1
EXHIBIT 1.1
4,000,000 Shares
MAXIMUS, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS INC.
LEGG MASON WOOD WALKER,
INCORPORATED
As representatives of the
several underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs and Mesdames:
MAXIMUS, Inc., a Virginia corporation (the "Company"), and the
stockholders of the Company named in Schedule II hereto, (collectively, the
"Selling Stockholders"), severally propose to sell an aggregate of 4,000,000
shares of common stock, no par value, of the Company (the "Firm Shares"), to the
several underwriters named in Schedule I hereto (the "Underwriters"). The Firm
Shares consist of 2,000,000 shares to be issued and sold by the Company and
2,000,000 outstanding shares to be sold by the Selling Stockholders. The Company
and the Selling Stockholders also propose to sell to the several Underwriters
not more than 600,000 additional shares of common stock, no par value, of the
Company (the "Additional Shares"), if requested by the Underwriters as provided
in Section 2 hereof. The Firm Shares and the
2
Additional Shares are herein collectively called the "Shares". The shares of
common stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "Common Stock". The
Company and the Selling Stockholders are hereinafter collectively called the
"Sellers".
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-3 (File No. 333- ) including a
prospectus relating to the Shares, which may be amended. The registration
statement as amended at the time when it becomes effective, including a
registration statement (if any) filed pursuant to Rule 462(b) under the Act
increasing the size of the offering registered under the Act and information (if
any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to as
the "Registration Statement"; and the prospectus in the form first used to
confirm sales of Shares is hereinafter referred as the "Prospectus".
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, (i) the Company agrees to issue and sell 2,000,000 Firm
Shares, (ii) each Selling Stockholder agrees, severally and not jointly, to sell
the number of Firm Shares set forth opposite such Selling Stockholder's name in
Schedule II hereto and (iii) each Underwriter agrees, severally and not jointly,
to purchase from each Seller at a price per share of $ (the "Purchase Price")
the number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) which bears the same proportion to the total number
of Firm Shares to be sold by such Seller as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto bears to the total
number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell up to Additional Shares, (ii) certain of the Selling Stockholders
agree, severally and not jointly, to sell up to the number of Additional Shares
set forth opposite such Selling Stockholder's name in Schedule II hereto and
(iii) the Underwriters shall have the right to purchase, severally and not
jointly, up to an aggregate of 600,000 Additional Shares from the Company and
those Selling Stockholders who have agreed to sell Additional Shares, at the
Purchase Price. Additional Shares may be purchased solely for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. The Underwriters may exercise their right to purchase Additional Shares
in whole or in part from time
-2-
3
to time by giving written notice thereof to the Company within 30 days after the
date of this Agreement. You shall give any such notice on behalf of the
Underwriters and such notice shall specify the aggregate number of Additional
Shares to be purchased pursuant to such exercise and the date for payment and
delivery thereof. The date specified in any such notice shall be a business day
(i) no earlier than the Closing Date (as hereinafter defined), (ii) no later
than ten business days after such notice has been given and (iii) no earlier
than two business days after such notice has been given. The maximum number of
Additional Shares to be purchased from each such Selling Stockholder is set
forth on SCHEDULE II hereto. If less than the maximum number of Additional
Shares are to be purchased hereunder, each of the Company and such Selling
Stockholders, severally and not jointly, agrees to sell to the Underwriters the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as you may determine) which bears the same proportion to the total number
of Additional Shares to be purchased by the Underwriters as the maximum number
of Additional Shares to be sold by each of the Company or such Selling
Stockholders bears to the total number of Additional Shares. If any Additional
Shares are to be purchased, each Underwriter, severally and not jointly, agrees
to purchase from the Company and such Selling Stockholders the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased from the Company and such Selling Stockholders
as the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I bears to the total number of Firm Shares.
