Exhibit 1.01
_______________ Shares
XxxXxxxxxxxx.xxx Inc.
Common Stock
UNDERWRITING AGREEMENT
----------------------
March __, 2000
Credit Suisse First Boston Corporation
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. XxxXxxxxxxxx.xxx Inc., a Delaware corporation
("Company"), proposes to issue and sell __________ shares ("Firm Securities") of
its common stock, par value $.001 per share ("Securities"), and also proposes to
issue and sell to the Underwriters, at the option of the Underwriters, an
aggregate of not more than __________ additional shares ("Optional Securities")
of its Securities as set forth below. The Firm Securities and the Optional
Securities are herein collectively called the "Offered Securities". As part of
the offering contemplated by this Agreement, Credit Suisse First Boston
Corporation (the "Designated Underwriter") has agreed to reserve out of the Firm
Securities purchased by it under this Agreement, up to
shares, for sale to the Company's directors, officers, employees and other
parties associated with the Company (collectively, "Participants"), as set forth
in the Prospectus (as defined herein) under the heading "Underwriting" (the
"Directed Share Program"). The Firm Securities to be sold by the Designated
Underwriter pursuant to the Directed Share Program (the "Directed Shares") will
be sold by the Designated Underwriter pursuant to this Agreement at the public
offering price. Any Directed Shares not subscribed for by the end of the
business day on which this Agreement is executed will be offered to the public
by the Underwriters as set forth in the Prospectus. The Company hereby agrees
with the several Underwriters named in Schedule A hereto ("Underwriters") as
follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that:
a. A registration statement (No. 333-96271) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (i) has been
declared effective under the Securities Act of 1933, as amended ("Act"),
and is not proposed to be amended or (ii) is proposed to be amended by
amendment or post-effective amendment. If such registration statement
("initial registration statement") has been declared effective, either (i)
an additional registration statement ("additional registration statement")
relating to the Offered Securities may have been filed with the Commission
pursuant to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has
become effective upon filing pursuant to such Rule and the Offered
Securities all have been duly registered under the Act pursuant to the
initial registration statement and, if applicable, the additional
registration statement or (ii) such
an additional registration statement is proposed to be filed with the
Commission pursuant to Rule 462(b) and will become effective upon filing
pursuant to such Rule and upon such filing the Offered Securities will all
have been duly registered under the Act pursuant to the initial
registration statement and such additional registration statement. If the
Company does not propose to amend the initial registration statement or if
an additional registration statement has been filed and the Company does
not propose to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment (if
any) to each such registration statement has been declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c)
("Rule 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"Effective Time" with respect to the initial registration statement or, if
filed prior to the execution and delivery of this Agreement, the additional
registration statement means (i) if the Company has advised the
Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or
the most recent post-effective amendment thereto (if any) filed prior to
the execution and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c), or
(ii) if the Company has advised the Representatives that it proposes to
file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement, as
amended by such amendment or post-effective amendment, as the case may be,
is declared effective by the Commission. If an additional registration
statement has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that it proposes
to file one, "Effective Time" with respect to such additional registration
statement means the date and time as of which such registration statement
is filed and becomes effective pursuant to Rule 462(b). "Effective Date"
with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its Effective
Time, including all information contained in the additional registration
statement (if any) and deemed to be a part of the initial registration
statement as of the Effective Time of the additional registration statement
pursuant to the General Instructions of the Form on which it is filed and
including all information (if any) deemed to be a part of the initial
registration statement as of its Effective Time pursuant to Rule 430A(b)
("Rule 430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as amended
at its Effective Time, including the contents of the initial registration
statement incorporated by reference therein and including all information
(if any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to as
the "Additional Registration Statement". The Initial Registration
Statement and the Additional Registration Statement are herein referred to
collectively as the "Registration Statements" and individually as a
"Registration Statement". The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no such
filing is required) as included in a Registration Statement, is hereinafter
referred to as the "Prospectus". No document has been or will be prepared
or distributed in reliance on Rule 434 under the Act.
