EXHIBIT 1.1
8/23/96
3,800,000 Shares/1/
Lightbridge, Inc.
Common Stock
UNDERWRITING AGREEMENT
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_____________, 1996
COWEN & COMPANY
Montgomery Securities
Prudential Securities Incorporated
As Representatives of the Several Underwriters
c/o Cowen & Company
Financial Square
New York, New York 10005
Dear Sirs:
1. Introductory. Lightbridge, Inc., a Delaware corporation (the
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"Company"), and certain stockholders of the Company named in Schedule B hereto
(the "Selling Stockholders") propose to sell, pursuant to the terms of this
Agreement, to the several underwriters named in Schedule A hereto (the
"Underwriters," or, each, an "Underwriter"), an aggregate of 3,800,000 shares of
Common Stock, $.01 par value (the "Common Stock") of the Company, of which
__________ shares will be sold by the Company and ________ shares will be sold
by the Selling Stockholders. The aggregate of 3,800,000 shares so proposed to
be sold is hereinafter referred to as the "Firm Stock." The respective amounts
of the Firm Stock to be so purchased by the several Underwriters are set forth
opposite their names in Schedule A hereto, and the respective amounts to be sold
by the Selling Stockholders are set forth opposite their names in Schedule B
hereto. The Company and the Selling Stockholders also have granted to the
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/1/________________________________
Plus an option to purchase up to 570,000 additional shares from the Company to
cover over-allotments.
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Underwriters, upon the terms and conditions set forth in Section 3 hereof, up to
an additional 570,000 shares of Common Stock (the "Optional Stock"). The Firm
Stock and the Optional Stock are hereinafter collectively referred to as the
"Stock." Cowen & Company ("Cowen"), Montgomery Securities and Prudential
Securities Incorporated are acting as representatives of the several
Underwriters and in such capacity are hereinafter referred to as the
"Representatives."
2. (a) Representations and Warranties of the Company. The Company
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represents and warrants to, and agrees with, the several Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-6589) in the
form in which it became or becomes effective and also in such form as
it may be when any post-effective amendment thereto shall become
effective with respect to the Stock, including any preeffective
prospectuses included as part of the registration statement as
originally filed or as part of any amendment or supplement thereto, or
filed pursuant to Rule 424 under the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, copies of which have heretofore been
delivered to you, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act and has been
filed with the Commission under the Securities Act; one or more
amendments to such registration statement, including in each case an
amended preeffective prospectus, copies of which amendments have
heretofore been delivered to you, have been so prepared and filed. If
it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed
and must be declared effective before the offering of the Stock may
commence, the term "Registration Statement" as used in this Agreement
means the registration statement as amended by said post-effective
amendment. The term "Registration Statement" as used in this Agreement
shall also include any registration statement relating to the Stock
that is filed and declared effective pursuant to Rule 462(b) under the
Securities Act. All copies of Registration Statements that have been
delivered to you are identical to the electronically transmitted copies
thereof filed with the Commission pursuant to the Commission's
Electronic Data Gathering, Analysis and Retrieval System ("EDGAR"),
except to the extent permitted by Regulation S-T. The term
"Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement, or, (A) if the prospectus
included in the Registration Statement omits information in reliance on
Rule 430A under the Securities Act and such information is included in
a prospectus filed with the Commission pursuant to Rule 424(b) under
the Securities Act, the term "Prospectus" as used in this Agreement
means the prospectus in the form included in the Registration Statement
as supplemented by the addition of the Rule 430A information contained
in the prospectus filed with the Commission pursuant to Rule 424 (b)
and (B) if prospectuses that meet the requirements of Section 10(a) of
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the Securities Act are delivered pursuant to Rule 434 under the
Securities Act, then (i) the term "Prospectus" as used in this
Agreement means the "prospectus subject to completion" (as such term is
defined in Rule 434 (g) under the Securities Act) as supplemented by
(a) the addition of Rule 430A information or other information
contained in the form of prospectus delivered pursuant to Rule 434 (b)
(2) under the Securities Act or (b) the information contained in the
term sheets described in Rule 434 (b) (3) under the Securities Act,
(ii) the date of such prospectuses shall be deemed to be the date of
the term sheets. The term "Preeffective Prospectus" as used in this
Agreement means the prospectus subject to completion in the form
included in the Registration Statement at the time of the initial
filing of the Registration Statement with the Commission, and as such
prospectus shall have been amended from time to time prior to the date
of the Prospectus. For purposes of this Agreement, all references to
the Registration Statement, any Preeffective Prospectus, the
Prospectus, or any amendment or supplement to any of the foregoing
shall be deemed to include the respective copies thereof filed with the
Commission pursuant to EDGAR.
(ii) The Commission has not issued or threatened to issue any order
preventing or suspending the use of any Preeffective Prospectus, and,
at its date of issue, each Preeffective Prospectus conformed in all
material respects with the requirements of the Securities Act and did
not include 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, in light of the circumstances under which they were
made, not misleading; and, when the Registration Statement becomes
effective and at all times subsequent thereto up to and including the
Closing Dates, the Registration Statement and the Prospectus and any
amendments or supplements thereto contained and will contain all
material statements and information required to be included therein by
the Securities Act at the time of the filing thereof and conformed and
will conform in all material respects to the requirements of the
Securities Act and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omitted or will omit
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; provided, however, that the
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foregoing representations, warranties and agreements shall not apply to
information contained in or omitted from any Preeffective Prospectus or
the Registration Statement or the Prospectus or any such amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any
Underwriter, directly or through you (or by any Selling Stockholder),
specifically for use in the preparation thereof; there is no franchise,
lease, contract, agreement or document required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to
the Registration Statement which is not
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described or filed therein as required; and all descriptions of any
such franchises, leases, contracts, agreements or documents contained
in the Registration Statement are accurate descriptions of such
documents in all material respects.
(iii) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as set
forth or contemplated in the Prospectus, the Company has not incurred
any liabilities or obligations, direct or contingent, nor entered into
any transactions, not in the ordinary course of business, and there has
not been any material adverse change in the condition (financial or
otherwise), properties, business, management, net worth or results of
operations of the Company, or any change in the capital stock (except
pursuant to stock plans and warrants described in the Registration
Statement), or any material change in the short-term or long-term debt
of the Company.
(iv) The financial statements, together with the related notes, set
forth in the Prospectus and elsewhere in the Registration Statement
fairly present, on the basis stated in the Registration Statement, the
financial position and the results of operations and changes in
financial position of the Company at the respective dates or for the
respective periods therein specified. Such statements and related notes
and schedules have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis except as may be
set forth in the Prospectus. The selected financial and statistical
data set forth in the Prospectus under the caption "Selected Financial
Data" fairly present, on the basis stated in the Registration
Statement, the information set forth therein.
(v) Deloitte & Touche LLP, who have expressed their opinions on the
audited financial statements and related schedules included in the
Registration Statement and the Prospectus are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(vi) The Company has been duly organized and is validly existing and
in good standing as a corporation under the laws of its jurisdiction of
organization, with power and authority (corporate and other) to own or
lease its business as described in the Prospectus; the Company is in
possession of and operating in material compliance with all franchises,
grants, authorizations, licenses, permits, easements, consents,
certificates and orders required for the conduct of its business, all
of which are valid and in full force and effect; and the Company is
duly qualified to do business and in good standing as a foreign
corporation in all other jurisdictions where its ownership or leasing
of properties or the conduct of its business 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. The Company has all requisite power and authority, and all
necessary
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consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits 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, and no such
consent, approval, authorization, order, registration, qualification,
license or permit contains a materially burdensome restriction not
adequately disclosed in the Registration Statement and the Prospectus.
THE COMPANY DOES NOT OWN OR CONTROL, DIRECTLY OR INDIRECTLY, ANY
CORPORATION, ASSOCIATION OR OTHER ENTITY OTHER THAN BGX, INC.("BGX"),
OF WHICH THE COMPANY HOLDS 50% OF THE OUTSTANDING CAPITAL STOCK. AS OF
THE DATE HEREOF, BGX HAS NOT BEGUN OPERATIONS AND HAS NO REAL PROPERTY,
PLACE OF BUSINESS, ASSETS, LIABILITIES, CUSTOMERS OR SUPPLIERS. THERE
IS NO ACTION, SUIT, CLAIM, PROCEEDING OR INVESTIGATION PENDING OR
THREATENED AGAINST OR AFFECTING BGX AND BGX IS NOT SUBJECT TO ANY
ORDER, WRIT, INJUNCTION OR DECREE ENTERED IN ANY LAWSUIT OR PROCEEDING.