The Sellers hereby agree, severally and not jointly, and the Company
shall, concurrently with the execution of this Agreement, deliver an agreement
executed by (i) each of the directors and officers of the Company and (ii) each
stockholder of the Company, pursuant to which each such person agrees not to
offer, sell, contract to sell, pledge, grant any option to purchase, or
otherwise dispose of any common stock of the Company or any securities
convertible into or exercisable or exchangeable for such common stock or in any
other manner transfer all or a portion of the economic consequences associated
with the ownership of any such common stock, except to the Underwriters pursuant
to this Agreement, for a period of 90 days after the date of the Prospectus
without the prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation. Notwithstanding the foregoing, during such period (i) the Company
may grant stock options pursuant to the Company's existing stock option plan
described in the Prospectus and (ii) the Company may issue shares of its common
stock upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof.
3. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that the
Underwriters propose (i) to make a public offering
-3-
4
of their respective portions of the Shares as soon after the effective date of
the Registration Statement as in your judgment is advisable and (ii) initially
to offer the Shares upon the terms set forth in the Prospectus.
4. DELIVERY AND PAYMENT. Delivery to the Underwriters of and payment
for the Firm Shares shall be made at 10:00 A.M., New York City time, on the
third or fourth business day following the date this Agreement becomes effective
unless otherwise permitted by the Commission pursuant to Rule 15c6-1 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (the "Closing
Date"), at such place outside the State of New York as you shall designate. The
Closing Date and the location of delivery of and the form of payment for the
Firm Shares may be varied by agreement between you and the Sellers.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at such place as you shall
designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "Option
Closing Date"). Any such Option Closing Date and the location of delivery of and
the form of payment for such Additional Shares may be varied by agreement
between you and the Company and the Selling Stockholders.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection not
later than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the respective Sellers, for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by wire
transfer of same day funds to the order of the applicable Sellers.
5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To use its best efforts to maintain the effectiveness of the
Registration Statement.
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment to it becomes effective, (ii) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional
-4-
5
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, and
(iv) of the happening of any event during the period referred to in
paragraph (e) below which makes any statement of a material fact made in
the Registration Statement or the Prospectus untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal or lifting of such order at the
earliest possible time.
(c) To furnish to you, without charge, two (2) signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, together with two (2) copies of
all documents incorporated by reference therein, and to furnish to you and
each Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus of which you shall
not previously have been advised or to which you shall reasonably object;
and to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause the
same to become promptly effective.
(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the opinion of counsel
for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus and including any incorporated
documents) as such Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters,
it becomes necessary to amend or supplement the Prospectus in order to make
the statements
-5-
6
therein, in the light of the circumstances when the Prospectus is delivered
to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with any law, forthwith to prepare and
file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with law,
and to furnish to each Underwriter and to such dealers as you shall
specify, such number of copies thereof as such Underwriter or dealers may
reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such qualification in effect
so long as required for distribution of the Shares and to file such
consents to service of process or other documents as may be necessary in
order to effect such registration or qualification.
(h) To mail and make generally available to its stockholders as soon
as reasonably practicable an earnings statement covering a period of at
least twelve months after the effective date of the Registration Statement
(but in no event commencing later than 90 days after such date) which shall
satisfy the provisions of Section 11(a) of the Act, and to advise you in
writing when such statement has been so made available.
(i) During the period of five years after the date of this Agreement,
to comply with all reporting and shareholder communications obligations
imposed upon the Company under the Exchange Act.
(j) During the period referred to in paragraph (i), to furnish to you
as soon as available a copy of each report or other publicly available
information of the Company mailed to the holders of Common Stock or filed
with the Commission and such other publicly available information
concerning the Company and its subsidiaries, if any, as you may reasonably
request.
(k) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), each
preliminary prospectus and all amendments and supplements to any of them
prior to or during the period specified in paragraph (e), (ii) the printing
and delivery of the Prospectus and all amendments
-6-
7
or supplements to it during the period specified in paragraph (e), (iii)
the photocopying and delivery of this Agreement, the Blue Sky Memoranda and
all other agreements, memoranda, correspondence and other documents
delivered in connection with the offering of the Shares (including in each
case any disbursements of counsel for the Underwriters relating to such
photocopying and delivery), (iv) the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of the
several states (including in each case the reasonable fees and
disbursements of counsel for the Underwriters relating to such registration
or qualification and memoranda relating thereto), (v) filings and clearance
with the National Association of Securities Dealers, Inc. in connection
with the offering (including the reasonable fees and disbursements of
counsel for the Underwriters relating to such filings and clearance), (vi)
the listing of the Shares on the New York Stock Exchange, (vii) furnishing
such copies of the Registration Statement, the Prospectus and all
amendments and supplements thereto as may be requested for use in
connection with the offering or sale of the Shares by the Underwriters or
by dealers to whom Shares may be sold and (viii) the performance by the
Sellers of their other obligations under this Agreement.