b. If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement: (i) on the Effective Date
of the Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and the rules and
regulations of the Commission ("Rules and Regulations") and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, (ii) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed, or will conform,
in all respects to the requirements of the Act and the Rules and
Regulations and did not include, or will not include, any untrue statement
of a material fact and did not omit, or will not omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) on the date of this Agreement,
the Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and delivery of
this Agreement, the Additional Registration Statement each conforms, and at
the time of filing of the Prospectus pursuant to Rule 424(b) or (if no such
filing is required) at the Effective Date of the Additional Registration
Statement in which the Prospectus is included, each Registration Statement
and the Prospectus will conform, in all respects to the
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requirements of the Act and the Rules and Regulations, and none of such
documents includes, or will include, any untrue statement of a material
fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
If the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement: on the Effective Date of
the Initial Registration Statement, the Initial Registration Statement and
the Prospectus will conform in all respects to the requirements of the Act
and the Rules and Regulations, neither of such documents will include any
untrue statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and no Additional Registration Statement has been or will
be filed. The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or the Prospectus based upon
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 is that described as such in Section
7(b) hereof.
c. The Company has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Delaware, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and the Company is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business of the
Company.
d. Each subsidiary of the Company has been duly incorporated and is an
existing corporation in good standing under the laws of the jurisdiction of
its incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus; and
each subsidiary of the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on the business of the Company; all of the
issued and outstanding capital stock of each subsidiary of the Company has
been duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each subsidiary owned by the
Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
e. The Offered Securities and all other outstanding shares of capital
stock of the Company have been duly authorized; all outstanding shares of
capital stock of the Company are, and, when the Offered Securities have
been delivered and paid for in accordance with this Agreement on each
Closing Date (as defined below), such Offered Securities will have been,
validly issued, fully paid and nonassessable and will conform in all
material respects to the description thereof contained in the Prospectus;
and the stockholders of the Company and other third parties have no
preemptive rights with respect to the Offered Securities that have not been
waived or terminated prior to the Closing Date.
f. Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with
this offering or any other arrangements, agreements, understandings,
payments or issuance with respect to the Company or any of its officers,
directors, shareholders, partners, employees, subsidiaries or affiliates
that may affect the Underwriters' compensation as determined by the
National Association of Securities Dealers, Inc. ("NASD").
g. Except as disclosed in the Prospectus and except for such rights
which have been waived with respect to the filing of the Registration
Statements, 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 Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Act.
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h. The Offered Securities have been approved for listing on the Nasdaq
Stock Market's National Market, subject to notice of issuance.
i. No consent, approval, authorization, or order of, or filing with, any
governmental agency or governmental body or any court is required to be
obtained or made by the Company for the consummation of the transactions
contemplated by this Agreement in connection with the issuance and sale of
the Offered Securities by the Company, except such as have been obtained
and made under the Act and the Securities Exchange Act of 1934, as amended
("Exchange Act") and such as may be required under state securities laws or
the bylaws or rules and regulations of the NASD.
j. The execution, delivery and performance of this Agreement, and the
issuance and sale of the Offered Securities, will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over
the Company or any subsidiary of the Company or any of their properties, or
any agreement or instrument to which the Company or any such subsidiary is
a party or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is subject, or
the charter or bylaws of the Company or any such subsidiary, and the
Company has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by this Agreement.
k. This Agreement has been duly authorized, executed and delivered by
the Company.
l. Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case, free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Prospectus, the Company and its subsidiaries
hold any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the use made
or to be made thereof by them.
m. The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or
governmental bodies necessary to conduct the business now operated by them
and have not received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole ("Material
Adverse Effect").
n. No labor dispute with the employees of the Company or any subsidiary
exists or, to the knowledge of the Company, is imminent that might have a
Material Adverse Effect.
o. Except as disclosed in the Prospectus, the Company owns, possesses or
licenses from third parties adequate trademarks, trade names and other
rights to inventions, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), patents, copyrights and other intellectual property
(collectively, "intellectual property rights") necessary to conduct the
business now operated by it or presently employed by it.
p. Neither the Company nor any of its subsidiaries is in violation of
any statute, rule, regulation, decision or order of any governmental agency
or body or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "environmental laws"), owns or operates any real
property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to
any environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate
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have a Material Adverse Effect; and the Company is not aware of any pending
investigation which might lead to such a claim.
