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Conformed Copy
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XXXXXXXXX.XXX, INC.
___________ Shares/1/
Common Stock
UNDERWRITING AGREEMENT
March____, 0000
XXXXXXXXX & XXXXX LLC
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
XXXX XXXXXXXX XXXXXXX, a division of Xxxx Xxxxxxxx Incorporated
XXXXXX XXXXXX PARTNERS LLC
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
XxxxXxxxx.xxx, Inc., a Delaware corporation (herein called the Company),
proposes to issue and sell _________ shares of its authorized but unissued
Common Stock, $0.0001 par value (herein called the Common Stock) and the
shareholders of the Company named in Schedule II hereto (herein collectively
called the Selling Securityholders) propose to sell an aggregate of ________
shares of Common Stock of the Company (said _______ shares of Common Stock being
herein called the Underwritten Stock). The Company and a certain Selling
Securityholder named in Schedule III hereto (the "Principal Selling
Securityholder") propose to grant to the Underwriters (as hereinafter defined)
an option to purchase up to _________ additional shares of Common Stock (herein
called the Option Stock and with the Underwritten Stock herein collectively
called the Stock). The Common Stock is more fully described in the Registration
Statement and the Prospectus hereinafter mentioned.
The Company and the Selling Securityholders severally hereby confirm the
agreements made with respect to the purchase of the Stock by the several
underwriters, for whom you are acting, named in Schedule I hereto (herein
collectively called the Underwriters, which term shall also include any
underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent
and warrant that you have been authorized by each of the other Underwriters to
enter into this Agreement on its behalf and to act for it in the manner herein
provided.
____________________
/1/Plus an option to purchase from the Company and the Principal Selling
Securityholder up to _____________ additional shares to cover over allotments.
1. Registration Statement. The Company has filed with the Securities and
Exchange Commission (herein called the Commission) a registration statement on
Form S-1 (No. 333-___), including the related preliminary prospectus, for the
registration under the Securities Act of 1933, as amended (herein called the
Securities Act) of the Stock. Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary prospectus (meeting
the requirements of Rule 430A of the rules and regulations of the Commission)
heretofore filed by the Company with the Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean such
registration statement, including all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a Rule
462(b) registration statement), and, in the event of any amendment thereto after
the effective date of such registration statement (herein called the Effective
Date), shall also mean (from and after the effectiveness of such amendment) such
registration statement as so amended (including any Rule 462(b) registration
statement). The term Prospectus as used in this Agreement shall mean the
prospectus relating to the Stock first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in the
Registration Statement) and, in the event of any supplement or amendment to such
prospectus after the Effective Date, shall also mean (from and after the filing
with the Commission of such supplement or the effectiveness of such amendment)
such prospectus as so supplemented or amended. The term Preliminary Prospectus
as used in this Agreement shall mean each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective.
The Registration Statement has been declared effective under the Securities
Act, and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The Company has caused to be delivered
to you copies of each Preliminary Prospectus and has consented to the use of
such copies for the purposes permitted by the Securities Act.
2. Representations and Warranties of the Company and the Principal Selling
Securityholder.
(a) Each of the Company and the Principal Selling Securityholder hereby
represents and warrants as follows:
(i) Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has full corporate
power and authority to own or lease its properties and conduct its
business as described in the Registration Statement and the Prospectus
and as being conducted, and is duly qualified as a foreign corporation
and in good standing in all jurisdictions in which the character of
the property owned or leased or the nature of the business transacted
by it makes qualification necessary (except where the failure to be so
qualified would not have a material adverse effect on the business,
properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole).
(ii) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
materially adverse change in the business, properties, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, other than as set
forth in the Registration Statement and the Prospectus, and since such
dates, except in the or-
dinary course of business, neither the Company nor any of its
subsidiaries has entered into any material transaction not referred to
in the Registration Statement and the Prospectus.
(iii) The Registration Statement and the Prospectus comply, and on the
Closing Date (as hereinafter defined) and any later date on which
Option Stock is to be purchased, the Registration Statement and the
Prospectus will comply, in all material respects, with the provisions
of the Securities Act and the rules and regulations of the Commission
thereunder; on the Effective Date, the Registration Statement did not
contain any untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the
Effective Date the Prospectus did not and, on the Closing Date and any
later date on which Option Stock is to be purchased, will not contain
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that none of the representations and warranties in
this subparagraph (iii) shall apply to statements in, or omissions
from, the Registration Statement or the Prospectus made in reliance
upon and in conformity with information herein or otherwise furnished
in writing to the Company by or on behalf of the Underwriters for use
in the Registration Statement or the Prospectus.
(iv) The authorized capital stock of the Company consists of 15,000,000
shares of Preferred Stock, none of which are outstanding, and
50,000,000 shares of Common Stock, $0.0001 par value, of which there
are outstanding ___________ shares (including the Underwritten Stock
plus the number of shares of Option Stock, if any, issued on the date
hereof); proper corporate proceedings have been taken validly to
authorize such authorized capital stock; all of the shares of such
capital stock outstanding prior to the issuance of the Stock have been
duly and validly issued and are fully paid and nonassessable; all
outstanding shares of capital stock and options and other rights to
acquire capital stock have been issued in compliance with the
registration and qualification provisions of all applicable securities
laws and were not issued in violation of any preemptive rights, rights
of first refusal or other similar rights; and no preemptive rights of,
or rights of refusal in favor of, stockholders exist with respect to
the Stock, or the issue and sale thereof, pursuant to the Restated
Certificate of Incorporation or Bylaws of the Company, and there are
no contractual or statutory preemptive rights that have not been
waived, rights of first refusal or rights of co-sale which exist with
respect to the issue and sale of the Stock; except as described in the
Prospectus, there are no outstanding options, warrants or other rights
to purchase, agreements to issue or other rights to convert any
obligations into shares of capital stock of the Company or any of its
subsidiaries;
(v) All of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly by the Company, free
and clear of any security interest, lien, encumbrance, equity, claim
or adverse interest of any nature;
(vi) The Stock, when issued and sold to the Underwriters as provided
herein, will be duly and validly issued, fully paid and nonassessable
and conform to the description thereof in the Prospectus. No further
approval or authority of the stockholders or the Board of Directors of
the Company will be required for the transfer and sale of the Stock to
be sold by the Selling Securityholders or the issuance and sale of the
Stock by the Company, as contemplated herein.
(vii) The Company and each of its subsidiaries own or possess valid licenses
or other rights to use all patents, patent rights, inventions, trade
secrets, copyrights, trademarks, service marks, trade names,
technology and know-how (herein called Intellectual Property)
currently
employed or proposed to be employed by them in connection with their
business as described in the Prospectus. Except as disclosed in the
Prospectus, neither the Company nor any of its subsidiaries has
received any notice of infringement or conflict with (and neither the
Company nor any of its subsidiaries knows of any infringement or
conflict with) asserted rights of others with respect to any
Intellectual Property that is reasonably likely to have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
The discoveries, inventions, products or processes of the Company and
its subsidiaries referred to in the Prospectus do not, to the
Company's knowledge, infringe or conflict with any right or patent of
any third party, or any discovery, invention, product or process that
is the subject of a patent application filed by any third party, that
could have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(viii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been obtained
under the Securities Act and such as may be required under state
securities or blue sky laws in connection with the purchase and
distribution of the Stock by the Underwriters.