(l) To use its best efforts to maintain the listing of the Common
Stock on the New York Stock Exchange for a period of five years after the
effective date of the Registration Statement.
(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company
prior to the Closing Date or any Option Closing Date, as the case may be,
and to satisfy all conditions precedent to the delivery of the Shares.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each part of the Registration Statement, when such part became
effective, did not contain and each such part, as amended or supplemented,
if applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Act and (iii) the Prospectus
does
-7-
8
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph (b) do not apply
to statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, and each Registration Statement filed
pursuant to Rule 462(b) under the Act, if any, complied when so filed in
all material respects with the Act; and did not contain an 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 the light of the
circumstances under which they were made, not misleading. Any reference
herein to any preliminary prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to Form S-3 under the Act ("Incorporated Documents"), as of the
date of such preliminary prospectus or Prospectus, as the case may be. Any
document filed by the Company under the Exchange Act after the effective
date of the Registration Statement or the date of the Prospectus and
incorporated by reference in the Prospectus shall be deemed to be included
in that Registration Statement and the Prospectus as of the date of such
filing. The Incorporated Documents, when filed with the Commission,
conformed or will conform in all material respects to the requirements for
the Exchange Act, and none of such documents, as of the date of such
Incorporated Document, contained or will contain an untrue statement of a
material fact or omitted or will omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the Commonwealth of Virginia
and has the corporate power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its properties, and
is duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the Company.
-8-
9
(e) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights; and the Shares to be
issued and sold by the Company hereunder have been duly authorized and,
when issued and delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.
(f) The authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained or
incorporated by reference in the Prospectus.
(g) The Company is not in violation of its charter or by-laws or in
default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument material to
the conduct of the business of the Company to which the Company is a party
or by which the Company or its property is bound.
(h) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except as such may
be required under the federal securities laws and the securities or Blue
Sky laws of the various states) and will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
charter or by-laws of the Company or any agreement, indenture or other
instrument to which the Company is a party or by which the Company or its
property is bound, or violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the Company or its
property.
(i) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending to which the Company is
a party or of which any of its property is the subject, and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated. No contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement is not so described or filed as
required.
-9-
10
(j) The Company has not violated any foreign, federal, state or local
law or regulation relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), nor any federal or state law relating
to discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of the
Employee Retirement Income Security Act or the rules and regulations
promulgated thereunder, which in each case might result in any material
adverse change in the business, prospects, financial condition or results
of operation of the Company.
(k) The Company has all material permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits"),
including, without limitation, under any applicable Environmental Laws, as
are necessary to own, lease and operate its properties and to conduct its
business; the Company has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit; and, except as described in the
Prospectus, such permits contain no restrictions that are materially
burdensome to the Company.
(l) Except as otherwise set forth in the Prospectus or such as are not
material to the business, prospects, financial condition or results of
operation of the Company, the Company has good and marketable title, free
and clear of all liens, claims, encumbrances and restrictions except liens
for taxes not yet due and payable, to all property and assets described in
the Registration Statement as being owned by it. All leases to which the
Company is a party are valid and binding and no default has occurred or is
continuing thereunder which might result in any material adverse change in
the business, prospects, financial condition or results of operation of the
Company and the Company enjoys peaceful and undisturbed possession under
all such leases to which it is a party as lessee with such exceptions as do
not materially interfere with the use made by the Company.
(m) The Company maintains reasonably adequate insurance.
(n) Ernst & Young LLP and Grant Thorton LLP are each independent
public accountants with respect to the Company as required by the Act.