q. There are no pending actions, suits or proceedings against or
affecting the Company or any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect, or would materially and adversely affect the ability of the
Company to perform its obligations under this Agreement, or which are
otherwise material in the context of the sale of the Offered Securities;
and no such actions, suits or proceedings are existing, threatened or, to
the Company's knowledge, contemplated.
r. The financial statements included in each Registration Statement and
the 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 have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent basis
and the schedule included in each Registration Statement presents fairly
the information required to be stated therein; and the assumptions used in
preparing the pro forma financial statements included in each Registration
Statement and the Prospectus provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or events
described therein, the related pro forma adjustments give appropriate
effect to those assumptions, and the pro forma columns therein reflect the
proper application of those adjustments to the corresponding historical
financial statement amounts.
s. Except as disclosed in the Prospectus, since the date of the latest
audited financial statements included in the Prospectus there has been no
material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole, and, except as disclosed in or contemplated
by the Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
t. The Company is not and, after giving effect to the offering and sale
of the Offered Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940.
u. The Company represents and warrants to the Underwriters that (i) the
Registration Statement, the Prospectus and any preliminary prospectus
comply, and any further amendments or supplements thereto will comply, with
any applicable laws or regulations of foreign jurisdictions in which the
Prospectus or any preliminary prospectus, as amended or supplemented, if
applicable, are distributed in connection with the Directed Share Program,
and that (ii) no authorization, approval, consent, license, order,
registration or qualification of or with any government, governmental
instrumentality or court, other than such as have been obtained, is
necessary under the securities law and regulations of foreign jurisdictions
in which the Directed Shares are offered outside the United States.
v. The Company has not offered, or caused the Underwriters to offer, any
Offered Securities to any person pursuant to the Directed Share Program
with the specific intent to unlawfully influence (i) a customer or supplier
of the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its products.
w. The Agreement and Plan of Merger, dated _________, 2000 ("Merger
Agreement") by and between the Company and XxxXxxxxxxxx.xxx, a California
corporation ("AllAdvantage"), has been duly authorized by all necessary
board of directors and stockholder action on the part of the Company and
AllAdvantage and has been duly executed and delivered by each of the
parties thereto. The execution and delivery of the Merger Agreement and
the consummation of the merger contemplated thereby does not contravene any
provision of
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applicable Federal, California or Delaware corporate law or the certificate
or articles of incorporation or bylaws of the Company or the certificate of
incorporation or bylaws of AllAdvantage, or, to the knowledge of the
Company, any judgment or decree of any governmental body, governmental
agency or court having jurisdiction over the Company or AllAdvantage, and
no consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Company
and AllAdvantage of its obligations under the Merger Agreement except such
as have been obtained. The merger contemplated by the Merger Agreement is
effective under the laws of the State of California and the State of
Delaware.
x. All material Tax returns required to be filed by the Company have
been filed and all such returns are true, complete, and correct in all
material respects. All material Taxes that are due or claimed to be due
from the Company have been paid other than those (i) currently payable
without penalty or interest or (ii) being con tested in good faith and by
appropriate proceedings and for which, in the case of both clauses (i) and
(ii), xxx xxxxx reserves have been established on the books and records of
the Company in accordance with GAAP. There are no proposed, material Tax
assessments against the Company. To the best knowledge and belief of the
Company, the accruals and reserves on the books and records of the Company
in respect of any material Tax liability for any Taxable period not finally
determined are adequate to meet any assessments of Tax for any such period.
For purposes of this Agreement, the term "Tax" and "Taxes" shall mean all
Federal, state, local, and foreign taxes, and other assessments of a
similar nature (whether imposed directly or through with holding),
including any interest, additions to tax, or penalties applicable thereto.
(y) Neither the Company, nor any of its affiliates, has taken, directly
or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of the Securities
to facilitate the sale or resale of the Offered Securities.
(z) To the knowledge of the Company, Ernst & Young LLP, who have
certified the financial statements filed with the Commission as part of
each Registration Statement, are independent public auditors as required by
the Act and the Rules and Regulations. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with management's general
or specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
and (C) access to assets is permitted only in accordance with management's
general or specific authorization.
(aa) The Company carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of its business and the
value of its properties and as is customary for companies engaged in
similar industries.
