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EXHIBIT 1.1
INTERVU INC.
2,500,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
April __, 1999
PRUDENTIAL SECURITIES INCORPORATED
ING BARING XXXXXX XXXX LLC
XX XXXXX SECURITIES CORPORATION
CRUTTENDEN XXXX INCORPORATED
JOESPHTHAL & CO. INC.
XXXX, XXXX & CO.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
InterVU Inc., a Delaware corporation (the "Company"), hereby
confirms its agreement with the several underwriters named in Schedule I hereto
(the "Underwriters"), for whom you have been duly authorized to act as
representatives (in such capacities, the "Representatives"), as set forth below.
If you are the only Underwriters, all references herein to the Representatives
shall be deemed to be to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained, the
Company proposes to issue and sell to the several Underwriters an aggregate of
2,500,000 shares (the "Firm Securities") of the Company's Common Stock, par
value $0.001 per share ("Common Stock"). The Company also proposes to issue and
sell to the several Underwriters not more than 375,000 additional shares of
Common Stock if requested by the Representatives as provided in Section 3 of
this Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such option are referred to herein as the "Option
Securities", and the Firm Securities and any Option Securities are collectively
referred to herein as the "Securities".
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the several Underwriters that:
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1 Plus an option purchase from InterVU Inc. up to 375,000 additional shares
to cover over-allotments.
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(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement on such
Form (File No. 333-75283) with respect to the Securities, including a prospectus
subject to completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Act, and one or more amendments
to such registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (i) if such
registration statement, as it may have been amended, has been declared by the
Commission to be effective under the Act, either (A) if the Company relies on
Rule 434 under the Act, a Term Sheet (as hereinafter defined) relating to the
Securities, that shall identify the Preliminary Prospectus (as hereinafter
defined) that it supplements and, if required to be filed pursuant to Rules
434(c)(2) and 424(b), an Integrated Prospectus (as hereinafter defined), in
either case, containing such information as is required or permitted by Rule
434, 430A and 424(b) under the Act or (B) if the Company does not rely on Rule
434 under the Act, a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall have
been filed, in such registration statement), with such changes or insertions as
are required by Rule 430A under the Act or permitted by Rule 424(b) under the
Act, and in the case of clause (i)(A) or (i)(B) of this sentence as have been
provided to and approved by the Representatives prior to the execution of this
Agreement, or (ii) if such registration statement, as it may have been amended,
has not been declared by the Commission to be effective under the Act, an
amendment to such registration statement, including a form of prospectus, a copy
of which amendment has been furnished to and approved by the Representatives
prior to the execution of this Agreement. The Company may also file a related
registration statement with the Commission pursuant to Rule 462(b) under the Act
for the purpose of registering certain additional Securities, which registration
shall be effective upon filing with the Commission. As used in this Agreement,
the term "Original Registration Statement" means the registration statement
initially filed relating to the Securities, as amended at the time when it was
or is declared effective, including (A) all financial schedules and exhibits
thereto, (B) all documents incorporated by reference therein filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (C) any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined) or, if required to be filed pursuant
to Rule 434(c)(2) and 424(b), in the Integrated Prospectus; the term "Rule
462(b) Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Act (including the Registration
Statement and any Preliminary Prospectus or Prospectus incorporated therein at
the time such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective), including all documents incorporated by reference therein
filed under the Exchange Act; the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the preliminary Prospectus
identified therein that such Term Sheet supplements:
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(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b) under
the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the
Act, the prospectus included in the Registration Statement,
including, in the case of clauses (A), (B) or (C) of this sentence, all
documents incorporated by reference therein filed under the Exchange
Act;
the term "Integrated Prospectus" means a prospectus first filed with the
Commission pursuant to Rules 434(c)(2) and 424(b) under the Act; and the Term
"Term Sheet" means any abbreviated term sheet that satisfies the requirements of
Rule 434 under the Act. Any reference in this Agreement to an "amendment or
supplement" to any Preliminary Prospectus, Prospectus or any Integrated
Prospectus or an "amendment" to any registration statement (including the
Registration Statement) shall be deemed to include any document incorporated by
reference therein that is filed with the Commission under the Exchange Act after
the date of such Preliminary Prospectus, Prospectus, Integrated Prospectus or
registration statement, as the case may be; any reference herein to the "date"
of a Prospectus that includes a Term Sheet shall mean the date of such Term
Sheet. For purposes of the preceding sentence, any reference to the "effective
date" of an amendment to a registration statement shall, if such amendment is
effected by means of the filing with the Commission under the Exchange Act of a
document incorporated by reference in such registration statement, be deemed to
refer to the date on which such document was so filed with the Commission.
