EXHIBIT 1.1
UNDERWRITING AGREEMENT
ROWECOM INC.
_______ Shares of Common Stock
Underwriting Agreement
________ __, 1999
X.X. Xxxxxx Securities Inc.
CIBC Oppenheimer
Xxxxx Xxxxx Xxxxxx & Company
As representatives of the several
underwriters listed in Schedule I
hereto
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
RoweCom Inc., a Delaware corporation (the "Company"), proposes to issue and
sell to the several underwriters listed in Schedule I hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives") an aggregate of __________ shares of Common Stock, par value
$.01 per share, of the Company (the "Underwritten Shares") and, for the sole
purpose of covering over-allotments in connection with the sale of the
Underwritten Shares, at the option of the Underwriters, up to an additional
_________ shares of Common Stock of the Company (the "Option Shares"). The
Underwritten Shares and the Option Shares are herein referred to as the
"Shares". The shares of Common Stock of the Company to be outstanding after
giving effect to the sale of the Shares are herein referred to as the "Stock".
As part of the offering contemplated by this Agreement, X.X. Xxxxxx Securities
Inc. has agreed to reserve out of the Shares set forth opposite its name on
Schedule I to this Agreement up to _________ Shares for sale to the Company's
employees, officers and directors and other parties associated with the Company
(collectively, "Participants"), as set forth in the Prospectus under the heading
"Underwriting" (the "Directed Share Program"). The Shares to be sold pursuant
to the Directed Share Program (the "Directed Shares") will be sold pursuant to
this Agreement at
the public offering price. Any Directed Shares not orally confirmed for purchase
by any Participants by the end of the first business day after the date on which
this Agreement is executed will be offered to the public as set forth in the
Prospectus.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Shares. The registration
statement as amended at the time when it shall become effective, including
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is referred to
in this Agreement as the "Registration Statement", and the prospectus in the
form first used to confirm sales of Shares is referred to in this Agreement as
the "Prospec tus". If the Company files or has filed on the date hereof an
abbreviated registration statement pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement") in connection with the transactions
contemplated hereby, then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to issue and sell the Underwritten Shares to the
several Underwriters as hereinafter provided, and each Underwriter, on the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the respective number of Underwritten Shares set forth opposite
such Underwriter's name in Schedule I hereto at a purchase price per share of
$______ (the "Purchase Price").
In addition, the Company agrees to issue and sell the Option Shares to the
several Underwriters as hereinafter provided and the Underwriters shall have the
option to purchase at their election up to ________ Option Shares for the sole
purpose of covering over-allotments in the sale of the Underwritten Shares.
Each Underwriter, on the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, shall have the
option to purchase, severally and not jointly, from the Company at the Purchase
Price that portion of the number of Option Shares as to which such election
shall have been exercised (to be adjusted by you so as to eliminate fractional
shares) determined by multiplying such number of Option Shares by a fraction the
numerator of which is the number of Underwritten Shares set forth opposite such
Underwriter's name on Schedule I hereto and the denominator of which is the
total number of Underwritten Shares set forth in Schedule I hereto, for the sole
purpose of
2
covering over-allotments (if any) in the sale of the Underwritten Shares by the
several Underwriters.
The Underwriters may exercise the option to purchase the Option Shares at
any time (but not more than once) on or before the thirtieth day following the
date of this Agreement, by written notice to the Company from X.X. Xxxxxx
Securities Inc. on behalf of the several Underwriters. Such notice shall set
forth the aggregate number of Option Shares as to which the option is being
exercised and the date and time when the Option Shares are to be delivered and
paid for, which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later
than the tenth full Business Day (as hereinafter defined) after the date of such
notice (unless such time and date are postponed in accordance with the
provisions of Section 9 hereof). Any such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
2. The Company understands that the several Underwriters intend (i) to
make a public offering of their respective portions of the Shares as soon after
(A) the Registration Statement has become effective and (B) the parties hereto
have executed and delivered this Agreement, as in the judgment of the
Representatives is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
3. Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Representatives,
in the case of the Underwritten Shares, at 10:00 a.m., New York City time, on
___________, 1999, or at such other time on the same or such other date, not
later than the fifth Business Day thereafter, as X.X. Xxxxxx Securities Inc. on
behalf of the several Underwriters and the Company may agree upon in writing or,
in the case of the Option Shares, on the date and at the time specified by X.X.