(bb) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus under the heading "Actual" under the
caption "Capitalization", and, after giving effect to the conversion of
preferred stock into common stock and the issuance of the Series D
Preferred Stock will be as set forth "Pro Forma", and after giving effect
to the offering and the conversion of preferred stock and the issuance of
the Series D Preferred Stock will be as set forth under the heading "Pro
Forma As Adjusted", in each case under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Prospectus) and the number of authorized, issued and
outstanding options and other rights is set forth in the footnotes under
such caption. The shares of issued and outstanding capital stock of the
Company have been issued in compliance, in all material respects, with all
federal and state securities laws. Except as disclosed in the Prospectus
and as described in this and the following sentence, there are no
outstanding options to purchase, or any preemptive rights or other rights
to subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of the
Company's capital stock or any such options, rights, convertible securities
or
6
obligations, other than options issued pursuant to the Company's equity
incentive plans in the ordinary course of business. Since December 31,
1999, the Company has not issued any securities other than (i) Common Stock
of the Company pursuant to the exercise of previously outstanding and
privately granted options pursuant to the 1999 Equity Incentive Plan, and
(ii) options granted pursuant to the 1999 Equity Incentive Plan and the
2000 Equity Incentive Plan (collectively, the "Plans"). The description of
the Company's Plans and purchase plans and the options or other rights
granted and exercised thereunder set forth in the Prospectus accurately and
fairly describe, in all material respects, the information required to be
shown with respect to such plans, arrangements, options and rights.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements contained herein, but subject to the
terms and conditions set forth herein, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $ per share, the respective
numbers of shares of Firm Securities set forth opposite the names of the
Underwriters in Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives for the
accounts of the Underwriters, against payment of the purchase price in Federal
(same day) funds by official bank check or checks or wire transfer to an account
at a bank acceptable to Credit Suisse First Boston Corporation ("CSFBC") drawn
to the order of the Company at the office of Fenwick & West LLP, Two Xxxx Xxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, at 10:00 A.M., New York time, on
, or at such other time not later than seven full business days thereafter as
CSFBC and the Company determine, such time being herein referred to as the
"First Closing Date". For purposes of Rule 15c6-1 under the Exchange Act, the
First Closing Date (if later than the otherwise applicable settlement date)
shall be the settlement date for payment of funds and delivery of securities for
all the Offered Securities sold pursuant to the offering. The certificates for
the Firm Securities so to be delivered will be in definitive form, in such
denominations and registered in such names as CSFBC requests, and will be made
available for checking and packaging at least 24 hours prior to the First
Closing Date.
In addition, upon written notice from CSFBC given to the Company from time
to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per share to be paid for the Firm Securities. The Company agrees
to sell to the Underwriters the number of shares of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Securities set forth opposite such Underwriter's name
bears to the total number of shares of Firm Securities (subject to adjustment by
CSFBC to eliminate fractions) and may be purchased by the Underwriters only for
the purpose of covering over-allotments made in connection with the sale of the
Firm Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities being
herein referred to as an "Optional Closing Date", which may be the First Closing
Date (the First Closing Date and each Optional Closing Date, if any, being
sometimes referred to as a "Closing Date"), shall be determined by CSFBC but
shall be not later than five full business days after written notice of election
to purchase Optional Securities is given. The Company will deliver the Optional
Securities being purchased on each Optional Closing Date to the Representatives
for the accounts of the several Underwriters, against payment of the purchase
price therefor in Federal (same day) funds by official bank check or checks or
wire transfer to an account at a bank acceptable to CSFBC drawn to the order of
the Company, at the above office of Fenwick & West LLP. The certificates for
the Optional Securities being purchased on each Optional Closing Date will be in
definitive form, in such denominations and registered in such names as CSFBC
requests upon reasonable notice prior to such Optional Closing Date and will be
made available for checking and packaging at a reasonable time in advance of
such Optional Closing Date.