(b) The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus. When any Preliminary Prospectus and any
amendment or supplement thereto was filed with the Commission, it (i) contained
all statements required to be stated therein in accordance with, and complied in
all material respects with the requirements of, the Act, the Exchange Act and
the respective rules and regulations of the Commission thereunder, and (ii) did
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared effective, it
(i) contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus or
any Term Sheet that is a part thereof or any Integrated Prospectus or any
amendment or supplement thereto is filed with the Commission pursuant to Rule
424(b) (or, if the Prospectus or part thereof or such amendment or supplement is
not required to be so filed, when the Registration Statement or the amendment
thereto containing such amendment or supplement to the Prospectus was or is
declared effective), on the date when the Prospectus is otherwise amended or
supplemented and on the Firm Closing Date and any Option Closing Date (both as
hereinafter defined), each of the Prospectus, and, if required to be filed
pursuant to Rules 434(c)(2) and 424(b) under the Act, the Integrated
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Prospectus as amended or supplemented at any such time, (i) contained or will
contain all statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of, the
Act, the Exchange Act and the respective rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing provisions of this paragraph (b) do not
apply to statements or omissions made in any Preliminary Prospectus or any
amendment or supplement thereto, or, if required to be filed pursuant to Rules
434(c)(2) and 424(b) under the Act, the Integrated Prospectus or any amendment
or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration has not been declared effective (i) the Company has filed a
Rule 462(b) Registration Statement in compliance with and that is effective upon
filing pursuant to Rule 462(b) and has received confirmation of its receipt and
(ii) the Company has given irrevocable instructions for transmission of the
applicable filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under the Act or
the Commission has received payment of such filing fee.
(d) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and is duly
qualified to transact business as a foreign corporation and is in good standing
under the laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified does not amount to a material liability or
disability to the Company. The Company does not have any subsidiaries.
(e) The Company has full power (corporate and other) to own or lease its
properties and conduct its business as described in the Registration Statement,
the Prospectus and any Integrated Prospectus or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus; and the Company has full power (corporate and other) to enter into
this Agreement and to carry out all the terms and provisions hereof to be
carried out by it.
(f) The Company has an authorized, issued and outstanding capitalization
as set forth in each of the Prospectus and any Integrated Prospectus or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus. All of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. The Firm Securities and the Option Securities have been duly
authorized and at the Firm Closing Date or the related Option Closing Date (as
the case may be), after payment therefor in accordance herewith, will be validly
issued, fully paid and nonassessable. No holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Securities, and no holder of securities of
the Company has any right which has not been fully exercised or waived to
require the Company to register the offer or sale of any securities owned by
such holder under the Act in the public offering contemplated by this agreement.
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(g) The capital stock of the Company conforms to the description thereof
contained in each of the Prospectus and any Integrated Prospectus or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus.
(h) Except as disclosed in each of the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus), there are not outstanding
(A) securities or obligations of the Company convertible into or exchangeable
for any capital stock of the Company, (B) warrants, rights or options to
subscribe for or purchase from the Company any such capital stock or any such
convertible or exchangeable securities or obligations, or (C) obligations of the
Company to issue any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or options.
(i) The financial statements and schedules of the Company included in
the Registration Statement and each of the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus) fairly present the
financial position of the Company and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Financial Data" in each of the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus) and in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, fairly present, on the basis stated in each of the
Prospectus and any Integrated Prospectus (or such Preliminary Prospectus) and
such Annual Report, the information included therein.
(j) Ernst & Young, who have certified certain financial statements of
the Company and delivered their report with respect to the audited financial
statements and schedules included in the Registration Statement, the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus), are
independent public accountants as required by the Act, the Exchange Act and the
related published rules and regulations thereunder.
(k) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(l) No legal or governmental proceedings are pending to which the
Company is a party or to which the property of the Company is subject that is
required to be described in the Registration Statement, the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus), and no
such proceedings have been threatened against the Company or with respect to any
of its properties; and no contract or other document is required to be described
in the Registration Statement, the
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Prospectus or any Integrated Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein (or, if the Prospectus and
any required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus) or filed as required.
(m) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue sky laws and, if the registration statement filed with
respect to the Securities (as amended) is not effective under the Act as of the
time of execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act, or (ii) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other agreement
or instrument to which the Company is a party or by which the Company or any of
its properties are bound, or the charter documents or by-laws of the Company, or
any statute or any judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to the Company.