(ix) Other than the subsidiaries of the Company listed in Exhibit 21 to the
Registration Statement, the Company owns no capital stock or other
equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.
(x) All outstanding shares of Common Stock held by officers, directors and
Selling Securityholders, and all securities convertible into or
exercisable or exchangeable for Common Stock held by officers,
directors and Selling Securityholders, are subject to valid, binding
and enforceable agreements (herein called the Lock-up Agreements) that
restrict the holders thereof from selling, making any short sale of,
granting any option for the purchase of, or otherwise transferring or
disposing of, any of such shares of Common Stock, or any such
securities convertible into or exercisable or exchangeable for Common
Stock, for a period of 90 days after the date of the Prospectus
without the prior written consent of Xxxxxxxxx & Xxxxx LLC.
(xi) [The Company (i) has notified each holder of a currently outstanding
option issued under the Company's Restated Flexible 1996 Stock
Incentive Plan (herein called the Option Plan) and each person who has
acquired shares of Common Stock pursuant to the exercise of any option
granted under the Option Plan that pursuant to the terms of the Option
Plan, none of such options or shares may be sold or otherwise
transferred or disposed of for a period of 90 days after the date of
the offering of the Shares and (ii) has imposed a stop-transfer
instruction with the Company's transfer agent in order to enforce the
foregoing lock-up provision imposed pursuant to the Option Plan.]
(xii) Except as to defaults which individually or in the aggregate would not
have a material adverse effect on the business, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, neither the Company nor any of its subsidiaries is in violation
of any provision of its Restated Certificate of Incorporation or
Bylaws or other organizational documents, or is in breach of or
default with respect to any provision of any agreement, judgment,
decree, order, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which it is a party or by
which it or any of its properties are bound; and; to the Company's
knowledge, there does not exist any state of facts which constitutes
an event of default on the part of the Company or any such subsidiary
as defined in such documents or which, with notice or lapse of time or
both, would constitute such an event of default.
(xiii) There are no franchises, contracts, leases, documents or legal
proceedings, pending or threatened, which are of a character required
to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement, which are not
described and filed as required; the franchises, contracts, leases and
documents so described in the Prospectus (assuming due authorization,
execution and delivery by the parties thereto other than the Company)
are in full force and effect on the date hereof; and neither the
Company nor any of its subsidiaries, nor to the best of the Company's
knowledge, any other party is in breach of or default under any of
such franchises, contracts, leases and documents;
(xiv) The Company has not been advised, and has no reason to believe, that
either it or any of its subsidiaries is not conducting business in
compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without
limitation, all applicable local, state and federal environmental laws
and regulations, except where failure to be so in compliance would not
have a material adverse effect on the business, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole.
(xv) The execution and delivery by the Company and the Selling
Securityholders of, and the performance by the Company and the Selling
Securityholders of their obligations pursuant to, the Underwriting
Agreement, and the issue and sale by the Company and the Selling
Securityholders of the shares of Stock pursuant to the Underwriting
Agreement will not conflict with, or result in a violation of, the
Restated Certificate of Incorporation or Bylaws of the Company or the
charter or bylaws of any of its subsidiaries or result in any breach
of, or constitute an event of default under, any agreement or
instrument to which the Company or any of its subsidiaries is a party
or violate any applicable law, regulation, order, writ, injunction or
decree of any jurisdiction, court or governmental instrumentality;
(xvi) The Stock to be sold by the Selling Securityholders is listed and duly
admitted to trading on the Nasdaq National Market, and prior to the
Closing Date, the Stock to be issued and sold by the Company will be
authorized for listing by the Nasdaq National Market upon official
notice of issuance.
(b) Each of the Selling Securityholders hereby represents and warrants,
severally and not jointly, as follows:
(i) Such Selling Securityholder has good and marketable title to all the
shares of Stock to be sold by such Selling Securityholder hereunder,
free and clear of all liens, encumbrances, equities, security
interests and claims whatsoever, with full right and authority to
deliver the same hereunder, subject, in the case of each Selling
Securityholder, to the rights of [ ] , as Custodian (herein called the
Custodian), and that upon the delivery of and payment for such shares
of the Stock hereunder, the several Underwriters will receive good and
marketable title thereto, free and clear of all liens, encumbrances,
equities, security interests and claims whatsoever.
(ii) Certificates in negotiable form for the shares of the Stock to be sold
by such Selling Securityholder have been placed in custody under a
Custody Agreement for delivery under this Agreement with the
Custodian; such Selling Securityholder specifically agrees that the
shares of the Stock represented by the certificates so held in custody
for such Selling Securityholder are subject to the interests of the
several Underwriters and the Company, that the arrangements made by
such Selling Securityholder for such custody, including the Power of
Attorney provided for in such Custody Agreement, are to that extent
irrevocable, and that the obligations of such Selling Securityholder
shall not be terminated by any act of such Selling Securityholder or
by operation of
law, whether by the death or incapacity of such
Selling Securityholder (or, in the case of a Selling Securityholder
that is not an individual, the dissolution or liquidation of such
Selling Securityholder) or the occurrence of any other event; if any
such death, incapacity, dissolution, liquidation or other such event
should occur before the delivery of such shares of the Stock
hereunder, certificates for such shares of the Stock shall be
delivered by the Custodian in accordance with the terms and conditions
of this Agreement as if such death, incapacity, dissolution,
liquidation or other event had not occurred, regardless of whether the
Custodian shall have received notice of such death, incapacity,
dissolution, liquidation or other event.
(iii) Such Selling Securityholder has reviewed the Registration Statement
and Prospectus and, although such Selling Securityholder has not
independently verified the accuracy or completeness of all the
information contained therein, nothing has come to the attention of
such Selling Securityholder that would lead such Selling
Securityholder to believe that on the Effective Date, the Registration
Statement contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading; or that the
Prospectus, as of its date, or on the Closing Date and any later date
on which Option Stock is to be purchased, will contain any untrue
statement of a material fact or omitted or omits 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.