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4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the several
Underwriters that:
a. If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifteenth business day after the Effective Date of the Initial
Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to Rule
424(b). If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement and an additional
registration statement is necessary to register a portion of the Offered
Securities under the Act but the Effective Time thereof has not occurred as
of such execution and delivery, the Company will file the additional
registration statement or, if filed, will file a post-effective amendment
thereto with the Commission pursuant to and in accordance with Rule 462(b)
on or prior to 10:00 P.M., New York time, on the date of this Agreement or,
if earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later date
as shall have been consented to by CSFBC.
b. The Company will advise CSFBC promptly of any proposal to amend or
supplement the initial or any additional registration statement as filed or
the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not
effect such amendment or supplementation without CSFBC's consent; and the
Company will also advise CSFBC promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
c. If, at any time when a prospectus relating to the Offered Securities
is required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Act, the Company will promptly notify CSFBC
of such event and will promptly prepare and file with the Commission, at
its own expense, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance.
Neither CSFBC's consent to, nor the Underwriters' delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 6.
d. As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
e. The Company will furnish to the Representatives copies of each
Registration Statement, four of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a
prospectus
8
relating to the Offered Securities is required to be delivered under the
Act in connection with sales by any Underwriter or dealer, the Prospectus
and all amendments and supplements to such documents, in each case in such
quantities as CSFBC requests. The Prospectus shall be so furnished on or
prior to 6:00 P.M., New York time, on the business day following the later
of the execution and delivery of this Agreement or the Effective Time of
the Initial Registration Statement. All other documents shall be so
furnished as soon as available. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
f. The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and will continue such qualifications in effect so long as
required for the distribution; provided, however, that the Company will not
be required to arrange for the qualification of the Offered Securities in
any jurisdiction in which the Company would be required to qualify to do
business as a foreign corporation or to execute a general consent to
service of process in order to effect such qualification.
g. During the period of five years hereafter, the Company will furnish
to the Representatives and, upon request, to each of the other
Underwriters, (i) as soon as practicable after the end of each fiscal year,
a copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (ii) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Exchange Act or mailed to stockholders, and (iii)
from time to time, such other public information concerning the Company as
CSFBC may reasonably request.
h. The Company will pay all expenses incident to the performance of its
obligations under this Agreement, for any filing fees and other expenses
(including the fees and disbursements of counsel) incurred in connection
with qualification of the Offered Securities for sale and determination of
their eligibility for investment under the laws of such jurisdictions as
CSFBC designates and the printing of memoranda relating thereto, for the
filing fee incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the NASD of
the Offered Securities, for any travel expenses of the Company's officers
and employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of the Offered
Securities and for expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto) to the Underwriters.
i. For a period of 180 days after the date of the initial public
offering of the Offered Securities, the Company will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly,
or file with the Commission a registration statement under the Act relating
to, any additional shares of its Securities or securities convertible into
or exchangeable or exercisable for any shares of its Securities, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of CSFBC, except
issuances of Securities pursuant to the conversion or exchange of
convertible or exchangeable securities or the exercise of warrants or
options, in each case outstanding on the date hereof, grants of employee
stock options pursuant to the terms of a plan in effect on the date hereof,
issuances of Securities pursuant to the exercise of such options, other
than (i) the Company's issuance of Securities upon the exercise of warrants
and stock options that are presently outstanding and described as such in
the Prospectus or which may be issued hereafter under the option plans in
effect on the date hereof, (ii) the Company's grants of options pursuant to
the option plans in effect on the date hereof, (iii) the Company's issuance
of Securities under the employee stock purchase plan in effect on the date
hereof and (iv) the Company's issuance of Securities in an acquisition of
another corporation or entity provided that (1) such Securities represent
less than 10% of the Company's then outstanding Securities and (2) the
Company has taken steps to ensure that such Securities may not be resold
during the 180 days following the first date that any of the Offered
Securities are released by the Underwriters for sale to the public.
9
j. In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent required
by the NASD or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. The Designated Underwriter
will notify the Company as to which Participants will need to be so
restricted. The Company will direct the transfer agent to place stop
transfer restrictions upon such securities for such period of time.
k. The Company will pay all fees and disbursements of counsel incurred
by the Underwriters in connection with the Directed Share Program and stamp
duties, similar taxes or duties or other taxes, if any, incurred by the
underwriters in connection with the Directed Share Program.