(o) The Company owns or possesses adequate rights with respect to the
use of all trade secrets, know-how, propriety techniques, including
processes and substances, trademarks,
-10-
11
service marks, trade names and copyrights (collectively, "Intellectual
Property") described, referred to or incorporated by in the Prospectus as
owned or used by it, or which are necessary for the conduct of its business
as described in the Prospectus, other than Intellectual Property the lack
of which would not reasonably be expected to result in any material adverse
change in the business, prospects, financial condition or results of
operation of the Company and no such rights as are material to the business
and prospects of the Company expire or are subject to termination at the
election of another party without cause or the Company's consent at a time
or under circumstances which would result in any material adverse change in
the business, prospects, financial condition or results of operation of the
Company. The Company has not received any notice of infringement of or
conflict with asserted rights of others with respect to any patents, patent
rights, inventions, trade secrets, know-how, proprietary techniques,
including processes and substances, trademarks, service marks, trade names
or copyrights which would result in any material adverse change in the
business, prospects, financial condition or results of operation of the
Company.
(p) The Company is not involved in any labor dispute which, either
individually or in the aggregate, would reasonably be expected to result in
any material adverse change in the business, prospects, financial condition
or results of operation of the Company, nor, to the knowledge of the
Company, is any such dispute threatened.
(q) The financial statements included or incorporated by reference in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto), together with related schedules and notes forming part
of the Registration Statement and the Prospectus (and any amendment or
supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of the Company and
its subsidiaries on the basis stated therein at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; the supporting schedules (if any)
included or incorporated by reference in the Registration Statement present
fairly in accordance with generally accepted accounting principles the
information required to be stated therein; and the other financial and
statistical information and data set forth in or incorporated by reference
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) is, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books
and
-11-
12
records of the Company. The pro forma financial statements and data set
forth in or incorporated by reference in the Prospectus present fairly in
all material respects the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro
forma information, have been properly compiled on the pro forma basis
described therein, and, in the opinion of the Company, the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate under the circumstances.
(r) The Company is not and, after giving effect to the offer and sale
of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(s) Except as disclosed in the Prospectus, no holder of any security
of the Company has any right to require registration of shares of Common
Stock or any other security of the Company.
(t) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(u) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, the Company or any
subsidiary thereof except as otherwise disclosed in the Registration
Statement.
(v) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(w) All material tax returns required to be filed by the Company in
any jurisdiction have been filed, other than those filings being contested
in good faith, and all material taxes, including withholding taxes,
penalties and interest,
-12-
13
assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Company have been paid, other
than those being contested in good faith and for which adequate reserves
have been provided.
(x) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
7. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder severally represents and warrants to each Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has, and on
the Closing Date (and Option Closing Date, if applicable) will have, good
and clear title to such Shares, free of all restrictions on transfer,
liens, encumbrances, security interests and claims whatsoever.
(b) Upon delivery of and payment for such Shares pursuant to this
Agreement, good and clear title to such Shares will pass to the
Underwriters, free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever.
(c) Such Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority to enter into this Agreement and the
Custody Agreement between the Selling Stockholders and the Company, as
Custodian (the "Custody Agreement"), and to sell, assign, transfer and
deliver such Shares in the manner provided herein and therein, and this
Agreement and the Custody Agreement have been duly authorized, executed and
delivered by such Selling Stockholder and each of this Agreement and the
Custody Agreement is a valid and binding agreement of such Selling
Stockholder enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited by applicable law.
(d) The power of attorney signed by such Selling Stockholder
appointing David V. Mastran and Raymond B. Ruddy, or either one of them, as
his or her attorney-in-fact to the extent set forth therein with regard to
the transactions contemplated hereby and by the Registration Statement and
the Custody Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder and is a valid and binding
instrument of such Selling Stockholder enforceable in accordance with its
terms, and, pursuant to such power of attorney, such Selling Stockholder
has
-13-
14
authorized David V. Mastran and Raymond B. Ruddy, or either one of them, to
execute and deliver on his or her behalf this Agreement and any other
document necessary or desirable in connection with transactions
contemplated hereby and to deliver the Shares to be sold by such Selling
Stockholder pursuant to this Agreement.
(e) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably
be expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares pursuant to the distribution contemplated by this Agreement, and
other than as permitted by the Act, the Selling Stockholder has not
distributed and will not distribute any prospectus or other offering
material in connection with the offering and sale of the Shares.
