1
2,875,000 Shares
WEBTRENDS CORPORATION
Common Stock
No Par Value Per Share
UNDERWRITING AGREEMENT
May __, 1999
Xxxx Xxxxxxxx Incorporated
SoundView Technology Group, Inc.
BancBoston Xxxxxxxxx Xxxxxxxx
As Representatives of the several Underwriters
x/x Xxxx Xxxxxxxx Xxxxxxx
Xxxx Xxxxxxxx Xxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
WebTrends Corporation, an Oregon corporation (the "Company"), and the
shareholders of the Company named in Schedule B hereto (the "Selling
Shareholders") propose, subject to the terms and conditions stated herein, to
issue and sell, or to sell, as the case may be, to the several Underwriters
named in Schedule A hereto (the "Underwriters"), for which you are acting as
representatives (the "Representatives"), an aggregate of 2,500,000 shares (the
"Firm Shares") of Common Stock, no par value per share, of the Company (the
"Common Stock"), including 1,250,000 shares to be sold by the Company and
1,250,000 shares to be sold by the Selling Shareholders. The Company and Selling
Shareholders also propose, subject to the terms and conditions stated herein, to
sell to the Underwriters, at the Underwriters' election, up to an aggregate of
375,000 additional shares of Common Stock (the "Option Shares"). The Firm Shares
and the Option Shares are herein collectively called the "Shares."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. [ ]) and a related
preliminary prospectus for the registration of the Shares under the Securities
Act of 1933, as amended (the "Act"). The registration statement, as amended at
the time it was declared effective, including the information (if any) deemed to
be part thereof pursuant to Rule 430A under the Act is herein referred to as the
"Registration Statement." The form of prospectus first filed by the Company with
the Commission pursuant to Rules 424(b) and 430A under the Act is referred to
herein as the "Prospectus." Each preliminary prospectus included in the
Registration Statement prior to the time it became effective or
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filed with the Commission pursuant to Rule 424(a) under the Act is referred to
herein as a "Preliminary Prospectus." Copies of the Registration Statement,
including all exhibits and schedules thereto, any amendments thereto and all
Preliminary Prospectuses have been delivered to you.
The Company and the Selling Shareholders hereby confirm their respective
agreements with respect to the purchase of the Shares by the Underwriters as
follows:
1. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(i) The Registration Statement has been declared
effective under the Act, and no post-effective amendment to the Registration
Statement has been filed as of the date of this Agreement. No stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or threatened by the
Commission.
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, nor, to the best of
the Company's knowledge have proceedings for such purpose been instituted, and
each Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and regulations
of the Commission promulgated thereunder (collectively, the "Regulations"), and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, the Company makes no representation or warranty
as to information contained in or omitted in reliance upon, and in conformity
with, written information furnished to the Company by or on behalf of any
Underwriter through the Representatives expressly for use in the preparation
thereof.
(iii) The Registration Statement conforms, and the
Prospectus and any amendments or supplements thereto will conform, in all
material respects to the requirements of the Act and Regulations. Neither the
Registration Statement nor any amendment thereto, and neither the Prospectus nor
any supplement thereto, contains or will contain, as the case may be, any untrue
statement of a material fact or omits or will omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to information
contained in or omitted from the Registration Statement or the Prospectus, or
any such amendment or supplement, in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of any Underwriter
through the Representatives, expressly for use in the preparation thereof.
(iv) The Company has been duly organized, is validly
existing as a corporation under the laws of the state of Oregon, has the
corporate power and authority to own, lease, license and use its properties and
conduct its business as described in the
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Prospectus, and is duly qualified to transact business and is in good standing
in all jurisdictions in which the conduct of its business or its ownership,
leasing, licensing or using of property requires such qualification and the
failure so to qualify would have a material adverse effect on the business,
properties, condition, financial or otherwise, or results of operations of the
Company and its subsidiaries, taken as a whole (a "Material Adverse Effect").
(v) The Company has no subsidiaries other than WebTrends
FSC Inc. (hereinafter referred to as its "subsidiaries"). Each subsidiary of the
Company has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own, lease, license and use its properties and
conduct its business as described in the Prospectus, and is duly qualified to
transact business in all jurisdictions in which the conduct of its business or
its ownership, lease, license or use of property requires such qualification and
the failure so to qualify would have a Material Adverse Effect. Other than the
Company's subsidiaries, the Company does not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint venture,
association or other entity. All outstanding shares of capital stock of each of
the subsidiaries of the Company have been duly authorized and validly issued,
are fully paid and non-assessable, and are owned, directly or indirectly, by the
Company free and clear of all liens, encumbrances and security interests. 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 any of the subsidiaries of the Company are
outstanding.
(vi) The outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. All offers and sales by the Company of outstanding shares of
capital stock and other securities of the Company, prior to the date hereof,
were made in compliance with the Act and all applicable state securities or blue
sky laws and were not issued in violation of any preemptive right, resale right,
right of first refusal or similar right. The Shares to be issued and sold by the
Company to the Underwriters pursuant to this Agreement have been duly authorized
and, when issued and paid for as contemplated herein, will be validly issued,
fully paid and nonassessable. Each of the Underwriters will receive good and
marketable title to the Shares purchased by it, free and clear of any and all
liens, encumbrances, pledges, security interests, charges, claims, equitable
interests, restrictions and defects. Except as otherwise stated in the
Prospectus, there are no preemptive rights or other rights to subscribe for or
to purchase, or any restriction upon the voting or transfer of, any shares of
capital stock of the Company pursuant to the Company's Articles of
Incorporation, Bylaws or any agreement or other instrument to which the Company
is a party or by which the Company is bound. Neither the filing of the
Registration Statement nor the offering or the sale of the Shares as
contemplated by this Agreement gives rise to any rights for, or relating to, the
registration of any shares of capital stock or other securities of the Company,
accept such rights which have been validly waived or satisfied. Except as
described in the Prospectus, there are no outstanding options, warrants,
agreements or contracts to purchase or preemptive or other rights to purchase,
subscribe for or acquire from the Company any shares of its capital stock or any
securities or obligations convertible into or exercisable for shares of the
Company's capital stock. The Company has the
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authorized and outstanding capital stock as set forth under the heading
"Capitalization" in the Prospectus as of the date set forth therein. The
outstanding capital stock of the Company, including the Shares, conforms, and
the Shares to be issued by the Company to the Underwriters will conform, to the
description thereof contained in the Prospectus.
(vii) The financial statements, together with the
related notes and schedules as set forth in the Registration Statement and
Prospectus, present fairly the consolidated financial position, results of
operations and changes in financial position of the Company and its subsidiaries
on the basis stated in the Registration Statement at the indicated dates and for
the indicated periods. Such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, and all adjustments necessary for a fair
presentation of results for such periods have been made, except as otherwise
stated therein and are in accordance with the books and records of the Company.
The summary and selected financial and statistical data included in the
Registration Statement present fairly the information shown therein on the basis
stated in the Registration Statement and have been compiled on a basis
consistent with the financial statements presented therein. The books, records
and accounts of the Company and its subsidiaries accurately and fairly reflect
in all material respects, in reasonable detail, the transactions in and
dispositions of the assets of, and the results of operations of, the Company and
its subsidiaries.
(viii) There is no action, suit, claim, proceeding or
investigation pending or, to the knowledge of the Company, threatened or
contemplated against the Company or any of its subsidiaries or any of their
respective officers, directors, properties, assets or rights before any court or
administrative or regulatory agency which, if determined adversely to the
Company or any of its subsidiaries, would, individually or in the aggregate,
result in a Material Adverse Effect except as set forth in the Registration
Statement.