Xxxxxx Securities Inc. in the written notice of the Underwriters' election to
purchase such Option Shares or at such other time on the same or such other
date, not later than the fifth Business Day thereafter, as X.X. Xxxxxx
Securities Inc. on behalf of the several Underwriters and the Company may agree
upon in writing. The time and date of such payment for the Underwritten Shares
is referred to herein as the "Closing Date" and the time and date for such
payment for the Option Shares, if other than the Closing Date, are herein
referred to as the "Additional Closing Date". The closing and additional
closing, if any, shall take place at the offices of Xxxxxxx Xxxx XXX, Xxxxxx,
XX. As used herein, the term "Business Day" means any day other than a day on
which banks are permitted or required to be closed in New York City.
3
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made only against delivery
to the Representatives for the respective accounts of the several Underwriters
of the Shares to be purchased on such date, registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company. The certificates
for the Shares, if any, will be made available for inspection and packaging by
the Representatives at the office of X.X. Xxxxxx Securities Inc. set forth above
not later than 1:00 P.M., New York City time, on the Business Day prior to the
Closing Date or the Additional Closing Date, as the case may be.
4. The Company represents and warrants to each Underwriter that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so filed in all material respects with
the Securities Act, and as of the date thereof did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided
that the foregoing representations and warranties shall not apply to any
statements or omissions made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened by the
Commission; the Registration Statement and Prospectus (and the Registration
Statement and Prospectus as amended or supplemented, if the Company shall
have furnished any amendments or supplements thereto) comply, and will
comply, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the date of the Prospectus
and any amendment or supplement thereto, in all material respects with the
Securities Act and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of the
date of the Prospectus and any amendment or supplement thereto, contain any
untrue statement of a
4
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Prospectus, as amended or supplemented, if applicable, at the Closing Date
and the Additional Closing Date, if any, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided that the foregoing representations and
warranties shall not apply to statements or omissions in the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
(c) the financial statements, and the related notes thereto,
included in the Registration Statement and the Prospectus present fairly
the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their operations
and changes in their consolidated cash flows for the periods specified;
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis, and the
supporting schedules included in the Registration Statement present fairly
the information required to be stated therein; and the pro forma financial
information, and the related notes thereto, included in the Registration
Statement and the Prospectus has been prepared in accordance with the
applicable requirements of the Securities Act and is based upon good faith
estimates and assumptions believed by the Company to be reasonable;
(d) the statistical and market-related data included in the
Prospectus are based on or derived from sources that the Company believes
are reliable and accurate;
(e) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
change in the capital stock or long-term 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,
business, prospects, condition (financial or other), management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus (as it stood at the time of the execution
and delivery of this Agreement) and except as set forth or contemplated in
the Prospectus (as it stood at the time of the execution and delivery of
this Agreement) neither the Company nor any of
5
its subsidiaries has entered into any transaction or agreement (whether or
not in the ordinary course of business) material to the Company and its
subsidiaries taken as a whole;
(f) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so qualified
or in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
(g) each of the Company's subsidiaries has been duly incorporated
and is validly existing as a corporation under the laws of its jurisdiction
of incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each jurisdiction in
which it owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so qualified
or in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole; and all the outstanding shares of
capital stock of each subsidiary of the Company have been duly authorized
and validly issued, are fully-paid and non-assessable, and (except, in the
case of Xxxx Communications Ltd., for a single share of common stock owned
by Xxx Xxxxx) upon consummation of the Transactions (as defined below) will
be owned by the Company, directly or indirectly, free and clear of all
liens, encumbrances, security interests and claims;
(h) this Agreement has been duly authorized, executed and delivered
by the Company;
(i) the Company has an authorized capitalization as set forth in
the Prospectus and such authorized capital stock conforms as to legal
matters to the description thereof set forth in the Prospectus, and all of
the outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully-paid and non-assessable and are
not subject to any pre-emptive or similar rights; and, except for this
Agreement and as described in or expressly contemplated by the
6
Prospectus, there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or other
