EXHIBIT 1.1
7,500,000 Shares
URS CORPORATION
COMMON STOCK, PAR VALUE $0.01 PER SHARE
UNDERWRITING AGREEMENT
April 7, 2004
April 7, 2004
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
URS Corporation, a Delaware corporation (the "COMPANY"), proposes to issue
and sell to the several Underwriters named in Schedule I hereto (the
"UNDERWRITERS") 7,500,000 shares of Common Stock, par value $0.01 per share, of
the Company (the "FIRM SHARES"). The Company also proposes to issue and sell to
the several Underwriters not more than an additional 1,125,000 shares of its
Common Stock, par value $0.01 per share (the "ADDITIONAL SHARES"), if and to the
extent that you, as Managers of the offering, shall have determined to exercise,
on behalf of the Underwriters, the right to purchase such shares granted to the
Underwriters in Section 2 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES". The shares of Common
Stock, par value $0.01 per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"COMMON STOCK".
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-112216), including a
prospectus, relating to the Shares, and has filed with, or transmitted for
filing to, or shall promptly hereafter file with or transmit for filing to, the
Commission (i) a prospectus supplement (the "PROSPECTUS SUPPLEMENT")
specifically relating to the Shares pursuant to Rule 424 under the Securities
Act of 1933, as amended (the "SECURITIES Act"), and (ii) a related prospectus
dated March 1, 2004 (the "BASE PROSPECTUS") and the offering thereof from time
to time in accordance with Rule 415 of the rules and regulations of the
Commission under the Securities Act (the "SECURITIES ACT REGULATIONS"). Such
registration statement has been declared effective by the Commission. Such
registration statement, as amended to the date hereof, is referred to herein as
the "REGISTRATION STATEMENT"; and the Base Prospectus and the Prospectus
Supplement, in the form first used to confirm sales of the Shares, are
collectively referred to herein as the "PROSPECTUS"; provided, however, that all
references to the "REGISTRATION STATEMENT" and the "PROSPECTUS" shall also be
deemed to include all documents incorporated therein by reference pursuant to
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"). If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"RULE 462 REGISTRATION STATEMENT"), then any reference herein to the term
"REGISTRATION STATEMENT" shall be deemed to include such Rule 462 Registration
Statement.
1. Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:
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(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by
the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act, and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder,
(ii) the Registration Statement, when it became effective and when the
Company's most recent Annual Report on Form 10-K was filed with the
Commission, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (iii) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the applicable Securities Act Regulations and (iv) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this paragraph 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) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(d) Each subsidiary of the Company has been duly incorporated or
formed, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation or formation, has the
corporate or limited liability company power and authority to own its
property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; all of the issued shares of capital stock of each subsidiary of the
Company that is a corporation and all of the issued limited liability
company interests of each subsidiary that is a limited liability company
have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or beneficially by the Company or
through wholly owned subsidiaries of the Company, free
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and clear of all liens, encumbrances, equities or claims (except in each
case as disclosed in the Prospectus).
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid
and non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
under this Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and sale
of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its subsidiaries
is subject that are required to be described in the Registration Statement
or the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required or
described in a document incorporated by reference into the Registration
Statement.
(l) Each preliminary prospectus or preliminary prospectus supplement
filed as part of the Registration Statement as originally filed or as part
of any
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amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the Securities Act Regulations.
(m) The Company is not, and after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as
described in the Prospectus will not be, required to register as an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended.
(n) Except as disclosed in the Prospectus, the Company and its
subsidiaries (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"),
(ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of
any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate,
reasonably be expected to have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(o) Except as disclosed in the Prospectus, there are no costs or
liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, reasonably be expected to have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(p) Except for the Registration Rights Agreement dated as of August
22, 2002, by and among the Company, Blum Strategic Partners, L.P., Blum
Capital Partners, L.P., Carlyle-EG&G, L.L.C. and EG&G Technical Services
Holdings, L.L.C., there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Securities
Act with respect to any securities of the Company or to require the
Company to include such securities with the Shares registered pursuant to
the Registration Statement.