(ix) The Company has good and marketable title to all
properties and assets reflected in the financial statements hereinabove
described as owned by the Company (or as described in the Prospectus as owned by
the Company), in each case free and clear of all liens, encumbrances, pledges,
security interests, charges, claims, equitable interests, restrictions and
defects, except such as are described in the Prospectus or do not materially
affect the value of such properties and assets and do not materially interfere
with the use made and proposed to be made of such properties and assets by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid and
enforceable leases with such exceptions set forth in the Prospectus or as are
not material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries.
(x) Since the respective dates as of which information
is given in the Registration Statement and Prospectus, as they may be amended or
supplemented, (A) there has not been any material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in or affecting the condition, financial or otherwise, of the Company
and its subsidiaries, taken as a whole, or the business affairs,
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management, financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole, whether or not occurring in
the ordinary course of business, (B) there has not been any transaction not in
the ordinary course of business entered into by the Company or any of its
subsidiaries which is material to the Company and its subsidiaries, taken as a
whole, other than transactions described or contemplated in the Registration
Statement, (C) the Company and its subsidiaries have not incurred any material
liabilities or obligations, direct or indirect or contingent or non-contingent,
which are not in the ordinary course of business or which could result in a
material reduction in the future earnings of the Company and its subsidiaries,
(D) the Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance, (E)
there has not been any change in the capital stock of the Company (other than
upon the exercise of options and warrants described in the Registration
Statement), or any material increase in the short-term or long-term debt
(including capitalized lease obligations) of the Company and its subsidiaries,
taken as a whole, (F) there has not been any declaration or payment of any
dividends or any distributions of any kind with respect to the capital stock of
the Company, other than any dividends or distributions described or contemplated
in the Registration Statement, or (G) there has not been any issuance of
warrants, options, convertible securities or other rights to purchase or acquire
capital stock of the Company (other than options granted under the Company's
1998 Stock Incentive Compensation Plan and rights to purchase capital stock
under the 1999 Employee Stock Purchase Plan).
(xi) Neither the Company nor any of its subsidiaries is
in violation of, or in default under, its Articles of Incorporation or Bylaws,
or any statute, or any law, rule, regulation, order, judgment, injunction,
decree or authorization of any court or governmental or administrative agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their properties, or any indenture, mortgage, deed of trust, loan agreement,
lease, franchise, license or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which it or any of them are bound or
to which any property or assets of the Company or any of its subsidiaries is
subject, which violation or default would have a Material Adverse Effect.
(xii) The issuance and sale of the Shares by the Company
and the compliance by the Company with all of the provisions of this Agreement
and the consummation of the transactions contemplated herein will not violate
any provision of the Articles of Incorporation or Bylaws of the Company or any
of its subsidiaries or any statute or any order, judgment, decree, rule,
regulation or authorization of any court or governmental or administrative
agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their properties, and will not conflict with, result in a breach or
violation of, or constitute, either by itself or upon notice or passage of time
or both, a default under any indenture, mortgage, deed of trust, loan agreement,
lease, franchise, license or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any property or assets of the Company or any
of its subsidiaries is subject. No approval, consent, order, authorization,
designation, declaration or filing by or with any court or governmental agency
or body is required for the execution and delivery by the Company of this
Agreement and the consummation of the transactions herein contemplated, except
as may be required under the Act or
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any state securities or blue sky laws or under the rules and regulations of the
National Association of Securities Dealers, Inc. (the "NASD"). No further
approval or authorization of any securityholder, the Company's Board of
Directors or any duly appointed committee thereof or others is required for the
issuance and sale or transfer of the Shares, except as may be required under the
Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), by
the NASD or under state securities or blue sky laws.
(xiii) The Company and each of its subsidiaries holds
and is operating in compliance with all licenses, approvals, certificates and
permits from governmental and regulatory authorities, foreign and domestic,
which are necessary or material to the conduct of its business as described in
the Prospectus (except where the failure to so hold or operate in compliance
with such a license, approval, certificate or permit would not have a Material
Adverse Effect) and there are no proceedings pending or, to the knowledge of the
Company, threatened, which may cause any such license, approval, certificate or
permit to be withdrawn, cancelled, suspended or not renewed.
(xiv) The Company has the power and authority to enter
into this Agreement and to authorize, issue and sell the Shares it will sell
hereunder as contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(xv) KPMG Peat Marwick LLP, which has certified certain
of the financial statements filed with the Commission as part of the
Registration Statement, are independent public accountants as required by the
Act and Regulations.
(xvi) The Company has not taken and will not take,
directly or indirectly, any action designed to, or which has constituted, or
which might reasonably be expected to cause or result in, stabilization or
manipulation of the price of the Common Stock.
(xvii) The Shares to be sold by the Selling Shareholders
are listed and duly admitted for trading on The Nasdaq National Market and the
Shares have been (or will, prior to the Closing Date, be) approved for
additional listing upon notice of issuance on The Nasdaq National Market under
the symbol "WEBT."
(xviii) The Company has obtained and delivered to the
Representatives written agreements (the "Lock-Up Agreements"), in form and
substance satisfactory to the Representatives, of each of its shareholders
(except for those shareholders released from Lock-Up Agreements pursuant to the
Agreement to Waive Lock-Up Restrictions dated as of April 26, 1999 between the
Company and Xxxx Xxxxxxxx Incorporated on behalf of the underwriters named in
Schedule A (the "IPO Underwriters) to that certain Underwriting Agreement
between the IPO Underwriters and the Company dated February 18, 1999 that such
shareholders shall not (A) offer, pledge, sell, offer to sell, contract to sell,
sell any option or contract to purchase, purchase any option to sell, grant any
option right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any of the shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, Common Stock, or (B) enter
into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership
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of the shares of Common Stock or any securities convertible into, or
exercisable or exchangeable for, shares of Common Stock (whether any such
transaction described in clause (A) or (B) above is to be settled by delivery of
the shares of Common Stock or such other securities, in cash or otherwise), in
each case, beneficially owned (within the meaning of Rule 13d-3 under the
Exchange Act) or otherwise controlled by such shareholder on the date hereof or
hereafter acquired, for a period beginning from the date of execution of this
Agreement and continuing to and including the date 180 days after February 19,
1999 (the "Lock-Up Period"); provided, however, that, if such shareholder is an
individual, such shareholder may, without the prior written consent of Xxxx
Xxxxxxxx Xxxxxxx on behalf of the Underwriters, transfer shares of Common Stock
or any securities convertible into, or exercisable or exchangeable for, Common
Stock either during his or her lifetime or, on death, by will or intestacy to
members of such shareholder's immediate family or to trusts exclusively for the
benefit of members of such shareholder's immediate family or in connection with
bona fide gifts, provided that, prior to any such transfer, such transferee
executes an agreement, satisfactory to Xxxx Xxxxxxxx Xxxxxxx, pursuant to which
such transferee agrees to receive and hold such shares subject to the provisions
of the Lock-Up Agreement and that there shall be no further transfer except in
accordance with the provisions of the Lock-Up Agreement. For purposes of this
paragraph, "immediate family" shall mean such shareholder's spouse, lineal
descendant, father, mother, brother or sister. The restrictions on transfers
described in the Lock-Up Agreements shall not apply to (1) the sale of any
shares of Common Stock to the Underwriters pursuant to this Agreement or (2)
transactions in shares of Common Stock acquired in open-market transactions
after completion of the Offering.
(xix) The Company has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectus or the
Prospectus or other materials permitted by the Act to be distributed by the
Company.
(xx) The Company is in compliance with all provisions of
Florida Statutes Section 517.075 (Chapter 92-198, laws of Florida). The Company
does not do any business, directly or indirectly, with the government of Cuba or
with any person or entity located in Cuba.