BGX DOES NOT OWN, LICENSE OR HAVE ANY RIGHT TO ANY COPYRIGHTS, PATENTS,
TRADEMARKS, SERVICE MARKS, TRADENAMES OR APPLICATIONS FOR THE SAME. BGX
IS NOT A PARTY TO OR OTHERWISE BOUND BY ANY WRITTEN OR ORAL AGREEMENT,
INSTRUMENT, COMMITMENT OR RESTRICTION.
(vii) The Company's authorized and outstanding capital stock is on
the date hereof, and will be on the Closing Date, as set forth under
the heading "Capitalization" in the Prospectus; the outstanding shares
of capital stock (including the outstanding shares of Stock) of the
Company conform to the description thereof in the Prospectus and have
been duly authorized and validly issued and are fully paid and
nonassessable, have been approved for quotation on the Nasdaq National
Market and have been issued in compliance with all federal and state
securities laws and were not issued in violation of or subject to any
preemptive rights or similar rights to subscribe for or purchase
securities and conform to the description thereof contained in the
Prospectus. Except as disclosed in and or contemplated by the
Prospectus and the financial statements of the Company and related
notes thereto included in the Prospectus, the Company does not have
outstanding any options or warrants to purchase, or any preemptive
rights or other rights to subscribe for or to purchase any securities
or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations, except for options granted
subsequent to the date of information provided in the Prospectus
pursuant to the Company's employee stock purchase and stock option
plans as disclosed in the Prospectus. The description of the Company'
s stock option and other stock plans or arrangements, and the options
or other rights granted or exercised thereunder, as set forth in the
Prospectus, accurately and fairly presents the information required to
be shown with respect to such plans, arrangements, options and rights.
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(viii) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and nonassessable and free of
any preemptive or similar rights and will conform to the description
thereof in the Prospectus.
(ix) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any executive
officers or directors is a party or of which any property of the
Company or any affiliate is subject, which, if determined adversely to
the Company or any executive officers or directors, might individually
or in the aggregate (i) prevent or adversely affect the transactions
contemplated by this Agreement, (ii) suspend the effectiveness of the
Registration Statement, (iii) prevent or suspend the use of the
Preeffective Prospectus in any jurisdiction or (iv) result in a
material adverse change in the condition (financial or otherwise),
properties, business, management, net worth or results of operations of
the Company; and to the best of the Company's knowledge no such
proceedings are threatened or contemplated against the Company or any
affiliate by governmental authorities or others. The Company is not a
party nor subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body or other
governmental agency or body. The description of the Company's
litigation under the heading "Legal Proceedings" in the Prospectus is
true and correct and complies with the Rules and Regulations.
(x) The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not result in
a breach or violation of any of the terms or provisions of or
constitute a default under any indenture, mortgage, deed of trust, note
agreement or other material agreement or instrument to which the
Company is a party or by which it or any of its properties is or may be
bound, the Certificate of Incorporation, By-laws or other
organizational documents of the Company, or any law, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties or will result
in the creation of a lien.
(xi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except such
as may be required by the National Association of Securities Dealers,
Inc. (the "NASD") or under the Securities Act or the securities or
"Blue Sky" laws of any jurisdiction in connection with the purchase and
distribution of the Stock by the Underwriters.
(xii) The Company has the full corporate power and authority to
enter into this Agreement and to perform its obligations hereunder
(including to
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issue, sell and deliver the Stock), and this Agreement has been duly
and validly authorized, executed and delivered by the Company and is a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that rights
to indemnity and contribution hereunder may be limited by federal or
state securities laws or the public policy underlying such laws.
(xiii) The Company is in all material respects in compliance with,
and conducts its business in material conformity with, all applicable
federal, state, local and foreign laws, rules and regulations
(including but not limited to the Foreign Corrupt Practices Act and any
rules and regulations of the Federal Communications Commission) of any
court or governmental agency or body and the Company has all material
permits or licenses required thereunder; to the knowledge of the
Company, otherwise than as set forth in the Registration Statement and
the Prospectus, no prospective change in any of such federal or state
laws, rules or regulations has been adopted which, when made effective,
would have a material adverse effect on the operations of the Company.
(xiv) The Company has filed all necessary federal, state, local and
foreign income, payroll, franchise and other tax returns and have paid
all taxes shown as due thereon or with respect to any of its
properties, and there is no tax deficiency that has been, or to the
knowledge of the Company has been threatened or is likely to be,
asserted against the Company or any of its properties or assets that
would adversely affect the financial position, business or operations
of the Company.
(xv) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statement or otherwise,
except for persons and entities who have expressly waived such right or
who have been given proper notice and have failed to exercise such
right within the time or times required under the terms and conditions
of such right.
(xvi) Neither the Company nor any of its officers or directors has
taken or will take, directly or indirectly, any action designed or
intended to stabilize or manipulate the price of any security of the
Company, or which caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or
manipulation of the price of the Common Stock of the Company.
(xvii) The Company has provided you with all financial statements
since inception to the date hereof that are available to the officers
of the Company,
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including financial statements for the three months ended December 31,
1995 and the six months ended June 30, 1996.
(xviii) The Company owns, possesses, or has rights to use all
patents, trademarks, trademark registrations, service marks, service
mark registrations, tradenames, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned or used
by it or necessary for the conduct of its business, and the Company has
not received notice of any claim to the contrary or any challenge by
any other person to the rights of the Company with respect to the
foregoing. The Company's business as now conducted does not and will
not infringe or conflict with in any material respect patents,
trademarks, service marks, trade names, copyrights, trade secrets,
licenses or other intellectual property or franchise right of any
person. No claim has been made against the Company alleging the
infringement by the Company of any patent, trademark, service mark,
tradename, copyright, trade secret, license in or other intellectual
property right or franchise right of any person.
(xix) No breach or default exists in the due performance and
observance by the Company of any term, covenant or condition of all
contracts required by Item 601(b)(10) of Regulation S-K under the
Securities Act to be filed as exhibits to the Registration Statement.
To the Company's knowledge, no other party to such contract is in
material default under or in breach of any such obligations. The
Company has not received any notice of such default or breach.
(xx) The Company is not involved in any labor dispute nor is any such
dispute threatened. The Company is not aware that (A) any executive,
key employee or significant group of employees of the Company plans to
terminate employment with the Company or (B) any such executive or key
employee is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by
the present or proposed business activities of the Company. The
Company does not have or expects to have any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or
other plan which is subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), to which the Company makes or ever
has made a contribution and in which any employee of the Company is or
has ever been a participant. With respect to such plans, the Company
is in compliance in all material respects with all applicable
provisions of ERISA.
(xxi) The Company has, and the Company as of the Closing Dates will
have, good and marketable title in fee simple to all real property and
good and marketable title to all personal property owned by it which is
material to the
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business of the Company, in each case free and clear of all liens,
encumbrances and defects except such as are described the Prospectus or
such as would not have a material adverse effect on the Company; and
any real property and buildings held under lease by the Company are, or
will be as of the Closing Dates, held by it under valid, subsisting and
enforceable leases with such exceptions as would not have a material
adverse effect on the Company, in each case except as described in or
contemplated by the Prospectus.
(xxii) The Company is insured by insurers of financial
responsibility against such losses and risks and in such amounts as are
customary in the business in which it is engaged; and no such insurer
has notified or indicated to the Company that it will not be able to
renew its existing insurance coverage as and when such coverage
expires; and the Company has no reason to believe that, if such
coverage is not renewed, that it will not be able 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, except as described in or contemplated by
the Prospectus.
(xxiii) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(xxiv) The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198; Laws of Florida).
(xxv) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxvi) To the Company's knowledge, neither the Company nor any
employee or agent of the Company has made any payment or received or
retained any payment in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
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(xxvii) The Company is not or will not become 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,
after the closing of the offering and the application of the proceeds
therefrom.
(xxiii) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company as to the
matters covered thereby.
(xxiv) The Company has obtained the written agreement described in
Section 8 (k) of this Agreement from each of its officers, directors
and holders of Common Stock.