(n) Subsequent to the respective dates as of which information is given
in the Registration Statement, the Prospectus or any Integrated Prospectus or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus, the Company has not sustained any
material loss or interference with its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding and there has not
been any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise), management,
business prospects, net worth, or results of operations of the Company (a
"Material Adverse Effect"), except in each case as described in or contemplated
by the Prospectus and any Integrated Prospectus or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus.
(o) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(p) The Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Securities, will
not distribute any offering material in connection with the offering and sale of
the Securities other than the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or other materials, if any permitted by the Act.
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(q) Subsequent to the respective dates as of which information is given
in the Registration Statement, the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus), (1) the Company has not incurred any
material liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (2) the Company has
not purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock;
and (3) there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company, except in each case as described in or
contemplated by the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
(r) The Company has good and marketable title in fee simple to all items
of real property and marketable title to all personal property owned by it, in
each case free and clear of any security interests, liens, encumbrances,
equities, claims and other defects, except such as do not materially and
adversely 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 any real
property and buildings held under lease by the Company are held under valid,
subsisting and enforceable leases, with such exceptions as are not material and
do not interfere with the use made or proposed to be made of such property and
buildings by the Company, in each case except as described in or contemplated by
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated are not in existence, the most recent Preliminary
Prospectus).
(s) No labor dispute with the employees of the Company exists or is
threatened or imminent that could have a Material Adverse Effect, except as
described in or contemplated by the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus).
(t) The Company owns and has the unrestricted right to use all material
patents, patent applications, trademarks, service marks, trade names, licenses,
copyrights, trade secrets, know-how (including all other unpatented and/or
unpatentable proprietary or conditional information, systems or procedures),
inventions, designs, processes, works of authorship, computer programs and
technical data and information (collectively herein "intellectual property")
that are material to the development, manufacture, operation, sale or use of
products or services sold or provided or proposed to be sold or provided by the
Company, free and clear of and without violating any right, lien, or claim of
others, including without limitation, former employers of its employees, and the
Company has not received any notice of infringement of or conflict with asserted
rights of any third party with respect to any of the foregoing which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect, except as described in or contemplated by
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(u) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; the Company has not
been refused any insurance coverage sought or applied for;
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and the Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect, except as
described in or contemplated by the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus).
(v) The Company possesses all certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct its business, and the Company has not received any notice
of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, except as described in or contemplated by the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(w) The Company is not an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended, and this transaction will not
cause the Company to become an investment company subject to registration under
such Act.
(x) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure to so file would not have a Material
Adverse Effect) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine or penalty
that is currently being contested in good faith or as described in or
contemplated by the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
(y) The Company does not own any shares of stock or any other equity
securities of any corporation or have any equity interest in any firm,
partnership, association or other entity, except as described in or contemplated
by the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
Integrated prospectus are not in existence, the most recent Preliminary
Prospectus).
(z) No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which the Company is a party
or by which the Company or any of its respective properties is bound or may be
affected in any material adverse respect with regard to property, business or
operations of the Company.
(aa) The Common Stock is registered pursuant to Section 12(b) or 12(g)
of the Exchange Act and is listed on the Nasdaq Stock Market's National Market
(the "Nasdaq National Market"), and the Company has taken no action designed to,
or likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act or delisting the Common Stock from the Nasdaq
National Market.