(xxi) The Company and its subsidiaries have timely filed
all federal, state, local and foreign tax returns or reports required to be
filed, and have paid in full all taxes indicated by said returns or reports and
all assessments received by it or any of them to the extent that such taxes have
become due and payable, except where the Company and its subsidiaries are
contesting in good faith such taxes and assessments and there is no tax
deficiency that has been or, to the Company's knowledge, might be asserted
against the Company or any of its subsidiaries which might have a Material
Adverse Effect and all material tax liabilities, whether or not disputed, are
adequately provided for on the books of the Company and its subsidiaries. Except
as set forth in the Registration Statement and the Prospectus, neither the
Company nor any subsidiary has executed or filed with any taxing authority,
foreign or domestic, any agreement extending the period for assessment or
collection of any income taxes or is a party to any pending action or proceeding
by any foreign or domestic governmental agency for assessment or collection of
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taxes, and no claims for assessment or collection of taxes have been asserted
against the Company or any of its subsidiaries.
(xxii) The Company and each of its subsidiaries owns or
possesses adequate licenses or other rights to use all patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses, inventions, trade secrets
know-how, technology and other similar rights necessary for or material to the
conduct of its business as described in the Prospectus (except for failures to
own or possess such rights that would not have a Material Adverse Effect). The
Company has no knowledge of any facts which would preclude it from having rights
to its patent applications described in the Prospectus. The Company has no
knowledge of any infringement by it or its subsidiaries of, or conflicts with,
any patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets, know-how, technology or other similar rights of
others, and neither the Company nor any of its subsidiaries has any knowledge of
or has received any notice or claim of conflict with the asserted rights of
others with respect any of the foregoing, with the exception of (1) trademark
rights asserted by Desktalk Systems, Inc. relating to the asserted xxxx
"TrendWeb" and (2) copyrights asserted by certain individuals relating to
certain software implementing a user interface, both of which assertions are
without merit, and accordingly will not have a Material Adverse Effect.
(xxiii) The Company is not, and upon completion of the
sale of Shares contemplated hereby will not be, required to register as an
"investment company" under the Investment Company Act of 1940, as amended.
(xxiv) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to records is
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxv) Other than as contemplated by this Agreement,
neither the Company nor any of its subsidiaries has incurred any liability for
any finder's or broker's fee or agent's commission in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xxvi) The Company and its subsidiaries maintain
insurance with insurers of recognized financial responsibility of the types and
in the amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company or its subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect; neither the Company
nor any such subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to
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continue its business at a cost that would not have a Material Adverse Effect.
(xxvii) To the Company's knowledge, no labor disturbance
by the employees of the Company or any of its subsidiaries exists or is
imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, subassemblers,
subcontractors or international distributors that might be expected to result in
a material adverse change in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its subsidiaries
considered as one enterprise. No collective bargaining agreement exists with any
of the Company's employees and, to the Company's knowledge, no such agreement is
imminent.
(xxviii) The Company has not distributed and will not
distribute prior to the later of (A) the Closing Date, or any date on which
Option Shares are to be purchased, as the case may be, and (B) completion of the
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectuses, the
Prospectus, the Registration Statement and other materials, if any, permitted by
the Act.
(xxix) Neither the Company nor any of its subsidiaries
has at any time during the last five (5) years (A) made any unlawful
contribution to any candidate for foreign office or failed to disclose fully any
contribution in violation of law, or (B) made any payment to any federal or
state governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof.
(xxx) Except as set forth in the Registration Statement
and Prospectus, (i) the Company and each of its subsidiaries is in compliance
with all rules, laws and regulations relating to the use, treatment, storage and
disposal of toxic substances and protection of health or the environment
("Environmental Laws") which are applicable to its business, except for such
instances of non-compliance as would not individually or in the aggregate have a
Material Adverse Effect (ii) neither the Company nor any of its subsidiaries has
received notice from any governmental authority or third party of an asserted
claim under Environmental Laws, which claim is required to be disclosed in the
Registration Statement and the Prospectus and is not so disclosed, (iii) to the
knowledge of the Company, neither the Company nor any of its subsidiaries will
be required to make future material capital expenditures to comply with
Environmental Laws and (iv) to the knowledge of the Company, no property which
is owned, leased or occupied by the Company or any of its subsidiaries has been
designated as a Superfund site pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601, et seq.), or otherwise designated as a contaminated site under applicable
state or local law.
(xxxi) There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of the members of the families of
any of them, except as disclosed in the Xxxxxxxxxxxx
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Xxxxxxxxx xxx xxx Xxxxxxxxxx.
(x) Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel to the Underwriters shall be deemed
to be a representation and warranty of the Company to each Underwriter as to the
matters covered thereby.
2. Representations, Warranties and Covenants of the Selling
Shareholders.
(a) Each Selling Shareholder severally represents and warrants
to, and covenants and agrees with, each of the Underwriters and the Company
that:
(i) Such Selling Shareholder has duly executed and
delivered a Power of Attorney (the "Power of Attorney"), appointing [ ] and [ ]
and each of them, as attorney-in-fact (the "Attorneys-In-Fact") with full power
and authority to execute and deliver this Agreement on behalf of such Selling
Shareholder, to authorize the delivery of the Shares to be sold by the Selling
Shareholder hereunder, and otherwise to act on behalf of such Selling
Shareholder in connection with the transactions contemplated by this Agreement.
(ii) Such Selling Shareholder has duly executed and
delivered a Custody Agreement (the "Custody Agreement") with BankBoston, N.A.,
as Custodian, pursuant to which certificates in negotiable form for the Shares
to be sold by such Selling Shareholder hereunder have been placed in custody for
delivery under this Agreement.
(iii) Such Selling Shareholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody
Agreement, and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Shareholder hereunder; and all consents, approvals, authorizations
and orders necessary for the execution and delivery by such Selling Shareholder
of this Agreement, the Power of Attorney and the Custody Agreement, and for the
sale and delivery of the Shares to be sold by such Selling Shareholder
hereunder, have been obtained, except such as may be required by any state
securities or blue sky laws.
(iv) Such Selling Shareholder has, and at the Closing
Date and the Option Closing Date, as the case may be (as such dates are
hereinafter defined), will have good and valid title to the Firm Shares and the
Option Shares, respectively, to be sold by such Selling Shareholder hereunder,
free of any liens, encumbrances, security interests; equities or claims
whatsoever; and upon delivery of and payment for such Firm Shares and Option
Shares pursuant to this Agreement, good and valid title thereto, free of any
liens, encumbrances, security interests, equities or claims whatsoever, will be
transferred to the several Underwriters.
(v) The execution and delivery by each Selling
Shareholder of this Agreement, the Power of Attorney and the Custody Agreement
and the consummation by such Selling Shareholder of the transactions herein and
therein contemplated and the fulfillment by such Selling Shareholder of the
terms hereof and thereof will not conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any
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will, mortgage, deed of trust, loan agreement or other agreement, instrument or
obligation to which such Selling Shareholder is a party or to which any of the
property or assets of such Selling Shareholder is subject, except for such
agreements, instruments or obligations for which consents have been obtained,
nor will such actions result in any violations of the provisions of the charter
or by-laws if such Selling Shareholder is a corporation, the partnership
agreement, certificate or articles if the Selling Shareholder is a partnership,
or any statute, rule, regulation or order applicable to such Selling Shareholder
of any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction over such Selling Shareholder.
(vi) Such Selling Shareholder has not taken and will not
take, directly or indirectly, any action designed to, or which has constituted,
or which might reasonably be expected to cause or result in, stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Shares.