(b) Representations and Warranties and Agreements of the Selling
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Stockholders. Each Selling Stockholder represents, severally and not jointly,
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and warrants to, and agrees with, the several Underwriters that such Selling
Stockholder:
(i) Now has, and on the Closing Dates will have, valid and marketable
title to the Stock to be sold by such Selling Stockholder, free and
clear of any lien, claim, security interest or other encumbrance,
including, without limitation, any restriction on transfer, and has
full right, power and authority to enter into this Agreement, the Power
of Attorney and the Custody Agreement (each as hereinafter defined),
and, to the extent such Selling Stockholder is a corporation, has been
duly organized and is validly existing and in good standing as a
corporation under the laws of its jurisdiction of organization.
(ii) Now has, and on the Closing Dates will have, upon delivery of
and payment for each share of Stock hereunder, full right, power and
authority and any approval required by law to sell, transfer, assign
and deliver the Stock being sold by such Selling Stockholder hereunder,
and each of the several Underwriters will acquire valid and marketable
title to all of the Stock being sold to the Underwriters by such
Selling Stockholder, free and clear of any liens, encumbrances,
equities claims, restrictions on transfer or other defects whatsoever.
(iii) For a period of 180 days after the date of this Agreement,
without the prior written consent of Cowen, such Selling Stockholder
will not offer, sell, assign, transfer, encumber, contract to sell,
grant an option to purchase or otherwise dispose of any shares of
Common Stock held by such Selling Stockholder (including without
limitation any shares of Common Stock that may be deemed to be
beneficially owned by such Selling Stockholder on the date hereof in
accordance with the Rules and Regulations) or any securities
convertible into, derivative of or exercisable or exchangeable for such
Common Stock for 180 days commencing on
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the date of the final prospectus, except for (i) shares of Common Stock
sold by such Selling Stockholder pursuant to this Agreement, if any,
(ii) shares of Common Stock purchased by such Selling Stockholder in
the public market pursuant to brokers' transactions, (iii) shares of
Common Stock sold to the Company or the entities on Schedule D, and
(iv) distributions of Common Stock to limited partners or shareholders
of such Selling Stockholder provided that the distributees thereof
agree in writing to be bound by the terms of this restriction.
(iv) Has duly executed and delivered a power of attorney, in
substantially the form heretofore delivered by the Representatives (the
"Power of Attorney"), appointing Pamela D.A. Reeve and William G.
Brown, and each of them, as attorney-in-fact (the "Attorneys-in-fact")
with authority to execute and deliver this Agreement on behalf of such
Selling Stockholder, to authorize the delivery of the shares of Stock
to be sold by such Selling Stockholder hereunder and otherwise to act
on behalf of such Selling Stockholder in connection with the
transactions contemplated by this Agreement.
(v) Has duly executed and delivered a custody agreement, in
substantially the form heretofore delivered by the Representatives (the
"Custody Agreement"), with the Company as custodian (the "Custodian"),
pursuant to which certificates in negotiable form for the shares of
Stock to be sold by such Selling Stockholder hereunder have been placed
in custody for delivery under this Agreement.
(vi) Has, by execution and delivery of each of this Agreement, the
Power of Attorney and the Custody Agreement, created valid and binding
obligations of such Selling Stockholder, enforceable against such
Selling Stockholder in accordance with the terms of such agreements and
documents, except to the extent that rights to indemnity hereunder may
be limited by federal or state securities laws or the public policy
underlying such laws.
(vii) The performance of this Agreement, the Custody Agreement and
the Power of Attorney, and the consummation of the transactions
contemplated hereby and thereby will not result in a breach or
violation by such Selling Stockholder of any of the terms or provisions
of, or constitute a default by such Selling Stockholder under, any
indenture, mortgage, deed of trust, trust (constructive or other), loan
agreement, lease, franchise, license or other agreement or instrument
to which such Selling Stockholder is a party or by which such Selling
Stockholder or any of its properties is bound, or any judgment of any
court or governmental agency or body applicable to such Selling
Stockholder or any of its properties, or to such Selling Stockholder's
knowledge, any statute, decree, order,
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rule or regulation of any court or governmental agency or body
applicable to such Selling Stockholder or any of its properties.
(viii) Has reviewed the Registration Statement and Prospectus and,
although such Selling Stockholder has not independently verified the
accuracy or completeness of all the information contained therein,
nothing has come to the attention of such Selling Stockholder that
would lead such Selling Stockholder to believe that on the Effective
Date, the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date the Prospectus contained and, on
the Closing Date and any later date on which Optional Stock is to be
purchased, contains any untrue statement of a material fact or omitted
or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Each Selling Stockholder agrees that the shares of Stock represented by
the certificates held in custody under the Custody Agreement are for
the benefit of and coupled with and subject to the interests of the
Underwriters, the other Selling Stockholders and the Company hereunder,
and that the arrangement for such custody and the appointment of the
Attorneys-in-fact are irrevocable; that the obligations of such Selling
Stockholder hereunder shall not be terminated by operation of law,
whether by the death or incapacity, liquidation or distribution of such
Selling Stockholder, or any other event, that if such Selling
Stockholder should die or become incapacitated or is liquidated or
dissolved or any other event occurs, before the delivery of the Stock
hereunder, certificates for the Stock to be sold by such Selling
Stockholder shall be delivered on behalf of such Selling Stockholder in
accordance with the terms and conditions of this Agreement and the
Custody Agreement, and action taken by the Attorneys-in-fact or any of
them under the Power of Attorney shall be as valid as if such death,
incapacity, liquidation or dissolution or other event had not occurred,
whether or not the Custodian, the Attorneys-in-fact or any of them
shall have notice of such death, incapacity, liquidation or dissolution
or other event.
3. Purchase by, and Sale and Delivery to, Underwriters -- Closing
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Dates. The Company and the Selling Stockholders agree, severally and not
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jointly, to sell to the Underwriters the Firm Stock with the number of shares to
be sold by the Company and each Selling Shareholder being the number of Shares
set opposite his, her or its name in Schedule B and on the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase the Firm Stock from the Company and the
Selling Stockholders, the number of shares of Firm Stock to be purchased by each
Underwriter being set opposite its name in Schedule A,
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subject to adjustment in accordance with Section 12 hereof. The number of shares
of Stock to be purchased by each Underwriter from each Selling Stockholder
hereunder shall bear the same proportion to the total number of shares of Stock
to be purchased by such Underwriter hereunder as the number of shares of stock
being sold by each Selling Stockholder bears to the total number of shares of
Stock being sold by all Selling Stockholders, subject to adjustment by the
Representatives to eliminate fractions.
The purchase price per share to be paid by the Underwriters to the
Company and the Selling Stockholders will be $ _____ per share (the "Purchase
Price").
The Company and the Selling Stockholders will deliver the Firm Stock
to the Representatives for the respective accounts of the several Underwriters
in the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York Time, on the second full
business day preceding the First Closing Date (as defined below) or, if no such
direction is received, in the names of the respective Underwriters or in such
other names as Cowen may designate (solely for the purpose of administrative
convenience) and in such denominations as Cowen may determine, against payment
of the aggregate Purchase Price therefor by wire transfer (same day funds),
payable to the order of the Company, all at the offices of Foley, Hoag & Eliot
LLP, One Post Office Square, Boston, Massachusetts 02109. The time and date of
the delivery and closing shall be at 10:00 A.M., New York Time, on ___________,
1996, in accordance with Rule 15c6-1 of the Exchange Act. The time and date of
such payment and delivery are herein referred to as the "First Closing Date".
The Closing Date and the location of delivery of, and the form of payment for,
the Firm Stock may be varied by agreement between the Company and Cowen. The
Closing Date may be postponed pursuant to the provisions of Section 12.
The Company and the Selling Stockholders shall make the certificates
for the Stock available to the Representatives for examination on behalf of the
Underwriters not later than 10:00 A.M., New York Time, on the business day
preceding the Closing Date at the offices of Cowen & Company, Financial Square,
New York, New York 10005.
It is understood that Cowen, Montgomery Securities or Prudential
Securities Incorporated, individually and not as Representatives of the several
Underwriters, may (but shall not be obligated to) make payment to the Company on
behalf of any Underwriter or Underwriters, for the Stock to be purchased by such
Underwriter or Underwriters. Any such payment by Cowen, Montgomery Securities
or Prudential Securities Incorporated shall not relieve such Underwriter or
Underwriters from any of its or their other obligations hereunder.
The several Underwriters agree to make an initial public offering of
the Firm Stock at the initial public offering price as soon after the
effectiveness of the Registration Statement as in their judgment is advisable.
The Representatives shall promptly advise the Company and the Selling
Stockholders of the making of the initial public offering.
