Exhibit 1.1
ExlService Holdings, Inc.
5,000,000 Shares
1
Common Stock
($0.001 par value)
Underwriting Agreement
New York, New York
October 19, 2006
Citigroup Global Markets
Inc.
Goldman, Sachs & Co.
As Representatives of the several
Underwriters,
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
ExlService Holdings, Inc., a
corporation organized under the laws of Delaware (the
“Company”), proposes to sell to the several
underwriters named in Schedule I hereto (the
“Underwriters”), for whom you (the
“Representatives”) are acting as representatives,
5,000,000 shares of common stock, $0.001 par value (“Common
Stock”) of the Company (said shares to be issued and sold by
the Company being hereinafter called the “Underwritten
Securities”). The Company also proposes to grant to the
Underwriters an option to purchase up to 750,000 additional shares
of Common Stock (the “Option Securities”; the Option
Securities, together with the Underwritten Securities, being
hereinafter called the “Securities”). To the extent
there are no additional Underwriters listed on Schedule I other
than you, the term Representatives as used herein shall mean you,
as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires.
Certain terms used in this Agreement are defined in Section 20
hereof.
1. Representations and
Warranties.
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(i)
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The Company
represents and warrants to, and agrees with, each Underwriter
that:
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(a) The Company has prepared and
filed with the Commission a registration statement (file number
333-121001) on Form S-1, including a related preliminary
prospectus, for registration under the Securities Act of 1933 (the
“Act”) of the offering and sale of the Securities. Such
Registration Statement, including any amendments thereto filed
prior to the Execution Time, has become effective. The Company may
have filed one or more amendments thereto, including a related
preliminary prospectus, each
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1
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Plus an option to
purchase from the Company up to 750,000 additional
Securities.
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of which has previously been
furnished to you. The Company will file with the Commission the
Prospectus in accordance with Rule 424(b). As filed, such
Prospectus shall contain all information required by the Act and
the rules thereunder and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary
Prospectus) as the Company has advised you, prior to the Execution
Time, will be included or made therein.
(b) On the Effective Date, the
Registration Statement did, and when the Prospectus is first filed
in accordance with Rule 424(b) and on the Closing Date (as
defined herein) and on any date on which Option Securities are
purchased, if such date is not the Closing Date (a
“settlement date”), the Prospectus (and any supplement
thereto) will, comply in all material respects with the applicable
requirements of the Act and the rules thereunder; on the Effective
Date and at the Execution Time, the Registration Statement did not
and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading;
and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date and any settlement date, the Prospectus (together
with any supplement thereto) will not, include any untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided , however , that the Company makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of
any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus (or any
supplement thereto), it being understood and agreed that the only
such information furnished by an Underwriter consists of the
information described as such in Section 8 hereof.
(c) (i) As of the Execution
Time, the Disclosure Package and the price to the public, the
number of Underwritten Securities and the number of Option
Securities to be included on the cover page of the Prospectus, when
taken together as a whole, and (ii) each electronic road show
when taken together as a whole with the Disclosure Package, and the
price to the public, the number of Underwritten Securities and the
number of Option Securities to be included on the cover page of the
Prospectus , does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The preceding sentence
does not apply to statements in or omissions from the Disclosure
Package based upon and in conformity with written information
furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by or on behalf
of any Underwriter consists of the information described as such in
Section 8 hereof.
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(d) (i) At the time of filing
the Registration Statement and (ii) as of the Execution Time
(with such date being used as the determination date for purposes
of this clause (ii)), the Company was not and is not an Ineligible
Issuer (as defined in Rule 405), without taking account of any
determination by the Commission pursuant to Rule 405 that it is not
necessary that the Company be considered an Ineligible
Issuer.
(e) Each Issuer Free Writing
Prospectus does not include any information that conflicts with the
information contained in the Registration Statement, including any
document incorporated by reference therein that has not been
superseded or modified. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that
the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in
Section 8 hereof.
(f) Each of the Company and its
subsidiaries has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction
in which it is chartered or organized with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Disclosure
Package and the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification except where
the failure of any subsidiary of the Company, except with regard to
Inductis, Inc., to be so incorporated or organized, existing and in
good standing or qualified would not have a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the
ordinary course of business (a “Material Adverse
Effect”) or on the performance of this Agreement and the
consummation of any of the transactions contemplated
hereby.