(vii) To the extent that any statements or omissions
made in the Registration Statement, any Preliminary Prospectus thereof, the
Prospectus or any amendment or supplement thereto are made in reliance upon and
in conformity with written information with respect to such Selling Shareholder
furnished to the Company by such Selling Shareholder expressly for use therein,
such Preliminary Prospectus and the Registration Statement did not, and the
Prospectus and any further amendments or supplements to the Registration
Statement and the Prospectus will not, when they become effective or are filed
with the Commission, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(viii) Such Selling Shareholder will not offer to sell,
sell, transfer, assign or otherwise dispose of any Common Stock or other capital
stock of the Company, directly or indirectly, during the Lock-Up period,
otherwise than as expressly permitted hereunder, under the Lock-Up Agreement
between each such Selling Shareholder and Xxxx Xxxxxxxx Xxxxxxx and SoundView
Technology Group, Inc., or with the written consent of Xxxx Xxxxxxxx Xxxxxxx and
SoundView Technology Group, Inc.
(ix) Such Selling Shareholder has reviewed the
information contained in the Registration Statement and, based on such review
and such Selling Shareholder's knowledge of the industry, the Company and its
business (but without further investigation), such Selling Shareholder does not
have knowledge that, and nothing has come to such Selling Shareholder's
attention that would give such Selling Shareholder reason to believe that, at
the time the Registration Statement became or becomes, as the case may be,
effective and at all times subsequent thereto up to and on the Closing Date and
on any Option Closing Date, (i) the Registration Statement and the Prospectus,
and any amendments or supplements thereto, contained or will contain any untrue
statement of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (ii) the Prospectus, and any amendments or supplements thereto
effective on or prior to the Closing Date or any Option Closing Date, contained
or will contain any untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
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(x) The Shares to be sold by such Selling Shareholder
pursuant to this Agreement have been duly authorized and are validly issued,
fully paid and non-assessable.
(xi) This Agreement, the Custody Agreement and the Power
of Attorney have been duly authorized, executed and delivered by such Selling
Shareholder and are valid and binding agreements of such Selling Shareholder.
(xii) Assuming the Underwriters purchase the Shares to
be sold by each Selling Shareholder for value, in good faith and without notice
of any adverse claim within the meaning of Article VIII of the Uniform
Commercial Code, delivery of the Shares to be sold by such Selling Shareholder
pursuant to this Agreement will pass marketable title to such Shares free and
clear of any security interests, claims, liens, equities and other encumbrances.
(b) The Selling Shareholders each represent and warrant to, and
agree with, the Underwriters to the same effect as the representations and
warranties of the Company set forth in Section 2 of this Agreement.
(c) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of 1986, as
amended, with respect to the transactions herein contemplated, each of the
Selling Shareholders agrees to deliver to you prior to or at the Closing Date a
properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
(d) Each of the Selling Shareholders specifically agrees that
the Shares represented by the certificates held in custody for such Selling
Shareholder under the Custody Agreement are subject to the interests of the
Underwriters hereunder, and that the arrangements made by such Selling
Shareholder for such custody and the appointment by such Selling Shareholder of
the Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable.
Each of the Selling Shareholders specifically agrees that the obligations of the
Selling Shareholders hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling Shareholder or, in
the case of an estate or trust, by the death or incapacity of any executor or
trustee or the termination of such estate or trust, or in the case of a
corporation or partnership, by the dissolution of such corporation or
partnership, or by the occurrence of any other event. If any individual Selling
Shareholder or any such executor or trustee should die or become incapacitated,
or if any such estate or trust should be terminated, or if any such corporation
or partnership should be dissolved, or if any other such event should occur
before the delivery of the Shares hereunder, certificates representing the
Shares shall be delivered by or on behalf of the Selling Shareholders in
accordance with the terms and conditions of this Agreement and of the Custody
Agreement, and actions taken by the Attorneys-in-Fact pursuant to the Powers of
Attorney shall be as valid as if such death, incapacity, termination,
dissolution or other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of
such death, incapacity, termination, dissolution or other event.
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(e) Any certificate signed by or on behalf of any Selling
Shareholder and delivered to the Representatives or to counsel to the
Underwriters shall be deemed to be a representation and warranty of such Selling
Shareholder to each Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and covenants contained herein, and subject to the
terms and conditions herein set forth, the Company and each Selling Shareholder
agrees, severally and not jointly, to sell to each Underwriter and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Shareholder, at a price of $[ ] per share, the number of Firm
Shares (to be adjusted by you to eliminate fractional shares) determined by
multiplying the aggregate number of Firm Shares to be sold by the Company and
each of the Selling Shareholders, as set forth opposite their respective names
in Schedule B hereto, by a fraction, the numerator of which is the aggregate
number of Firm Shares to be purchased by such Underwriter as set forth opposite
the name of such Underwriter in Schedule A hereto and the denominator of which
is the aggregate number of Firm Shares to be purchased by all the Underwriters
from the Company and the Selling Shareholders hereunder.
In addition, on the basis of the representations, warranties and
covenants contained herein and subject to the terms and conditions herein set
forth, each of the Company and the Selling Shareholders, as and to the extent
indicated in Schedule B hereto, hereby grant, severally and not jointly, to the
several Underwriters an option to purchase at the Underwriters' election up to
375,000 Option Shares at the same price per share as set forth for the Firm
Shares in the paragraph above, for the sole purpose of covering over allotments
in the sale of the Firm Shares. The option granted hereby may be exercised in
whole or in part, but only once, and at any time upon written notice given
within 30 days after the date of this Agreement, by you, as Representatives of
the several Underwriters, to the Company, the Attorneys-in-Fact and the
Custodian setting forth the number of Option Shares as to which the several
Underwriters are exercising the option and the time and date at which
certificates are to be delivered. Any such election to purchase Option Shares
shall be made in proportion to the maximum number of Option Shares to be sold by
the Company and each Selling Shareholder as set forth in Schedule B hereto. If
any Option Shares are purchased, each Underwriter agrees, severally and not
jointly, to purchase that portion of the number of Option Shares as to which
such election shall have been exercised (subject to adjustment to eliminate
fractional shares) determined by multiplying such number of Option Shares by a
fraction the numerator of which is the maximum number of Option Shares which
such Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule A hereto and the denominator of which is the maximum
number of Option Shares which all of the Underwriters are entitled to purchase
hereunder. The time and date at which certificates for Option Shares are to be
delivered shall be determined by the Representatives but shall not be earlier
than two or later than ten full business days after the exercise of such option,
and shall not in any event be prior to the Closing Date. If the date of exercise
of the option is three or more full days before the Closing Date, the notice of
exercise shall set the Closing Date as the Option Closing Date.
Certificates in definitive form for the Shares to be purchased by each
Underwriter hereunder,
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and in such denominations and registered in such names as Xxxx Xxxxxxxx Xxxxxxx
may request upon at least forty-eight hours' prior notice to the Company, shall
be delivered by or on behalf of the Company to you for the account of such
Underwriter at such time and place as shall hereafter be designated by the
Representatives, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks, payable
to the order of the Company in next day funds. The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 6:30 a.m.
Portland, Oregon time, at the offices of Xxxxxxx Coie LLP, 0000 XX 0xx Xxxxxx,
00xx Xxxxx, Xxxxxxxx, Xxxxxx, on May __, 1999, or such other time and date as
you and the Company may agree upon in writing, such time and date being herein
referred to as the "Closing Date," and, with respect to the Option Shares, at
the time and on the date specified by you in the written notice given by you of
the Underwriters' election to purchase the Option Shares, or such other time and
date as you and the Company may agree upon in writing, such time and date being
referred to herein as the "Option Closing Date." Such certificates will be made
available for checking and packaging at least twenty-four hours prior to the
Closing Date or the Option Closing Date, as the case may be, at a location as
may be designated by you.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to make a public offering of the Firm Shares as soon as the
Representatives deem it advisable to do so. The Firm Shares are to be initially
offered to the public at the public offering price and terms set forth in the
Prospectus. The Representatives may from time to time thereafter change the
public offering price and other selling terms. To the extent, if at all, that
any Option Shares are purchased pursuant to Section 3 hereof, the Underwriters
will offer such Option Shares to the public on the foregoing terms.