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(bb) Each certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
3. Purchase, Sale and Delivery of the Securities. (a) On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, at a purchase
price of $_______ per share, the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule 1 hereto. One or more certificates in
definitive form for the Firm Securities that the several Underwriters have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Representatives request upon notice to
the Company at least 48 hours prior to the Firm Closing Date, shall be delivered
by or on behalf of the Company to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by wire transfer in same-day funds
(the "Wired Funds") to the account of the Company. Such delivery of and payment
for the Firm Securities shall be made at the offices of Xxxxxxx Xxxx & Xxxxx
LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:30 A.M., New York time, on
, 1999, or at such other place, time or date as the Representatives and
the Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date". The Company will make such certificate
or certificates for the Firm Securities available for checking and packaging by
the Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated at least 24
hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Securities. The purchase price
to be paid for any Option Securities shall be the same price per share as the
price per share for the Firm Securities set forth above in paragraph (a) of this
Section 3. The option granted hereby may be exercised as to all or any part of
the Option Securities from time to time within thirty days after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading). The Underwriters shall not be under any obligation to purchase any of
the Option Securities prior to the exercise of such option. The Representatives
may from time to time exercise the option granted hereby by giving notice in
writing or by telephone (confirmed in writing) to the Company setting forth the
aggregate principal amount of Option Securities as to which the several
Underwriters are then exercising the option and the date and time for delivery
of and payment for such Option Securities. Any such date of delivery shall be
determined by the Representatives but shall not be earlier than two business
days or later than five business days after such exercise of the option and, in
any event, shall not be earlier than the Firm Closing Date. The time and date
set forth in such notice, or such other time on such other date as the
Representatives and the Company may agree upon or as the Representatives may
determine pursuant to Section 9 hereof, is herein called the "Option Closing
Date" with respect to such Option Securities. Upon exercise of the option as
provided herein, the Company shall become obligated to sell to each of the
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several Underwriters, and, subject to the terms and conditions herein set forth,
each of the Underwriters (severally and not jointly) shall become obligated to
purchase from the Company, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the option
as such Underwriter is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional Shares. If the option is exercised as to all or
any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3, except that reference therein to
the Firm Securities and the Firm Closing Date shall be deemed, for purposes of
this paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(c) The Company hereby acknowledges that the wire transfer by or on
behalf of the Underwriters of the purchase price for any Shares does not
constitute closing of a purchase and sale of the Shares. Only execution and
delivery of a receipt for Shares by the Underwriters indicates completion of the
closing of a purchase of the Shares from the Company. Furthermore, in the event
that the Underwriters wire funds to the Company prior to the completion of the
closing of a purchase of Shares, the Company hereby acknowledges that until the
Underwriters execute and deliver a receipt for the Shares, by facsimile or
otherwise, the Company will not be entitled to the Wired Funds and shall return
the Wired Funds to the Underwriters as soon as practicable (by wire transfer of
same-day funds) upon demand. In the event that the closing of a purchase of
Shares is not completed and the Wired Funds are not returned by the Company to
the Underwriters on the same day the Wired Funds were received by the Company,
the Company agrees to pay to the Underwriters in respect of each day the Wired
Funds are not returned by it, in same-day funds, interest on the amount of such
Wired Funds in an amount representing the Underwriters' cost of financing as
reasonably determined by Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not as one of the
Representatives, may (but shall not be obligated to) make payment on behalf of
any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such Underwriter
or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each
of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as possible. If required, the
Company will file each of the Prospectus and any Integrated Prospectus or any
Term Sheet that constitutes a part thereof and any amendment or supplement
thereto with the Commission in the manner and within the time period required by
Rule 434 and 424(b) under the Act. During any time when a prospectus relating to
the Securities is
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required to be delivered under the Act, the Company (i) will comply with all
requirements imposed upon it by the Act, the Exchange Act and the Trust
Indenture Act and the respective rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of the
Prospectus and any Integrated Prospectus, as then amended or supplemented, and
(ii) will not file with the Commission the prospectus or the amendment referred
to in the third sentence of Section 2(a) hereof, any amendment or supplement to
such prospectus or any amendment to the Registration Statement or any Rule
462(b) Registration Statement of which the Representatives shall not previously
have been advised and furnished with a copy for a reasonable period of time
prior to the proposed filing and as to which filing the Representatives shall
not have given their consent. The Company will prepare and file with the
Commission, in accordance with the rules and regulations of the Commission,
promptly upon request by the Representatives or counsel for the Underwriters,
any amendments to the Registration Statement or amendments or supplements to the
Prospectus and any Integrated Prospectus that may be necessary or advisable in
connection with the distribution of the Securities by the several Underwriters,
and will use its best efforts to cause any such amendment to the Registration
Statement to be declared effective by the Commission as promptly as possible.
The Company will advise the Representatives, promptly after receiving notice
thereof, of the time when the Registration Statement or any amendment thereto
has been filed or declared effective or the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence satisfactory to the Representatives of each such filing or
effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
post-effective amendment thereto or any order directed at any document
incorporated by reference in the Registration Statement or any order preventing
or suspending the use of any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus or any amendment or supplement thereto, (ii) the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus or for additional information. The
Company will use its best efforts to prevent the issuance of any such stop order
and, if any such stop order is issued, to obtain the withdrawal thereof as
promptly as possible.
