Exhibit 1.2
Xxxxxxx Xxxx and Xxxx
Draft of June 1, 1998
4FRONT TECHNOLOGIES, INC.
800,000 Shares (1)
(1) Plus an option to purchase from the Company up to 120,000 additional
shares to cover over-allotments.
1
Common Stock
UNDERWRITING AGREEMENT
(International Version)
_____ __, 1998
XXXXXXXXX & XXXXX EUROMARKETS
Panmure Xxxxxx & Co. Limited
As International Managers
c/x Xxxxxxxxx & Xxxxx Euromarkets
The Registry
Royal Mint Court
London EC3N 4EY
Ladies and Gentlemen:
4Front Technologies, Inc., a Delaware corporation (herein called the
Company), proposes to offer and sell 686,800 shares of its authorized but
unissued Common Stock, par value $.001 per share (herein called the Common
Stock), and the shareholders of the Company named in Schedule II hereto (herein
collectively called the Selling Securityholders) propose to sell an aggregate
of 113,200 shares of Common Stock (said 800,000 shares of Common Stock being
herein called the Underwritten Stock). The Company proposes to grant to the
International Managers (as hereinafter defined) an option to purchase up to
120,000 additional shares of Common Stock (herein called the Option Stock and
with the Underwritten Stock herein collectively called the Stock). The Common
Stock is more fully described in the Registration Statement and the Prospectus
hereinafter mentioned.
The Company and the Selling Securityholders severally hereby confirm the
agreements made with respect to the purchase of the Stock by the several
International Managers, for whom you are acting, named in Schedule I hereto
(herein collectively called the International Managers, which term shall also
include any Manager purchasing Stock pursuant to Section 2(b) hereof). You
represent and warrant that you have been authorized by each of the other
International Managers to enter into this Agreement on its behalf and to act
for it in the manner herein provided.
It is understood by all the parties that the Company and the Selling
Securityholders are concurrently entering into an agreement (the "U.S.
Underwriting Agreement") providing for the sale of 3,200,000 shares of Common
Stock in an offering to be conducted in the United States and Canada on the
Nasdaq National Market (the "U.S. Offering), through arrangements with certain
Managers in the United States, Xxxxxxxxx & Xxxxx LLC, First Albany Corporation,
Wheat First Securities, Inc. and Xxxxxxx Bros., L.P. (the "U.S. Underwriters"),
providing for the sale of 2,747,192 shares of Common Stock by the Company and
452,808 shares of Common Stock by the Selling Securityholders and an
overallotment option from the Company. Anything herein or therein to the
contrary notwithstanding, the respective closings under this Agreement and the
U.S. Underwriting Agreement are hereby made expressly conditional on one
another.
The International Managers hereunder and the U.S. Managers are
simultaneously entering into an Agreement between U.S. and International
Underwriting Syndicates (the "Agreement Between Syndicates"), which provides,
among other things, that Xxxxxxxxx & Xxxxx LLC shall act as the global
coordinator for the
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offering of the Common Stock and for the transfer of Common Stock between the
two syndicates and for consultation by the lead Manager hereunder with
Xxxxxxxxx & Xxxxx LLC prior to exercising the rights of the International
Managers under Section 8 herof.
The prospectuses for the U.S. Offering and for the International Offering
are identical, except that the prospectus for the International Offering
includes an Exhibit A incorporating certain additional information required by
EASDAQ.
In addition, this Agreement incorporates by reference certain provisions
from the U.S. Underwriting Agreement (including the related definitions of
terms, which are also used elsewhere herein) and, for purposes of applying the
same, references (whether in these precise words or their equivalent) in the
incorporated provisions to the U.S. Underwriters shall be to the International
Managers hereunder, to the Common Stock or the Stock shall be to the Common
Stock or the Stock hereunder as just defined, to this Agreement (meaning
therein the U.S. Underwriting Agreement) shall be to this Agreement (except
where this Agreement is already referred to or as the context may otherwise
require) and to the Managers or to Xxxxxxxxx & Xxxxx LLC shall be to the
addressees of this Agreement and to Xxxxxxxxx & Xxxxx Euromarkets, and in
general, all such provisions and defined terms shall be applied mutatis
mutandis as if the incorporated provisions were set forth in full herein having
regard to their context in this Agreement as opposed to the U.S. Underwriting
Agreement.