-13-
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Company and each of the Selling Stockholders hereby grants to the Underwriters
an option to purchase, severally and not jointly, up to the aggregate number of
shares of Optional Stock set forth opposite the Company's and each such Selling
Stockholder's name on Schedule B hereto, for an aggregate of up to
______________ shares. The price per share to be paid for the Optional Stock
shall be the Purchase Price. The option granted hereby may be exercised as to
all or any part of the Optional Stock at any time, and from time to time, not
more than thirty (30) days subsequent to the effective date of this Agreement.
No Optional Stock shall be sold and delivered unless the Firm Stock previously
has been, or simultaneously is, sold and delivered. The right to purchase the
Optional Stock or any portion thereof may be surrendered and terminated at any
time upon notice by the Underwriters to the Company and the Selling
Stockholders.
The option granted hereby may be exercised by the Underwriters by
giving written notice from Cowen to the Company and the Selling Stockholders
setting forth the number of shares of the Optional Stock to be purchased by them
and the date and time for delivery of and payment for the Optional Stock. Each
date and time for delivery of and payment for the Optional Stock (which may be
the First Closing Date, but not earlier) is herein called the "Option Closing
Date" and shall in no event be earlier than two (2) business days nor later than
ten (10) business days after written notice is given. (The Option Closing Date
and the First Closing Date are herein called the "Closing Dates"). All
purchases of Optional Stock shall be made first from the Company and then the
Selling Stockholders on a pro rata basis. Optional Stock shall be purchased for
the account of each Underwriter in the same proportion as the number of shares
of Firm Stock set forth opposite such Underwriter's name in Schedule B hereto
bears to the total number of shares of Firm Stock (subject to adjustment by the
Underwriters to eliminate odd lots). Upon exercise of the option by the
Underwriters, the Company and the Selling Stockholders agree to sell to the
Underwriters the number of shares of Optional Stock set forth in the written
notice of exercise and the Underwriters agree, severally and not jointly and
subject to the terms and conditions herein set forth, to purchase the number of
such shares determined as aforesaid.
The Company and the Selling Stockholders will deliver the Optional
Stock to the Underwriters in the form of definitive certificates, issued in such
names and in such denominations as the Representatives may direct by notice in
writing to the Company and the Selling Stockholders given at or prior to 12:00
Noon, New York Time, on the second full business day preceding the Option
Closing Date or, if no such direction is received, in the names of the
respective Underwriters or in such other names as Cowen may designate (solely
for the purpose of administrative convenience) and in such denominations as
Cowen may determine, against payment of the aggregate Purchase Price therefor by
wire transfer (same day funds), payable to the order of the Company and the
Company as Custodian for the Selling Stockholders or payable as directed by the
Company and such Custodian all at the offices of Foley, Hoag & Eliot LLP, One
Post Office Square, Boston, Massachusetts 02109. The Company and the Selling
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Stockholders shall make the certificates for the Optional Stock available to the
Underwriters for examination not later than 10:00 A.M., New York Time, on the
business day preceding the Option Closing Date at the offices of Cowen &
Company, Financial Square, New York, New York 10005. The Option Closing Date and
the location of delivery of, and the form of payment for, the Option Stock may
be varied by agreement between the Company, the Custodian for the Selling
Stockholders and Cowen. The Option Closing Date may be postponed pursuant to
the provisions of Section 12.
4. Covenants and Agreements of the Company. The Company covenants
---------------------------------------
and agrees with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives have
determined not to proceed pursuant to Rule 430A, use its best efforts to
cause the Registration Statement to become effective, (ii) if the Company
and the Representatives have determined to proceed pursuant to Rule 430A,
use its best efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to Rule 430A and Rule 424 of
the Rules and Regulations and (iii) if the Company and the Representatives
have determined to deliver Prospectuses pursuant to Rule 434 of the Rules
and Regulations, to use its best efforts to comply with all the applicable
provisions thereof. The Company will advise the Representatives promptly
as to the time at which the Registration Statement becomes effective, will
advise the Representatives promptly of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of the institution of any proceedings for that purpose, and will use its
best efforts to prevent the issuance of any such stop order and to obtain
as soon as possible the lifting thereof, if issued. The Company will
advise the Representatives promptly of the receipt of any comments of the
Commission or any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for
additional information and will not at any time file any amendment to the
Registration Statement or supplement to the Prospectus which shall not
previously have been submitted to the Representatives a reasonable time
prior to the proposed filing thereof or which the Representatives shall not
have previously approved in writing (such approval not to be unreasonably
withheld or delayed) or which is not in compliance with the Securities Act
and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon the request of the Representatives, any amendments or supplements to
the Registration Statement or the Prospectus which in the opinion of the
Representatives may be necessary to enable the several Underwriters to
continue the distribution of the Stock and will use its best efforts to
cause the same to become effective as promptly as possible.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Stock is required to be
delivered under the Securities Act any
-15-
event relating to or affecting the Company occurs as a result of which the
Prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Securities Act, the Company
will promptly notify the Representatives thereof and will prepare an
amended or supplemented prospectus which will correct such statement or
omission; and in case any Underwriter is required to deliver a prospectus
relating to the Stock nine (9) months or more after the effective date of
the Registration Statement, the Company upon the request of the
Representatives and at the expense of such Underwriter will prepare
promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Securities Act.
(d) The Company will deliver to the Representatives, at or before the
Closing Dates, signed copies of the Registration Statement, as originally
filed with the Commission, and all amendments thereto including all
financial statements and exhibits thereto, and will deliver to the
Representatives such number of copies of the Registration Statement,
including such financial statements, but without exhibits, and all
amendments thereto, as the Representatives may reasonably request. The
Company will deliver or mail to or upon the order of the Representatives,
from time to time until the effective date of the Registration Statement,
as many copies of the Preeffective Prospectus as the Representatives may
reasonably request. The Company will deliver or mail to or upon the order
of the Representatives on the date of the initial public offering, and
thereafter from time to time during the period when delivery of a
prospectus relating to the Stock is required under the Securities Act, as
many copies of the Prospectus, in final form or as thereafter amended or
supplemented as the Representatives may reasonably request; provided,
--------
however, that the expense of the preparation and delivery of any prospectus
-------
required for use nine (9) months or more after the effective date of the
Registration Statement shall be borne by the Underwriters required to
deliver such prospectus.
(e) The Company will make generally available to its Stockholders as
soon as practicable, but not later than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement which
will be in reasonable detail (but which need not be audited) and which will
comply with Section 11(a) of the Securities Act, covering a period of at
least twelve (12) months beginning after the "effective date" (as defined
in Rule 158 under the Securities Act) of the Registration Statement.
(f) The Company will cooperate with the Representatives to enable the
Stock to be registered or qualified for offering and sale by the
Underwriters and by dealers under the securities laws of such jurisdictions
as the Representatives may designate, provided that such jurisdictions are
within the United States, Guam or Puerto Rico, and at the request of the
Representatives will make such applications and furnish such consents to
-16-
service of process or other documents as may be required of it as the
issuer of the Stock for that purpose; provided, however, that the Company
-------- -------
shall not be required to qualify to do business or to file a general
consent (other than that arising out of the offering or sale of the Stock)
to service of process in any such jurisdiction where it is not now so
subject. The Company will, from time to time, prepare and file such
statements and reports as are or may be required of it as the issuer of the
Stock to continue such qualifications in effect for so long a period as the
Representatives may reasonably request for the distribution of the Stock.
The Company will advise the Representatives promptly after the Company
becomes aware of the suspension of the qualifications or registration of
(or any such exception relating to) the Common Stock of the Company for
offering, sale or trading in any jurisdiction or of any initiation or
threat of any proceeding for any such purpose, and in the event of the
issuance of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the Representatives
use its best efforts to obtain the withdrawal thereof.
(g) The Company will furnish to its stockholders annual reports
containing financial statements certified by independent public accountants
and with quarterly summary financial information in reasonable detail which
may be unaudited.
(h) The Company will use its best efforts to list the Stock on the
Nasdaq National Market.
(i) The Company will maintain a transfer agent and registrar for its
Common Stock.
(j) Prior to filing its first six quarterly statements on Form 10-Q,
the Company will have its independent auditors perform a limited quarterly
review of its quarterly numbers.