(f) The execution, delivery and performance of this Agreement by such
Selling Stockholder, compliance by such Selling Stockholder with all the
provisions hereof and the consummation of the transactions contemplated
hereby will not require any consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental
body (except as such may be required under the Act, state securities laws
or Blue Sky laws) and will not conflict with or constitute a breach of any
of the terms or provisions of, or a default under, organizational documents
of such Selling Stockholder, if not an individual, or any agreement,
indenture or other instrument to which such Selling Stockholder is a party
or by which such Selling Stockholder or property of such Selling
Stockholder is bound, or violate or conflict with any laws, administrative
regulation or ruling or court decree applicable to such Selling Stockholder
or property of such Selling Stockholder.
(g) (i) To the knowledge of such Selling Stockholder, the
representations and warranties of the Company set forth in Section 6 hereof
are true and correct and (ii) such parts of the Registration Statement
under the caption "Selling Shareholders" which specifically relate to such
Selling Stockholder do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of circumstances under
which they were made, not misleading.
(h) At any time during the period described in paragraph 5(e) hereof,
if there is any change in the information referred to in paragraph 7(g)
above, the Selling Stockholders will immediately notify you of such change.
-14-
15
8. INDEMNIFICATION. (a) The Company and each Selling Stockholder,
jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), from and against any
and all losses, claims, damages, liabilities and judgments caused by any
untrue statement or alleged untrue statement of a material fact contained
or incorporated by reference in the Registration Statement or the
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities
or judgments are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any
Underwriters furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use therein. Notwithstanding the
foregoing, the aggregate liability of any Selling Stockholder pursuant to
the provisions of this paragraph shall be limited to an amount equal to the
aggregate purchase price received by such Selling Stockholder from the sale
of such Selling Stockholder's Shares hereunder; PROVIDED, HOWEVER, that the
foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages and liabilities and judgments
purchased Shares, or any person controlling such Underwriter, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale of
the Shares to such person, and if the Prospectus (as so amended and
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or judgment.
(b) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the
Company and the Selling Stockholders, such Underwriter shall promptly
notify the Company and the Selling Stockholders in writing and the Company
and the Selling Stockholders shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such indemnified party
and payment of all fees and expenses. Any Underwriter or any such
controlling person shall have the right to employ separate
-15-
16
counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the employment of such
counsel has been specifically authorized in writing by the Company, (ii)
the Company and the Selling Stockholders shall have failed to assume the
defense and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both such Underwriter or such
controlling person and the Company or any Selling Stockholder, as the case
may be, and such Underwriter or such controlling person shall have been
advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available
to the Company or the Selling Stockholders, as the case may be (in which
case the Company and the Selling Stockholders shall not have the right to
assume the defense of such action on behalf of such Underwriter or such
controlling person, it being understood, however, that the Company and the
Selling Stockholders shall not, in connection with any one such action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all such
Underwriters and controlling persons, which firm shall be designated in
writing by Donaldson, Lufkin & Jenrette Securities Corporation and that all
such fees and expenses shall be reimbursed as they are incurred). A Seller
shall not be liable for any settlement of any such action effected without
the written consent of such Seller but if settled with the written consent
of such Seller, such Seller agrees to indemnify and hold harmless any
Underwriter and any such controlling person from and against any loss or
liability by reason of such settlement. Notwithstanding the immediately
preceding sentence, if in any case where the fees and expenses of counsel
are at the expense of the indemnifying party and an indemnified party shall
have requested the indemnifying party to reimburse the indemnified party
for such fees and expenses of counsel as incurred, such indemnifying party
agrees that it shall be liable for any settlement of any action effected
without its written consent if (i) such settlement is entered into more
than twenty business days after the receipt by such indemnifying party of
the aforesaid request and (ii) such indemnifying party shall have failed to
reimburse the indemnified party in accordance with such request for
reimbursement prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which
any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an
-16-
17
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
Selling Stockholder and each person, if any, controlling such Selling
Stockholder within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the
Sellers to each Underwriter but only with reference to information relating
to such Underwriter furnished in writing by or on behalf of such
Underwriter through you expressly for use in the Registration Statement,
the Prospectus or any preliminary prospectus. In case any action shall be
brought against the Company, any of its directors, any such officer or any
person controlling the Company or any Selling Stockholder or any person
controlling such Selling Stockholder based on the Registration Statement,
the Prospectus or any preliminary prospectus and in respect of which
indemnity may be sought against any Underwriter, the Underwriter shall have
the rights and duties given to the Sellers (except that if any Seller shall
have assumed the defense thereof), such Underwriter shall not be required
to do so, but may employ separate counsel therein and participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of such Underwriter), and the Company, its directors, any such
officers and any person controlling the Company and the Selling
Stockholders and any person controlling such Selling Stockholders shall
have the rights and duties given to the Underwriter, by Section 8(b)
hereof.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Sellers on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Sellers and the Underwriters
in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Sellers
-17-
18
and the Underwriters shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received
by the Sellers, and the total underwriting discounts and commissions
received by the Underwriters, bear to the total price to the public of the
Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Sellers and the Underwriters shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission 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 Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities or judgments referred
to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8(d) are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder
and not joint.