The Company and the Underwriters agree that the Company may sell the
Shares to be sold by the Company hereunder notwithstanding the restriction of
Section 5(h) of the Underwriting Agreement dated February 18, 1999 among the
Company and Xxxx Xxxxxxxx Xxxxxxx, a division of Xxxx Xxxxxxxx Incorporated,
and SoundView Technology Group, Inc. as representatives of the underwriters
thereunder; provided, however, that such restriction shall remain in full force
and effect with respect to issuances by the Company other than under this
Underwriting Agreement.
5. Covenants of the Company. The Company covenants and agrees with the
several Underwriters that:
(a) The Company will prepare and timely file with the Commission
under Rule 424(b) under the Act a Prospectus containing information previously
omitted at the time of effectiveness of the Registration Statement in reliance
on Rule 430A under the Act, and will not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy and as to which the
Representatives shall have reasonably objected in writing promptly after
reasonable notice thereof or which is not in compliance with the Act or the
Regulations.
(b) The Company will advise the Representatives promptly of any
request of the Commission for amendment of the Registration Statement or for any
supplement to the Prospectus or for any additional information, or of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
institution or threatening of any proceedings for that purpose, and the Company
will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus or suspending such
qualification and to obtain as soon as possible the lifting thereof, if issued.
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(c) To the extent required of issuers listed on The Nasdaq
National Market, the Company will endeavor to qualify the Shares for sale under
the securities laws of such jurisdictions as the Representatives may reasonably
have designated in writing and will, or will cause counsel to, make such
applications, file such documents, and furnish such information as may be
reasonably requested by the Representatives, provided that the Company shall not
be required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not now so qualified or
required to file such a consent. 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 the
Representatives may reasonably request for distribution of the Shares.
(d) The Company will furnish the Underwriters with as many
copies of any Preliminary Prospectus as the Representatives may reasonably
request and, during the period when delivery of a prospectus is required under
the Act, the Company will furnish the Underwriters with as many copies of the
Prospectus in final form, or as thereafter amended or supplemented, as the
Representatives may, from time to time, reasonably request. The Company will
deliver to the Representatives, at or before the Closing Date, three signed
copies of the Registration Statement and all amendments thereto including all
exhibits filed therewith, and will deliver to the Representatives such number of
copies of the Registration Statement, without exhibits, and of all amendments
thereto, as the Representatives may reasonably request.
(e) If, during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur as a
result of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, not misleading, or if
for any other reason it shall be necessary at any time to amend or supplement
the Prospectus to comply with any law, the Company promptly will prepare and
file with the Commission an appropriate amendment to the Registration Statement
or supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein in
light of the circumstances existing when it is so delivered, not misleading, or
so that the Prospectus will comply with law. In case any Underwriter is required
to deliver a prospectus in connection with sales of any Shares at any time nine
months or more after the effective date of the Registration Statement, upon the
request of the Representatives but at the expense of such Underwriter, the
Company will prepare and deliver to such Underwriter as many copies as the
Representatives may request of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Act.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later than
18 months after the effective date of the Registration Statement, an earnings
Statement (which need not be audited) in reasonable detail, covering a period of
at least 12 consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the requirements
of Section 11(a) of the Act and Rule 158 thereunder and will advise you in
writing when such statement has been so
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made available.
(g) During a period of five (5) years after the date hereof, or
such shorter period that the Company remains subject to the periodic reporting
requirements of the Exchange Act, the Company, as soon as practicable after the
end of each respective financial quarter or year, as applicable, will furnish to
its shareholders annual reports (including financial statements audited by
independent certified public accountants) and will furnish to its shareholders
unaudited quarterly reports of operations for each of the first three quarters
of the fiscal year, and will, upon request, furnish to you and the other several
Underwriters hereunder (i) concurrently with making such reports available to
its shareholders, statements of operations of the Company for each of the first
three quarters in the form made available to the Company's shareholders; (ii)
concurrently with the furnishing thereof to its shareholders, a balance sheet of
the Company as of the end of such fiscal year, together with statements of
operations, of shareholders' equity and of cash flow of the Company for such
fiscal year, accompanied by a copy of the certificate or report thereon of
nationally recognized independent certified public accountants; and (iii)
concurrently with the furnishing of such reports to its shareholders, copies of
all reports (financial or other) mailed to shareholders; and (iv) as soon as
they are available, copies of all reports and financial statements furnished to
or filed with the Commission, any securities exchange or The Nasdaq National
Market by the Company (except for documents for which confidential treatment is
requested).
(h) No offering, sale or other disposition of any Common Stock
or other capital stock of the Company, or warrants, options, convertible
securities or other rights to acquire such Common Stock or other capital stock
(other than pursuant to employee stock option plans, employee stock purchase
plans, outstanding options or on the conversion of convertible securities
outstanding on the date of this Agreement; provided, that any employee stock
options issued pursuant to employee stock option plans during the Lock-Up
Period shall not vest and become exercisable to any extent prior to the
expiration of the Lock-Up Period) will be made for a period beginning
from the date of this Agreement until the end of the Lock-Up Period, directly
or indirectly, by the Company otherwise than hereunder or with the prior written
consent of the Representatives.
(i) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the purposes
set forth under "Use of Proceeds" in the Prospectus. The Company will invest
such proceeds pending their use in such a manner that, upon completion of such
investment, the Company will not be an 'investment company' as defined in the
Investment Company Act of 1940, as amended.
(j) The Company will use its best efforts to maintain the
designation of the Common Stock on The Nasdaq National Market.
(k) The Company will file with the Commission such information
with respect to the use of proceeds from the sale of the Shares as may be
required pursuant to Rule 463 under the Act.
(l) From the date of this Agreement until the termination of the
Lock-Up Period, the Company will not, without the prior written consent of Xxxx
Xxxxxxxx Xxxxxxx on behalf of the Underwriters, alter or amend in any manner the
vesting schedule of any option, warrant
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or other security of the Company or its subsidiaries.
(m) The Company will maintain a Transfer Agent and, if necessary
under the jurisdiction of incorporation of the Company, a Registrar (which may
be the same entity as the Transfer Agent) for its Common Stock.
6. Costs and Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, the Company will pay (directly or by
reimbursement) all costs, expenses and fees incident to the performance of the
obligations of the Company and the Selling Shareholders under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Company the cost of preparing, printing and filing of the Registration
Statement, Preliminary Prospectuses and the Prospectus and any amendments and
supplements thereto and the printing, mailing and delivery to the Underwriters
and dealers of copies thereof and of this Agreement, the Agreement Among
Underwriters, any Selected Dealers Agreement, the Underwriters' Selling
Memorandum, the Invitation Letter, the Power of Attorney, the Blue Sky
Memorandum and any supplements or amendments thereto (excluding, except as
provided below, fees and expenses of counsel to the Underwriters); the filing
fees of the Commission; the filing fees and expenses (including legal fees and
disbursements of counsel for the Underwriters) incident to securing any required
review by the NASD of the terms of the sale of the Shares; listing fees, if any,
transfer taxes and the expenses, including the fees and disbursements of counsel
for the Underwriters incurred in connection with the qualification of the Shares
under state securities or Blue Sky laws; the fees and expenses incurred in
connection with the designation of the Shares on The Nasdaq National Market; the
costs of preparing stock certificates; the costs and fees of any registrar or
transfer agent and all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section 6. In addition, the Company will pay all travel and lodging
expenses incurred by management of the Company in connection with any
informational "road show" meetings held in connection with the offering and will
also pay for the preparation of all materials used in connection with such
meetings. The Selling Shareholders will pay the fees and expenses of any
separate counsel retained by them in connection with the transactions
contemplated hereby. The Company and the Selling Shareholders shall not,
however, be required to pay for any of the Underwriters' expenses (other than
those related to qualification of the Shares under state securities or Blue Sky
laws and those incident to securing any required review by the NASD of the terms
of the sale of the shares but including, without limitation, the Underwriter
expenses specified in Section 5(e) of this Agreement) except that, if this
Agreement shall not be consummated because the conditions in Section 7 hereof
(other than the condition in Section 7(d)) are not satisfied or because this
Agreement is terminated by the Representatives pursuant to clause (i) of Section
11(a) hereof, or by reason of any failure, refusal or inability on the part of
the Company or the Selling Shareholders to perform any undertaking or satisfy
any condition of this Agreement or to comply with any of the terms hereof on
their respective parts to be performed, unless such failure to satisfy said
condition or
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to comply with said terms shall be due to the default or omission of any
Underwriter, then the Company shall promptly upon request by the Representatives
reimburse the several Underwriters for all appropriately itemized out-of-pocket
accountable expenses, including fees and disbursements of counsel, reasonably
incurred in connection with investigating, marketing and proposing to market the
Shares or in contemplation of performing their obligations hereunder; but the
Company and the Selling Shareholders shall not in any event be liable to any of
the several Underwriters for damages on account of loss of anticipated profits
from the sale by them of the Shares.