(k) The Company will not offer, sell, assign, transfer, encumber,
contract to sell, grant an option to purchase or otherwise dispose of any
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock (including, without limitation, Common Stock
of the Company which may be deemed to be beneficially owned by the Company
in accordance with the Rules and Regulations) during the 180 days following
the date on which the price of the Common Stock to be purchased by the
Underwriters is set (except with prior written consent of each of the
Representatives), other than the Company's sale of Common Stock hereunder
and the Company's issuance of Common Stock upon the exercise of warrants
and stock options which are presently outstanding and described in the
Prospectus or pursuant to the Company's employee stock purchase and stock
option plans.
-17-
(l) The Company will apply the net proceeds from the sale of the Stock
as set forth in the description under "Use of Proceeds" in the Prospectus
which description complies in all material respects with the requirements
of Item 504 of Regulation S-K.
(m) The Company will supply you with copies of all correspondence to
and from, and all documents issued to and by, the Commission in connection
with the registration of the Stock under the Securities Act and the
Exchange Act.
(n) Prior to the Closing Dates, the Company will furnish to you, as
soon as they have been prepared, copies of any unaudited interim financial
statements of the Company for any periods subsequent to the periods covered
by the financial statements appearing in the Registration Statement and the
Prospectus.
(o) Prior to the First Closing Date, the Company will issue no press
release or other communications directly or indirectly and hold no press
conference with respect to the Company, its financial condition, results of
operation, business, prospects, assets or liabilities, or the offering of
the Stock, without your prior written consent. For a period of twelve (12)
months following the Closing Date, the Company will use its best efforts to
provide to you copies of each press release or other public communications
with respect to the financial condition, results of operations, business,
prospects, assets or liabilities of the Company at least twenty-four (24)
hours prior to the public issuance thereof or such longer advance period as
may reasonably be practicable.
(p) During the period of five (5) years hereafter, the Company will
furnish to the Representatives, and upon request of the Representatives, to
each of the Underwriters: (i) as soon as practicable after the end of each
fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and
statements of income, stockholder's equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public
accountants; (ii) as soon as practicable after the filing thereof, copies
of each proxy statement, Annual Report on Form 10-K, Quarterly Report on
Form 10-Q, Current Report on Form 8-K or other report filed by the Company
with the Commission, or the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company
mailed generally to holders of its Common Stock and (iv) from time to time,
such other information concerning the Company as you may reasonably
request.
(Q) THE COMPANY HAS NOT DISTRIBUTED AND, PRIOR TO THE LATER OF (I) THE
CLOSING DATE AND (II) THE COMPLETION OF THE DISTRIBUTION OF THE STOCK, WILL
NOT DISTRIBUTE ANY OFFERING MATERIAL IN CONNECTION WITH THE OFFERING AND
SALE OF THE STOCK OTHER THAN THE REGISTRATION STATEMENT OR ANY AMENDMENT
THERETO, ANY PRELIMINARY PROSPECTUS OR THE PROSPECTUS OR ANY AMENDMENT OR
SUPPLEMENT THERETO, OR OTHER MATERIALS, IF ANY PERMITTED BY THE ACT.
-18-
5. Payment of Expenses. (a) The Company will pay (directly or by
-------------------
reimbursement) all costs, fees and expenses incurred in connection with or
incident to the performance of the obligations of the Company and of the Selling
Stockholders under this Agreement and in connection with the transactions
contemplated hereby, including but not limited to (i) all expenses and taxes
incident to the issuance and delivery of the Stock to the Representatives; (ii)
all expenses incident to the registration of the Stock under the Securities Act;
(iii) the costs of preparing stock certificates (including printing and
engraving costs); (iv) all fees and expenses of the registrar and transfer agent
of the Stock; (v) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Stock to the Underwriters; (vi)
fees and expenses of the Company's counsel and the Company's independent
accountants; (vii) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement, each Preeffective Prospectus and the Prospectus (including all
exhibits and financial statements) and all amendments and supplements provided
for herein, the Selling Stockholders' Powers of Attorney, the Custody
Agreements, the "Agreement Among Underwriters" between the Representatives and
the Underwriters, the Master Selected Dealers' Agreement, the Underwriters'
Questionnaire and the Blue Sky memoranda and this Agreement; (viii) all filing
fees, attorneys fees' and expenses incurred by the Company or the Underwriters
in connection with exemptions from the qualifying or registering (or obtaining
qualification or registration of) all or any part of the Stock for offer and
sale and determination of its eligibility for investment under the Blue Sky or
other securities laws of such jurisdictions as the Representatives may
designate; (ix) all fees and expenses paid or incurred in connection with
filings made with the NASD; and (x) all other reasonable costs and expenses
incident to the performance of their obligations hereunder which are not
otherwise specifically provided for in this Section.
(b) Each Selling Stockholder will pay (directly or by reimbursement)
all fees and expenses incident to the performance of such Selling Stockholder's
obligations under this Agreement which are not otherwise specifically provided
for herein, including but not limited to any fees and expenses of counsel for
such Selling Stockholder, such Selling Stockholder's pro rata share of fees and
expenses of the Attorneys-in-fact and the Custodian and all expenses and taxes
incident to the sale and delivery of the Stock to be sold by such Selling
Stockholder to the Underwriters hereunder.
(c) In addition to their other obligations under Section 6(a) and (b)
hereof, but subject to the provisions of this Section 6(c) and Section 6(e)
hereof, the Company and the Selling Stockholders agree that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding arising out of or based upon (i) any misstatement or omission
or any alleged misstatement or omission or (ii) any breach or inaccuracy in
their representations and warranties, they will reimburse each Underwriter on a
quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial
-19-
determination as to the propriety and enforceability of the Company's
and Selling Stockholders' obligation to reimburse each Underwriter for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company or the Selling Stockholder, as the case
maybe, together with interest, compounded daily, determined on the basis of the
prime rate (or other commercial lending rate for borrowers of the highest credit
standing) announced from time to timed by Chemical Bank, New York, New York (the
"Prime Rate"). Any such interim reimbursement payments which are not made to an
Underwriter in a timely manner as provided below shall bear interest at the
Prime Rate from the due date for such reimbursement. This expense reimbursement
agreement will be in addition to any other liability which the Company and the
Selling Stockholders may otherwise have. The request for reimbursement will be
sent to the Company with a copy to each Selling Stockholder. In the event that
the Company fails to make such reimbursement payment and the Underwriters have
exhausted their remedies against the Company for such payments, the
Representatives shall notify the Selling Stockholders of their obligation to
make such reimbursement payments within fifteen (15) days; provided, however,
that each Selling Stockholder shall be required to advance at such time only its
pro rata portion of the reimbursement payment. To the extent that any Selling
Stockholder fails to pay its pro rata portion in timely response to the
Underwriters' request, the other Selling Stockholders shall be jointly and
severally liable for such reimbursement payment and each shall render such
payment to the Representatives within fifteen (15) days of written demand
therefor by the Representatives.
(d) In addition to its other obligations under Section 6(c) hereof,
each Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any misstatement or omission of a material fact, or
any alleged misstatement or omission of a material fact, described in Section
6(c) hereof which relates to information furnished by the Underwriters to the
Company, directly or through the Representatives, it will reimburse the Company
(and, to the extent applicable, each officer, director, or controlling person or
Selling Stockholder) on a quarterly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director, or controlling person or Selling
Stockholder) for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To
the extent that any such interim reimbursement payment is so held to have been
improper, the Company (and, to the extent applicable, each officer, director, or
controlling person or Selling Stockholder) shall promptly return it to the
Underwriters together with interest, compounded daily, determined on the basis
of the Prime Rate. Any such interim reimbursement payments which are not made
to the Company within thirty (30) days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
-20-
(e) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in paragraph (c) and/or (d) of
this Section 5, including the amounts of any requested reimbursement payments
and the method of determining such amounts, shall be settled by arbitration
conducted under the provisions of and pursuant to the arbitration procedures of
the National Association of Securities Dealers, Inc. Any such arbitration must
be commenced by service of a written demand for arbitration or written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the event
the party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Such an arbitration would be limited to the
operation of the interim reimbursement provisions contained in paragraph (c)
and/or (d) of this Section 5 and would not resolve the ultimate propriety or
enforceability of the obligation to reimburse expenses which is created by the
provisions of Section 6.
6. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of the Securities Act and the
respective officers, directors, shareholders, partners and employees of each of
such Underwriter or person who controls such Underwriter (collectively, the
"Underwriter Indemnified Parties" and, each, an "Underwriter Indemnified
Party"), against any losses, claims, damages, liabilities or expenses
(including, unless the Company elects to assume the defense, the reasonable cost
of investigating and defending against any claims therefor and counsel fees
incurred in connection therewith), joint or several, which may be based upon the
Securities Act, the Exchange Act or any other statute or at common law, on the
ground or alleged ground that any Preeffective Prospectus, the Registration
Statement or the Prospectus (or any Preeffective Prospectus, the Registration
Statement or the Prospectus as from time to time amended or supplemented)
includes an untrue statement of a material fact or omits to state a 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, unless such statement or omission was made in reliance upon, and in
conformity with, written information furnished to the Company by any
Underwriter, directly or through the Representatives, specifically for use in
the preparation thereof; provided, that with respect to any untrue statement or
omission or alleged untrue statement or omission made in any Registration
Statement, the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Underwriter Indemnified Party from whom the person
asserting any such losses, claims, damages or liabilities purchased the shares
of Stock concerned to the extent that any such loss, claim, damage or liability
of such Underwriter Indemnified Party results from the fact that a copy of the
Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such shares of Stock to such person as required by
the Securities Act and if the untrue statement or omission concerned has been
corrected in the Prospectus; provided, however, that in no case is the Company
to be liable with respect to any claims made against any Underwriter Indemnified
Party against whom the action is brought unless such Underwriter Indemnified
Party shall have notified the Company in writing within a reasonable time after
the summons or other first legal process giving
-21-
information of the nature of the claim served upon the Underwriter Indemnified
Party, but failure to notify the Company of such claim shall not relieve it from
any liability which it may have to any Underwriter Indemnified Party otherwise
than on account of its indemnity agreement contained in this paragraph. The
Company will be entitled to participate at its own expense in the defense or, if
it so elects, to assume the defense of any suit brought to enforce any such
liability, but if the Company elects to assume the defense, such defense shall
be conducted by counsel chosen by it. In the event the Company elects to assume
the defense of any such suit and retain such counsel, any Underwriter
Indemnified Parties, defendant or defendants in the suit, may retain additional
counsel but shall bear the fees and expenses of such counsel unless (i) the
Company shall have specifically authorized in writing the retaining of such
counsel or (ii) the parties to such suit include any such Underwriter
Indemnified Parties and the Company, and such Underwriter Indemnified Parties at
law or in equity have been advised by counsel to the Underwriters that one or
more legal defenses may be available to it or them which may not be available to
the Company, in which case the Company shall not be entitled to assume the
defense of such suit notwithstanding its obligation to bear the fees and
expenses of such counsel. The Company shall not be liable to indemnify any
person for any settlement of any such claim effected without the Company's
consent. This indemnity agreement is not exclusive and will be in addition to
any liability which the Company might otherwise have and shall not limit any
rights or remedies which may otherwise be available at law or in equity to each
Underwriter Indemnified Party.
(b) Subject to the provisions of subparagraph (e) of this Section 6,
each Selling Stockholder agrees to indemnify and hold harmless each Underwriter
Indemnified Party against any losses, claims, damages, liabilities or expenses
(including, unless such Selling Stockholder elects to assume the defense, the
reasonable cost of investigating and defending against any claims therefor and
counsel fees incurred in connection therewith), joint or several, which may be
based upon the Securities Act, the Exchange Act or any other statute or at
common law, on the ground or alleged ground that any Preeffective Prospectus,
the Registration Statement or the Prospectus (or any Preeffective Prospectus,
the Registration Statement or the Prospectus, as from time to time amended and
supplemented) includes an untrue statement of a material fact or omits to state
a 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, unless such statement or omission was made in reliance upon, and
in conformity with, written information furnished to the Company by any
Underwriter, directly or through Representatives, specifically for use in the
preparation thereof; provided, that with respect to any untrue statement or
omission or alleged untrue statement or omission made in any Registration
Statement, the indemnity agreement contained in this subsection (b) shall not
inure to the benefit of any Underwriter Indemnified Party from whom the person
asserting any such losses, claims, damages or liabilities purchased the shares
of Stock concerned to the extent that any such loss, claim, damage or liability
of such Underwriter Indemnified Party results from the fact that a copy of the
Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such shares of Stock to such person as required by
the Securities Act and if the untrue statement or omission concerned has been
corrected in the Prospectus; provided, however, that in no case is such Selling
-22-
Stockholder to be liable with respect to any claims made against any Underwriter
Indemnified Party against whom the action is brought unless such Underwriter
Indemnified Party shall have notified such Selling Stockholder in writing within
a reasonable time after the summons or other first legal process giving
information of the nature of the claim served upon the Underwriter Indemnified
Party, but failure to notify such Selling Stockholder of such claim shall not
relieve it from any liability which it may have to any Underwriter Indemnified
Party otherwise than on account of its indemnity agreement contained in this
paragraph; and provided, further, that with respect to any indemnfication
arising out of or based upon any breach of any representation contained in
Section 2 hereof, the Underwriters agree to exhaust their remedies against the
Company before proceeding against the Selling Stockholders. Such Selling
Stockholder shall be entitled to participate at his own expense in the defense,
or, if he so elects, to assume the defense of any suit brought to enforce any
such liability, but, if such Selling Stockholder elects to assume the defense,
such defense shall be conducted by counsel chosen by him. In the event that any
Selling Stockholder elects to assume the defense of any such suit and retain
such counsel, the Underwriter Indemnified Parties, defendant or defendants in
the suit, may retain additional counsel but shall bear the fees and expenses of
such counsel unless (i) such Selling Stockholder shall have specifically
authorized in writing the retaining of such counsel or (ii) the parties to such
suit include such Underwriter Indemnified Parties, and such Selling Stockholder
and such Underwriter Indemnified Parties have been advised by counsel that one
or more legal defenses may be available to it or them which may not be available
to such Selling Stockholder, in which case, such Selling Stockholder shall not
be entitled to assume the defense of such suit notwithstanding its obligation to
bear the fees and expenses of such counsel. The Selling Stockholders against
whom indemnity may be sought shall not be liable to indemnify any person for any
settlement of any such claim effective without such Selling Stockholder's
consent. This indemnity agreement is not exclusive and will be in addition to
any liability which such Selling Stockholder might otherwise have and shall not
limit any rights or remedies which may otherwise be available at law or in
equity to each Underwriter Indemnified Party. The Company and the Selling
Stockholders may agree, as among themselves and without limiting the rights of
the Underwriters under this Agreement, as to their respective amounts of such
liability for which they each shall be responsible.
(c) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who have signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act (collectively, the "Company Indemnified
Parties") and each Selling Stockholder and each person, if any, who controls a
Selling Stockholder within the meaning of the Securities Act (collectively, the
"Stockholder Indemnified Parties"), against any losses, claims, damages,
liabilities or expenses (including, unless the Underwriter or Underwriters elect
to assume the defense, the reasonable cost of investigating and defending
against any claims therefor and counsel fees incurred in connection therewith),
joint or several, which arise out of or are based in whole or in part upon the
Securities Act, the Exchange Act or any other federal, state, local or foreign
statute or regulation, or at common law, on the ground or alleged ground that
any Preeffective Prospectus,
-23-
the Registration Statement or the Prospectus (or any Preeffective Prospectus,
the Registration Statement or the Prospectus, as from time to time amended and
supplemented) includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading, but only insofar as any such statement or omission was made in
reliance upon, and in conformity with, written information furnished to the
Company by such Underwriter, directly or through the Representatives,
specifically for use in the preparation thereof; provided, however, that in no
case is such Underwriter to be liable with respect to any claims made against
any Company Indemnified Party or Stockholder Indemnified Party against whom the
action is brought unless such Company Indemnified Party or Stockholder
Indemnified Party shall have notified such Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim served upon the Company Indemnified Party
or Stockholder Indemnified Party, but failure to notify such Underwriter of such
claim shall not relieve it from any liability which it may have to any Company
Indemnified Party or Stockholder Indemnified Party otherwise than on account of
its indemnity agreement contained in this paragraph. Such Underwriter shall be
entitled to participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but, if
such Underwriter elects to assume the defense, such defense shall be conducted
by counsel chosen by it. In the event that any Underwriter elects to assume the
defense of any such suit and retain such counsel, the Company Indemnified
Parties or Stockholder Indemnified Parties and any other Underwriter or
Underwriters or controlling person or persons, defendant or defendants in the
suit, shall bear the fees and expenses of any additional counsel retained by
them, respectively unless (i) the Underwriter shall have specifically authorized
in writing the retaining of such counsel or (ii) the parties to such suit
- ----------
include the Company or a Stockholder Indemnified Party, and the Underwriters and
such Company or Stockholder Indemnified Party at law or in equity have been
advised by counsel to the Company or such Stockholder Indemnified Party that one
or more defenses may be available to them which may not be available to the
Underwriters, in which case the Underwriters shall not be entitled to assume the
defense of such suit notwithstanding its obligation to bear fees and expenses of
such counsel. The Underwriter against whom indemnity may be sought shall not be
liable to indemnify any person for any settlement of any such claim effected
without such Underwriter's consent. This indemnity agreement is not exclusive
and will be in addition to any liability which such Underwriter might otherwise
have and shall not limit any rights or remedies which may otherwise be available
at law or in equity to any Company Indemnified Party or Stockholder Indemnified
Party.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) or (c) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein,
then, subject to Section 6(e) below, each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and
-24-
the Underwriters on the other from the offering of the Stock. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company and the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution 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. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, defending, settling or compromising any
such claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of the Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
Underwriters' obligations to contribute are several in proportion to their
respective underwriting obligations and not joint. 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.