(q) The Company and each of its subsidiaries (i) have all necessary
consents, authorizations, approvals, orders, certificates and permits of
and from, and have made all declarations and filings with, all federal,
state, local and other governmental, administrative or regulatory
authorities, all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use their respective properties and
assets and to conduct their respective businesses in the manner described
in the Prospectus, except to the extent that the failure to obtain such
consents, authorizations, approvals, orders, certificates and permits or
make such declarations and filings would not have a
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material adverse effect on the Company and its subsidiaries, taken as a
whole, and (ii) have not received any notice of proceedings relating to
revocation or modification of any such consent, authorization, approval,
order, certificate or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, except as described in the Prospectus.
(r) No material labor dispute exists with the employees of the
Company or any of its subsidiaries, except as described in or contemplated
by the Prospectus, or, to the Company's knowledge, is imminent; and the
Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(s) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to their respective
businesses, in each case free and clear of all liens, encumbrances and
defects, except such as (i) are described in the Prospectus, (ii) do not
materially affect the value of such property or (iii) do not interfere
with the use made and proposed to be made of such property by them; and
any real property and buildings held under lease by them are held under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed to
be made of such property and buildings by them, in each case except as
described in the Prospectus.
(t) Each of the Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively, "INTELLECTUAL
PROPERTY RIGHTS") necessary to conduct the business now operated by them,
or presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect to
any intellectual property rights that, if determined adversely to the
Company or any of its subsidiaries would individually or in the aggregate
reasonably be expected to have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(u) URS Holdings, Inc., a Delaware corporation ("URS HOLDINGS");
O'Brien Kreitzberg, Inc., a California corporation ("OBK"); EG&G Technical
Services, a Delaware corporation ("EG&G"); and URS Corporation, a Nevada
corporation ("URS NEVADA") are the only significant subsidiaries of the
Company (calculated on a basis consistent with the term "significant
subsidiary" as defined under Regulation S-X promulgated under the
Securities Act for the period ended October 31, 2003).
(v) The financial statements and related notes included in the
Registration Statement and Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries as of the dates
shown and their results of operations and cash flows for the periods
shown, and such financial statements and the
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notes thereto have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent basis
except as disclosed therein.
(w) The Company and its subsidiaries maintain systems 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.
(x) There is and has been no failure on the part of the Company or
any of the Company's directors or officers, in their capacities as such,
to comply with Section 402 (related to loans) and Sections 302 and 906
(related to certifications) of the Sarbanes-Oxley Act of 2002 (the
"Sarbanes-Oxley Act") and the rules and regulations promulgated in
connection therewith (the "Sarbanes-Oxley Regulations"), nor has there
been any failure on the part of the Company or any of the Company's
directors or officers, in their capacities as such, to comply with any
other provision of the Sarbanes-Oxley Act or the Sarbanes-Oxley
Regulations.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company at $25.3075 a share (the "PURCHASE PRICE") the number of Firm Shares set
forth in Schedule I hereto opposite its name.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have the
right to purchase, severally and not jointly, up to 1,125,000 Additional Shares
at the Purchase Price. You may exercise this right on behalf of the Underwriters
in whole or from time to time in part by giving written notice of each election
to exercise the option not later than 30 days after the date of this Agreement.
Any exercise notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Each purchase date must be at least two business days after the
written notice is given and may not be earlier than the closing date for the
Firm Shares nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 4 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. On each day, if any, that Additional Shares are to be purchased
(an "OPTION CLOSING DATE"), each Underwriter agrees, severally and not jointly,
to purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the total number of Additional Shares to be purchased on such Option Closing
Date as the number of Firm Shares set forth in Schedule I hereto opposite the
name of such Underwriter bears to the total number of Firm Shares.
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The Company hereby agrees that, without the prior written consent of
Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith
Incorporated on behalf of the Underwriters, it will not, during the period
ending 90 days after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or file any registration statement with the Commission relating to
the offering of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise.
The restrictions contained in the preceding paragraph shall not apply to
(A) the Shares to be sold hereunder, (B) the issuance by the Company of shares
of Common Stock upon the exercise of options granted under the Company's
employee benefit plans that are outstanding as of the date of this Agreement;
(C) the grant by the Company of options to purchase shares of Common Stock under
the Company's employee benefit plans as in effect on the date hereof, so long as
such plans are described in the Registration Statement and the Prospectus or in
a document incorporated therein by reference; or (D) the issuance by the Company
of shares of Common Stock under the Company's employee stock purchase plan as in
effect on the date hereof, so long as such plan is described in the Registration
Statement and the Prospectus or in a document incorporated therein by reference.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after this Agreement has become effective as in your judgment
is advisable. The Company is further advised by you that the Shares are to be
offered to the public initially at $26.50 a share (the "PUBLIC OFFERING PRICE")
and to certain dealers selected by you at a price that represents a concession
not in excess of $0.75 a share under the Public Offering Price.
