Selling Stockholders, at the time
the Registration Statement became effective, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (B) has no reason to believe that (except
for financial statements and schedules and other financial and
statistical data as to which such counsel need not express any belief)
such parts of the Prospectus as specifically refer to the TIGP Selling
Stockholders contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(e) The Underwriters shall have received on the Closing Date an
opinion of Katten Muchin & Zavis, special counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in clauses (v),
(vi), (viii) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters") and (xvii) of Section
6(c) above.
With respect to clause (xvii) of Section 6(c) above, Neal, Gerber &
Eisenberg and Katten Muchin & Zavis, and with respect to clause (vi) of
Section 6(d) above, Rosenberg & Liebentritt PC, may state that their
opinion and belief are based upon their participation in the preparation of
the Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification except as specified. With respect to
Section 6(c) above, Neal, Gerber & Eisenberg may rely, with respect to
matters involving the application of laws of any jurisdictions other than
the laws of the State of New York or the United States or the Delaware
General Corporation Law, to the extent such counsel deems appropriate, upon
an opinion or opinions of local counsel, provided that (A) each such local
counsel is reasonably satisfactory to your counsel, (B) a copy of each
opinion so relied upon is delivered to you and is in form and substance
reasonably satisfactory to your counsel, and (C) Neal, Gerber & Eisenberg
shall state in their opinion that they believe they are justified in
relying on each other opinion. With respect to Section 6(c) above, Neal,
Gerber & Eisenberg, and with respect to Section 6(d) above, Rosenberg &
Liebentritt PC, may rely, with respect to factual matters and to the extent
such counsel deems appropriate, upon the representations of each Selling
Stockholder contained herein and in the Custody Agreement and Power of
Attorney of such Selling Stockholder and in other documents and
instruments; provided that copies of such Custody Agreements and Powers of
Attorney and of any such other documents and instruments shall be delivered
to you and shall be in form and substance satisfactory to your counsel. In
addition, with respect to Section 6(c) above, Neal, Gerber & Eisenberg may
rely upon an opinion or opinions of counsel for any Non-TIGP Selling
Stockholders, provided that
17
(A) each such counsel for the Non-TIGP Selling Stockholders is reasonably
satisfactory to your counsel, (B) a copy of each opinion so relied upon is
delivered to you and is in form and substance reasonably satisfactory to
your counsel, and (D) Neal, Gerber and Eisenberg shall state in their
opinion that they believe they are justified in relying on each other
opinion.
The opinion of Neal, Gerber & Eisenberg described in Section 6(c)
above and the opinion of Rosenberg & Liebentritt PC described in Section
6(d) above (and any other opinions of counsel referred to in the
immediately preceding paragraph) shall be rendered to the Underwriters at
the request of the Company and/or one or more of the Selling Stockholders,
as the case may be, and shall so state therein.
(f) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to you, from Arthur
Andersen LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(g) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to you, of Gumbiner,
Savett, Finkel, Fingleson & Rose, Inc. (formerly Gumbiner, Savett, Friedman
& Rose, Inc.), independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus for the Company's fiscal years ended January 31, 1992 and
1993 and the 11 month period ended December 31, 1993.
(h) The Underwriters shall have received, on or prior to the Closing
Date, agreements ("Lock-Up Agreements") executed by each of the directors
and officers of the Company who is not a Selling Stockholder, pursuant to
which such Selling Stockholder agrees that, without the prior written
consent of Morgan Stanley & Co. Incorporated, it will not, during the
period ending January 27, 1997, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer
or dispose of , directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
(whether such shares of Common Stock or any such securities are now owned
or hereafter acquired), (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common
18
Stock or such other securities, in cash or otherwise, or (iii) make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock; PROVIDED, HOWEVER, that no director or
officer who executed and delivered to you a Lock-Up Agreement in connection
with the Company's initial public offering shall be required to execute a
new or additional Lock-Up Agreement pursuant to this Agreement. The
restrictions imposed by the Lock-Up Agreement shall not apply to the Shares
to be sold hereunder. The Lock-Up Agreements received by the Underwriters
pursuant to this Section 6(h) shall be in full force and effect on the
Closing Date.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to the delivery to the U.S. Representatives on the
Option Closing Date of such documents as they may reasonably request with
respect to the good standing of the Company, the due authorization and issuance
of the Additional Shares and other matters related to the issuance of the
Additional Shares.