(e) The liability of each Selling Stockholder under such Selling
Stockholder's representations and warranties contained in Section 2 hereof and
under the indemnity and reimbursement agreements contained in the provisions of
this Section 5 and Section 6 hereof shall be limited to the lesser of (i) that
portion of the total of such losses, claims, damages, liabilities or expenses
indemnified against equal to the proportion of the Stock sold by such Selling
Stockholder to the Underwriters or (ii) the proceeds (net of underwriting
discounts and commission) received upon the sale of the Stock sold by such
selling Stockholder to the Underwriters.
-25-
7. Survival of Indemnities, Representations, Warranties, etc. The
---------------------------------------------------------
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Selling
Stockholders, the Company or any of its officers or directors or any controlling
person, and shall survive delivery of and payment for the Stock.
8. Conditions of Underwriters Obligations. The respective
--------------------------------------
obligations of the several Underwriters hereunder shall be subject to the
accuracy, at and (except as otherwise stated herein) as of the date hereof and
at and as of the Closing Dates, of the representations and warranties made
herein by the Company and the Selling Stockholders, to compliance at and as of
the Closing Dates by the Company and the Selling Stockholders with their
covenants and agreements herein contained and other provisions hereof to be
satisfied at or prior to the Closing Dates, and to the following additional
conditions:
(a) The Registration Statement shall have become effective and no
stop order suspending the effectiveness thereof shall have been issued
and no proceedings for that purpose shall have been initiated or, to
the knowledge of the Company or the Representatives, shall be
threatened by the Commission, and any request for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representatives.
Any filings of the Prospectus, or any supplement thereto, required
pursuant to Rule 424 (b) or Rule 434 of the Rules and Regulations,
shall have been made in the manner and within the time period required
by Rule 424(b) and Rule 434 of the Rules and Regulations, as the case
may be.
(b) The Representatives shall have been satisfied that there
shall not have occurred any change prior to the Closing Dates in the
condition (financial or otherwise), properties, business, management,
net worth or results of operations of the Company, or any change in
the capital stock, or any material change in short-term or long-term
debt of the Company, such that (i) the Registration Statement or the
Prospectus, or any amendment or supplement thereto, contains an untrue
statement of fact which, in the opinion of the Representatives, is
material, or omits to state a fact which, in the opinion of the
Representatives, is required to be stated therein or is necessary to
make the statements therein not misleading, or (ii) it is
unpracticable in the reasonable judgment of the Representatives to
proceed with the public offering or purchase the Stock as contemplated
hereby.
-26-
(c) The Representatives shall be satisfied that no legal or
governmental action, suit or proceeding affecting the Company which is
material and adverse to the Company or which affects or may affect the
Company's or the Selling Stockholders' ability to perform their
respective obligations under this Agreement shall have been instituted
or threatened and there shall have occurred no material adverse
development in any existing such action, suit or proceeding.
(d) At the time of execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP,
independent certified public accountants, a letter, dated the date
hereof, in form and substance satisfactory to the Underwriters.
(e) The Representatives shall have received from Deloitte &
Touche LLP, independent certified public accountants, a letter, dated
the Closing Dates, to the effect that such accountants reaffirm, as of
the Closing Dates, and as though made on the Closing Date(s), the
statements made in the letter furnished by such accountants pursuant
to paragraph (d) of this Section 8.
(f) The Representatives shall have received from Foley, Hoag &
Eliot LLP, counsel for the Company and for the Selling of
Stockholders, an opinion, dated the Closing Dates, to the effect set
forth in Exhibit I hereto and from Foley, Hoag & Eliot LLP or other
counsel for the Selling Stockholders reasonably acceptable to the
Representatives, an opinion, dated the Closing Dates, to the effect
set forth in Exhibit II hereto.
(g) The Representatives shall have received from Testa, Hurwitz &
Thibeault, LLP, counsel for the Underwriters, their opinion or
opinions dated the Closing Dates with respect to the incorporation of
the Company, the validity of the Stock, the Registration Statement and
the Prospectus and such other related matters as they may reasonably
request, and the Company and the Selling Stockholders shall have
furnished to such counsel such documents as they may request for the
purpose of enabling them to pass upon such matters.
(h) The Representatives shall have received a certificate, dated
the Closing Dates, of the Chief Executive Officer or the President and
the chief financial or accounting officer of the Company to the effect
that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of the
knowledge of the signers, no proceedings for that purpose have
been instituted or are pending or contemplated under the
Securities Act;
-27-
(ii) Neither any Preeffective Prospectus, as of its date,
nor the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, as of the time when the
Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate,
included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as set forth or contemplated in the
Prospectus, the Company has not incurred any material liabilities
or obligations, direct or contingent, nor entered into any
material transactions, not in the ordinary course of business and
there has not been any material adverse change in the condition
(financial or otherwise), properties, business, management, net
worth or results of operations of the Company, or any change in
the capital stock (except pursuant to stock plans and warrants
described in the Registration Statement), or any material change
in the short-term or long-term debt of the Company;
(iv) The representations and warranties of the Company in
this Agreement are true and correct at and as of the Closing
Dates, and the Company has complied with all the agreements and
performed or satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Dates; and
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, (i)
there has not been any material adverse change or a development
involving a material adverse change in the condition (financial
or otherwise), properties, business, management, net worth or
results of operations of the Company; (ii) the business and
operations conducted by the Company have not sustained a loss by
strike, fire, flood, accident or other calamity (whether or not
insured) of such a character as to interfere materially with the
conduct of the business and operations of the Company; (iii) no
legal or governmental action, suit or proceeding is pending or
threatened against the Company which is material to the Company,
whether or not arising from transactions in the ordinary course
of business, or which may materially and adversely affect the
transactions contemplated by this Agreement; (iv) since such
dates and except as so disclosed, the Company has not incurred
any
-28-
material liability or obligation, direct, contingent or
indirect, made any change in its capital stock (except pursuant
to stock plans and warrants described in the Registration
Statement), made any material change in its short-term or funded
debt or repurchased or otherwise acquired any of the Company's
capital stock; and (v) the Company has not declared or paid any
dividend, or made any other distribution, upon its outstanding
capital stock payable to stockholders of record on a date prior
to the Closing Date.
(i) The Representatives shall have received a certificate or
certificates, dated the Closing Dates, of each of the Selling
Stockholders to the effect that as of the Closing Dates its
representations and warranties in this Agreement are true and correct
as if made on and as of the Closing Dates, and that it has performed
all its obligations and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Dates.
(j) The Company and each of the Selling Stockholders shall have
furnished to the Representatives such additional certificates as the
Representatives may have reasonably requested as to the accuracy, at
and as of the Closing Dates, of the representations and warranties
made herein by them and as to compliance at and as of the Closing
Dates by them with their covenants and agreements herein contained and
other provisions hereof to be satisfied at or prior to the Closing
Dates, and as to satisfaction of the other conditions to the
obligations of the Underwriters hereunder.