7. Conditions of Obligations of the Underwriters. The several
obligations of the Underwriters to purchase the Firm Shares on the Closing Date
and the Option Shares, if any, on the Option Closing Date, are subject to the
condition that all representations and warranties of the Company, and the
Selling Shareholders contained herein are true and correct, at and as of the
Closing Date or the Option Closing Date, as the case may be, the condition that
the Company and the Selling Shareholders shall have performed all of their
respective covenants and obligations hereunder (to the extent performance of
such covenants and obligations are due at such times) and to the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the Regulations and in accordance with Section 4(a) hereof; no stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, or any part thereof shall have been issued and no proceedings
for that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of the Representatives.
(b) The Representatives shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of Xxxxxxx Coie LLP,
counsel for the Company, dated the Closing Date or the Option Closing Date, as
the case may be, addressed to the Underwriters, to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation under the laws of the state of Oregon, with corporate
power and authority to own, lease, license and use its properties and conduct
its business as described in the Prospectus, and is duly qualified to transact
business and is in good standing in all jurisdictions in which the conduct of
its business or its ownership, lease, license or use of property requires such
qualification and the failure so to qualify would have a Material Adverse
Effect.
(ii) The Company has authorized and outstanding capital
stock as described in the Prospectus as of the date set forth therein. The
outstanding shares of the Company's capital stock have been duly authorized and
validly issued and are fully paid and nonassessable. The form of certificate for
the Shares is in due and proper form and complies with the requirements of the
[State] Business Corporations Act. The Shares to be issued and sold by the
Company pursuant to this Agreement have been duly authorized and, when issued
and paid for as contemplated herein, will be validly issued, delivered, fully
paid and nonassessable. No preemptive right, co-sale right, registration right,
right of first refusal or other
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similar right of shareholders of the Company, or of holders of warrants,
options, convertible securities or other rights to acquire shares of capital
stock of the Company, exist with respect to any of the Shares or the issue and
sale thereof (i) pursuant to the terms of the Company's Articles of
Incorporation or Bylaws or (ii) to the knowledge of such counsel, pursuant to
the terms of any agreement or instrument to which the Company is a party or by
which the Company is bound. To the knowledge of such counsel, no rights to
register outstanding shares of the Company's capital stock, or shares issuable
upon the exercise of outstanding warrants, options, convertible securities or
other rights to acquire shares of such capital stock, exist which have not been
validly exercised or waived with respect to the Registration Statement. The
capital stock of the Company, including the Shares, conforms in all material
respects as to legal matters to the description thereof contained in the
Prospectus.
(iii) The Registration Statement has become effective
under the Act and, to the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued under the Act
and no proceedings for that purpose have been instituted or are pending or
threatened by the Commission.
(iv) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in all material respects with
the requirements of the Act and the rules and regulations thereunder (except
that such counsel need express no opinion as to the financial statements and the
notes thereto and related schedules and other financial data included therein or
omitted therefrom).
(v)The statements (A) in the Prospectus under the
caption "Description of Capital Stock," "Management--Limitation of Liability;
Indemnification of Directors and Officers," and "Shares Eligible for Future
Sale" and (B) in the Registration Statement in Item 15 insofar as such
statements constitute a summary of matters of law, are in all material respects,
accurate summaries and fairly present the information called for with respect to
such matters.
(vi) Such counsel does not know of any contracts,
agreements, documents or instruments required to be filed as exhibits to the
Registration Statement, incorporated by reference into the Prospectus, or
described in the Registration Statement or the Prospectus which are not so
filed, incorporated by reference or described as required; and insofar as any
statements in the Registration Statement or the Prospectus constitute summaries
of any contract, agreement, document or instrument to which the Company is a
party, such statements are, in all material respects, accurate summaries and
fairly present the information called for with respect to such matters.
(vii) Such counsel knows of no legal or governmental
proceeding, pending or threatened, before any court or administrative body or
regulatory agency, to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement or
Prospectus and are not so described, or statutes or regulations that are
required to be described in the Registration Statement or the Prospectus that
are not so described.
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(viii) The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated do not and will not
conflict with or result in a violation of or default under the charter or bylaws
of the Company, or under any statute, permit, judgment, decree, order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its properties (other than the
state securities and blue sky laws, as to which such counsel need express no
opinion) and do not and will not conflict with or result in a violation of or
default under (except for such conflicts, violations or defaults as would not
have a Material Adverse Effect) under any lease, license, contract, indenture,
mortgage, loan agreement or other agreement or other instrument or obligation
known to such counsel to which the Company is a party or by which the Company is
bound or to which any property or assets of the Company is subject, except such
agreements, instruments or obligations with respect to which valid consents or
waivers have been obtained by the Company.
(ix) The Company has the corporate power and authority
to enter into this Agreement and to authorize, issue, sell and deliver the
Shares as contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(x) No approval, consent, order, authorization,
designation, declaration, qualification or filing by or with any judicial,
regulatory, administrative or other governmental body is necessary in connection
with the execution and delivery of this Agreement and the consummation of the
transactions herein contemplated (other than as may be required by state
securities and blue sky laws, as to which such counsel need express no opinion)
except such as have been obtained or made.
(xi) The Company is not, and immediately upon completion
of the sale of Shares contemplated hereby will not be, required to register as
an "investment company" under the Investment Company Act of 1940, as amended.
(xii) Although such counsel assumes no responsibility
for the factual accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to in the
opinion in subsections (ii) and (v) of this Section 7(b) and on the basis of the
procedures undertaken by such counsel (and relying as to materiality to the
extent such counsel deems appropriate upon opinions of officers and other
representatives of the Company), no facts have come to the attention of such
counsel that cause it to believe that the Registration Statement and any
amendments and supplements thereto, at the time they became effective and as of
the Closing Date or the Option Closing Date, contained an 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, in
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light of the circumstances under which they were made, not misleading, or that
the Prospectus or any further amendment or supplement thereto, at the time it
was mailed or otherwise delivered to the Commission for filing pursuant to Rule
424(b) and as of the Closing Date and the Option Closing Date, included an
untrue statement of a material fact or omitted 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, except that such counsel need not
express any opinion with respect to the financial statements and supporting
schedules and other financial data included in the Registration Statement and
the Prospectus. Such counsel may indicate that it has not undertaken any
independent investigation to verify the completeness or accuracy of the
statements in the Registration Statement or the Prospectus.