(g) No consent, approval,
authorization, filing with or order of any court or governmental
agency or body is required in connection with the transactions
contemplated herein, except such as have been obtained under the
Act and such as may be required under U.S. federal, state or local
law and under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the
Disclosure Package and the Prospectus or such as the failure to
obtain would not have a material adverse effect on the performance
of this Agreement and the consummation of any of the transactions
contemplated hereby.
(h) All the outstanding shares of
capital stock of each subsidiary have been duly and validly
authorized and issued and are fully paid and non-assessable, except
with respect to Inductis (Singapore) PTE Ltd., and, except as
otherwise set forth in the Disclosure Package and the Prospectus
and, except with regard to a qualifying shareholder of Inductis
(India) Private Limited, all outstanding shares of capital stock of
the subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances.
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(i) The Company’s authorized
equity capitalization is as set forth in the Disclosure Package and
the Prospectus; the capital stock of the Company, after giving
effect to the Share Conversion, will conform in all material
respects to the description thereof contained in the Disclosure
Package and the Prospectus; following the Share Conversion, the
outstanding shares of Common Stock will have been duly and validly
authorized and issued and fully paid and non-assessable; the
Securities have been duly and validly authorized, and, when issued
and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and non-assessable; the Securities
are duly listed, and admitted and authorized for trading, subject
to official notice of issuance and evidence of satisfactory
distribution, on the Nasdaq Global Market; the certificates for the
Securities are in valid and sufficient form; the holders of
outstanding shares of capital stock of the Company are not entitled
to preemptive or other rights to subscribe for the Securities; and,
except as set forth in the Disclosure Package and the Prospectus,
no options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital stock of or
ownership interests in the Company are outstanding.
(j) There is no franchise, contract
or other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit
thereto, which is not described or filed as required (and the
Disclosure Package contains in all material respects the same
description of the foregoing matters contained in the Prospectus);
and the statements in the Preliminary Prospectus and the Prospectus
under the heading “Description of Capital Stock”, to
the extent that they constitute a summary of the terms of the
Common Stock, and under the headings “Material U.S. Federal
Tax Considerations for Non-U.S. Holders” and
“Underwriting”, to the extent that they constitute
summaries of the provisions of the laws or documents discussed
therein, fairly summarize the matters described under those
headings in all material respects.
(k) This Agreement has been duly
authorized, executed and delivered by the Company.
(l) The Company is not and, after
giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Disclosure
Package and the Prospectus under the heading “Use of
Proceeds”, will not be required to be registered as an
“investment company” under the Investment Company Act
of 1940, as amended.
(m) Neither the issue and sale of
the Securities nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof has or will conflict with, result in a breach or violation
of, or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter, articles of association or
by-laws of the Company or any of its subsidiaries, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of
its subsidiaries is a party or bound or to which its or their
property is subject or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or
any of its subsidiaries of any court,
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regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of
its or their properties, except with respect to clauses
(ii) and (iii), such conflict, breach or violation or
imposition that would not have a material adverse effect on the
performance of this Agreement or the consummation of any
transactions contemplated hereby.
(n) No holders of securities of the
Company have rights to the registration of such securities under
the Registration Statement.
(o) The consolidated historical
financial statements and schedules of the Company and its
consolidated subsidiaries included in the Preliminary Prospectus
and the Prospectus and the Registration Statement present fairly in
all material respects the financial condition, results of
operations and cash flows of the Company as of the dates and for
the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in
conformity with U.S. generally accepted accounting principles
applied on a consistent basis throughout the periods involved
(except as otherwise noted therein).
(p) The consolidated historical
financial statements and schedules of Inductis, Inc. and its
consolidated subsidiaries included in the Preliminary Prospectus
and the Prospectus and the Registration Statement present fairly in
all material respects the financial condition, results of
operations and cash flows of Inductis, Inc. as of the dates and for
the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in
conformity with U.S. generally accepted accounting principles
applied on a consistent basis throughout the periods involved
(except as otherwise noted therein).
(q) The selected financial data set
forth under the caption “Selected Consolidated Financial and
Other Data” in the Preliminary Prospectus, Prospectus and
Registration Statement fairly present, in all material respects, on
the basis stated in the Preliminary Prospectus, Prospectus and the
Registration Statement, the information included therein. The pro
forma financial statements included in the Preliminary Prospectus,
the Prospectus and the Registration Statement include assumptions
that provide a reasonable basis for presenting the significant
effects directly attributable to the transactions and events
described therein, the related pro forma adjustments give
appropriate effect in all material respects to those assumptions,
and the pro forma adjustments reflect the proper application of
those adjustments to the historical financial statement amounts in
the pro forma financial statements included in the Preliminary
Prospectus, the Prospectus and the Registration Statement. The pro
forma financial statements included in the Preliminary Prospectus,
the Prospectus and the Registration Statement comply as to form in
all material respects with the applicable accounting requirements
of Regulation S-X under the Act and the pro forma adjustments have
been properly applied to the historical amounts in the compilation
of those statements.