equity interest in the Company or any of its subsidiaries, or any contract,
commitment, agreement, understanding or arrangement of any kind relating to
the issuance of any capital stock of the Company or any such subsidiary,
any such convertible or exchangeable securities or any such rights,
warrants or options;
(j) the shares of capital stock of the Company to be issued
pursuant to (i) the transactions (the "Transactions") described in the
Prospectus under "Certain Transactions" and under footnote 3 to the table
included under the heading "Capitalization" (including any shares of
preferred stock) and (ii) the stock options described in the Prospectus
under "Stock Incentive Plans" and any options granted outside the plans
described thereunder have been duly authorized and, when issued, will be
validly issued, fully-paid and non-assessable and will not be subject to
any preemptive or similar rights;
(k) the Shares to be issued and sold by the Company hereunder have
been duly authorized, and, when issued and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be duly
issued and will be fully paid and non-assessable and will conform to the
descriptions thereof in the Prospectus; and the issuance of the Shares is
not subject to any preemptive or similar rights that have not been waived;
(l) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both, or after giving effect to the
Transactions, would be, in violation of or in default under, its
Certificate of Incorporation or By-Laws or any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which it or any of them or any
of their respective properties is bound, except for such violations and
defaults which individually and in the aggregate are not material to the
Company and its subsidiaries, taken as a whole; the issue and sale of the
Shares and the performance by the Company of its obligations under this
Agreement and the consummation of the Transactions and the transactions
contemplated hereby will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
7
property or assets of the Company or any of its subsidiaries is subject,
except for such conflicts, breaches or defaults which individually and in
the aggregate are not material to the Company and its subsidiaries taken as
a whole; nor will any such action result in any violation of the provisions
of the Certificate of Incorporation or the By-Laws of the Company or any
applicable law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, its
subsidiaries or any of their respective properties; and no consent,
approval, authorization, order, license, registration or qualification of
or with any such court or governmental agency or body is required for the
issue and sale of the Shares or the consummation by the Company of the
Transactions or the transactions contemplated by this Agreement, except
such consents, approvals, authorizations, orders, licenses, registrations
or qualifications as have been obtained under the Securities Act and as may
be required under state securities or Blue Sky Laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(m) there are no legal or governmental investigations, actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries or
any of their respective properties or to which the Company or any of its
subsidiaries is or may be a party or to which any property of the Company
or any of its subsidiaries is or may be the subject which, if determined
adversely to the Company or any of its subsidiaries, could individually or
in the aggregate have, or reasonably be expected to have, a material
adverse effect on the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole, and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and there are no
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required;
(n) the Company and its subsidiaries have good and marketable title
in fee simple to all items of real property and good and marketable title
to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described or referred to
in the Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made or proposed to be made of
such property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its
8
subsidiaries are held by them under valid, existing and enforceable leases
with such exceptions as are not material and do not materially interfere
with the use made or proposed to be made of such property and buildings by
the Company or its subsidiaries;
(o) no relationship, direct or indirect, exists between or among
the Company or any or its subsidiaries on the one hand, and the directors,
officers, stockholders, clients, publishers, content providers or suppliers
of the Company or any entity with whom the Company has a strategic alliance
or any of their subsidiaries on the other hand, which is required by the
Securities Act to be described in the Registration Statement and the
Prospectus which is not so described;
(p) no person has the right to require the Company to register any
securities for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issue and
sale of the Shares except as described in the Prospectus;
(q) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(r) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries, are independent
public accountants as required by the Securities Act;
(s) except as disclosed in the Prospectus, the Company and its
subsidiaries have filed all federal, state, local and foreign tax returns
which have been required to be filed and have paid all taxes shown thereon
and all assessments received by them or any of them to the extent that such
taxes have become due and are not being contested in good faith; and,
except as disclosed in the Registration Statement and the Prospectus, there
is no tax deficiency which has been or might reasonably be expected to be
asserted or threatened against the Company or any subsidiary, except for
such deficiencies as will not have, individually or in the aggregate, a
material adverse effect on the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole;