4. Payment and Delivery. Payment for the Firm Shares shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on April 14, 2004, or at such
other time on the same or such other date, not later than April 21, 2004, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the corresponding
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than May 21, 2004, as shall be designated in
writing by you.
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The Firm Shares and Additional Shares shall be registered in such names
and in such denominations as you shall request in writing not later than one
full business day prior to the Closing Date or the applicable Option Closing
Date, as the case may be. The Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or an Option Closing Date, as the case may
be, for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Securities Act or
proceedings therefor initiated or threatened by the Commission.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 5(a)(i) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
The officer signing and delivering such certificate may rely upon the best
of his knowledge as to proceedings threatened.
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(c) The Underwriters shall have received on the Closing Date an
opinion of Cooley Godward LLP, outside counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Delaware, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and, to such counsel's knowledge, is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a
whole;
(ii) each of URS Holdings, OBK and EG&G (each, a "COVERED
Subsidiary" and together, the "COVERED SUBSIDIARIES"), has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus;
(iii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock" and in
the Form 8-A dated January 30, 1984 under the caption "Description
of Capital Stock" (which incorporates by reference the description
of the Common Stock contained in the Registration Statement on Form
S-1 filed on February 28, 1983);
(iv) the outstanding shares of Common Stock have been duly
authorized and are validly issued, fully paid and non-assessable;
(v) the Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive rights or, to such
counsel's knowledge, similar rights;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law (except for
Section 8 relating to indemnity and contribution as to which such
counsel need not express any opinion) or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that
is (A) filed as an exhibit to the Registration Statement or any
document incorporated by reference therein, (B) incorporated by
reference in the Registration Statement or (C) which the Company has
advised such counsel will
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be filed as an exhibit to the Company's next quarterly report on
Form 10-Q and which was executed by the Company prior to the date of
such opinion or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any of its subsidiaries, and
no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement,
except such as have been made or obtained or except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares;
(viii) the statements in (A) the Prospectus under the captions
"Description of Capital Stock" and "Underwriters" and (B) the
Registration Statement in Item 15, in each case insofar as such
statements constitute matters of law, summaries of legal matters,
provisions of the Company's certificate of incorporation or by-laws
or other equivalent corporate governance documents or legal
proceedings, or legal conclusions, have been reviewed by such
counsel and fairly present the matters referred to therein, to the
extent required by the Act and the Securities Act Regulations;
(ix) such counsel does not know of any legal or governmental
proceedings pending or overtly threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in
the Registration Statement or the Prospectus that are not so
described or described in documents incorporated by reference in the
Registration Statement as required;
(x) the Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus will not be, required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended; and
(xi) to such counsel's knowledge, (A) each document filed
pursuant to the Exchange Act and incorporated by reference in the
Registration Statement or the Prospectus (except for the financial
statements and financial schedules and other financial and
statistical data derived therefrom, as to which such counsel need
not express any belief) complied as to form when filed in all
material respects with the requirements of the Exchange Act, and the
applicable rules and regulations of the Commission thereunder and
(B) the Registration Statement or the Prospectus (except for the
financial statements and financial schedules and other financial and
statistical data derived therefrom, as to which such counsel need
not express any belief) complied as to form in all material respects
with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. In addition, such
counsel shall confirm that such counsel has participated in
conferences with officers and other
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representatives of the Company and the independent public
accountants of the Company and representatives of the Underwriters
at which conferences the contents of the Registration Statement and
Prospectus were discussed and, although such counsel is not passing
upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statements or Prospectus (except as and to the extent
stated in subparagraphs ((iii) and (viii) above), on the basis of
the foregoing, nothing has come to the attention of such counsel
that causes such counsel to believe that the Registration Statement
or the prospectus included therein (except for the financial
statements and financial schedules and other financial and
statistical data derived therefrom, as to which such counsel need
not express any belief) at the time the Registration Statement
became effective contained an 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 or the
Prospectus (except for the financial statements and financial
schedules and other financial and statistical data derived
therefrom, as to which such counsel need not express any belief) as
of its date or as of the date of such opinion contained or contains
an untrue statement of a material fact or omitted 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.