(r) Except as set forth in the
Disclosure Package and the Prospectus, no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries or its or their
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property is pending or, to the
knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of
this Agreement or the consummation of any of the transactions
contemplated hereby, (ii) would challenge the Share Conversion
or (iii) could reasonably be expected to have a Material
Adverse Effect.
(s) Except as set forth in the
Disclosure Package and the Prospectus, each of the Company and each
of its subsidiaries owns or leases all such properties as are
necessary to the conduct of its operations as presently conducted,
except as otherwise would not have a Material Adverse
Effect.
(t) Neither the Company nor any
subsidiary is in violation or default of (i) any provision of
its charter, articles of association or bylaws, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound
or to which its property is subject or (iii) any statute, law,
rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company
or such subsidiary or any of its properties, as applicable, except,
in the case of clauses (ii) or (iii), for such violations or
defaults as would not have a Material Adverse Effect.
(u) Ernst & Young LLP, who
have certified certain financial statements of the Company and its
consolidated subsidiaries and delivered their report with respect
to the audited consolidated financial statements and schedules
included in the Disclosure Package and the Prospectus, are
independent public accountants with respect to the Company within
the meaning of the Act and the applicable published rules and
regulations thereunder.
(v) Russell Bedford Stefanou
Mirchandani LLP, who have certified certain financial statements of
Inductis, Inc. and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial
statements and schedules included in the Disclosure Package and the
Prospectus, are independent public accountants with respect to each
of the Company and Inductis, Inc. (and its consolidated
subsidiaries) within the meaning of the Act and the applicable
published rules and regulations thereunder.
(w) There are no transfer taxes or
other similar fees or charges under U.S. federal law or the laws of
any state, or any political subdivision thereof, required to be
paid in connection with the execution and delivery of this
Agreement or the issuance by the Company or sale by the Company of
the Securities, except for such taxes, fees or charges as would not
have a material adverse effect on this Agreement and the
transactions contemplated hereby; provided , however
, that except as otherwise set forth in Section 5(i)(i)
hereto, any such taxes, fees or charges shall be paid by the
Company.
(x) The Company and its subsidiaries
have filed all U.S. federal, state and local tax returns and all
Indian and other foreign tax returns that are required to be filed
or have requested extensions thereof (except in any case in which
the failure so to file
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would not have a Material Adverse
Effect, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto) and have paid all taxes
required to be paid by them and any other assessment, fine or
penalty levied against them, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine
or penalty that is currently being contested in good faith or as
would not have a Material Adverse Effect, except in each case as
set forth in or contemplated in the Disclosure Package and the
Prospectus (exclusive of any supplement thereto).
(y) No labor problem or dispute with
the employees of the Company or any of its subsidiaries exists or,
to the knowledge of the Company, is threatened or imminent, except
as otherwise would not have a Material Adverse Effect, and the
Company is not aware of any existing or imminent labor disturbance
by the employees of any of its or its subsidiaries’ principal
suppliers, contractors or customers, that could have a Material
Adverse Effect, except in each case as set forth in or contemplated
in the Disclosure Package and the Prospectus (exclusive of any
supplement thereto).
(z) Except as otherwise would not
have a Material Adverse Effect, the Company and each of its
subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are
engaged; except as otherwise would not have a Material Adverse
Effect, all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full
force and effect; except as otherwise would not have a Material
Adverse Effect, the Company and its subsidiaries are in compliance
with the terms of such policies and instruments; and there are no
claims by the Company or any of its subsidiaries under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause, except
as otherwise would not have a Material Adverse Effect; and neither
the Company nor any such subsidiary has been refused any insurance
coverage sought or applied for, except as otherwise would not have
a Material Adverse Effect; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have
a Material Adverse Effect.
(aa) No subsidiary of the Company is
currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on
such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary’s property or assets to
the Company or any other subsidiary of the Company, except as
described in or contemplated by the Disclosure Package and the
Prospectus (exclusive of any supplement thereto).