(t) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected
to,
9
cause or result in stabilization or manipulation of the price of the
Common Stock;
(u) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations
and all courts and other tribunals, domestic or foreign, necessary to own
or lease, as the case may be, and to operate its properties and to carry on
its business as conducted as of the date hereof, except for such licenses,
permits, certificates, consents, orders or other approvals, the absence of
which will not have, individually or in the aggregate, a material adverse
effect on the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole, and neither the Company nor any such
subsidiary has received any actual notice of any proceeding relating to
revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described in the
Registration Statement and the Prospectus; and each of the Company and its
subsidiaries is in compliance with all laws and regulations relating to the
conduct of its business as conducted as of the date hereof, except for such
instances of non-compliance as shall not have, individually or in the
aggregate, a material adverse effect on the general affairs, business,
prospects, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, taken as a whole;
(v) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which are likely to have a material adverse effect on the
Company and its subsidiaries taken as a whole;
(w) each employee benefit plan, within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA") that is maintained, administered or contributed to by the Company
or any of its affiliates for employees or former employees of the Company
and its affiliates has been maintained in compliance in all material
respects with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended, ("Code"). No prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of
the Code has occurred with respect to any such plan excluding transactions
effected pursuant to a statutory or administrative
10
exemption. For each such plan which is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA no "accumulated funding deficiency" as
defined in Section 412 of the Code has been incurred, whether or not waived, and
the fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the present value of all
benefits accrued under such plan determined using reasonable actuarial
assumptions.
(x) the Company, including through its subsidiary Xxxx Communications
Ltd., owns or possesses adequate licenses or other rights to use all patents,
copyrights, trademarks, trade dress, service marks, trade names, technology,
trade secrets and know-how (the "Intellectual Property") necessary to conduct
its business in the manner described in the Prospectus and the Company has not
received any notice of infringement or conflict with (and the Company is not
aware of any infringement or conflict with) asserted rights of others with
respect to any patents, copyrights, trademarks, trade dress, service marks,
trade names, technology or know-how which could result in any material adverse
effect upon the Company and its subsidiaries taken as a whole; and the
discoveries, inventions, products or processes of the Company necessary to
conduct its business in the manner described in the Prospectus do not, to the
best knowledge of the Company, infringe or conflict with any right or patent of
any third party, or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the Company
which could have a material adverse effect on the Company and its subsidiaries
taken as a whole;
(y) the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are executed
in accordance with management's general or specific authorizations; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences;
(z) with the exception of _____ shares of Common Stock to be owned by
_____ upon completion of the Transactions, all outstanding shares of Common
Stock, all shares of Common Stock that will become outstanding upon completion
of the Transactions, and all securities convertible into or exercisable or
exchangeable for Common Stock, are
11
subject to agreements (collectively, the "Lock-up Agreements") executed by the
holders thereof substantially in the form attached hereto as Exhibit A;
(aa) the Company (A) has notified each holder of a currently
outstanding option issued under any of the stock incentive plan described in the
Prospectus under "Management--Stock Incentive Plans" (the "Option Plans") and
each person who has acquired shares of Common Stock pursuant to the exercise of
any option granted under an Option Plan that pursuant to the terms of such
Option Plan, none of such options or shares may be sold or otherwise transferred
or disposed of for a period of 180 days after the date of the initial public
offering of the Shares and (B) has imposed a stop-transfer instruction with the
Company's transfer agent in order to enforce the foregoing lock-up provision
imposed pursuant to the Option Plan;
(bb) as of the date the Registration Statement becomes effective, the
Common Stock will be authorized for listing on the Nasdaq National Market (as
herein defined) upon official notice of issuance;
(cc) upon completion of the offering of the Shares contemplated hereby,
the Amended and Restated Stockholders' Agreement dated as of May 4, 1998 (the
"Stockholders Agreement") shall cease to have any legal effect, except as
provided in Sections 7.11 and 11.2 thereof;
(dd) upon completion of the offering of the Shares contemplated hereby,
the Amended and Restated Unanimous Shareholders' Agreement, dated May 4, 1998 of
Xxxx Communications Ltd. (the "RoweCan Shareholders Agreement") shall cease to
have any legal effect, except as provided in Section 11.2 thereof;
(ee) upon completion of the offering of the Shares contemplated hereby,
the Transactions will have been completed;
(ff) the Company's only subsidiary is Xxxx Communications Ltd.