(k) Cowen shall have received the written agreements of the
officers, directors and holders of Common Stock and options to
purchase Common Stock listed in Schedule C that each will not offer,
sell, assign, transfer, encumber, contract to sell, grant an option to
purchase or otherwise dispose of any shares of Common Stock held by
such person (including without limitation any shares of Common Stock
that may be deemed to be beneficially owned by such person on the date
hereof in accordance with the Rules and Regulations) or any securities
convertible into, derivative of or exercisable or exchangeable for
such Common Stock for 180 days commencing on the date of the final
prospectus, except for (i) shares of Common Stock sold pursuant to
this Agreement, if any, and (ii) shares of Common Stock purchased by
such person in the public market pursuant to brokers' transactions,
(iii) shares of Common Stock sold to the Company or the entities on
Schedule D and (iv) distributions of Common Stock to limited partners
or shareholders of such Selling Stockholder provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the
-29-
Representatives. The Company will furnish to the Representatives conformed
copies of such opinions, certificates, letters and other documents as the
Representatives shall reasonably request. If any of the conditions hereinabove
provided for in this Section shall not have been satisfied when and as required
by this Agreement, this Agreement may be terminated by the Representatives by
notifying the Company of such termination in writing or by telegram at or prior
to the Closing Dates, but Cowen shall be entitled to waive any of such
conditions.
9. Effective Date. This Agreement shall become effective immediately
--------------
as to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to all other
provisions, at 11:00 a.m. New York City time on the first full business day
following the effectiveness of the Registration Statement or at such earlier
time after the Registration Statement becomes effective as the Representatives
may determine on and by notice to the Company or by release of any of the Stock
for sale to the public. For the purposes of this Section 9, the Stock shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Stock or upon the release by you of
telegrams (i) advising Underwriters that the shares of Stock are released for
public offering or (ii) offering the Stock for sale to securities dealers,
whichever may occur first.
10. Termination. This Agreement (except for the provisions of
-----------
Section 5) may be terminated by the Company at any time before it becomes
effective in accordance with Section 9 by notice to the Representatives and may
be terminated by the Representatives at any time before it becomes effective in
accordance with Section 9 by notice to the Company. In the event of any
termination of this Agreement under this or any other provision of this
Agreement, there shall be no liability of any party to this Agreement to any
other party, other than as provided in Sections 5, 6 and 11 and other than as
provided in Section 12 as to the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First Closing
Date, or the Option Closing Date trading in securities on any of the New York
Stock Exchange, American Stock Exchange, or the Nasdaq National Market shall
have been suspended or minimum or maximum prices shall have been established on
any such exchange or market, or a banking moratorium shall have been declared by
New York or United States authorities; (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) if at or prior to the First Closing Date or the Option Closing
Date there shall have been (A) an outbreak or escalation of hostilities between
the United States and any foreign power or of any other insurrection or armed
conflict involving the United States or (B) any change in financial markets or
any calamity or crisis which, in the judgment of the Representatives,
-30-
makes it impractical or inadvisable to offer or sell the Firm Stock or Optional
Stock, as applicable, on the terms contemplated by the Prospectus; (iv) if there
shall have been any development or prospective development involving
particularly the business or properties or securities of the Company or the
transactions contemplated by this Agreement, which, in the judgment of the
Representatives, makes it impracticable or inadvisable to offer or deliver the
Firm Stock or the Optional Stock, as applicable, on the terms contemplated by
the Prospectus; (v) if there shall be any litigation or proceeding, pending or
threatened, which, in the judgment of the Representatives, makes it
impracticable or inadvisable to offer or deliver the Firm Stock or Optional
Stock, as applicable, on the terms contemplated by the Prospectus; or (vi) if
there shall have occurred any of the events specified in the immediately
preceding clauses (i) - (v) together with any other such event that makes it, in
the judgment of the Representatives, impractical or inadvisable to offer or
deliver the Firm Stock or Optional Stock, as applicable, on the terms
contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any other
-----------------------------
provisions hereof, if this Agreement shall not become effective by reason of any
election of the Company pursuant to the first paragraph of Section 10 or shall
be terminated by the Representatives under Section 8 or Section 10, the Company
will bear and pay the expenses specified in Section 5 hereof and, in addition to
its obligations pursuant to Section 6 hereof, the Company will reimburse the
reasonable out-of-pocket expenses of the several Underwriters (including
reasonable fees and disbursements of counsel for the Underwriters) incurred in
connection with this Agreement and the proposed purchase of the Stock, and
promptly upon demand the Company will pay such amounts to you as
Representatives.
12. Substitution of Underwriters. If any Underwriter or Underwriters
----------------------------
shall default in its or their obligations to purchase shares of Stock hereunder
and the aggregate number of shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent (10%) of
the total number of shares underwritten, the other Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (i) the Company and
the Selling Stockholders shall have the right to postpone the Closing Dates for
a period of not more than five (5) full business days in order that the Company
and the Selling Stockholders may effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective numbers of shares to be
purchased by the remaining Underwriters or substituted Underwriters shall be
taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to
-31-
the Company, the Selling Stockholders or the other Underwriters for damages
occasioned by its default hereunder. Any termination of this Agreement pursuant
to this Section 12 shall be without liability on the part of any non-defaulting
Underwriter, the Selling Stockholders or the Company, except for expenses to be
paid or reimbursed pursuant to Section 5 and except for the provisions of
Section 6.
13. Notices. All communications hereunder shall be in writing and,
-------
if sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you, as their Representatives c/o Cowen & Company at Financial
Square, New York, New York 10005 except that notices given to an Underwriter
pursuant to Section 6 hereof shall be sent to such Underwriter at the address
furnished by the Representatives or, if sent to the Company, shall be mailed,
delivered or telegraphed and confirmed at Lightbridge, Inc., 281 Winter Street,
Waltham, Massachusetts 02154. With respect to the Selling Stockholders, notices
may be sent to an Attorney-in-Fact.
14. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the several Underwriters, the Company and the Selling Stockholders
and their respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company and the Selling
Stockholders contained in this Agreement shall also be for the benefit of the
person or persons, if any, who control any Underwriter or Underwriters within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and the indemnities of the several Underwriters shall also be for the
benefit of each director of the Company, each of its officers who has signed the
Registration Statement and the person or persons, if any, who control the
Company or any Selling Stockholders within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act.
15. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of New York.
16. Authority of the Representatives. In connection with this
--------------------------------
Agreement, you will act for and on behalf of the several Underwriters, and any
action taken under this Agreement by Cowen, as Representative, will be binding
on all the Underwriters; and any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all of the Selling Stockholders.
17. Partial Unenforceability. The invalidity or unenforceability of
------------------------
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement
-32-
is for any reason determined to be invalid or unenforceable, there shall be
deemed to be made such minor changes (and only such minor changes) as are
necessary to make it valid and enforceable.
18. General. This Agreement constitutes the entire agreement of the
-------
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Stockholders and the
Representatives.
19. Counterparts. This Agreement may be signed in two (2) 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.
Any person executing and delivering this Agreement as Attorney-in-fact
for the Selling Stockholders represents by so doing that he has been duly
appointed as Attorney-in-fact by such Selling Stockholder pursuant to a validly
existing and binding Power of Attorney which authorizes such Attorney-in-fact to
take such action.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
LIGHTBRIDGE, INC.
By:
Name:
Title:
SELLING STOCKHOLDERS LISTED
IN SCHEDULE B
-33-
By:
Pamela D.A. Reeve
Attorney-in-fact
By:
William G. Brown
Attorney-in-fact
Acting on behalf of the Selling Stockholders
listed in Schedule B.
-34-
Accepted and delivered in
New York New York as of
the date first above written.
COWEN & COMPANY
MONTGOMERY SECURITIES
PRUDENTIAL SECURITIES
INCORPORATED
By: COWEN & COMPANY
Acting on their own behalf and as
Representatives of several Underwriters
referred to in the foregoing Agreement.
By: Cowen Incorporated,
its general partner
By:_____________________________
Name:
Title:
-35-
SCHEDULE A
Number
of Firm
Shares
to be
Name Purchased
- ----- ---------
Cowen & Company.....................................................
Montgomery Securities...............................................
Prudential Securities Incorporated..................................
Total..........................................................
=========
-36-
SCHEDULE B
Number
Number of of
Optional Firm
Shares to Shares to
be Sold be Sold
--------- ---------
Selling Stockholders
- --------------------
-37-
SCHEDULE C
LOCKUP AGREEMENTS
[to include all stockholders and notice of the lock-up to be sent to
optionholders]
-38-
SCHEDULE D
ENTREPRENEURIAL LIMITED PARTNERSHIP I
ENTREPRENEURIAL LIMITED PARTNERSHIP II
ENTREPRENEURIAL LIMITED PARTNERSHIP III
ENTREPRENEURIAL LIMITED PARTNERSHIP IV
-39-