7. COVENANTS OF THE COMPANY. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, seven signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. local time on the business day next succeeding
the date of this Agreement and during the period mentioned in paragraph (c)
below, as many copies of the Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of your counsel, it is necessary to amend or supplement the
Prospectus to comply with law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses you will furnish to the Company) to
which Shares may have been sold by you on behalf of the Underwriters and to
any other dealers upon request, either amendments or supplements to the
Prospectus
19
so that the statements in the Prospectus as so amended or supplemented will
not, in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; PROVIDED, HOWEVER, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not currently so qualified.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the twelve-
month period ending December 31, 1997 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated and except as provided in
Section 8 entitled "Expenses of Selling Stockholders," to pay or cause to
be paid all expenses (the "Expenses") incident to the performance of the
obligations of the Company and the Selling Stockholders under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery
of the Shares to the Underwriters, including any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky or
Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws
as provided in Section 7(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky or
Legal Investment memorandum, (iv) all filing fees and reasonable
disbursements of counsel to the Underwriters incurred in connection with
the review and qualification of the offering of the Shares by the National
Association of Securities Dealers, Inc., (v) all fees and expenses in
connection with the preparation and filing of the registration statement on
Form 8-A relating to the Common Stock and all costs and expenses incident
to listing the Shares on the Nasdaq National Market and other national
securities exchanges and foreign stock exchanges, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (viii) the costs and expenses of
the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the
20
production of road show slides and graphics, reasonable fees and expenses
of any consultants engaged in connection with the road show presentations
with the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
the cost of any aircraft chartered in connection with the road show, and
(ix) all other reasonable costs and expenses incident to the performance of
the obligations of the Company and the Selling Stockholders hereunder for
which provision is not otherwise made in this Section or Section 8;
PROVIDED, HOWEVER, that the Company shall be reimbursed for such Expenses
by the Selling Stockholders to the extent set forth in, and in accordance
with, Section 8. It is understood, however, that except as provided in
this Section 7, Section 9 entitled "Indemnity and Contribution", and the
last paragraph of Section 11 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make.
8. EXPENSES OF SELLING STOCKHOLDERS. Each Selling Stockholder, severally
and not jointly, agrees to pay or cause to be paid (i) all taxes, if any, on the
transfer and sale of the Shares being sold by such Selling Stockholder, and (ii)
the fees, disbursements and expenses of counsel for such Selling Stockholder, if
other than Neal, Gerber & Eisenberg. Furthermore, the Selling Stockholders
agree, severally and not jointly, in the proportions that the number of Firm
Shares sold hereunder by such Selling Stockholders bear to the aggregate number
of Shares sold hereunder by all Sellers (including the Company, if the U.S.
Underwriters exercise their right to purchase Additional Shares from the Company
pursuant to Section 3), to promptly reimburse the Company for all Expenses
incurred by the Company pursuant to Section 7(f). Notwithstanding the
foregoing, any Selling Stockholder who is an employee of the Company and who
acquires all of the Firm Shares to be sold by such Selling Stockholder upon the
exercise of options granted by the Company under the TeleTech Holdings, Inc.
Stock Plan shall have no obligation to reimburse the Company for Expenses
pursuant to this Section 8.
9. INDEMNITY AND CONTRIBUTION.
(a) The Company, Tuchman and each Inside Selling Stockholder agree,
jointly and severally, to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), from and against any
and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection
with defending or investigating any such action or claim) caused by any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or caused by
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or
21
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use therein; PROVIDED, HOWEVER, that, with respect to any
untrue statement or alleged untrue statement or omission or alleged
omission made in any preliminary prospectus, the foregoing indemnity
agreement shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
the Shares concerned, or any person controlling such Underwriter, to the
extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that a copy of the Prospectus (or Prospectus as
amended or supplemented) was not sent or given to such person, if required
by the Securities Act so to have been delivered, at or prior to the written
confirmation of the sale of such Shares to such person and the untrue
statement or alleged untrue statement or omission or alleged omission was
corrected in such Prospectus (or Prospectus as amended or supplemented), if
the Company had previously furnished copies of such Prospectus (or
Prospectus as amended or supplemented) to such Underwriter.