(gg) 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;
12
(hh) 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 laws and regulations of any foreign
jurisdiction in which the Directed Shares are offered outside the United
States; and
(ii) the Company has not offered, or caused the Underwriters to
offer, Shares 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.
5. The Company covenants and agrees with each of the several
Underwriters as follows:
(a) to use its best efforts to cause the Registration Statement
to become effective at the earliest possible time and, if required, to file
the final Prospectus with the Commission within the time periods specified
by Rule 424(b) and Rule 430A under the Securities Act and to furnish copies
of the Prospectus to the Underwriters in New York City prior to 10:00 a.m.,
New York City time, on the Business Day next succeeding the date of this
Agreement in such quantities as the Representatives may reasonably request;
(b) to deliver, at the expense of the Company, to the
Representatives four signed copies of the Registration Statement (as
originally filed) and each amendment thereto, in each case including
exhibits, and to each other Underwriter a conformed copy of the
Registration Statement (as originally filed) and each amendment thereto, in
each case without exhibits and, during the period mentioned in Section 5
below, to each of the Underwriters as many copies of the Prospectus
(including all amendments and supplements thereto) as the Representatives
may reasonably request during the period specified in 5 below;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the time
the Registration Statement becomes effective, to furnish to the
Representatives a copy of the proposed amendment or supplement for
13
review and not to file any such proposed amendment or supplement to which the
Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm such advice in
writing (i) when the Registration Statement has become effective, (ii when any
amendment to the Registration Statement has been filed or becomes effective, (ii
when any supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Representatives with copies thereof, (iv of any request by
the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for any additional information, (v) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose, (vi of the occurrence of any event, within the
period referenced in Section 5 below, 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 in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, and (vi of the receipt by the Company
of any notification with respect to any suspension of the qualification of the
Shares for offer and sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; and to use its best efforts to prevent the
issuance of any such stop order, or of any order preventing or suspending the
use of any preliminary prospectus or the Prospectus, or of any order suspending
any such qualification of the shares, or notification of any such order thereof
and, if issued, to obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall occur
as a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Company, to the Underwriters and to the dealers
(whose names and addresses the Representatives will furnish to the Company) to
which Shares may have been sold by the Representatives on behalf of the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the statements
14
in the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall
reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Shares; provided that the Company
shall not be required to file a general consent to service of process in any
jurisdiction;
(g) to make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement covering a period
of at least twelve months beginning with the first fiscal quarter of the Company
occurring after the effective date of the Registration Statement, which shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Commission promulgated thereunder;
(h) for a period of three years after the Closing Date, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange;
(i) for a period of 180 days after the date of the initial public offering
of the Shares, without the prior written consent of X.X. Xxxxxx Securities Inc.,
on behalf of the Underwriters, not to (i) offer, pledge, announce the intention
to sell, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, or file or
cause to be filed a registration statement in respect of, any shares of Stock or
any securities convertible into or exercisable or exchangeable for Stock or (ii
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Stock or such other securities, in cash or otherwise, other than (A) the
Shares to be sold hereunder; (B) any shares of Stock of the Company issued upon
the exercise of options granted under existing employee stock option plans; (C)
shares of Stock of the Company issued in connection with the Transactions; (D)
options granted pursuant to the stock incentive plans described in the
Prospectus and (E) the filing of a registration statement on
15
Form S-8 in connection with the stock incentive plans described in the
Prospectus;
(j) to use the net proceeds received by the Company from the sale of the
Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(k) to use its best efforts to list for quotation the Shares on the Nasdaq
National Association of Securities Dealers Automated Quotations National Market
(the "Nasdaq National Market");
(l) to report the use of the proceeds of the sale of Shares contemplated