(e) Each Seller hereby designates MAXIMUS, Inc., 1356 Beverly Road,
McLean, Virginia 22101 (a Virginia corporation), as its authorized agent,
upon which process may be served in any action, suit or proceeding which
may be instituted in any state or federal court in the State of New York by
any Underwriter or person controlling an Underwriter asserting a claim for
indemnification or contribution under or pursuant to this Section 8, and
each Seller will accept the jurisdiction
-18-
19
of such court in such action, and waives, to the fullest extent permitted
by applicable law, any defense based upon lack of personal jurisdiction or
venue. A copy of any such process shall be sent or given to such Seller at
the address for notices specified in Section 13 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters to purchase the Firm Shares under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective not later
than 5:00 P.M.(and in the case of a Registration Statement filed under Rule
462(b) of the Act, not later than 10:00 p.m.), New York City time, on the
date of this Agreement or at such later date and time as you may approve in
writing, and at the Closing Date no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for
that purpose shall have been commenced or shall be pending before or
contemplated by the Commission.
(c)(i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of the Company, (ii) since the date of the
latest balance sheet included in the Registration Statement and the
Prospectus, there shall not have been any change, or any development
involving a prospective material adverse change, in the capital stock or in
the long-term debt of the Company from that set forth in the Registration
Statement and Prospectus, (iii) the Company and its subsidiaries shall have
no liability or obligation, direct or contingent, which is material to the
Company and its subsidiaries, taken as a whole, other than those reflected
in the Registration Statement and the Prospectus and (iv) on the Closing
Date you shall have received a certificate dated the Closing Date, signed
by David V. Mastran and Raymond B. Ruddy, in their capacities as the Chief
Executive Officer and Chairman of the Board and President of Consulting
Services, respectively, of the Company, confirming the matters set forth in
paragraphs (a), (b), and (c) of this Section 9.
-19-
20
(d) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date and
you shall have received a certificate to such effect, dated the Closing
Date, from each Selling Stockholder.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Palmer & Dodge LLP counsel for the Company and the Selling
Stockholders, to the effect that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the Commonwealth
of Virginia and has the corporate power and authority required to
carry on its business as it is currently being conducted and to own,
lease and operate its properties;
(ii) the Company is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the Company;
(iii) all the outstanding shares of Common Stock (including the
Shares to be sold by the Selling Stockholders) have been duly
authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights arising under law or
any contracts known to us;
(iv) the Shares to be issued and sold by the Company hereunder
have been duly authorized, and when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement,
will have been validly issued and will be fully paid and
non-assessable, and the issuance of such Shares is not subject to any
preemptive or similar rights arising under law or any contracts know
to us;
(v) this Agreement has been duly authorized, executed and
delivered by the Company and each of the Selling Stockholders;
(vi) the authorized capital stock of the Company, including the
Common Stock, conforms as to legal matters to the description thereof
contained incorporated by reference in the Prospectus;
-20-
21
(vii) the Registration Statement has become effective under the
Act, no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the knowledge of such counsel,
pending before or contemplated by the Commission;
(viii) the statements under the captions "Risk Factors - Certain
Anti-Takeover Effects" and "Underwriting" in the Prospectus and Item
15 of Part II of the Registration Statement insofar as such statements
constitute a summary of legal matters documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings;
(ix) the Company is not in violation of its charter or by-laws
and, to the best of such counsel's knowledge, the Company is not in
default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument
material to the conduct of the business of the Company, to which the
Company is a party or by which the Company or its property is bound;
(x) the execution, delivery and performance of this Agreement by
the Company and each Selling Stockholder, compliance by the Company
and each Selling Stockholder with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require
any consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
(except as such may be required under the Act or other securities or
Blue Sky laws) and will not conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the charter or