(c) The Company will arrange for the qualification of the Securities for
offering and sale under the securities or blue sky laws of such jurisdictions as
the Representatives may designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of the
Securities, provided, however, that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event
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occurs as a result of which the Prospectus or any Integrated Prospectus, as then
amended or supplemented, would include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if for any other reason it is necessary at any time to amend or
supplement the Prospectus or any Integrated Prospectus to comply with the Act,
the Exchange Act or the respective rules or regulations of the Commission
thereunder, the Company will promptly notify the Representatives thereof and,
subject to Section 5(a) hereof, will prepare and file with the Commission, at
the Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus or any Integrated Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the Representatives
and to counsel for the Underwriters a signed copy of the registration statement
originally filed with respect to the Securities and each amendment thereto (in
each case including exhibits thereto) or any Rule 462(b) Registration Statement,
certified by the Secretary or an Assistant Secretary of the Company to be true
and complete copies thereof as filed with the Commission by electronic
transmission, (ii) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus, the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request; without limiting the application of clause (iii) of this
sentence, the Company, not later than (A) 6:00 PM, New York City time, on the
date of determination of the public offering price, if such determination
occurred at or prior to 10:00 AM, New York City time on such date or (B) 2:00
PM, New York City time, on the business day following the date of determination
of the public offering price, if such determination occurred after 10:00 AM, New
York City time, on such date, will deliver to the Underwriters, without charge,
as many copies of the Prospectus and any amendment or supplement thereto as the
Representatives may reasonably request for purposes of confirming orders that
are expected to settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally available
to its securityholders and to the Representatives an earnings statement of the
Company that satisfies the provisions of Section 11(a) of the Act and Rule 158
thereunder.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus or any
Integrated Prospectus.
(h) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock for
a period of 180 days after the date hereof, except pursuant to this Agreement
and except for issuances pursuant to the exercise of employee stock
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options outstanding on the date hereof, pursuant to the Company's dividend
reinvestment plan or pursuant to the terms of convertible securities of the
Company outstanding on the date hereof.
(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(j) The Company will obtain the agreements described in Section 7(f)
hereof prior to the Firm Closing Date.
(k) If at any time during the 25 day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the Prospectus
and any Integrated Prospectus), the Company will, after notice from you advising
the Company to the effect set forth above, forthwith prepare, consult with you
concerning the substance of, and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall both
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 promulgated
under the Act by the earlier of (i) 10:00 P.M. Eastern time on the date of this
Agreement and (ii) the time confirmations are sent or given, as specified by
Rule 462(b)(2).
(m) The Company will cause the Securities to be duly included for
quotation on the Nasdaq National Market prior to the Firm Closing Date. The
Company will ensure that the Securities remain included for quotation on the
Nasdaq National Market following the Firm Closing Date.
6. Expenses. The Company will pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus and any amendment or supplement thereto, this Agreement
and any blue sky memoranda, (ii) all arrangements relating to the delivery to
the Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, accountants and any other experts or advisors
retained by the Company, (iv) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees, (v) the qualification of the Securities
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under state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vi) the filing
fees of the Commission and the National Association of Securities Dealers, Inc.
relating to the Securities, (vii) the quotation of the Securities on the Nasdaq
National Market, (viii) meetings with prospective investors in the Securities
(other than shall have been specifically approved by the Representatives to be
paid for by the Underwriters) and (ix) advertising relating to the offering of
the Securities (other than shall have been specifically approved by the
Representatives to be paid for by the Underwriters). If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 hereof is not satisfied,
because this Agreement is terminated pursuant to Section 11 hereof or because of
any failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm Closing
Date, to the accuracy of the statements of the Company's officers made pursuant
to the provisions hereof, to the performance by the Company of its covenants and
agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of the
time of execution hereof, Original Registration Statement or such amendment and,
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to
the registration statement originally filed with respect to the Securities or to
the Registration Statement, as the case may be, containing information regarding
the initial public offering price of the Securities has been filed with the
Commission and (ii) the time confirmations are sent or given as specified by
Rule 462(b)(2), or with respect to the Original Registration Statement, or such
later time and date as shall have been consented to by the Representatives; if
required, the Prospectus or any Term Sheet that constitutes a part thereof and
any Integrated Prospectus and any amendment or supplement thereto shall have
been filed with the Commission in the manner and within the time period required