Furthermore, the Company covenants with the Underwriters that the
Company will comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered, if any, in connection with the Directed Share
Program.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
a. The Representatives shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall
be on or prior to the date of this Agreement or, if the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of the amendment
or post-effective amendment to the Initial Registration Statement to be
filed shortly prior to such Effective Time), of Ernst & Young LLP
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder
and stating to the effect that:
i. in their opinion the financial statements and schedule examined
by them and included in the Registration Statements comply as to form in
all material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
ii. on the basis of a reading of the latest available interim
financial statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that caused
them to believe that:
(A) at the date of the latest available balance sheet read by such
accountants, or at a subsequent specified date not more than three
business days prior to the date of this Agreement, there was any
change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its consolidated
subsidiaries or and its consolidated this Agreement, at the date of
the latest available balance sheet read by such accountants, there
was any decrease in consolidated net assets, as compared with amounts
shown on the latest balance sheet included in the Prospectus; or
(B) for the period from the closing date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there were
any decreases, as compared with the corresponding period of the
previous year and with the period of corresponding length ended the
date of the latest income statement included in the Prospectus, in
consolidated net sales or net operating income or in the total or per
share amounts of consolidated income before extraordinary items or
net income,
10
except in all cases set forth in clauses (A) and (B) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
iii they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the Initial Registration
Statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration Statement
is subsequent to such execution and delivery, "Registration Statements" shall
mean the Initial Registration Statement and the Additional Registration
Statement as proposed to be filed or as proposed to be amended by the post-
effective amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration Statements.
b. If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time
shall have occurred not later than 10:00 P.M., New York time, on the date
of this Agreement or such later date as shall have been consented to by
CSFBC. If the Effective Time of the Additional Registration Statement (if
any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, the time the Prospectus
is printed and distributed to any Underwriter, or shall have occurred at
such later date as shall have been consented to by CSFBC. If the Effective
Time of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) of
this Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Representatives, shall be contemplated by
the Commission.
c. Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as one enterprise which, in the judgment of a majority
in interest of the Underwriters including the Representatives, is material
and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities; (ii) any material suspension or material limitation of
trading in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange, or any suspension
of trading of any securities of the Company on any exchange or in the over-
the-counter market; (iii) any banking moratorium declared by U.S. Federal
or New York authorities; or (iv) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war
by Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment
for the Offered Securities.
d. The Representatives shall have received an opinion, dated such
Closing Date, of Fenwick & West LLP, counsel for the Company, to the effect
that:
11
i. The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and corporate authority to own its properties and
conduct its business as described in the Prospectus; and the Company
is duly qualified to do business as a foreign corporation in good
standing in all other United States jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification;
ii. The Offered Securities have been duly authorized and validly
issued, are nonassessable and are fully paid and conform in all
material respects to the description thereof contained in the
Prospectus; and the stockholders of the Company and other third
parties have no preemptive rights with respect to the Offered
Securities;
iii There are no contracts, agreements or understandings known to
such counsel between the Company and any person granting such person
the right to require the Company to file a registration statement
under the Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act, except for
such rights which have been waived with respect to the filing of the
Registration Statements;
iv. The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940.