by-laws of the Company or any agreement, indenture or other instrument
known to us to which the Company or any Selling Stockholder is a party
or by which the Company or any Selling Stockholder or their respective
properties are bound, or violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to
the Company or any Selling Stockholder or their respective properties;
(xi) such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company is a party or to
which any of its property is subject which is required to be described
in the Registration Statement or the Prospectus and is not so
described, or of any contract or other document which is required to
be described in the Registration Statement or
-21-
22
the Prospectus or is required to be filed as an exhibit to the
Registration Statement which is not described or filed as required;
(xii) to the best of such counsel's knowledge, the Company has
not violated any Environmental Laws, nor any federal or state law
relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours laws,
nor any provisions of the Employee Retirement Income Security Act or
the rules and regulations promulgated thereunder, which in each case
might result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company;
(xiii) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(xiv) to the best of such counsel's knowledge, except as
disclosed in the Prospectus, no holder of any security of the Company
has any right to require registration of shares of Common Stock or any
other security of the Company;
(xv) to the best of such counsel's knowledge, all leases to which
the Company is a party are valid and binding and no default has
occurred or is continuing thereunder that might result in any material
adverse change in the business, prospects, financial condition or
results of operation of the Company, and the Company enjoys peaceful
and undisturbed possession under all such leases to which it is a
party as lessee with such exceptions as do not materially interfere
with the use made by the Company;
(xvi) the Registration Statement (including any Registration
Statement filed under 462(b) of the Act, if any) and the Prospectus
and any supplement or amendment thereto (except for financial
statements as to which no opinion need be expressed) comply as to form
in all material respects with the Act;
(xvii) the Custody Agreement has been duly executed and delivered
by each Selling Stockholder and is a valid and binding agreement of
such Selling Stockholder enforceable in accordance with its terms;
(xviii) each Selling Stockholder has full legal right, power and
authority, and any approval required by law (other than any approval
imposed by the applicable
-22-
23
state securities and Blue Sky laws) to sell, assign, transfer and
deliver the Shares to be sold by him in the manner provided in this
Agreement and the Custody Agreement;
(xix) each Selling Stockholder has good and clear title to the
certificates for the Shares to be sold by such Selling Stockholder and
upon delivery thereof, pursuant hereto and payment therefor, good and
clear title will pass to the Underwriters, severally, free of all
restrictions on transfer, liens, encumbrances, security interests and
claims whatsoever; and
(xx) the power of attorney signed by each Selling Stockholder
appointing David V. Mastran and Raymond B. Ruddy, or either of them,
as his or her attorney-in-fact to the extent set forth therein with
regard to the transactions contemplated hereby and by the Registration
Statement has been duly authorized, executed and delivered by or on
behalf of each Selling Stockholder and are valid and binding
instruments of such Selling Stockholder enforceable in accordance with
its terms, and pursuant to such power of attorney, each of the Selling
Stockholders has authorized David V. Mastran and Raymond B. Ruddy, or
either of them, to execute and deliver on their behalf this Agreement
and any other document necessary or desirable in connection with
transactions contemplated hereby and to deliver the Shares to be sold
by them pursuant to this Agreement.
Such counsel shall also provide a statement that based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but without independent check or verification except as
specified, nothing has come to their attention that would lead them to believe
that (except for financial statements, as to which no belief need be expressed)
the Registration Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and that the
Prospectus, as amended or supplemented, if applicable (except for financial
statements, as aforesaid) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
Such counsel shall also provide a statement that based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto and review and discussion
of the contents thereof, but
-23-
24
without independent check or verification except as specified, nothing has come
to their attention that would lead them to believe that any of the documents
incorporated by reference in the Prospectus, when they were so filed, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed, not
misleading; such counsel need express no belief as to the financial statements
or other financial or statistical data contained in any such document.