by Rule 434 and 424(b) under the Act; no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto shall have been issued and no proceedings for that purpose
shall have been instituted or threatened or, to the knowledge of the Company or
the Representatives, shall be contemplated by the Commission; and the Company
shall have complied
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with any request of the Commission for additional information (to be included in
the Registration Statement, the Prospectus or any Integrated Prospectus or
otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxx & Xxxxxxx, counsel for the Company, to the effect that:
(i) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
is duly qualified to transact business as a foreign corporation and is
in good standing under the laws of all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
does not amount to a material liability or disability to the Company,
taken as a whole;
(ii) the Company has corporate power to own or lease its properties and
conduct its business as described in the Registration Statement and the
Prospectus or any Integrated Prospectus, and the Company has corporate
power to enter into this Agreement and to carry out all the terms and
provisions hereof and thereof to be carried out by it;
(iii) the Company has an authorized, issued and outstanding
capitalization as set forth in each of the Prospectus and any Integrated
Prospectus; all of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable
federal and state securities laws and were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or
purchase securities; the Firm Securities have been duly authorized by
all necessary corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and nonassessable; the
Securities have been duly included for trading on the Nasdaq National
Market; no holders of outstanding shares of capital stock of the Company
are entitled as such to any preemptive or other rights to subscribe for
any of the Securities; and no holders of securities of the Company are
entitled to have such securities registered under the Registration
Statement;
(iv) the statements set forth under the heading "Description of Capital
Stock" in each of the Prospectus and any Integrated Prospectus, insofar
as such statements purport to summarize certain provisions of the
capital stock of the Company, provide a fair summary of such provisions;
and the statements set forth under the headings "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results
of Operations," "Business," "Principal Stockholders," "Legal Matters,"
"Executive Compensation" and "Certain Relationships and Related
Transactions" in each of the Prospectus and any Integrated Prospectus,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, provide a fair summary of
such legal matters, documents and proceedings;
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(v) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(vi) no legal or governmental proceedings are pending to which the
Company is a party or to which the property of the Company is subject
that are required to be described in the Registration Statement, the
Prospectus and any Integrated Prospectus and are not described therein,
and, to the best knowledge of such counsel, no such proceedings have
been threatened against the Company or with respect to any of its
properties; and no contract or other document is required to be
described in the Registration Statement, the Prospectus and any
Integrated Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required;
(vii) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have
been obtained and such as may be required under state securities or blue
sky laws, or (B) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, lease or other agreement or
instrument, known to such counsel, to which the Company is a party or by
which the Company or any of its properties are bound, or the charter
documents or by-laws of the Company, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator known to such counsel and applicable to the
Company;
(viii) the Registration Statement is effective under the Act; any
required filing of the Prospectus, or any Term Sheet that constitutes a
part thereof, and any Integrated Prospectus pursuant to Rules 434 and
424(b) has been made in the manner and within the time period required
by Rules 434 and 424(b); and no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto
and no order directed at any document incorporated by reference in the
Registration Statement, the Prospectus and any Integrated Prospectus or
any amendment or supplement thereto has been issued, and no proceedings
for that purpose have been instituted or threatened or, to the best
knowledge of such counsel, are contemplated by the Commission;
(ix) the Registration Statement originally filed with respect to the
Securities and each amendment thereto and any Rule 462(b) Registration
Statement, the Prospectus and any Integrated Prospectus (in each case,
including the documents incorporated by reference therein but not
including the financial statements and other financial information
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act,
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the Exchange Act and the respective rules and regulations of the
Commission thereunder;
(x) If the Company elects to rely on Rule 434, the Prospectus is not
"materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or any effective post-effective amendment thereto
(including such information that is permitted to be omitted pursuant to
Rule 430A); and
(xi) The Company is not an investment company, as such term is defined
in the Investment Company Act of 1940, as amended, and this transaction
will not cause the Company to become an investment company subject to
registration under such Act.
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus and any Integrated Prospectus, as of its date or the date of such
opinion, included or includes 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.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, counsel for the Underwriters, with respect to the issuance and sale of
the Firm Securities, the Registration Statement, the Prospectus and any
Integrated Prospectus, and such other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters.
(d) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxx & Xxxxx, special intellectual property counsel to the
Company, covering such intellectual property matters as the Representatives may
reasonably require, and otherwise in form and substance reasonably satisfactory
to the Representatives.