v. No consent, approval, authorization or order of, or filing
with, any United States governmental agency or governmental body or
any United States court is required for the consummation of the
transactions contemplated by this Agreement in connection with the
issuance or sale of the Offered Securities by the Company, except such
as have been obtained and made under the Act and the Exchange Act and
such as may be required under state or foreign securities laws or the
bylaws or rules and regulations of the NASD;
vi. The execution, delivery and performance of this Agreement and
the issuance and sale of the Offered Securities will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any United States governmental agency or governmental body or any
court having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, or any agreement or instrument to
which the Company or any such subsidiary is a party or by which the
Company is bound or to which any of the properties of the Company or
any such subsidiary is subject and in all cases, which the Company has
filed as an exhibit to the Registration Statements, except where such
breach, violation or default would not individually or in the
aggregate have a Material Adverse Effect, or the charter or bylaws of
the Company or any such subsidiary, and the Company has full corporate
power and corporate authority to authorize, issue and sell the Offered
Securities as set forth in this Agreement;
vii Based solely upon such advice from the Staff of the
Commission, the Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion, the
Additional Registration Statement (if any) was filed and became
effective under the Act as of the date and time (if determinable)
specified in such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in
such opinion on the date specified therein or was included in the
Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best of the knowledge of
such counsel, no stop order suspending the effectiveness of a
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and each Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates,
12
complied as to form in all material respects with the requirements of
the Act and the Rules and Regulations; the descriptions in the
Registration Statements and Prospectus in the sections entitled "Risk
Factors-We rely on our intellectual property rights. If we are unable
to protect these rights, we might face increased competition or
greater difficulty in successfully establishing the AllAdvantage
brand", "-We are subject to foreign government regulation and
taxation, currency issues, difficulties in managing foreign operations
and foreign political and economic instability", "-Failure to comply
with laws governing our service or material changes in the regulatory
environment relating to the Internet could harm our business", "-We
may face risks if new laws or government regulations regarding the
Internet are enacted", "-Provisions in our charter documents, Delaware
law and other documents could prevent or delay a change in control of
AllAdvantage and might reduce the market price of our common stock",
"Capitalization", "Business- Intellectual Property", "-Governmental
Regulation", "-Legal Proceedings", "Related Party Transactions",
"Description of Capital Stock", "____________" and "____________" of
statutes, legal and governmental proceedings and contracts and other
documents, insofar as such descriptions constitute a summary of legal
matters, documents or proceedings referred to therein, are accurate
and fairly present the information required to be shown in all
material respects by the Act and the Rules and Regulations; and such
counsel do not know of any legal or governmental proceedings required
to be described in a Registration Statement or the Prospectus which
are not described as required or of any contracts or documents
required to be described in a Registration Statement or the Prospectus
or to be filed as exhibits to a Registration Statement which are not
described or filed as required; it being understood that such counsel
need express no opinion as to the financial statements and the notes
and schedules thereto or other financial data contained in the
Registration Statements or the Prospectus; and
vii This Agreement was duly authorized, executed and delivered by
the Company.
ix. The Merger Agreement has been duly authorized by all
necessary board of directors and stockholder action on the part of the
Company and AllAdvantage and duly executed and delivered by each of
the parties thereto. The execution and delivery of the Merger
Agreement and the consummation of the merger contemplated thereby did
not contravene any provision of applicable federal, California or
Delaware corporate law or the articles of incorporation or bylaws of
the Company or the certificate of incorporation or bylaws of
AllAdvantage, or, to the knowledge of such counsel, any judgment or
decree of any governmental body, agency or court having jurisdiction
over the Company or AllAdvantage, and, to the knowledge of such
counsel, no consent, approval, authorization or order of or
qualification with any governmental body or agency was required for
the performance by the Company and AllAdvantage of its obligations
under the Merger Agreement except such as have been obtained. The
merger contemplated by the Merger Agreement was effective under the
laws of the State of California and the State of Delaware.
x. To our knowledge, all holders of securities of the Company
having rights to register shares of common stock, or other securities,
have waived such rights.
xi. To our knowledge, the Company has not received any notice of
infringement of or conflict with asserted rights of any third party's
material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, system or
procedures), trademarks, service marks and trade names that, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in any material adverse effect on the business,
properties, operations, conditions (financial or otherwise) or results
of operations on the Company, except such as are described in the
Registration Statements and Prospectus.
xii The authorized, issued and outstanding capital stock of the
Company as of December 31, 1999 is as set forth under the heading
"Actual" under the caption "Capitalization" in the Prospectus. The
Plans and the stock options granted by the Company in accordance with
the Plans conforms in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus.
13
In addition to the matters set forth above, counsel rendering the
foregoing opinion shall also include a statement to the effect that nothing has
come to the attention of such counsel that causes it to believe that the
Registration Statement (except as to the financial statements and other
financial and statistical data derived therefrom, as to which such counsel need
not express any opinion or belief) at the date the Registration Statement became
effective or as of such Closing Date contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus or any amendment or supplement thereto (except as to the financial
statements and other financial and statistical data derived therefrom, as to
which such counsel need not express any opinion or belief) as of its date or as
of such Closing Date, contained or contains any 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.