(bb) The Company and its
subsidiaries possess all licenses, certificates, permits and other
authorizations issued by the appropriate U.S. federal and state or
other foreign regulatory authorities necessary to conduct their
respective businesses, except as would not, individually or in the
aggregate, result in a Material Adverse Effect, and neither
the
7
Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect,
except in each case as set forth in or contemplated in the
Disclosure Package and the Prospectus (exclusive of any supplement
thereto).
(cc) The Company and each of its
subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with U.S.
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.
(dd) The Company and its
subsidiaries maintain “disclosure controls and
procedures” (as such term is defined in Rule 13a-15(e) under
the Exchange Act); such disclosure controls and procedures are
effective in all material respects.
(ee) The Company has not taken,
directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result
in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(ff) The Company and its
subsidiaries are (i) in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”), (ii) have received and are
in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) have not received notice
of any actual or potential liability under any Environmental Law,
except where such non-compliance with Environmental Laws, failure
to receive required permits, licenses or other approvals, or
liability would not, individually or in the aggregate, have a
Material Adverse Effect, except as set forth in or contemplated in
the Disclosure Package and the Prospectus (exclusive of any
supplement thereto). Except as set forth in the Disclosure Package
and the Prospectus, neither the Company nor any of the subsidiaries
has been named as a “potentially responsible party”
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, except where such
“potentially responsible party” status would not,
individually or in the aggregate, have a Material Adverse
Effect.
(gg) The minimum funding standard
under Section 302 of the Employee Retirement Income Security
Act of 1974, as amended, and the regulations and published
interpretations thereunder (“ERISA”), has been
satisfied by each “pension plan” (as defined in
Section 3(2) of ERISA) which has been established or
maintained by the Company and/or one or more of its subsidiaries,
and the trust forming part of each such
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plan which is intended to be
qualified under Section 401 of the Code is so qualified,
except as otherwise would not have a Material Adverse Effect; each
of the Company and its subsidiaries has fulfilled its obligations,
if any, under Section 515 of ERISA; neither the Company nor
any of its subsidiaries maintains or is required to contribute to a
“welfare plan” (as defined in Section 3(1) of
ERISA) which provides retiree or other post-employment welfare
benefits or insurance coverage (other than “continuation
coverage” (as defined in Section 602 of ERISA)); each
pension plan and welfare plan established or maintained by the
Company and/or one or more of its subsidiaries is in compliance in
all material respects with the currently applicable provisions of
ERISA, except in each case as would not have a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has
incurred or could reasonably be expected to incur any withdrawal
liability under Section 4201 of ERISA, any liability under
Section 4062, 4063, or 4064 of ERISA, or any other liability
under Title IV of ERISA, except as otherwise would not have a
Material Adverse Effect.
(hh) There is and has been no
failure on the part of the Company and any of the Company’s
directors or officers, in their capacities as such, to comply with
Section 402 related to loans of the Sarbanes Oxley Act of
2002.
(ii) Neither the Company nor any of
its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or
any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such
Persons of the Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder (the “FCPA”),
including, without limitation, making use of the mails or any means
or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA, except for such actions or violations as would not have,
individually or in the aggregate, a Material Adverse Effect. The
Company, its subsidiaries and, to the knowledge of the Company, its
affiliates have conducted their businesses in compliance with the
FCPA in all material respects and have instituted and maintain
policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance
therewith, except as would not have a Material Adverse
Effect.
(jj) There are no loans outstanding
from the Company to its directors or executive officers that would
violate the provisions of Section 13(k) of the Exchange Act;
the Company has an audit committee, at least one member of the
Company’s audit committee is independent pursuant to Rule
10A-3 under the Exchange Act.
(kk) The operations of the Company
and its subsidiaries are in compliance in all material respects
with applicable financial recordkeeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by
any
9
governmental agency (collectively,
the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened, except for such
actions, suits or proceedings as would not, individually or in the
aggregate, have a Material Adverse Effect.