(c) The Representatives shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of counsel for each
of the Selling Shareholders, which counsel shall be reasonably acceptable to the
Representative(s), dated the Closing Date or the Option Closing Date, as the
case may be, addressed to the Underwriters, to the effect that:
(i) A Power of Attorney and a Custody Agreement have
been duly executed and delivered by such Selling Shareholder and are the valid
and binding agreements of such Selling Shareholder.
(ii) This Agreement has been duly authorized, executed
and delivered by or on behalf of such Selling Shareholder.
(iii) The sale of the Shares to be sold by such Selling
Shareholder hereunder and the compliance by such Selling Shareholder with all of
the provisions of this Agreement, the Power of Attorney and the Custody
Agreement, and the consummation of the transactions herein and therein
contemplated, will not conflict with or result in a breach or violation of any
terms or provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which such Selling Shareholder is a party or
by which such Selling Shareholder is bound or to which any of the property or
assets of such Selling Shareholder is subject, nor will such action result in
any violation of any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over such Selling
Shareholder or the property of such Selling Shareholder.
(iv) No consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the Shares to be
sold by such Selling Shareholder hereunder, except such consents, approvals,
authorizations or orders as have been validly obtained and are in full force and
effect, such as have been obtained under the Act, and such as may be required
under the state securities or blue sky laws in connection with the purchase and
distribution of such Shares by the Underwriters, as to which such counsel need
express no opinion.
(v) Such Selling Shareholder has full right, power and
authority to sell, assign, transfer and deliver the Shares to be sold by such
Selling Shareholder hereunder.
(vi) Upon delivery of the Shares being sold by such
Selling Shareholder and payment therefor, good and valid title to the Shares
being sold by such Selling Shareholder, free and clear of any claims, liens,
encumbrances, security interests or other
-22-
22
adverse claims, will be transferred to each of the several Underwriters who have
purchased such Shares in good faith and without notice of any such claim, lien,
encumbrance, security interest or other adverse claim within the meaning of the
Uniform Commercial Code.
In rendering the opinions described above, counsel for each of the
Selling Shareholders may rely, as to matters of fact with respect to such
Selling Shareholder, upon the representations of such Selling Shareholder
contained in this Agreement, the Power of Attorney and the Custody Agreement.
(d) The Representatives shall have received from Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for the Underwriters, an
opinion dated the Closing Date or the Option Closing Date, as the case may be,
with respect to the incorporation of the Company, the validity of the Shares,
the Registration Statement, the Prospectus, and other related matters as the
Representatives may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters.
(e) The Representatives shall have received on each of the date
hereof, the Closing Date and the Option Closing Date, as the case may be, a
signed letter, dated as of the date hereof, the Closing Date or the Option
Closing Date, as the case may be, in form and substance reasonably satisfactory
to the Representatives, from KPMG Peat Marwick LLP, to the effect that they are
independent public accountants with respect to the Company and its subsidiaries
within the meaning of the Act and the related rules and regulations and
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(f) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date or the Option Closing Date, as the case may be,
there shall not have been any change or any development involving a prospective
change, in or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in your judgment, is material and adverse to the Company and
makes it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at the Closing Date or the Option Closing
Date, as the case may be, on the terms and in the manner contemplated in the
Prospectus.
(g) The Representatives shall have received on the Closing Date
or the Option Closing Date, as the case may be, a certificate or certificates of
the chief executive officer and the chief financial officer of the Company to
the effect that, as of the Closing Date or the Option Closing Date, as the case
may be, each of them severally represents as follows:
(i) The Prospectus was filed with the Commission
pursuant to Rule 424(b) within the applicable period prescribed for such filing
by the Regulations and in accordance with Section 4 of this Agreement; no stop
order suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for such purpose
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23
have been initiated or are, to his knowledge, threatened by the Commission.
(ii) The representations and warranties of the Company
set forth in Section 1 of this Agreement are true and correct at and as of the
Closing Date or the Option Closing Date, as the case may be, and the Company has
performed all of its obligations under this Agreement to be performed at or
prior to the Closing Date or the Option Closing Date, as the case may be.
(h) The Representatives shall have received on the Closing Date
or the Option Closing Date, as the case may be, a certificate of the Selling
Shareholders pursuant to which the Selling Shareholders certify that their
representations and warranties set forth in this Agreement are true and correct
at and as of the Closing Date or the Option Date, as the case may be, and that
they have performed all of their obligations under this Agreement to be
performed at or prior to the Closing Date or the Option Closing Date, as the
case may be.
(i) The Company and the Selling Shareholders shall have
furnished to the Representatives such further certificates and documents as the
Representatives may reasonably have requested.
(j) The Lock-Up Agreements shall have been delivered to the
Representatives prior to the date hereof and are (except as stated in Section
1(a)(xviii) hereof), as of the Closing Date or the Option Closing Date, as the
case may be, in full force and effect.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to the Representatives and to Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for the
Underwriters.
If any of the conditions hereinabove provided for in this Section 7
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representatives by notifying the Company of such termination in writing or
by telegram at or prior to the Closing Date or the Option Closing Date, as the
case may be. In such event, the Company and the Underwriters shall not be under
any obligation to each other (except to the extent provided in Sections 6 and 8
hereof).
8. Indemnification.
(a) The Company and the Selling Shareholders jointly and
severally agree to indemnify and hold harmless each Underwriter, each officer
and director thereof, and each person, if any, who controls any Underwriter
within the meaning of the Act, against any losses, claims, damages or
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) to which such Underwriter or such persons may became subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in the
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Registration Statement, any Preliminary Prospectus or the Prospectus, including
any amendments or supplements thereto, or (ii) 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 in light of the circumstances under
which they were made, or (iii) any act or failure to act or any alleged act or
failure to act by any Underwriter in connection with, or relating in any manner
to, the Common Stock or the offering contemplated hereby, and which is included
as part of or referred to in any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arising out of or based upon matters
covered by clause (i) or (ii) above, and will reimburse 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
or defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged omission,
made in the Registration Statement, any Preliminary Prospectus or the
Prospectus, including any amendments or supplements thereto, in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein; provided
further, that the Company and the Selling Shareholders shall not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission, made in a Preliminary Prospectus, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of the Underwriters to the person asserting such loss, claim, damage or
liability, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of Shares to such person, and if the Prospectus
(as amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability, unless the failure to so deliver the
Prospectus (as amended or supplemented) is the result of noncompliance by the
Company with the first sentence of paragraph 5(d) of this Agreement; provided,
further, that the Company shall not be liable in the case of any matter covered
by clause (iii) above to the extent that it is determined in a final judgment by
a court of competent jurisdiction that such losses, claims, damages or
liabilities resulted directly from any such acts or failures to act undertaken
or omitted to be taken by such Underwriter through its gross negligence or
willful misconduct; and, provided, further, that in no event shall any Selling
Shareholder be liable for an amount in excess of the net proceeds received by
such Selling Shareholder from the sale of the Shares.
(b) Each Underwriter agrees severally and not jointly to
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement, each Selling Shareholder
and each person, if any, who controls the Company or any Selling Shareholder
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer, Selling
Shareholder or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be
-25-
25
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, and will reimburse any
legal or other expenses reasonably incurred by the Company or any such director,
officer, Selling Shareholder or controlling person in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that each Underwriter will be liable in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity or contribution may be sought pursuant to this Section 8, such person
(the "indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a), or (b) or contribution provided
for in Section 8(d) shall be available with respect to a proceeding to any party
who shall fail to give notice of such proceeding as provided in this Section
8(c) if the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party otherwise than on account of the provisions of Section
8(a), (b), or (c). In case any such proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party and shall pay as incurred the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay promptly as incurred the reasonable fee and expenses of the counsel retained
by the indemnified party in the event (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it or other indemnified parties which are different from or
additional to those available to the indemnifying party. It is understood that
the indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm at any time for all such indemnified parties. Such
firm shall be designated in writing by the Representatives and shall be
reasonably satisfactory to the Company in the case of parties indemnified
pursuant to Section 8(a) and shall be designated in writing by the Company and
shall be reasonably satisfactory to the Representatives in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against
-26-
26
any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a), or (b) above in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other from the offering
of the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Shareholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholders bears
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Selling Shareholders on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 8(d) were
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 account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereto) referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriters, no Selling
Shareholder shall be required to contribute any amount in excess of the proceeds
received by such Selling Shareholder, 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 in this Section 8(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Selling Shareholders
under this Section 8 shall be in addition to any liability which the Company and
the Selling Shareholders may otherwise have, and the obligations of the
Underwriters under this Section 8 shall
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27
be in addition to any liability which the Underwriters may otherwise have.