3. Purchase of the Stock by the Underwriters.
(a) On the basis of the representations and warranties and subject to the terms
and conditions herein set forth, the Company agrees to issue and sell
__________ shares of the Underwritten Stock to the several Underwriters,
each Selling Securityholder agrees to sell to the several Underwriters the
number of shares of the Underwritten Stock set forth in Schedule II
opposite the name of such Selling Securityholder, and each of the
Underwriters agrees to purchase from the Company and the Selling
Securityholders the respective aggregate number of shares of Underwritten
Stock set forth opposite its name in Schedule I. The price at which such
shares of Underwritten Stock shall be sold by the Company and the Selling
Securityholders and purchased by the several Underwriters shall be $_______
per share. The obligation of each Underwriter to the Company and each of
the Selling Securityholders shall be to purchase from the Company and the
Selling Securityholders that number of shares of the Underwritten Stock
which represents the same proportion of the total number of shares of the
Underwritten Stock to be sold by each of the Company and the Selling
Securityholders pursuant to this Agreement as the number of shares of the
Underwritten Stock set forth opposite the name of such Underwriter in
Schedule I hereto represents of the total number of shares of the
Underwritten Stock to be purchased by all Underwriters pursuant to this
Agreement, as adjusted by you in such manner as you deem advisable to avoid
fractional shares. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraphs (b)
and (c) of this Section 3, the agreement of each Underwriter is to purchase
only the respective number of shares of the Underwritten Stock specified in
Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Sections 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company or the Selling Securityholders
shall immediately give notice thereof to you, and the non-defaulting
Underwriters shall have the right within 24 hours after the receipt by you
of such notice to purchase, or procure one or more other Underwriters to
purchase, in such proportions as may be agreed upon between you and such
purchasing Underwriter or Underwriters and upon the terms herein set forth,
all or any part of the shares of the Stock which such defaulting
Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such
shares and portion, the number of shares of the Stock which each non-
defaulting Underwriter is otherwise obligated to purchase under this
Agreement shall be automatically increased on
a pro rata basis to absorb the remaining shares and portion which the
defaulting Underwriter or Underwriters agreed to purchase; provided,
however, that the non-defaulting Underwriters shall not be obligated to
purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of
the Stock exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of
the Stock which the defaulting Underwriter or Underwriters agreed to
purchase shall not be purchased or absorbed in accordance with the two
preceding sentences, the Company and the Selling Securityholders jointly
shall have the right, within 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or
purchasers satisfactory to you for purchase of such shares and portion on
the terms herein set forth. In any such case, either you or the Company and
the Selling Securityholders shall have the right to postpone the Closing
Date determined as provided in Section 5 hereof for not more than seven
business days after the date originally fixed as the Closing Date pursuant
to said Section 5 in order that any necessary changes in the Registration
Statement, the Prospectus or any other documents or arrangements may be
made. If neither the non-defaulting Underwriters nor the Company and the
Selling Securityholders shall make arrangements within the 24-hour periods
stated above for the purchase of all the shares of the Stock which the
defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall be terminated without further act or deed and without any
liability on the part of the Company or the Selling Securityholders to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company or the Selling Securityholders.
Nothing in this paragraph (b), and no action taken hereunder, shall relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the
Company and the Principal Selling Securityholder grant an option to the
several Underwriters to purchase, severally and not jointly, up to ________
shares in the aggregate of the Option Stock from the Company and the
Principal Selling Securityholder at the same price per share as the
Underwriters shall pay for the Underwritten Stock. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Stock by the Underwriters and may be exercised in whole or in part at any
time (but not more than once) on or before the thirtieth day after the date
of this Agreement upon written or telegraphic notice by you to the Company
setting forth the aggregate number of shares of the Option Stock as to
which the several Underwriters are exercising the option. In the event of
exercise of such option, in whole or in part, half of the total number of
shares of Option Stock to be purchased by the several Underwriters shall be
sold to them by the Company and half shall be sold to them by the Principal
Selling Securityholder. Delivery of certificates for the shares of Option
Stock, and payment therefor, shall be made as provided in Section 5 hereof.
The number of shares of the Option Stock to be purchased by each
Underwriter shall be the same percentage of the total number of shares of
the Option Stock to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Stock, as adjusted by you in
such manner as you deem advisable to avoid fractional shares.
4. Offering by Underwriters.
(a) The terms of the offering by the Underwriters of the Stock to be purchased
by them shall be as set forth in the Prospectus. The Underwriters may from
time to time change the public offering price after the closing of the
offering and increase or decrease the concessions and discounts to dealers
as they may determine.
(b) The information set forth in paragraphs ___, ___, and ___ under
"Underwriting" in the Registration Statement, any Preliminary Prospectus
and the Prospectus relating to the Stock filed by the Company (insofar as
such information relates to the Underwriters) constitutes the only
information furnished by the Underwriters to the Company for inclusion in
the Registration Statement, any Preliminary Prospectus, and the Prospectus,
and you on behalf of the respective Underwriters represent and warrant to
the Company that the statements made therein are correct.
5. Delivery of and Payment for the Stock.
(a) Delivery of certificates for the shares of the Underwritten Stock and the
Option Stock (if the option granted by Section 3(c) hereof shall have been
exercised not later than 7:00 A.M., Seattle time, on the date two business
days preceding the Closing Date), and payment therefor, shall be made at
the office of Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional Corporation,
0000 Xxxxxxx Xxxxx, Xxxxxxxx, XX,xx 7:00 a.m., Seattle time, on the third
business day after the date of this Agreement, or at such time on such
other day, not later than seven full business days after such third
business day, as shall be agreed upon in writing by the Company, the
Selling Securityholders and you. The date and hour of such delivery and
payment (which may be postponed as provided in Section 3(b) hereof) are
herein called the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be exercised after 7:00
a.m., Seattle time, on the date two business days preceding the Closing
Date, delivery of certificates for the shares of Option Stock, and payment
therefor, shall be made at the office of Wilson, Sonsini, Xxxxxxxx &
Xxxxxx, Professional Corporation, 0000 Xxxxxxx Xxxxx, Xxxxxxxx, XX, at 7:00
a.m Seattle time, on the third business day after the exercise of such
option.
(c) Payment for the Stock purchased from the Company shall be made to the
Company or its order, and payment for the Stock purchased from the Selling
Securityholders shall be made to the Custodian, for the account of the
Selling Securityholders, in each case by one or more certified or official
bank check or checks in same day funds. Such payment shall be made upon
delivery of certificates for the Stock to you for the respective accounts
of the several Underwriters against receipt therefor signed by you.
Certificates for the Stock to be delivered to you shall be registered in
such name or names and shall be in such denominations as you may request at
least one business day before the Closing Date, in the case of Underwritten
Stock, and at least one business day prior to the purchase thereof, in the
case of the Option Stock. Such certificates will be made available to the
Underwriters for inspection, checking and packaging at the offices of Lewco
Securities Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the
business day prior to the Closing Date or, in the case of the Option Stock,
by 3:00 p.m., New York time, on the business day preceding the date of
purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Securityholders for shares to be purchased by any Underwriter
whose check shall not have been received by you on the Closing Date or any later
date on which Option Stock is purchased for the account of such Underwriter. Any
such payment by you shall not relieve such Underwriter from any of its
obligations hereunder.