Notwithstanding the foregoing, no Inside Selling Stockholder shall be
required to provide indemnification under this Section 9(a) with respect to
any losses, claims, damages or liabilities, unless (i) a court of competent
jurisdiction shall determine that such Inside Selling Stockholder had
actual knowledge of the untrue statement or omission or alleged untrue
statement or omission which caused such losses, claims, damages or
liabilities or (ii) such losses, claims, damages or liabilities are caused
by an untrue statement or omission or alleged untrue statement or omission
in such parts of the Registration Statement or Prospectus as specifically
refer to such Inside Selling Stockholder.
(b) Each Outside Selling Stockholder agrees, severally and not
jointly, to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, but only with reference to information relating to such
Outside Selling Stockholder furnished in writing by or on behalf of such
Outside Selling Stockholder expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto; PROVIDED, HOWEVER, that, with respect to any untrue
statement or alleged untrue statement or omission or alleged omission made
in any preliminary prospectus, the foregoing indemnity agreement shall not
inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased the Shares concerned,
or any person
22
controlling such Underwriter, to the extent that any such loss, claim,
damage or liability of such Underwriter results from the fact that a copy
of the Prospectus (or Prospectus as amended or supplemented) was not sent
or given to such person, if required by the Securities Act so to have been
delivered, at or prior to the written confirmation of the sale of such
Shares to such person and the untrue statement or alleged untrue statement
or omission or alleged omission was corrected in such Prospectus (or
Prospectus as amended or supplemented), if the Company had previously made
available copies of such Prospectus (or Prospectus as amended or
supplemented) to such Underwriter.
(c) Each Selling Stockholder agrees, severally and not jointly, in
proportion to the number of Shares to be sold by such Selling Stockholder
hereunder, to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only with reference to information relating to such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(d) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, and the Selling Stockholders from and against any and
all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only with reference to information relating to such Underwriter furnished
to the Company in writing by such Underwriter through you expressly for use
in the Registration Statement, any preliminary prospectus, the Prospectus
or any amendments or supplements thereto.
23
(e) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 9(a), (b), (c) or (d), such
person (the "Indemnified Party") shall promptly notify the person against
whom such indemnity may be sought (the "Indemnifying Party") in writing and
the Indemnifying Party, upon request of the Indemnified Party, shall retain
counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party and any others the Indemnifying Party may designate in
such proceeding and shall pay the reasonable fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel and the
payment of its fees or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnifying Party and
the Indemnified Party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall
not, in respect of the legal expenses of any Indemnified Party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for (i) all Underwriters and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, (ii)
the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the
meaning of either such Section and (iii) all Selling Stockholders and all
persons, if any, who control any Selling Stockholder within the meaning of
either such Sections of the Exchange Act, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of
Underwriters, such firm shall be designated in writing by Morgan Stanley &
Co. Incorporated. In the case of any such separate firm for the Company,
and such directors, officers and control persons of the Company, such firm
shall be designated in writing by the Company. In the case of any such
separate firm for the Selling Stockholders and such controlling persons of
the Selling Stockholders, such firm shall be designated in writing by the
persons named as attorneys-in-fact for the Selling Stockholders under the
Powers of Attorney. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
Indemnified Party shall have requested an Indemnifying Party to reimburse
the Indemnified Party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the Indemnifying Party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such Indemnifying Party of the aforesaid
request and (ii) such Indemnifying Party shall not have reimbursed the
Indemnified Party in accordance with such request prior to the date of such
24
settlement. No Indemnifying Party shall, without the prior written consent
of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Party from all liability on claims that are the subject
matter of such proceeding.
(f) If the indemnification provided for in Section 9(a), (b), (c) or
(d) is unavailable to an Indemnified Party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Party under such paragraph, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Indemnifying Party or Parties on the
one hand and the Indemnified Party or Parties on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Indemnifying Party or Parties
on the one hand and of the Indemnified Party or Parties on the other hand
in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Sellers on
the one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate
Public Offering Price of the Shares. The relative fault of the Sellers on
the one hand and the Underwriters on the other hand 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 Sellers or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant
to this Section 9 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
(g) The Sellers and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 9 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 that does not take
account of the equitable considerations referred to in Section 9(f). The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with
25
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, 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. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 9 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any Indemnified Party at law
or in equity.