hereby of the time and in the manner required by Rule 463 under the Securities
Act;
(m) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, issuance, registration, transfer,
execution and delivery of the Shares, including any transfer or other taxes
payable thereon, (ii incident to the preparation, printing and filing under the
Securities Act of the Registration Statement, the Prospectus and any preliminary
prospectus (including in each case all exhibits, amendments and supplements
thereto), (ii incurred in connection with the registration or qualification of
the Shares under the laws of such jurisdictions as the Representatives may
designate (including fees of counsel for the Underwriters and its
disbursements), (iv in connection with the listing of the Shares on the Nasdaq
National Market, (v) related to the filing with, and clearance of the offering
by, the National Association of Securities Dealers, Inc. (including fees of
counsel for the Underwriters and its disbursements), (vi in connection with the
printing (including word processing and duplication costs) and delivery of this
Agreement, the Preliminary and Supplemental Blue Sky Memoranda and the
furnishing to the Underwriters and dealers of copies of the Registration
Statement and the Prospectus, including mailing and shipping, as herein
provided, (vi any expenses incurred by the Company in connection with a "road
show" presentation to potential investors, (vi the cost of preparing stock
certificates and (ix the cost and charges of any transfer agent and any
registrar;
(n) in connection with the Directed Share Program, to ensure that the
Directed Shares will be restricted to the extent required by the National
16
Association of Securities Dealers, Inc. (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. ___________ will notify the Company as to which Participants
will need to be so restricted. At the request of ___________, the
Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time;
(o) to 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; and
(p) to comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share
Program.
6. The several obligations of the Underwriters hereunder to purchase
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, are subject to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) the Registration Statement shall have become effective (or if
a post-effective amendment is required to be filed under the Securities
Act, such post-effective amendment shall have become effective) not later
than 5:00 P.M., New York City time, on the date hereof; and no stop order
suspending the effectiveness of the Registration Statement or any post-
effective amendment shall be in effect, and no proceedings for such
purpose shall be pending before or threatened by the Commission; the
Prospectus shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Securities Act and in accordance with
Section 5 hereof; and all requests for additional information from the
Commission shall have been complied with to the satisfaction of the
Representatives;
(b) the representations and warranties of the Company contained
herein are true and correct on and as of the Closing Date or the
Additional Closing Date, as the case may be, as if made on and as of the
Closing Date or the Additional Closing Date, as the case may be, and the
Company shall have complied with all agreements and all conditions on its
part to be
17
performed or satisfied hereunder at or prior to the Closing Date or the
Additional Closing Date, as the case may be;
(c) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or long-
term 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, business, prospects, condition (financial or
other), management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise than
as set forth in or contemplated by the Prospectus (as it stood at the time of
the execution and delivery of this Agreement), the effect of which in the
judgment of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the Closing Date or
the Additional Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus (as it stood at the time of the execution and
delivery of this Agreement); and neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited financial statements included
in 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 employment or labor dispute, from any dispute relating to the use of
Intellectual Property, or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus (as it stood at
the time of the execution and delivery of this Agreement);
(d) the Representatives shall have received on and as of the Closing Date
or the Additional Closing Date, as the case may be, a certificate of an
executive officer of the Company, with specific knowledge about the Company's
financial matters, satisfactory to the Representatives to the effect set forth
in subsections (a), (b), (c) and (d) of this Section (but only with respect to
the respective representations, warranties, agreements and conditions of the
Company) and to the further effect that there has not occurred any change in the
capital stock or long term 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, business, prospects,
condition (financial and other), management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries taken as a
whole from that set forth or contemplated in the Prospectus (as it stood at the
time of the execution and delivery of this Agreement);
18
(e) Xxxxxxx Xxxx LLP, counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Closing
Date or the Additional Closing Date, as the case may be, in the form
attached hereto as Exhibit A hereto.