(e) The Representatives shall have received from Ernst & Young LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
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(i) they are independent accountants with respect to the Company within
the meaning of the Act, the Exchange Act and the applicable rules and
regulations thereunder;
(ii) in their opinion, the audited financial statements and schedules
examined by them and included in the Registration Statement, the
Prospectus and any Integrated Prospectus comply in form in all material
respects with the applicable accounting requirements of the Act, the
Exchange Act and the related published rules and regulations thereunder;
(iii) on the basis of carrying out certain specified procedures (which
do not constitute an examination made in accordance with generally
accepted auditing standards), a reading of the minute books of the
shareholders, the board of directors and any committees thereof of the
Company and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that at a specific date not
more than five business days prior to the date of such letter, there was
any change in the capital stock, increase in long-term debt or decrease
in net current assets or stockholders' equity of the Company, in each
case compared with amounts shown on the December 31, 1998 balance sheet
included in the Registration Statement, the Prospectus and any
Integrated Prospectus, or for the period from January 1, 1999 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding year in revenues, net income
before income taxes or total or per share amounts of net income of the
Company, or increases in net loss, except in all instances for changes,
decreases or increases set forth in such letter; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting
records of the Company and are included in the Registration Statement,
the Prospectus and any Integrated Prospectus under the captions
"Prospectus Summary," "Risk Factors," "Use of Proceeds," "Dilution,"
"Capitalization," "Selected Financial Data," "Management's Discussion
and Analysis of Financial Condition and Results of Operations,"
"Business," "Management" and "Principal Stockholders" and under Items 1,
5, 6, 7, 11, 12 and 13 of the Company's 10-K for the year ended December
31, 1998, incorporated by reference in the Registration Statement, the
Prospectus and any Integrated Prospectus, and have compared such
amounts, percentages and financial information with such records of the
Company and its consolidated subsidiaries and with information derived
from such records and have found them to be in agreement, excluding any
questions of legal interpretation.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or
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increases do not, in the sole judgment of the Representatives, make it
impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (d) with respect to either letter
referred to above shall include any amendment or supplement thereto at the date
of such letter.
(f) The Representatives shall have received a certificate, dated the
Firm Closing Date, of Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxxx of the Company to
the effect that:
(i) the representations and warranties of the Company in this Agreement
are true and correct as if made on and as of the Firm Closing Date; the
Registration Statement, as amended as of the Firm Closing Date, does not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading,
and the Prospectus and any Integrated Prospectus, as amended or
supplemented as of the Firm Closing Date, does not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the
Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Firm Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no order directed
at any document incorporated by reference in the Registration Statement
or the Prospectus or any amendment or supplement thereto has been
issued, and no proceedings for that purpose have been instituted or
threatened or, to the best of the Company's knowledge, are contemplated
by the Commission; and
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement, the Prospectus and any Integrated
Prospectus, the Company has not sustained any material loss or
interference with its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, and there has not been any Material Adverse Effect, except
in each case as described in or contemplated by the Prospectus and any
Integrated Prospectus.
(g) The Representatives shall have received from each person who is a
director or officer of the Company or, to the extent so requested, who owns
shares of Common Stock, an agreement to the effect that such person will not,
directly or indirectly, without the prior written consent of Prudential
Securities Incorporated, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or otherwise sell
or dispose (or announce any offer, sale, offer of sale, contract of sale,
pledge, grant of an option to purchase or other sale or disposition) of any
shares of Common Stock or any securities
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convertible into, or exchangeable or exercisable for, shares of Common Stock for
a period of __ days after the date of this Agreement.
(h) On or before the Firm Closing Date, the Representatives and counsel
for the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
(i) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq National Market.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the Company
in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto or (B) any application
or other document, or any amendment or supplement thereto, executed by
the Company or based upon written information furnished by or on behalf
of the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application"),
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus or any amendment or supplement
thereto, or any Application a material
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fact required to be stated therein or necessary to make the statements
therein not misleading or
(iv) any untrue statement or alleged untrue statement of any material
fact contained in any audio or visual materials used in connection with
the marketing of the Securities, including without limitation, slides,
videos, films, tape recordings,
and will reimburse, as incurred, each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred
by such Underwriter or such controlling person in connection with
investigating, defending against or appearing as a third-party witness
in connection with any such loss, claim, damage, liability or action;
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 any untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus or any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and provided, further, that the Company
will not be liable to any Underwriter or any person controlling such
Underwriter with respect to any such untrue statement or omission made
in any Preliminary Prospectus that is corrected in the Prospectus (or
any amendment or supplement thereto) if the person asserting any such
loss, claim, damage or liability purchased Securities from such
Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented), other than the documents incorporated by
reference therein, at or prior to the written confirmation of the sale
of such Securities to such person in any case where such delivery of the
Prospectus (as amended or supplemented) is required by the Act, unless
such failure to deliver the Prospectus (as amended or supplemented) was
a result of noncompliance by the Company with Section 5(d) and (a) of
this Agreement). This indemnity agreement will be in addition to any
liability which the Company may otherwise have. The Company will not,
without the prior written consent of the Underwriter or Underwriters
purchasing, in the aggregate, more than fifty percent (50%) of the
Securities, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not
any such Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional
release of all of the Underwriters and such controlling persons from all
liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnity and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, it any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act against
any losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof)
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arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto, or any Application or (ii)
the omission or the alleged omission to state therein a material fact required
to be stated in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto, or any Application 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, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or any action in respect thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8
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 this
Section 8, 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 this
Section 8. 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;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 8, representing the indemnified parties under such
paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the
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expense of the indemnifying party. After such notice from the indemnifying party
to such indemnified party, the indemnifying party will not be liable for the
costs and expenses of any settlement of such action effected by such indemnified
party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), 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 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 of the parties 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, the parties'
relative intents, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company and the Underwriters agree that it
would not be equitable if the amount of such contribution were determined by pro
rate or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to above in this paragraph
(d). Notwithstanding any other provision of this paragraph (d), no Underwriter
shall be obligated to make contributions hereunder that in the aggregate exceed
the total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company.