(ll) Neither the Company nor any of
its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or
any of its subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”), except as would not have
a Material Adverse Effect; and the Company will not directly or
indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint
venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
(mm) Except as set forth in the
Disclosure Package and the Prospectus, the Company and its
subsidiaries own, possess, license or have other rights to use, on
reasonable terms, all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology,
know-how and other intellectual property (collectively, the
“Intellectual Property”) necessary for the conduct of
the Company’s business as now conducted or as proposed in the
Disclosure Package and the Prospectus to be conducted, except where
the failure to own, possess, license or have the right to use would
not have a Material Adverse Effect. Except as set forth in the
Disclosure Package and the Prospectus, to the knowledge of the
Company, (a) there are no rights of third parties to any such
Intellectual Property, except as where such rights would not have a
Material Adverse Effect; (b) there is no material infringement
by third parties of any such Intellectual Property, except where
the infringement would not have a Material Adverse Effect;
(c) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the Company’s rights in or to any such Intellectual Property,
and the Company is unaware of any facts which would form a
reasonable basis for any such claim, except where such pending or
threatened action, suit, proceeding or claim by others would not
have a Material Adverse Effect; (d) there is no pending or
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim, except where such pending or threatened action,
suit, proceeding or claim by others would not have a Material
Adverse Effect; (e) there is no pending or threatened action,
suit, proceeding or claim by others that the Company infringes or
otherwise violates any patent, trademark, copyright, trade secret
or other proprietary rights of others, and the Company is unaware
of any other fact which would form a reasonable basis for any such
claim, except where such pending or threatened action, suit,
proceeding or claim by others would not have a Material Adverse
Effect; (f) there is no U.S. patent or published U.S. patent
application which contains claims that dominate or may dominate any
Intellectual Property described in the Disclosure Package and the
Prospectus as being owned by or licensed to the Company or that
interferes with
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the issued or pending claims of any
such Intellectual Property, except as would not have a Material
Adverse Effect; and (g) there is no prior art of which the
Company is aware that may render any U.S. patent held by the
Company invalid or any U.S. patent application held by the Company
unpatentable which has not been disclosed to the U.S. Patent and
Trademark Office, except as would not have a Material Adverse
Effect.
(nn) Neither the Company nor any of
its subsidiaries has sustained since the date of the latest audited
financial statements included in the Preliminary Prospectus and the
Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Preliminary Prospectus and the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Preliminary Prospectus and the
Prospectus, there has not been any change in the capital stock or
longterm debt of the Company or any of its subsidiaries or
any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders’ equity
or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Preliminary
Prospectus and the Prospectus.
(oo) The Company has the right under
each Stock Purchase Agreement (collectively, the “2003
Agreements”) entered into by and between the Company and
holders of options under the Company’s 2003 Stock Option Plan
and 2003 India Employee Stock Option Plan (together, the
“2003 Plan”) relating to the acquisition by such
holders of Common Stock pursuant to the exercise of options granted
by the Company under the 2003 Plan, whether such 2003 Agreements
are now in effect or entered into on or after the date hereof, to
prevent, in connection with the Company’s initial public
offering, any sales or other transfer or other dispositions of the
shares of Common Stock owned or acquired under any 2003 Agreement
by the respective parties thereto, and the Company has provided
notice of the exercise of such right to the relevant owners of
shares of Common Stock and options to acquire shares of Common
Stock pursuant to each of the 2003 Agreements and such notice
creates a valid, binding and enforceable obligation of each such
owner not to sell, transfer or otherwise dispose of any such shares
of Common Stock for the period specified in such notice. The
Company Holder Agreement (the “Company Holder
Agreement”), dated as of June 30, 2006, entered into by
and among the Company, Inductis, Inc. and the other security
holders parties thereto (the “Inductis Holders”)
restricts the Inductis Holders from transferring any of their
shares of Common Stock subject to certain exceptions.
Any certificate signed by any
officer of the Company and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the
Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each
Underwriter.
2. Purchase and Sale . (a)
Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees
to sell to each Underwriter, and each Underwriter agrees, severally
and not jointly, to purchase from the Company, at a purchase price
of $12.555 per share, the amount of the Underwritten Securities set
forth opposite such Underwriter’s name in Schedule I
hereto.
11
(b) Subject to the terms and
conditions and in reliance upon the representations and warranties
herein set forth, the Company hereby grants an option to the
several Underwriters to purchase, severally and not jointly, up to
750,000 Option Securities at the same purchase price per share as
the Underwriters shall pay for the Underwritten Securities. Said
option may be exercised in whole or in part at any time on or
before the 30th day after the date of the Prospectus upon written
or telegraphic notice by the Representatives to the Company setting
forth the number of shares of the Option Securities as to which the
several Underwriters are exercising the option and the settlement
date. The maximum number of Option Securities to be sold by the
Company is 750,000. The number of Option Securities to be purchased
by each Underwriter shall be the same percentage of the total
number of shares of the Option Securities to be purchased by the
several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional
shares.
3. Delivery and Payment .
Delivery of and payment for the Underwritten Securities and the
Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business
Day immediately preceding the Closing Date) shall be made at 10:00
AM, New York City time, on October 25, 2006, or at such time on
such later date not more than three Business Days after the
foregoing date as the Representatives shall designate,
whic