---------
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the State of Delaware and the Commonwealth of Massachusetts, to the extent such
counsel deems proper and to the extent specified in such opinion, if at all,
upon an opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel reasonably acceptable to the Underwrit
ers' counsel, familiar with the applicable laws and (B) as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Company, the representations and warranties made by the Company herein,
and certificates or other written statements of officials of jurisdictions
having custody of documents respecting the corporate existence or good standing
of the Company. The opinion of such counsel for the Company shall state that
the opinion of any such other counsel upon which they relied is in form
satisfactory to such counsel and, in such counsel's opinion, the Underwriters
and they are justified in relying thereon. With respect to the matters to be
covered in Section above counsel may state their opinion and belief is based
upon their participation in the preparation of the Registration Statement and
the Prospectus and any amendment or supplement thereto and review and discussion
of the contents thereof but is without independent check or verification except
as specified.
The opinion of Xxxxxxx Xxxx LLP described above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(f) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also on the Closing Date or Additional Closing
Date, as the case may be, PricewaterhouseCoopers LLP shall have furnished
to you letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, containing statements and information of the
type customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus;
(g) the Representatives shall have received on and as of the
Closing Date or Additional Closing Date, as the case may be, an opinion of
Xxxxx Xxxx & Xxxxxxxx, counsel to the Underwriters, with respect to the due
authorization and valid issuance of the Shares, the Registration
19
Statement, the Prospectus and other related matters as the Representatives
may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters;
(h) the Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for listing on
the Nasdaq National Market, subject to official notice of issuance;
(i) on or prior to the Closing Date or Additional Closing Date,
as the case may be, the Company shall have furnished to the Representatives
such further certificates and documents as the Representatives shall
reasonably request;
(j) Separate "lock-up" agreements, each substantially in the form
of Exhibit B hereto, between you and the officers and directors and all
securityholders (including holders of any securities issued in connection
with the Transactions) of the Company relating to sales and certain other
dispositions of shares of Stock or certain other securities, shall be in
full force and effect on the Closing Date or Additional Closing Date, as
the case may be; and
(k) Xxxx Xxxxxxx Xxxxxxx Broad, counsel for the Company and Xxxx
Communications Ltd., shall have furnished to the Representatives their
written opinion, dated the Closing Date or the Additional Closing Date, as
the case may be, in the form attached as Exhibit C hereto.
---------
7. The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934 (the "Exchange Act"), from and against any and all losses, claims, damages
and liabilities (including, without limitation, the legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except (i) insofar
as such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives expressly
20
for use therein; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented, if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by the Company
with Section 5(b) hereof.
The Company agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses incurred in connection with any suit,
action or proceeding or any claim asserted) (i) caused by any untrue statement
or alleged untrue statement of a material fact contained in the prospectus
wrapper material prepared by or with the consent of the Company for distribution
in foreign jurisdictions in connection with the Directed Share Program attached
to the Prospectus or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, when considered in conjunction with
the Prospectus or any applicable preliminary prospectus, not misleading; (ii)
caused by the failure of any Participant to pay for and accept delivery of any
Shares which, immediately following the effectiveness of the Registration
Statement, were subject to a properly confirmed agreement to purchase; or (iii)
related to, arising out of, or in connection with the Directed Share Program,
provided that, the Company shall not be responsible under this subparagraph
(iii) for any losses, claim, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of the Underwriters.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use in
the Registration Statement, the Prospectus, any amendment or supplement
thereto, or any preliminary prospectus.