6. Further Agreements of the Company and the Selling Securityholders. The
Company and, where expressly provided in this Section 6, the Selling
Securityholders covenant and agree as follows:
(a) The Company will (i) prepare and timely file with the Commission under Rule
424(b) a Prospectus containing information previously omitted at the time
of effectiveness of the Registration Statement in reliance on Rule 430A and
such other changes, if any, as permitted under Rule 424(b) and (ii) not
file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and
furnished with a copy or to which you shall have reasonably objected in
writing or which is not in compliance with the Securities Act or the rules
and regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the event of (i) the
request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii)
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, (iii) the institution or
notice of intended institution of any action or proceeding for that
purpose, (iv) the receipt by the Company of any notification with respect
to the suspension of the qualification of the Stock for sale in any
jurisdiction, or (v) the receipt by it of notice of the initiation or
threatening of any proceeding for such purpose. The Company and the
Principal Selling Securityholder will make every reasonable effort to
prevent the issuance of such a stop order and, if such an order shall at
any time be issued, to obtain the withdrawal thereof at the earliest
possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you a signed
copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement
becomes effective and, promptly upon the filing thereof, a signed copy of
each post-effective amendment, if any, to the Registration Statement
(together with, in each case, all exhibits thereto unless previously
furnished to you) and will also deliver to you, for distribution to the
Underwriters, a sufficient number of additional conformed copies of each of
the foregoing (but without exhibits) so that one copy of each may be
distributed to each Underwriter, (ii) as promptly as possible deliver to
you and send to the several Underwriters, at such office or offices as you
may designate, as many copies of the Prospectus as you may reasonably
request, and (iii) thereafter from time to time during the period in which
a prospectus is required by law to be delivered by an Underwriter or
dealer, likewise send to the Underwriters as many additional copies of the
Prospectus and as many copies of any supplement to the Prospectus and of
any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required by law
to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing
by you, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or of counsel for the Underwriters, to supplement
or amend the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser of the Stock, the Company will forthwith prepare and file with
the Commission a supplement to the Prospectus or an amended prospectus so
that the Prospectus as so supplemented or amended will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time such Prospectus is delivered to such
purchaser, not misleading. If, after the offering of the Stock by the
Underwriters and during such period, the Underwriters shall propose to vary
the terms of offering thereof by reason of changes in general market
conditions or otherwise, you will advise the Company in writing of the
proposed variation, and, if in the opinion either of counsel for the
Company or of counsel for the Underwriters such proposed variation requires
that the Prospectus be supplemented or amended, the Company will forthwith
prepare and file with the Commission a supplement to the Prospectus or an
amended prospectus setting forth such variation. The Company authorizes
the Underwriters and all dealers to whom any of the Stock may be sold by
the several Underwriters to use the Prospectus, as from time to time
amended or supplemented, in connection with the sale of the Stock in
accordance with the applicable provisions of the Securities Act and the
applicable rules and regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will submit to
you, for your information, a copy of any post-effective amendment to the
Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue
sky laws of such jurisdictions as you may designate and, during the period
in which a prospectus is required by law to be delivered by an Underwriter
or dealer, in keeping such qualifications in good standing under said
securities or blue sky laws; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified or would become subject to taxation. The Company will, from time
to time, prepare and file such statements, reports, and other documents as
are or may be required to continue such qualifications in effect for so
long a period as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the Company
will furnish to you, and to each Underwriter who may so request in writing,
copies of all periodic and special reports furnished to stockholders of the
Company and of all information, documents and reports filed with the
Commission.
(h) Not later than the 45th day following the end of the fiscal quarter first
occurring after the first anniversary of the Effective Date, the Company
will make generally available to its security holders an earnings statement
in accordance with Section 11(a) of the Securities Act and Rule 158
thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its and the Selling Securityholders' obligations under this
Agreement, including all costs and expenses incident to (i) the
preparation, printing and filing with the Commission and the National
Association of Securities Dealers, Inc. ("NASD") of the Registration
Statement, any Preliminary Prospectus and the Prospectus, (ii) the
furnishing to the Underwriters of copies of any Preliminary Prospectus and
of the several documents required by paragraph (c) of this Section 6 to be
so furnished, (iii) the preparation, printing and filing of all supplements
and amendments to the Prospectus referred to in paragraph (d) of this
Section 6, (iv) the furnishing to you and the Underwriters of the reports
and information referred to in paragraph (g) of this Section 6 and (v) the
printing and issuance of stock certificates, including the transfer agent's
fees. Each Selling Securityholder will pay any transfer taxes incident to
the transfer to the Underwriters of the shares of the Stock being sold by
such Selling Securityholder.
(j) The Company agrees to reimburse you, for the account of the several
Underwriters, for blue sky fees and related disbursements (including
counsel fees and disbursements and cost of printing memoranda for the
Underwriters) paid by or for the account of the Underwriters or their
counsel in qualifying the Stock under state securities or blue sky laws and
in the review of the offering by the NASD.
(k) The provisions of paragraphs (i) and (j) of this Section are intended to
relieve the Underwriters from the payment of the expenses and costs which
the Company hereby agrees to pay and shall not affect any agreement which
the Company and the Selling Securityholders may make, or may have made, for
the sharing of any such expenses and costs.
(l) The Company and each of the Selling Securityholders hereby agree that,
without the prior written consent of Xxxxxxxxx & Xxxxx LLC on behalf of the
Underwriters, the Company or such Selling Securityholder, as the case may
be, will not, for a period of 90 days following the commencement of the
public offering of the Stock by the Underwriters, directly or indirectly,
(i) sell, offer, contract to sell, make any short sale, pledge, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire Common
Stock or (ii) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences or ownership of Common
Stock, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (A) the Stock
to be sold to the Underwriters pursuant to this Agreement, (B) shares of
Common Stock issued by the Company upon the exercise of options or upon the
exercise of warrants outstanding as of the date hereof, all as described in
the Prospectus, (C) options to purchase Common Stock granted under the
Option Plan, (D) shares of Common Stock issued under the Company's 1998
Employee Stock Purchase Plan, (E) securities issued in connection with the
settlement or resolution of litigation described in the Prospectus and (F)
securities issued pursuant to any acquisition approved by the Company's
Board of Directors.
(m) The Company agrees to use its best efforts to cause all directors and
officers of the Company to agree that, without the prior written consent of
Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, such person or entity
will not, for a period of 90 days following the commencement of the public
offering of the Stock by the Underwriters, directly or indirectly, sell,
offer, contract to sell, transfer the economic risk of ownership in, make
any short sale, pledge or otherwise dispose of any shares of Common Stock
or any securities convertible into or exchangeable or exercisable for or
any other rights to purchase or acquire Common Stock.
(n) The Company agrees: (i) to enforce the terms of each Lock-up Agreement and
(ii) issue stop-transfer instructions to the transfer agent for the Common
Stock with respect to any transaction or contemplated
transaction that would constitute a breach of or default under the
applicable Lock-up Agreement. In addition, except with the prior written
consent of Xxxxxxxxx & Xxxxx LLC, the Company agrees (i) not to amend or
terminate, or waive any right under, any Lock-up Agreement, or take any
other action that would directly or indirectly have the same effect as an
amendment or termination, or waiver of any right under, any Lock-up
Agreement, that would permit any holder of shares of Common Stock, or
securities convertible into or exercisable or exchangeable for Common
Stock, to sell, make any short sale of, grant any option for the purchase
of, or otherwise transfer or dispose of, any of such shares of Common Stock
or other securities prior to the expiration of 90 days after the date of
the Prospectus, and (ii) not to consent to any sale, short sale, grant of
an option for the purchase of, or other disposition or transfer of shares
of Common Stock, or securities convertible into or exercisable or
exchangeable for Common Stock, subject to a Lock-up Agreement.
(o) If at any time during the 25-day period after the Registration Statement
becomes effective any rumor, publication or event relating to or affecting
the Company shall occur as a result of which in your opinion the market
price for the 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), the Company will, after
written 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.