(d) The Underwriters shall have received on the Closing Date an
opinion of Woodburn and Wedge, special Nevada counsel for the Company,
dated the Closing Date, to the effect that:
(i) URS Nevada has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Nevada, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus.
(e) The Underwriters shall have received on the Closing Date an
opinion of Sidley Austin Brown & Wood LLP, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
5(c)(v), 5(c)(vi), 5(c)(viii) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters") and
Section 5(c)(xi) (other than clause (A)) above.
The opinions of Cooley Godward LLP and Woodburn and Wedge LLP described in
Sections 5(c) and 5(d) above shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
(f) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the
Underwriters, from PricewaterhouseCoopers LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in,
or incorporated by reference into, the Registration Statement and the
11
Prospectus; provided that the letter delivered on the Closing Date shall
use a "cut-off date" not earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain stockholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the
Closing Date.
(h) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the chief financial
officer of the Company, certifying as to the preparation, completeness and
accuracy of certain financial and statistical data relating to the Company
included in the Prospectus.
The several obligations of the Underwriters to purchase 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 the Additional
Shares to be sold on such Option Closing Date and other matters related to the
issuance of such Additional Shares.
(6) Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, four signed copies of the
Registration Statement (including exhibits thereto and documents
incorporated by reference) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto but
including documents incorporated by reference) and to furnish to you in
New York City, without charge, prior to 10:00 a.m. New York City time on
the business day next succeeding the date of this Agreement and during the
period mentioned in Section 6(c) below, as many copies of the Prospectus,
any documents incorporated by reference, and any supplements and
amendments thereto or to the Registration Statement as you may reasonably
request. The terms "supplement" and "amendment" or "amend" as used in this
Agreement shall include all documents subsequently filed by the Company
with the Commission pursuant to the Exchange Act that are deemed to be
incorporated by reference in the Prospectus.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus or prospectus supplement required to be filed pursuant to such
Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event
12
shall occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the opinion of counsel
for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company) to
which Shares may have been sold by you on behalf of the Underwriters and
to any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending April 30, 2005 that satisfies the provisions of
Section 11(a) of the Securities Act and the Securities Act Regulations.
7. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company
agrees to pay or cause to be paid all expenses incident to the performance
of its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with
the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost of
printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Shares under state securities
laws and all expenses in connection with the qualification of the Shares
for offer and sale under state securities laws as provided in Section 6(d)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of
the offering of the Shares by the National Association of Securities
Dealers, Inc., (v) all costs and expenses incident to listing the Shares
on the NYSE and the Pacific Exchange, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (viii) the costs and expenses of
the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including,
13
without limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers
of the Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show, (ix) the document production
charges and expenses associated with printing this Agreement and (x) all
other costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this
Section, Section 8 entitled "Indemnity and Contribution", and the last
paragraph of Section 10 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them and
any advertising expenses connected with any offers they may make.
8. Indemnity and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter, each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, and each affiliate of any Underwriter
within the meaning of Rule 405 under the Securities Act, from and against
any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection
with defending or investigating any such action or claim) caused by any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or preliminary prospectus supplement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect to
any preliminary prospectus or preliminary prospectus supplement shall not
inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities 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 or supplemented) would have
cured the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by the
Company with Section 6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the directors of the Company, the officers
of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of
the Securities Act or Section 20
14
of the Exchange Act from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
any amendment thereof, any preliminary prospectus or preliminary
prospectus supplement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to
such Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use in the Registration Statement, any
preliminary prospectus or preliminary prospectus supplement, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 8(a) or 8(b), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing
by Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner &
Smith Incorporated in the case of parties indemnified pursuant to Section
8(a), and by the Company, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement
or judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered
into more than 30 days after receipt by such indemnifying party of
15
the aforesaid request and has not been objected to by such indemnifying
party within such 30 day period and (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request