21
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the three
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnify ing
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have mutual
ly agreed to the contrary, (ii) the Indemnifying Person has failed within a
reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in respect of the legal
expenses of any Indemnified Person in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (i) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act and (ii) the fees and expenses of more than one separate firm (in addition
to any local counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. Notwithstanding anything contained herein to
the contrary, if indemnity may be sought pursuant to the second paragraph of
this Section 7 in respect of any action or proceeding of a type described in
such paragraph, then in addition to such separate firm for the Underwriters and
all such persons, if any, who so control any Underwriter, the Indemnifying
Person shall be liable for the reasonable fees and expenses of not more than one
additional separate firm (in addition to any local counsel) for the Underwriters
and all such persons, if any, who so control any Underwriter for the defense of
any losses, claims, damages and liabilities arising out of the Directed Share
Program and all such fees and expenses shall be reimbursed as they are incurred.
In the case of any such separate firm or firms for the Underwriters and such
control persons of any Underwriters, such firm or firms shall be designated in
writing by X.X. Xxxxxx Securities Inc. In the case of any such separate firm
for the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. The
Indemnifying
22
Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for fees and expenses of counsel as contemplated by the
second, third and fourth sentences of this paragraph, the Indemnifying Person
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in this Section 7 is unavailable to an
Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person in lieu of
indemnifying such Indemnified Person, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause (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 hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand shall be deemed
to be in the same respective proportions as the net proceeds from the offering
(before deducting expenses) received by the Company and the total underwriting
discounts and the commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate public
offering price of the Shares. The relative fault of the Company on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the
23
Company or by the Underwriters, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purposes) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I hereto,
and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by or on behalf of
the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Shares, prior to the
Additional Closing
24
Date) (i) trading generally shall have been suspended or materially limited on
or by, as the case may be, any of the New York Stock Exchange, the American
Stock Exchange, the National Association of Securities Dealers, Inc., the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of or guaranteed by the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in the
United States, New York or Massachusetts shall have been declared by either
Federal, New York State or Commonwealth of Massachusetts authorities, or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Representatives, is material and adverse and which, in the judgment of the
Representatives, makes it impracticable to market the Shares being delivered at
the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of the Registration Statement (or, if applicable, any post-
effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten Shares set forth opposite the names of all such non-
defaulting Underwriters, or in such other proportions as the Representatives may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-tenth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Shares which it or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date, and arrangements satisfactory to the Representatives and the
Company for the purchase of such Shares are not made within 36 hours after such
default, this Agreement (or the obligations of the several Underwriters
25
to purchase the Option Shares, as the case may be) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the Closing
Date (or, in the case of the Option Shares, the Additional Closing Date), but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all out-of-
pocket expenses (including the fees and expenses of its counsel) reasonably
incurred by the Underwriters in connection with this Agreement and the offering
contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriters, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Shares from
any Underwriter shall be deemed to be a successor merely by reason of such
purchase.
12. Any action by the Underwriters or the Representatives hereunder may be
taken by the Representatives jointly or by X.X. Xxxxxx Securities Inc. alone on
behalf of the Underwriters or the Representatives, and any such action taken by
the Representatives jointly or by X.X. Xxxxxx Securities Inc. shall be binding
upon the Underwriters. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriters shall be
given to the Representatives, c/o X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (telefax: 212-648-5705); Attention: Syndicate
Department. Notices to the Company shall be given to it at ____________,
_____________, ____________, (telefax:________); Attention:____________.
26
13. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
ROWECOM INC.
By:
-----------------------------------
Title:
Accepted:_________, 199_
X.X. XXXXXX SECURITIES INC.
CIBC XXXXXXXXXXX
XXXXX XXXXX XXXXXX & COMPANY
Acting severally on behalf of themselves
and the several Underwriters listed
in Schedule I hereto.
By: X.X. XXXXXX SECURITIES INC.
By:
-----------------------------------
Title:
27
SCHEDULE I
----------- ----------------
Underwriter Number of Shares
To Be Purchased
X.X. Xxxxxx Securities Inc. ....................
CIBC Xxxxxxxxxxx ...............................
Xxxxx Xxxxx Xxxxxx & Company ...................
---------------
Total
===============
28