1. Representations and Warranties of the Company and the Significant
Selling Securityholders. The Company, the Significant Selling Securityholders
and each of the several Selling Securityholders hereby make to the
International Managers the same respective representations and warranties as
are set forth in Section 2 of the U.S. Underwriting Agreement, which Section is
incorporated herein by this reference.
2. Purchase of the Stock by the International Managers.
(a) On the basis of the representations and warranties and subject
to the terms and conditions herein set forth, the Company agrees to issue
and sell 686,800 shares of the Underwritten Stock to the several
International Managers, each Selling Securityholder agrees to sell to the
several International Managers the number of shares of the Underwritten
Stock set forth in Schedule II opposite the name of such Selling
Securityholder, and each of the International Managers agrees to purchase
from the Company and the Selling Securityholders the respective aggregate
number of shares of Underwritten Stock set forth opposite its name in
Schedule I. The price at which such shares of Underwritten Stock shall be
sold by the Company and the Selling Securityholders and purchased by the
several International Managers shall be $___ per share. The obligation of
each International Manager to the Company and each of the Selling
Securityholders shall be to purchase from the Company and the Selling
Securityholders that number of shares of the Underwritten Stock which
represents the same proportion of the total number of shares of the
Underwritten Stock to be sold by each of the Company and the Selling
Securityholders pursuant to this Agreement as the number of shares of the
Underwritten Stock set forth opposite the name of such International
Manager in Schedule I hereto represents of the total number of shares of
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the Underwritten Stock to be purchased by all International Managers
pursuant to this Agreement, as adjusted by you in such manner as you deem
advisable to avoid fractional shares. In making this Agreement, each
International Manager is contracting severally and not jointly; except as
provided in paragraphs (b) and (c) of this Section 2, the agreement of
each International Manager is to purchase only the respective number of
shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the International Managers
shall fail or refuse (otherwise than for a reason sufficient to justify
the termination of this Agreement under the provisions of Section 7 or 8
hereof) to purchase and pay for the number of shares of the Stock agreed
to be purchased by such International Manager or International Managers,
the Company or the Selling Securityholders shall immediately give notice
thereof to you, and the non-defaulting International Managers shall have
the right within 24 hours after the receipt by you of such notice to
purchase, or procure one or more other International Managers to purchase,
in such proportions as may be agreed upon between you and such purchasing
International Manager or International Managers and upon the terms herein
set forth, all or any part of the shares of the Stock which such
defaulting International Manager or International Managers agreed to
purchase. If the non-defaulting International Managers fail so to make
such arrangements with respect to all such shares and portion, the number
of shares of the Stock which each non-defaulting International Manager is
otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares
and portion which the defaulting International Manager or International
Managers agreed to purchase; provided, however, that the non-defaulting
International Managers shall not be obligated to purchase the shares and
portion which the defaulting International Manager or International
Managers agreed to purchase if the aggregate number of such shares of the
Stock exceeds 10% of the total number of shares of the Stock which al
International Managers agreed to purchase hereunder. If the total number
of shares of the Stock which the defaulting International Manager or
International Managers agreed to purchase shall not be purchased or
absorbed in accordance with the two preceding sentences, the Company and
the Selling Securityholders shall have the right, within 24 hours next
succeeding the 24hour period above referred to, to make arrangements with
other International Managers or purchasers satisfactory to you for
purchase of such shares and portion on the terms herein set forth. In any
such case, either you or the Company and the Selling Securityholders shall
have the right to postpone the Closing Date determined as provided in
Section 4 hereof for not more than seven business days after the date
originally fixed as the Closing Date pursuant to said Section 4 in order
that any necessary changes in the Registration Statement, the Prospectus
or any other documents or arrangements may be made. If neither the