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 unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a)
or 8(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company 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 8(d)(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 8(d)(i) above but also the
relative fault of the Company on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus
Supplement, bear to the aggregate Public Offering Price of the Shares. The
relative fault of the Company on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 8 are
several in proportion to the respective number of Shares they have
purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 8(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection
16
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 that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 8 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law
or in equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter, any person
controlling any Underwriter or any affiliate of any Underwriter or by or
on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
9. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the
Chicago Board of Trade or the Pacific Exchange, (ii) trading of any securities
of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a material disruption in securities settlement,
payment or clearance services in the United States shall have occurred, (iv) any
moratorium on commercial banking activities shall have been declared by Federal
or New York State authorities or (v) there shall have occurred any outbreak or
escalation of hostilities, or any change in financial markets, currency exchange
rates or controls or any calamity or crisis that, in your judgment, is material
and adverse and which, singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Shares on the terms and in the manner
contemplated in the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite
17
the names of all such non-defaulting Underwriters, or in such other proportions
as you may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 10 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such Option Closing Date, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase the Additional Shares to be sold on such Option
Closing Date or (ii) purchase not less than the number of Additional Shares that
such non-defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
[SIGNATURE PAGE FOLLOWS]
18
Very truly yours,
URS CORPORATION
By: /s/ Kent P. Ainsworth
----------------------------------------
Name: Kent P. Ainsworth
Title: Executive Vice President
and Chief Financial Officer
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
By: /s/ Bryan Andrzejewski
--------------------------------------
Name: Bryan Andrzejewski
Title: Executive Director
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Leonard Chung
---------------------------------------
Authorized Representative
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
19
SCHEDULE I
NUMBER OF FIRM
SHARES TO BE
UNDERWRITERS PURCHASED
Morgan Stanley & Co. Incorporated 2,625,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 2,625,000
Credit Suisse First Boston LLC 1,125,000
Lehman Brothers Inc. 750,000
D.A. Davidson & Co. 225,000
Morgan Joseph & Co. Inc. 150,000
---------
Total...................................................
7,500,000
=========
20
EXHIBIT A
[FORM OF LOCK-UP LETTER]
March -, 2004
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY") and Merrill Lynch, Pierce, Fenner & Smith Incorporated
("MERRILL LYNCH") propose to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with URS Corporation, a Delaware corporation (the
"COMPANY"), providing for the public offering (the "PUBLIC OFFERING") by the
several Underwriters, including Morgan Stanley and Merrill Lynch (the
"UNDERWRITERS"), of approximately 7,500,000 shares (the "Shares") of the common
stock, par value $0.01 per share, of the Company (the "COMMON Stock").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Morgan Stanley and
Merrill Lynch on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending the earlier of (x) 90 days after the
date of the final prospectus relating to the Public Offering (the "PROSPECTUS"),
and (y) if the Underwriting Agreement has not been executed by the parties
thereto by May 30, 2004, May 30, 2004, (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (a) the sale of any Shares
to the Underwriters pursuant to the Underwriting Agreement; (b) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the offering of the Shares; (c) transfers
of shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock as a bona fide gift or gifts; (d) transfers
21
or distributions of shares of Common Stock, or any security convertible into or
exercisable or exchangeable for Common Stock, to affiliates (as defined in Rule
405 under the Securities Act); (e) transfers to the Company of shares of Common
Stock to pay the exercise price of stock options granted to the undersigned
under the Company's employee stock option plans (provided that the shares so
transferred are not sold or otherwise disposed of by the Company) and transfers
of shares of Common Stock to the Company so long as the proceeds from such
transfers are applied solely to pay withholding taxes due with respect to the
exercise by the undersigned of any such stock options or with respect to the
vesting of restricted stock granted to the undersigned under the Company's
restricted stock plan; and (f) transfers by the undersigned or its permitted
distributee or transferee of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock to a family member of the
undersigned or of such distributee or transferee or a trust created for the
benefit of the undersigned or such distributee or transferee or a family member
of the undersigned or such distributee or transferee; provided that in the case
of any gift, transfer or distribution referred to in clause (c), (d) or (f)
above, such donee, transferee or distributee shall execute and deliver to Morgan
Stanley and Merrill Lynch, prior to or contemporaneously with such gift,
transfer or distribution, an agreement to be bound by the restrictions set forth
herein. In addition, the undersigned agrees that, without the prior written
consent of Morgan Stanley and Merrill Lynch on behalf of the Underwriters, it
will not, during the period commencing on the date hereof and ending 90 days
after the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
undersigned's shares of Common Stock except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
------------------------------------
(Name)
------------------------------------
(Address)