(p) The Company is familiar with the Investment Company Act of 1940, as
amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not
and will not be an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, and the rules and regulations thereunder.
7. Indemnification and Contribution.
(a) Subject to the provisions of paragraph (f) of this Section 7, the Company
and the Selling Securityholders, jointly and severally, agree to indemnify
and hold harmless each Underwriter and each person (including each partner
or officer thereof) who controls any Underwriter within the meaning of
Section 15 of the Securities Act from and against any and all losses,
claims, damages or liabilities, joint or several, to which such indemnified
parties or any of them may become subject under the Securities Act, the
Securities Exchange Act of 1934, as amended (herein called the Exchange
Act), or the common law or otherwise, and the Company and the Selling
Securityholders, jointly and severally, agree to reimburse each such
Underwriter and controlling person for any legal or other reasonable
expenses (including, except as otherwise hereinafter provided, reasonable
fees and disbursements of counsel) incurred by the respective indemnified
parties in connection with defending against any such losses, claims,
damages or liabilities or in connection with any investigation or inquiry
of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (including the Prospectus as part thereof and
any Rule 462(b) registration statement) or any post-effective amendment
thereto (including any Rule 462(b) registration statement), or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (ii)
any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any
amendment thereof or supplement thereto) or the omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that (1) the indemnity agreements
of the Company and the Selling Securityholders contained in this paragraph
(a) shall not apply to any such losses, claims, damages, liabilities or
expenses if such statement or omission was made in reliance upon and in
conformity with information furnished as herein stated or otherwise
furnished in writing to the Company by or on behalf of any Underwriter for
use in any Preliminary Prospectus or the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto and (2) the
indemnity agreement contained in this paragraph (a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Un-
derwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof
(or to the benefit of any person controlling such Underwriter) if at or
prior to the written confirmation of the sale of such Stock a copy of the
Prospectus (or the Prospectus as amended or supplemented) was not sent or
delivered to such person and the untrue statement or omission of a material
fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented) unless the
failure is the result of noncompliance by the Company with paragraph (c) of
Section 6 hereof, and (3) each Selling Securityholder (other than the
Principal Selling Securityholder) shall only be liable under this paragraph
with respect to (A) information pertaining to such Selling Securityholder
furnished by or on behalf of such Selling Securityholder expressly for use
in any Preliminary Prospectus or the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto or (B) a
breach of any representation or warranty of such Selling Securityholder set
forth in Section 2(b) hereof. The indemnity agreements of the Company and
the Selling Securityholders contained in this paragraph (a) and the
representations and warranties of the Company and the Selling
Securityholders contained in Section 2 hereof shall remain operative and in
full force and effect regardless of any investigation made by or on behalf
of any indemnified party and shall survive the delivery of and payment for
the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its officers who signs the Registration Statement on his
own behalf or pursuant to a power of attorney, each of its directors, each
other Underwriter and each person (including each partner or officer
thereof) who controls the Company or any such other Underwriter within the
meaning of Section 15 of the Securities Act, and the Selling
Securityholders, from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of
them may become subject under the Securities Act, the Exchange Act, or the
common law or otherwise and to reimburse each of them for any legal or
other reasonable expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any
such losses, claims, damages or liabilities or in connection with any
investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including the
Prospectus as part thereof and any Rule 462(b) registration statement) or
any post-effective amendment thereto (including any Rule 462(b)
registration statement) or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus (as
amended or as supplemented if the Company shall have filed with the
Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, if such statement or omission was made in
reliance upon and in conformity with information furnished as herein stated
or otherwise furnished in writing to the Company by or on behalf of such
indemnifying Underwriter for use in the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto. The
indemnity agreement of each Underwriter contained in this paragraph (b)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall
survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and (b) of
this Section 7 agrees that, upon the service of a summons or other initial
legal process upon it in any action or suit instituted against it or upon
its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in
such paragraphs, it will promptly give written notice (herein called the
Notice) of such service or notification to the party or parties from whom
indemnification may be sought hereunder. No indemnification provided for
in such paragraphs shall be available to any party who shall fail so to
give the Notice if the party to whom such Notice was not given was unaware
of the action, suit, investigation, inquiry or proceeding to which the
Notice would have related and was prejudiced by the failure to give the
Notice, but the omission so to notify such indemnifying party or parties of
any such service or notification shall not relieve such indemnifying party
or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on
account of such indemnity agreement. Any indemnifying party shall be
entitled at its own expense to participate in the defense of any action,
suit or proceeding against, or investigation or inquiry of, an indemnified
party. Any indemnifying party shall be entitled, if it so elects within a
reasonable time after receipt of the Notice by giving written notice
(herein called the Notice of Defense) to the indemnified party, to assume
(alone or in conjunction with any other indemnifying party or parties) the
entire defense of such action, suit, investigation, inquiry or proceeding,
in which event such defense shall be conducted, at the expense of the
indemnifying party or parties, by counsel chosen by such indemnifying party
or parties and reasonably satisfactory to the indemnified party or parties;
provided, however, that (i) if the indemnified party or parties reasonably
determine that there may be a conflict between the positions of the
indemnifying party or parties and of the indemnified party or parties in
conducting the defense of such action, suit, investigation, inquiry or
proceeding or that there may be legal defenses available to such
indemnified party or parties different from or in addition to those
available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to
the extent reasonably determined by such counsel to be necessary to protect
the interests of the indemnified party or parties and (ii) in any event,
the indemnified party or parties shall be entitled to have counsel chosen
by such indemnified party or parties participate in, but not conduct, the
defense. If, within a reasonable time after receipt of the Notice, an
indemnifying party gives a Notice of Defense and the counsel chosen by the
indemnifying party or parties is reasonably satisfactory to the indemnified
party or parties, the indemnifying party or parties will not be liable
under paragraphs (a) through (c) of this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party or parties in
connection with the defense of the action, suit, investigation, inquiry or
proceeding, except that (A) the indemnifying party or parties shall bear
the legal and other expenses incurred in connection with the conduct of the
defense as referred to in clause (i) of the proviso to the preceding
sentence and (B) the indemnifying party or parties shall bear such other
expenses as it or they have authorized to be incurred by the indemnified
party or parties. If, within a reasonable time after receipt of the Notice,
no Notice of Defense has been given, the indemnifying party or parties
shall be responsible for any legal or other expenses incurred by the
indemnified party or parties in connection with the defense of the action,
suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under paragraph (a) or
(b) of this Section 7, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in paragraph (a) or (b) of this Section
7 (i) in such proportion as is appropriate to reflect the relative benefits
received by each indemnifying party from the offering of the Stock or (ii)
if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of each indemnifying party in connection with the 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 and the
Selling Securityholders on the one hand and the Underwriters on the other
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Stock received by the Company and the
Selling Securityholders and the total underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the
Prospectus, bear to the aggregate public offering price of the Stock.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by each indemnifying party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or
by any other method of allocation which does not take into account the
equitable considerations referred to in the first sentence of this
paragraph (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities, or actions in respect thereof,
referred to in the first sentence of this paragraph (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of this paragraph (d). Notwithstanding the provisions of this
paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by
such Underwriter. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted
against it in respect of which contribution may be sought, it will promptly
give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or
parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise (except as specifically provided in paragraph (c) of this Section
7).