The opinion of Palmer & Dodge LLP described in paragraph (e) above
shall be rendered to you at the request of the Company or one or more of the
Selling Stockholders, as the case may be, and shall so state therein.
(f) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Winston & Strawn, counsel for the Underwriters, as to the
matters referred to in clauses (v), (vi) (but only with respect to the
Company), (viii), (ix) (but only with respect to the statements under the
caption "Underwriting") and (xviii) of the foregoing paragraph (e). In
giving such opinion with respect to the matters covered by clause (xvii),
such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
(g) You shall have received a letter on and as of the Closing Date, in
form and substance satisfactory to you, from each of Ernst & Young LLP and
Grant Thorton LLP, independent public accountants, with respect to the
financial statements and certain financial information contained or
incorporated by reference in the Registration Statement and the Prospectus
and substantially in the form and substance of the letter delivered to you
by Ernst & Young LLP and Grant Thorton LLP on the date of this Agreement.
(h) The Company and the Selling Stockholders shall not have failed at
or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with
by the Company and the Selling Stockholders at or prior to the Closing
Date.
(i) You shall have received on the Closing Date from each Selling
Stockholder a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
-24-
25
The several obligations of the Underwriters to purchase any Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of such Additional
Shares and other matters related to the issuance of such Additional Shares.
10. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Sellers if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company or the earnings, affairs, or business
prospects of the Company, whether or not arising in the ordinary course of
business, which would, in your reasonable judgment, make it impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus,
(ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your reasonable
judgment, is material and adverse and would, in your reasonable judgment, make
it impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus, (iii) the suspension or material limitation of
trading in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market or limitation on prices for securities on
any such exchange or the Nasdaq National Market, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your reasonable opinion materially and adversely affects, or will materially and
adversely affect, the business or operations of the Company, (v) the declaration
of a banking moratorium by either federal or New York State authorities or (vi)
the taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
-25-
26
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; PROVIDED that in no event shall the number of Firm Shares
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on an Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Additional Shares, as the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
applicable Sellers for purchase of such Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the applicable Sellers. In any such case
which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
11. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
severally agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes with respect to
the Shares to be sold by such Selling Stockholder; and
(b) To take all reasonable actions in cooperation with the Company and
the Underwriters to cause the Registration Statement to become effective at
the earliest possible time, to do and perform all things to be done and
performed under this Agreement prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Shares pursuant to this
Agreement.
-26-
27
12. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company to David V.
Mastran, c/o MAXIMUS, Inc., 1356 Beverly Road, McLean, Virginia 22101 (b) if to
the Selling Stockholders, to David V. Mastran, c/o MAXIMUS, Inc., 1356 Beverly
Road, McLean, Virginia 22101 and (c) if to any Underwriter or to you, to you c/o
Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York,
New York 10172, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties, covenants and other statements of the Selling Stockholders, the
Company, its officers and directors and of the several Underwriters set forth in
or made pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Shares, regardless of
(i) any investigation, or statement as to the results thereof, made by or on
behalf of any Underwriter or by or on behalf of the Sellers, the officers or
directors of the Company or any controlling person of the Sellers, (ii)
acceptance of the Shares and payment for them hereunder and (iii) termination of
this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Sellers agree to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Sellers, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
-27-
28
Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
MAXIMUS, INC.
By ____________________________________
Title:
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE II HERETO
By ____________________________________
Attorney-in-fact
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS INC.
LEGG MASON WOOD WALKER,
INCORPORATED
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By _____________________________
Title:
-28-
29
SCHEDULE I
----------
Number of Firm Shares
Underwriter To be Purchased
----------- ---------------------
Donaldson, Lufkin & Jenrette
Securities Corporation.....................................
Lehman Brothers Inc..........................................
Legg Mason Wood Walker, Incorporated.........................
---------
Total...................... 4,000,000
=========
-29-
30
SCHEDULE II
-----------
SELLING STOCKHOLDERS
Maximum Number of
Number of Firm Additional Shares
Name Shares Being Sold Subject to Sale
---- ----------------- ---------------
2,000,000
--------- -------
-30-