(h) The indemnity and contribution provisions contained in this
Section 9 and the representations and warranties of the Company and the
Selling Stockholders contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter, any Selling Stockholder or any
person controlling any Selling Stockholder, or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
(i) Notwithstanding anything to the contrary contained herein, the
aggregate liability of any Selling Stockholder pursuant to the provisions
of this Section 9 and with respect to any breaches of the representations,
warranties and agreements contained in Sections 2A, 2B and 2C (as
applicable), except for liability resulting from the willful misconduct or
intentional action of such Selling Stockholder, shall not exceed an amount
equal to the total price at which the Shares of which such Selling
Stockholder is a beneficial owner (as defined in Rule 13d-3 under the
Securities and Exchange Act of 1934, as amended) were offered to the
public. In addition, an Underwriter or person controlling an Underwriter
shall not bring any claim against any Selling Stockholder under this
Section 9 or with respect to any breach of a representation, warranty or
agreement contained in Section 2A, 2B or 2C (as applicable), except for a
claim caused by or arising out of an untrue statement or omission or
alleged untrue statement or omission in such parts of the Registration
Statement or Prospectus as specifically refer to such Selling Stockholder,
unless (a) such Underwriter or controlling person shall have first
submitted such claim to the Company and (b) the Company shall not, within
45 days, (i) have paid such claim in full or (ii) be otherwise fully
satisfying its indemnification obligations with respect to such claim (by
assuming the defense of any proceeding giving rise to such claim or
otherwise as set forth in this Section 9); PROVIDED, HOWEVER, that if at
any time thereafter the Company is no longer fully satisfying its
indemnification obligations with respect to such claim, such Underwriter or
controlling person may immediately bring such claim against such Selling
Stockholder.
26
10. TERMINATION. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv) of this Section 10, such
event singly or together with any other such event makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
11. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
or they have agreed to purchase hereunder on such date, and the aggregate number
of Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of the
Shares to be purchased on such date, the other Underwriters shall be obligated
severally, in the proportions that the number of Firm Shares set forth opposite
their respective names in Schedule I or Schedule II bears to the aggregate
number of Firm Shares set forth opposite the names of all such nondefaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; PROVIDED that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased on such date, and arrangements satisfactory to you, the
Company and the Selling Stockholders for the purchase of such Firm Shares are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Stockholders. In any such case either you or the relevant Selling
Stockholders shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any U.S.
Underwriter or Underwriters shall fail or refuse to purchase Additional Shares
and the aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting U.S. Underwriters shall have the option
27
to (i) terminate their obligation hereunder to purchase Additional Shares or
(ii) purchase not less than the number of Additional Shares that such non-
defaulting U.S. Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this Section 11 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of any Seller to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. HEADINGS. The Headings of the Sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
28
Very truly yours,
TELETECH HOLDINGS, INC.
By
----------------------------------
a duly authorized signatory
The Selling Stockholders named in
Schedule III hereto, acting severally
By
----------------------------------
Attorney-in-fact
Accepted, as of the date hereof
MORGAN STANLEY & CO. INCORPORATED
ALEX. BROWNS & SONS INCORPORATED
SMITH BARNEY INC.
Acting severally on behalf of themselves
and the several U.S. Underwriters named
in Schedule I hereto.
By Morgan Stanley & Co. Incorporated
By
-----------------------------------
a duly authorized signatory
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
ALEX. BROWN & SONS INCORPORATED
SMITH BARNEY INC.
Acting on behalf of themselves and the
several International Underwriters
named in Schedule II hereto.
By Morgan Stanley & Co. International Limited
By
-----------------------------------
a duly authorized signatory
29
Schedule I
U.S. UNDERWRITERS
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Morgan Stanley & Co. Incorporated
Alex. Brown & Sons Incorporated
Smith Barney Inc.
----------------
Total U.S. Firm Shares . . . . . . 2,880,000
----------------
----------------
Schedule II
INTERNATIONAL UNDERWRITERS
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Morgan Stanley & Co. International Limited
Alex. Brown & Sons Incorporated
Smith Barney Inc.
---------------
Total International Firm Shares . . . 720,000
---------------
---------------
Schedule III
SELLING STOCKHOLDERS
Number of
Firm Shares
To Be Sold
--------------
--------------
Total 3,600,000
--------------
--------------