9. Default by Underwriters. If on the Closing Date or the Option Closing
Date, as the case may be, any Underwriter shall fail to purchase and pay for the
portion of the Shares which such Underwriter has agreed to purchase and pay for
on such date (otherwise than by reason of any default on the part of the Company
or a Selling Shareholder), you, as Representatives of the Underwriters, shall
use your best efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Shareholders such amounts as may be agreed upon, and upon the terms set forth
herein, of the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If the aggregate
number of Shares that the defaulting Underwriter or Underwriters agreed to
purchase shall not be purchased in accordance with the preceding sentence, the
Company shall have the right, within 36 hours next succeeding the 36-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such remaining Shares on the terms herein
set forth. If during such two 36-hour periods you, as Representatives, and the
Company shall not have procured such other Underwriters, or any others, to
purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of Shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Firm Shares or Option Shares, as the case may be,
which they are obligated to purchase hereunder, to purchase the Firm Shares or
Option Shares, as the case may be, which such defaulting Underwriter or
Underwriters failed to purchase, or (b) if the aggregate number of shares of
Firm Shares or Option Shares, as the case may be, with respect to which such
default shall occur exceeds 10% of the Firm Shares or Option Shares, as the case
may be, covered hereby, the Company and the Selling Shareholders or you as the
Representatives of the Underwriters will have the right, by written notice given
within the next 36-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting Underwriters
or of the Company and the Selling Shareholders except for expenses to be borne
by the Company, the Selling Shareholders and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof. In the event of a default by any Underwriter or Underwriters, as set
forth in this Section 9 (and assuming that this Agreement is not terminated
pursuant to the immediately preceding sentences), the Closing Date or Option
Closing Date, as the case may be, may be postponed for such period, not
exceeding seven days, as you, as Representatives, may determine in order that
the required changes in the Registration Statement or in the Prospectus or in
any other documents or arrangements may be effected. The term "Underwriter"
includes any person substituted for a defaulting Underwriter. Any action taken
under this Section 9 shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
10. Notices. All communications hereunder shall be in writing and,
except as otherwise provided herein, will be mailed, delivered or telegraphed
and confirmed as follows: if to the Underwriters, to Xxxx Xxxxxxxx Xxxxxxx, 0000
Xxxx Xxxx Xxxx, Xxxxx 000, Xxxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxxx,
with copies to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
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28
Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000-0000,
Attention: Xxxxxx X. Xxxxx, Esq.; if to the Company or Selling Shareholders, to
WebTrends Corporation, 000 XX 0xx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx 00000,
Attention: Xxxxxxx Xxxxxxx, with copies to Xxxxxxx Coie LLP, 0000 XX Xxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx, 00000, Attention: Xxx X. Xxxxxx, Esq.
11. Termination. This Agreement may be terminated by you by notice to
the
Company and the Selling Shareholders as follows:
(a) at any time prior to the Closing Date if any of the
following has occurred: (i) since the respective dates as of which information
is given in the Registration Statement and the Prospectus, any material adverse
change in or affecting the condition, financial or otherwise, of the Company and
its subsidiaries taken as a whole or the business affairs, management, financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course of
business, (ii) any outbreak or escalation of hostilities or declaration of war
or national emergency after the date hereof or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, escalation, declaration, emergency, calamity, crisis or change
on the financial markets of the United States would, in your judgment, make the
offering or delivery of the Shares impracticable or inadvisable, (iii)
suspension of trading in securities on the New York Stock Exchange or the
American Stock Exchange or limitation on prices (other than limitations on hours
or numbers of days of trading) for securities on either such Exchange, or a halt
or suspension of trading in securities generally which are quoted on The Nasdaq
National Market System, or (iv) declaration of a banking moratorium by either
federal or New York State authorities; or
(b) as provided in Sections 7 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the Company,
as to any obligation of the Underwriters to purchase the Option Shares, upon the
occurrence at any time prior to the Option Closing Date of any of the events
described in subparagraph (a) above or as provided in Sections 7 and 9 of this
Agreement.
12. Limitation of Shareholder Liability. Notwithstanding anything in
this Agreement to the contrary, the liability of each Selling Shareholder under
the representations and warranties made by such Selling Shareholders pursuant to
Section 2(b) of this Agreement shall be limited to an amount equal to the net
proceeds received by such Selling Shareholder from the sale of the Shares.
13. Written Information. For all purposes under this Agreement
(including, without limitation, Section 1, Section 2, Section 3 and Section 8
hereof), the Company and the Selling Shareholders understand and agree with each
of the Underwriters that the following constitutes the only written information
furnished to the Company by or through the Representatives specifically for use
in preparation of the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto: (i) the per share "Price to
Public" and per share "Underwriting Discounts and Commissions" set forth on the
cover page of the Prospectus, and (ii) the information set forth under the
caption "Underwriting" in the Preliminary Prospectus and the Prospectus.
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29
14. Successors. This Agreement has been and is made solely for the
benefit of and shall be binding upon the Underwriters, the Company, the Selling
Shareholders and their respective successors, executors, administrators, heirs
and assigns, and the officers, directors and controlling persons referred to
herein, and no other person will have any right or obligation hereunder. The
term "successors" shall not include any purchaser of the Shares merely because
of such purchase.
15. 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 its directors or officers or the Selling Shareholders and (c)
delivery of and payment for the Shares under this Agreement.
Each provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable under any applicable
law or rule in any jurisdiction, such provision will be ineffective only to the
extent of such invalidity, illegality or unenforceability in such jurisdiction
or any provision hereof in any other jurisdiction.
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 Minnesota.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Shareholders and the several Underwriters in accordance with its terms.
Very truly yours,
WEBTRENDS CORPORATION
By:_________________________________
Xxxxxxx Xxxxxxx
Chief Executive Officer
SELLING SHAREHOLDERS LISTED ON
SCHEDULE B
By:_________________________________
Name:_______________________________
Attorney-in-Fact
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
Xxxx Xxxxxxxx Incorporated
SoundView Technology Group, Inc.
BancBoston Xxxxxxxxx Xxxxxxxx
As Representatives of the several Underwriters
By Xxxx Xxxxxxxx Incorporated
By:______________________________
Name:____________________________
Its:_____________________________
[SIGNATURE PAGE TO UNDERWRITING AGREEMENT]
31
SCHEDULE A
SCHEDULE OF UNDERWRITERS
1.
UNDERWRITER NUMBER OF FIRM MAXIMUM NUMBER
SHARES TO BE PURCHASED OF OPTION SHARES
Xxxx Xxxxxxxx Xxxxxxx...................
SoundView Technology Group, Inc. .......
BancBoston Xxxxxxxxx Xxxxxxxx Inc. .....
----------- ----------
Total................................... $ $
=========== ==========
32
SCHEDULE B
SELLER NUMBER OF MAXIMUM NUMBER
FIRM SHARES OF OPTION SHARES
[Company]...............................
Selling Shareholders:
[ ]
[ ]
---------- ---------
Total................................... ========== =========