(e) Neither the Company nor the Selling Securityholders will, without the prior
written consent of each Underwriter, 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 such Underwriter or any person who controls such
Underwriter within the meaning of Section 15 of the Securities 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 such Underwriter and each such controlling person
from all liability arising out of such claim, action, suit or proceeding.
(f) The liability of each Selling Securityholder pursuant to this Agreement
shall be limited to an amount equal to the product obtained by multiplying
(x) the number of shares of Stock sold by such Selling Securityholder to
the Underwriters pursuant to this Agreement by (y) the price per share set
forth in Section 3(a) hereof.
(g) The Underwriters shall seek indemnification to which they are entitled
under paragraph (A) of this Section 7 first from the Company. In the event
that the Underwriters are unable (or believe that they will be unable to)
obtain such indemnification from the Company, the Underwriters may then
seek indemnification from the Selling Securityholders.
8. Termination. This Agreement may be terminated by you at any time prior to
the Closing Date by giving written notice to the Company and the Selling
Securityholders if after the date of this Agreement trading in the Common Stock
shall have been suspended, or if there shall have occurred (i) the engagement in
hostilities or an escalation of major hostilities by the United States or the
declaration of war or a national emergency by the United States on or after the
date hereof, (ii) any outbreak of hostilities or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, calamity, crisis or change in economic or political conditions
in the financial markets of the United States would, in the Underwriters'
reasonable judgment, make the offering or delivery of the Stock impracticable,
(iii) suspension of trading in securities generally or a material adverse
decline in value of securities generally on the New York Stock Exchange, the
American Stock Exchange, or The Nasdaq Stock Market, or limitations on prices
(other than limitations on hours or numbers of days of trading) for securities
on either such exchange or system, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order
of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
Underwriters' reasonable opinion has a material adverse effect on the securities
markets in the United States. If this Agreement shall be terminated pursuant to
this Section 8, there shall be no liability of the Company or the Selling
Securityholders to the Underwriters and no liability of the Underwriters to the
Company or the Selling Securityholders; provided, however, that in the event of
any such termination the Company and the Selling Securityholders
agree to indemnify and hold harmless the Underwriters from all costs or expenses
incident to the performance of the obligations of the Company and the Selling
Securityholders under this Agreement, including all costs and expenses referred
to in paragraphs (i) and (j) of Section 6 hereof.
9. Conditions of Underwriters' Obligations. The obligations of the several
Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company and the Selling Securityholders of all their
respective obligations to be performed hereunder at or prior to the Closing Date
or any later date on which Option Stock is to be purchased, as the case may be,
and to the following further conditions:
(a) The Registration Statement shall have become effective; and no stop order
suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder and the
validity and form of the certificates representing the Stock, all corporate
proceedings and other legal matters incident to the foregoing, and the form
of the Registration Statement and of the Prospectus (except as to the
financial statements contained therein), shall have been approved at or
prior to the Closing Date by Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
counsel for the Underwriters.
(c) You shall have received from Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, counsel for the Company and the Selling Securityholders, and
Xxxxxx Xxxxxxx Xxxxxxx, counsel for Infospace Investments Limited, a U.K.
company, opinions, addressed to the Underwriters and dated the Closing
Date, covering the matters set forth in Annex A and Annex B hereto,
respectively, and if Option Stock is purchased at any date after the
Closing Date, additional opinions from each such counsel, addressed to the
Underwriters and dated such later date, confirming that the statements
expressed as of the Closing Date in such opinions remain valid as of such
later date.
(d) You shall be satisfied that (i) as of the Effective Date, the statements
made in the Registration Statement and the Prospectus were true and correct
and neither the Registration Statement nor the Prospectus omitted to state
any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading, (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in
such a supplement or amendment, (iii) since the respective dates as of
which information is given in the Registration Statement in the form in
which it originally became effective and the Prospectus contained therein,
there has not been any material adverse change or any development involving
a prospective material adverse change in or affecting the business,
properties, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, and, since such dates,
except in the ordinary course of business, neither the Company nor any of
its subsidiaries has entered into any material transaction not referred to
in the Registration Statement in the form in which it originally became
effective and the Prospectus contained therein, (iv) neither the Company
nor any of its subsidiaries has any material contingent obligations which
are not disclosed in the Registration Statement and the Prospectus, (v)
there are not any pending or known threatened legal proceedings or
developments relating to existing pending or threatened legal proceedings
to which the Company or any of its subsidiaries is a party or of which
property of the Company or any of its subsidiaries is the subject which are
material and which were not disclosed in the Registration Statement and the
Prospectus as of the date hereof, (vi) there are not any franchises,
contracts, leases or other documents which are required to be filed as
exhibits to the Registration Statement which have not been filed as
required, (vii) the representations and warranties of the Company and the
Selling Stockholders herein are true and correct in all material respects
as of the Closing Date or any later date on which Option Stock is to be
purchased, as the case may be, and (viii) there has not been any material
change in the market for securities in general or in political, financial
or economic conditions from those reasonably foreseeable as to render it
impracticable in your reasonable judgment to make a public offering of the
Stock, or a material adverse change in market levels for securities in
general (or those of companies in particular) or financial or economic
conditions which render it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later date on which
Option Stock is purchased a certificate, dated the Closing Date or such
later date, as the case may be, and signed by the President and the Chief
Financial Officer of the Company, stating that the respective signers of
said certificate have carefully examined the Registration Statement in the
form in which it originally became effective and the Prospectus contained
therein and any supplements or amendments thereto, and that the statements
included in clauses (i) through (vii) of paragraph (d) of this Section 9
are true and correct.
(f) You shall have received from Deloitte & Touche LLP, a letter or letters,
addressed to the Underwriters and dated the Closing Date and any later date
on which Option Stock is purchased, confirming that they are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder and based upon the procedures described in their letter
delivered to you concurrently with the execution of this Agreement (herein
called the Original Letter), but carried out to a date not more than three
business days prior to the Closing Date or such later date on which Option
Stock is purchased (i) confirming, to the extent true, that the statements
and conclusions set forth in the Original Letter are accurate as of the
Closing Date or such later date, as the case may be, and (ii) setting forth
any revisions and additions to the statements and conclusions set forth in
the Original Letter which are necessary to reflect any changes in the facts
described in the Original Letter since the date of the Original Letter or
to reflect the availability of more recent financial statements, data or
information. The letters shall not disclose any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company or any of its subsidiaries which, in your sole judgment,
makes it impractical or inadvisable to proceed with the public offering of
the Stock or the purchase of the Option Stock as contemplated by the
Prospectus.
(g) You shall have been furnished evidence in usual written or telegraphic form
from the appropriate authorities of the several jurisdictions, or other
evidence satisfactory to you, of the qualification referred to in paragraph
(f) of Section 6 hereof.
(h) Prior to the Closing Date, the Stock to be issued and sold by the Company
shall have been duly authorized for listing by the Nasdaq National Market
upon official notice of issuance.