e. The Representatives shall have received an opinion, dated such
Closing Date, of Xxxxxxx Xxxxxxxx Xxxxxx & Zafman LLP, special patent
counsel for the Company, in the form attached hereto as Annex A.
f. The Representatives shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the Company,
the validity of the Offered Securities delivered on such Closing Date, the
Registration Statements, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
g. The Representatives shall have received a certificate, dated such
Closing Date, of the Chief Executive Officer or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable investigation on
behalf of the Company, shall state that: the representations and warranties
of the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date; no stop
order suspending the effectiveness of any Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission; the Additional Registration Statement (if
any) satisfying the requirements of subparagraphs (1) and (3) of Rule
462(b) was filed pursuant to Rule 462(b), including payment of the
applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the time the Prospectus was printed and distributed to any
Underwriter; and, subsequent to the dates of the most recent financial
statements in the Prospectus, there has been no material adverse change,
nor any development or event involving a prospective material adverse
change, in the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Prospectus or as described in
such certificate.
h. The Representatives shall have received a letter, dated such Closing
Date, of Ernst & Young LLP which meets the requirements of subsection (a)
of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to such Closing
Date for the purposes of this subsection.
i. On or prior to the date of this Agreement, the Representatives shall
have received lockup letters from each of the executive officers and
directors and shareholders and holders of options to purchase securities of
the Company who in the aggregate own at least 95% of the outstanding shares
of the Company.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. CSFBC may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder,
whether in respect of an Optional Closing Date or otherwise.
14
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless, each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance 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 any Underwriter consists of the
information described as such in subsection (b) below; and provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus or Prospectus, as
then amended or supplemented, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased the
Offered Securities concerned, to the extent that a prospectus relating to such
Offered Securities was required to be delivered by such Underwriter under the
Act in connection with such purchase and any such loss, claim, damage or
liability of such Underwriter results from the fact that there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such Offered Securities to such person, a copy of the Prospectus (as amended or
supplemented) if the Company had previously furnished copies thereof to such
Underwriter.
The Company agrees to indemnify and hold harmless the Designated
Underwriter and each person, if any, who controls the Designated Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (the "Designated Entities"), 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) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program 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; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii) related to, arising out of, or
in connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
the Designated Entities.
b. Each Underwriter will severally and not jointly indemnify and hold
harmless, the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the fourth
paragraph
15
under the caption "Underwriting" and the information contained in the seventh
paragraph regarding sales to discretionary accounts and the sixteenth paragraph
relating to stabilization under the caption "Underwriting".
c. Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. Notwithstanding anything contained herein to
the contrary, if indemnity may be sought pursuant to the last paragraph in
Section 7(a) hereof in respect of such action or proceeding, then in addition to
such separate firm for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one separate firm
(in addition to any local counsel) for the Designated Underwriter for the
defense of any losses, claims, damages and liabilities arising out of the
Directed Share Program, and all persons, if any, who control the Designated
Underwriter within the meaning of either Section 15 of the Act of Section 20 of
the Exchange Act. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action 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 (i) includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act by or on behalf of an indemnified party.
d. If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (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 from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which 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 shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
16
e. The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed a Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or an Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFBC and the
Company for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Offered Securities have been purchased hereunder
the representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. If the purchase of the Offered Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 8, the occurrence of
any event specified in clause (ii), (iii) or (iv) of Section 6(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder must be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking Department--
Transactions Advisory Group, with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, 000 Xxxxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X.
Xxxxx, or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at 0000 Xxxxx Xxxx Xxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxx Xxxxxxxxx, with a copy to Fenwick & West, Xxx Xxxx Xxxx Xxxxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxx; provided, however, that any notice
to an Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed
and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
17
12. Representation of Underwriters. The Representatives will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CSFBC will be binding
upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of law.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
18
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
XXXXXXXXXXXX.XXX INC.
By_______________________________________________
Name:
Title:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above written.
Credit Suisse First Boston Corporation
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Acting on behalf of themselves and as the
Representatives of the several Underwriters
By Credit Suisse First Boston Corporation
By_________________________________________
Name:
Title:
19
SCHEDULE A
Number of
Shares of
Underwriter Firm Securities
----------------------------------------------------- ---------------
Credit Suisse First Boston Corporation
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
____________
Total
============
20