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9. Default of Underwriters. If one or more Underwriters default in their
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 10 hereof. In the event of any default by one or more Underwriters as
described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with respect to
the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company shall have, in the sole judgment of the Representatives,
sustained any material loss or interference with its business or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or
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from any labor dispute or any legal or governmental proceeding or there
shall have been any Material Adverse Effect, except in each case as
described in or contemplated by the Prospectus or any Integrated
Prospectus (exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or the Nasdaq National Market
shall have been suspended or minimum or maximum prices shall have been
established on either such exchange or (market) system,
(iii) a banking moratorium shall have been declared by New York,
California or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of hostilities
between the United States and any foreign power, (B) an outbreak or
escalation of any other insurrection or armed conflict involving the
United States or (C) any other calamity or crisis or material adverse
change in general economic, political or financial conditions having an
effect on the U. S. financial markets that, in the sole judgment of the
Representatives, makes it impractical or inadvisable to proceed with the
public offering or the delivery of the Securities as contemplated by the
Registration Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. Information Supplied by Underwriters. The statements set forth under
the heading "Underwriting" in any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus (to the extent such statements relate to the Underwriters)
constitute the only information furnished by any Underwriter through the
Representatives to the Company for the purposes of Sections 2(b) and 8 hereof.
The Underwriters confirm that such statements (to such extent) are correct.
13. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company at
InterVU Inc., 0000 Xxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxxx X. Xxxxxxxx.
14. Successors. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 8 of this
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Agreement shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Underwriters contained in Section 8
of this Agreement shall also be for the benefit of the directors of the Company,
the officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. No purchaser of Securities from any
Underwriter shall be deemed a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Company accepts for itself and
in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. The Company designates and appoints
_____________, and such other persons as may hereafter be selected by the
Company irrevocable agreeing in writing to so serve, as its agent to receive on
its behalf service of all process in any such proceedings in any such court,
such service being hereby acknowledged by the Company to be effective and
binding service in every respect. A copy of any such process so served shall be
mailed by registered mail to the Company at its address provided in Section 13
hereof; provided, however, that, unless otherwise provided by applicable law,
any failure to mail such copy shall not affect the validity of service of such
process. If any agent appointed by the Company refuses to accept service, the
Company hereby agrees that service of process sufficient for personal
jurisdiction in any action against the Company in the State of New York may be
made by registered or certified mail, return receipt requested, to the Company
at its address provided in Section 13 hereof, and the Company hereby
acknowledges that such service shall be effective and binding in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Underwriter to bring
proceedings against the Company in the courts of any other jurisdiction.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company and each of the
several Underwriters.
Very truly yours,
INTERVU INC.
By ____________________________
Xxxxx X. Xxxxxx
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
ING BARING XXXXXX XXXX LLC
XX XXXXX SECURITIES CORPORATION
CRUTTENDEN XXXX INCORPORATED
JOESPHTAHAL & CO. INC.
XXXX, XXXX & CO.
By PRUDENTIAL SECURITIES INCORPORATED
By ______________________________________
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
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SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- ------------
Prudential Securities Incorporated
ING Baring Xxxxxx Xxxx LLC
XX Xxxxx Securities Corporation
Cruttenden Xxxx Incorporated
Joesphthal & Co. Inc.
Xxxx, Xxxx & Co.
Total ................. ____________
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