(i) On or prior to the Closing Date, you shall have received from all of the
Company's directors and officers and the Selling Securityholders
agreements, in form reasonably satisfactory to Xxxxxxxxx & Xxxxx LLC,
stating that without the prior written consent of Xxxxxxxxx & Xxxxx LLC on
behalf of the Underwriters, such person or entity will not, for a period of
90 days following the commencement of the public offering of the Stock by
the Underwriters, directly or indirectly, sell, offer, contract to sell,
transfer the economic risk of ownership in, make any short sale, pledge or
otherwise dispose of any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for or any other rights to
purchase or acquire Common Stock.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel
for the Underwriters, shall be reasonably satisfied that they comply in
form and scope .
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and to the Securityholders. Any such termination shall be without
liability of the Company or the Selling Securityholders to the Underwriters
and without liability of the Underwriters to the Company or the Selling
Securityholders; provided, however, that (i) in the event of such
termination, the Company and the Selling Securityholders agree to indemnify
and hold harmless the Underwriters from all costs or expenses incident to
the performance of the obligations of the Company and to the Selling
Securityholders under this Agreement, including all costs and expenses
referred to in paragraphs (i) and (j) of Section 6 hereof, and (ii) if this
Agreement is terminated by you because of any refusal, inability or failure
on the part of the Company or the Selling Securityholders to perform any
agreement herein, to fulfill any of the conditions herein, or to comply
with any provision hereof 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 reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the
transactions contemplated hereby.
10. Conditions of the Obligation of the Company and the Selling
Securityholders. The obligation of the Company and the Selling Securityholders
to deliver the Stock in payment therefor by the several Underwriters shall be
subject to the conditions that (a) the Registration Statement shall have become
effective and (b) no stop order suspending the effectiveness thereof shall be in
effect and no proceedings therefor shall be pending or threatened by the
Commission.
In case either of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by the Company by giving notice to
you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company or the
Selling Securityholders; provided, however, that in the event of any such
termination the Company and the Selling Securityholders agree to indemnify and
hold harmless the Underwriters from all costs or expenses incident to the
performance of the obligations of the Company and the Selling Securityholders
under this Agreement, including all costs and expenses referred to in paragraphs
(i) and (j) of Section 6 hereof.
11. Reimbursement of Certain Expenses. In addition to their other obligations
under Section 7 of this Agreement (and subject, in the case of the Principal
Selling Securityholder, to the provisions of paragraph (f) of Section 7), the
Company and the Principal Selling Securityholder hereby, jointly and severally,
agree to reimburse on a quarterly basis the Underwriters for all reasonable
legal and other expenses incurred in connection with investigating or defending
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in paragraph (a) of Section 7 of this Agreement, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligations under this Section 11 and the possibility that such payments
might later be held to be improper; provided, however, that (i) to the extent
any such payment is ultimately held to be improper, the persons receiving such
payments shall promptly refund them and (ii) such persons shall provide to the
Company, upon request, reasonable assurances of their ability to effect any
refund, when and if due. The Underwriters shall seek reimbursement pursuant to
this section first from the Company. In the event that the Underwriters are
unable to (or believe that they will be unable to) obtain such reimbursement
from the Company, the Underwriters may then seek reimbursement from the
Principal Selling Stockholder.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of the Company, the Selling Securityholders and the several
Underwriters and, with respect to the provisions of Section 7 hereof, the
several parties (in addition to the Company, the Selling Securityholders and the
several Underwriters) indemnified under the provisions of said Section 7, and
their respective personal representatives, successors and assigns. Nothing in
this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser, of
any of the Stock from any of the several Underwriters.
13. Notices. Except as otherwise provided herein, all communications hereunder
shall be in writing or by telegraph and, if to the Underwriters, shall be
mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000 with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx 00000 Attention:
Xxxxxxx X. Xxxxx; and if to the Company, shall be mailed, telegraphed or
delivered to it at its office, 0000 000xx Xxxxxx X.X. Xxxxxxx, XX 00000,
Attention: President; and if to the Selling Securityholders, shall be mailed,
telegraphed or delivered to the Selling Securityholders in care of
__________________. All notices given by telegraph shall be promptly confirmed
by letter.
14. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or the Selling Securityholders or their respective directors or
officers, and (c) delivery and payment for the Stock under this Agreement;
provided, however, that if this Agreement is terminated prior to the Closing
Date, the provisions of paragraphs (l) and (m) of Section 6 hereof shall be of
no further force or effect.
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.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California.
Please sign and return to the Company and to the Selling Securityholders in
care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement between the Company, the Selling
Securityholders and the several Underwriters in accordance with its terms.
Very truly yours,
XXXXXXXXX.XXX, INC.
By
-----------------------
SELLING SECURITYHOLDERS
[List Names]
By
_______________________
[Attorney-in-Fact]
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
XXXX XXXXXXXX XXXXXXX, a division of Xxxx Xxxxxxxx Incorporated
XXXXXX XXXXXX PARTNERS LLC
By Xxxxxxxxx & Xxxxx LLC
By _____________________
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
SCHEDULE I
UNDERWRITERS
Number of
Shares
to be
Underwriters Purchased
------------ ---------
Xxxxxxxxx & Xxxxx LLC
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
XXXX XXXXXXXX XXXXXXX, a division of Xxxx Xxxxxxxx Incorporated
XXXXXX XXXXXX PARTNERS LLC
Total
SCHEDULE II
SELLING SECURITYHOLDERS
Number of
Shares
Names and Addresses of to be
Securityholders Sold
---------------------- ---------
Total
1
SCHEDULE III
PRINCIPAL SELLING SECURITYHOLDER
Name and Address of
Securityholder
-------------------
Xxxxxx Xxxx
Chief Executive Officer
XxxxXxxxx.xxx, Inc.
00000 X.X. 00xx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Total
1
ANNEX A
Matters to be Covered in the Opinion of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation
Counsel for the Company and the Selling Securityholders
(i) Each of the Company and its subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified as a foreign corporation
and in good standing in each state of the United States of America in which its
ownership or leasing of property requires such qualification (except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole), and has full corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement; all the issued and outstanding capital
stock of the subsidiary of the Company has been duly authorized and validly
issued and is fully paid and nonassessable, and is owned by the Company free and
clear of all liens, encumbrances and security interests and to the best of such
counsel's knowledge; no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in the Company
or in such corporate subsidiary are outstanding;
(ii)
(iii) the authorized capital stock of the Company consists of [ ] shares
of Preferred Stock, none of which are outstanding, and [ ] shares of Common
Stock, $0.0001 par value, of which there are outstanding [ ] shares
(including the Underwritten Stock plus the number of shares of Option Stock, if
any, issued on the date hereof); proper corporate proceedings have been taken
validly to authorize such authorized capital stock; all of the outstanding
shares of such capital stock have been duly and validly issued and are fully
paid and nonassessable; any Option Stock purchased after the Closing Date, when
issued and delivered to and paid for by the Underwriters as provided in the
Underwriting Agreement, will have been duly and validly issued and be fully paid
and nonassessable; all outstanding shares of capital stock (including the
Underwritten Stock and the Option Stock issued, if any) and options and other
rights to acquire capital stock have been issued in compliance with the
registration and qualification provisions of all applicable securities laws and
were not issued in violation of any statutory preemptive rights or, to the best
of such counsel's knowledge, other preemptive rights, rights of first refusal or
other similar rights and no preemptive rights of, or rights of refusal in favor
of, stockholders exist with respect to the Stock, or the issue and sale thereof,
pursuant to the Certificate of Incorporation or Bylaws of the Company and, to
the best of such counsel's knowledge, there are no contractual or statutory
preemptive rights that have not been waived, rights of first refusal or rights
of co-sale which exist with respect to the issue and sale of the Stock;
(iv)
2
(v) the Registration Statement has become effective under the Securities Act
and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus is in effect and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission;
(vi)
(vii) the Registration Statement and the Prospectus (except as to the financial
statements and notes thereto and schedules and other financial data derived
therefrom, as to which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Securities Act and with
the rules and regulations of the Commission thereunder;
(viii)
(ix) the information required to be set forth in the Registration Statement in
answer to Items 9, 10 (insofar as it relates to such counsel) and 11(c) of Form
S-1 is to the best of such counsel's knowledge accurately and adequately set
forth therein in all material respects or no response is required with respect
to such Items and the description of the Company's stock option plans and the
options granted and which may be granted thereunder and the options granted
otherwise than under such plans set forth in the Prospectus accurately and
fairly presents the information required to be shown with respect to said plans
and options to the extent required by the Securities Act and the rules and
regulations of the Commission thereunder;
(x)
(xi) to such counsel's knowledge, there are no franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
(xii)
(xiii) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company and the Selling Securityholders;
(xiv)
(xv) based insofar as factual matters are concerned solely upon certificates of
the Selling Securityholders, the accuracy of which such counsel has no reason to
question, (A) the Underwriting Agreement has been duly executed and delivered by
or on behalf of each of the Selling Securityholders; (B) the Custody Agreement
between the Selling Securityholders and , as Custodian, and the Power of
Attorney referred to in such Custody Agreement have been duly executed and
delivered by such Selling Securityholder; (C) the Custody Agreement entered into
by, and the Power of Attorney given by, such Selling Securityholder is valid and
binding on such Selling Securityholder; and (D) each Selling Securityholder has
full legal right and authority to enter into the Underwriting Agreement and to
sell, transfer and deliver in the manner provided in the Underwriting Agreement
the shares of Stock sold by such Selling Securityholder hereunder;
(xvi)
(xvii)
3
(xviii) the execution and delivery by the Company and the Selling
Securityholders of, and the performance by the Company and the Selling
Securityholders of their obligations pursuant to, the Underwriting Agreement,
and the issue and sale by the Company and the Selling Securityholders of the
shares of Stock pursuant to the Underwriting Agreement will not conflict with,
or result in a violation of, the Restated Certificate of Incorporation or Bylaws
of the Company or the charter documents of its subsidiaries or result in any
breach of, or constitute an event of default under, any agreement or instrument
known to such counsel to which the Company or any of its subsidiaries or a
Selling Stockholder is a party or any applicable law or regulation, or, to such
counsel's knowledge, violate any order, writ, injunction or decree, of any
jurisdiction, court or governmental instrumentality;
(xix)
(xx) The Company is not required to include in the underwriting covered by the
Registration Statement any securities of the Company held by any holders
thereof;
(xxi)
(xxii) good and marketable title to the shares of Stock sold by the Selling
Securityholders under the Underwriting Agreement, free and clear of all liens,
encumbrances, equities, security interests and claims, has been transferred to
the Underwriters which have severally purchased such shares of Stock under the
Underwriting Agreement, assuming for the purpose of this opinion that the
Underwriters purchased the same in good faith without notice of any adverse
claims;
(xxiii)
(xxiv) the statements (1) in the Prospectus under the captions ["Management,"
"Risk Factors--Antitakeover Effect of Certain Charter Provisions and Applicable
Law; Right of First Negotiations," "--Shares Eligible for Future Sale,"
"Management--Benefit Plans," "Certain Transactions," "Description of Capital
Stock," and "Shares Eligible for Future Sale"] and (2) in the Registration
Statement in Item 14, in each case insofar as such statements constitute matters
of law, legal conclusions or descriptions of statutes, contracts or other legal
documents, fairly present the information as required by the Securities Act and
accurately summarize the matters referred to therein;
(xxv)
(xxvi) based insofar as factual matters with respect to the stock to be sold by
the Selling Securityholders are concerned solely upon certificates of the
Selling Securityholders, the accuracy of which such counsel have no reason to
question, no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated in the Underwriting Agreement, except as may be required under the
rules and regulations of the NASD and under state securities or blue sky laws in
connection with the purchase and distribution of the Stock by the Underwriters;
and
(xxvii)
(xxviii) the Stock sold by the Selling Securityholders is listed and duly
admitted to trading on the Nasdaq, and the Stock issued and sold by the Company
has been duly authorized for listing by the Nasdaq National Market upon official
notice of issuance.
____________________________________
4
In addition to the matters set forth above, counsel rendering the foregoing
opinion shall also include a statement to the effect that during the course of
the preparation of the Registration Statement and the Prospectus, and any
amendments thereto, nothing has come to the attention of such counsel that leads
them to believe that the Registration Statement (except as to the financial
statements and notes thereto and schedules and other financial data derived
therefrom, as to which such counsel need not express any opinion or belief) at
the Effective Date contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, that the Prospectus (except as to the
financial statements and notes thereto and schedules and other financial data
derived therefrom, as to which such counsel need not express any opinion or
belief) as of its date or at the Closing Date (or any later date on which Option
Stock is purchased), contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States or of the States of Delaware, Washington
or California upon opinions of local counsel satisfactory in form and scope to
counsel for the Underwriters. Copies of any opinions so relied upon shall be
delivered to the Representatives and to counsel for the Underwriters and the
foregoing opinion shall also state that counsel knows of no reason the
Underwriters are not entitled to rely upon the opinions of such local counsel.
5
ANNEX B
Matters to be Covered in the Opinion of Xxxxxx Xxxxxxx Xxxxxxx
Counsel for Infospace Investments Limited, a U.K. company
(i) Infospace Investments Limited, a U.K. company ("IIL"), is duly incorporated
and validly existing as a private limited company registered in England under
company number 03583184. IIL is authorized pursuant to its Memorandum of
Association to own or lease its properties and conduct its business as described
in the Registration Statement. IIL is in good-standing under English law; and
(ii)
(iii) the authorized share capital of IIL is (Pounds)100,000 divided into
100,000 share of (Pounds)1 each of which 949,800 shares have been validly issued
and are fully paid up. XxxxXxxxx.xxx, Inc. is the registered holder of 474,900 A
ordinary share of (Pounds)1 each in the capital of IIL which to the best of such
counsel's knowledge an belief are free and clear of all liens, encumbrances and
security interests. Thomson Directories Limited is the registered holder of
474,900 of the issued ordinary shares of (Pounds)1 each in the capital of IIL to
the best of such counsel's knowledge and belief are free and clear of all liens
and encumbrances.
6