non-defaulting International Managers nor the Company and the Selling
Securityholders shall make arrangements within the
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24hour periods stated above for the purchase of all the shares of the
Stock which the defaulting International Manager or International Managers
agreed to purchase hereunder, this Agreement shall be terminated without
further act or deed and without any liability on the part of the Company
or the Selling Securityholders to any non-defaulting International Manager
and without any liability on the part of any non-defaulting International
Manager to the Company or the Selling Securityholders. Nothing in this
paragraph (b), and no action taken hereunder, shall relieve any defaulting
International Manager from liability in respect of any default of such
International Manager under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth,
the Company grants an option to the several International Managers to
purchase, severally and not jointly, up to 120,000 shares in the aggregate
of the Option Stock from the Company at the same price per share as the
International Managers shall pay for the Underwritten Stock. Said option
may be exercised only to cover over-allotments in the sale of the
Underwritten Stock by the International Managers and may be exercised in
whole or in part at any time (but not more than once) on or before the
thirtieth day after the date of this Agreement upon written or telegraphic
notice by you to the Company setting forth the aggregate number of shares
of the Option Stock as to which the several International Managers are
exercising the option. If exercised, the option to purchase Option Shares
hereunder must be exercised simultaneously with the exercise (if any) by
the U.S. Underwriters of the corresponding option under the U.S.
Underwriting Agreement, and the closing of the sale of the Option Stock
hereunder shall take place simultaneously with the sale of Option Stock
under the U.S. Underwriting Agreement. Delivery of certificates for the
shares of Option Stock, and payment therefor, shall be made as provided in
Section 4 hereof. The number of shares of the Option Stock to be
purchased by each International Manager shall be the same percentage of
the total number of shares of the Option Stock to be purchased by the
several International Managers as such International Manager is purchasing
of the Underwritten Stock, as adjusted by you in such manner as you deem
advisable to avoid fractional shares.
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3. Offering by International Managers.
(a) The terms of the initial public offering by the International
Managers of the Stock to be purchased by them shall be as set forth in the
Prospectus. The International Managers may from time to time change the
public offering price after the closing of the initial public offering and
increase or decrease the concessions and discounts to dealers as they may
determine.
(b) The information set forth in the last paragraph on the front
cover page and under "Underwriting" in the Registration Statement, any
Preliminary Prospectus and the Prospectus relating to the Stock filed by
the Company (insofar as such information relates to the International
Managers) constitutes the only information furnished by the International
Managers to the Company for inclusion in the Registration Statement, any
Preliminary Prospectus, and the Prospectus, and you on behalf of the
respective International Managers represent and warrant to the Company
that the statements made therein are correct.
4. Delivery of and Payment for the Stock.
(a) Delivery of certificates for the shares of the Underwritten
Stock and the Option Stock (if the option granted by Section 2(c) hereof
shall have been exercised not later than 7:00 A.M., San Francisco time, on
the date two business days preceding the Closing Date), and payment
therefor, shall be made at the office of Xxxxxxx Xxxx and Xxxx
International, London, at 11:00 a.m. London time, on the fourth business
day after the date of this Agreement, or at such time on such other day,
not later than seven full business days after such fourth business day, as
shall be agreed upon in writing by the Company, the Selling
Securityholders and you. The date and hour of such delivery and payment
(which may be postponed as provided in Section 2(b) hereof) are herein
called the Closing Date.
(b) If the option granted by Section 2(c) hereof shall be exercised
after 7:00 a.m., San Francisco time, on the date two business days
preceding the Closing Date, delivery of certificates for the shares of
Option Stock, and payment therefor, shall be made at the office of Xxxxxxx
Xxxx and Xxxx International, London, at 11:00 a.m. London time, on the
third business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made
to the Company or its order, and payment for the Stock purchased from the
Selling Securityholders shall be made to the Custodian, for the account of
the Selling Securityholders, in each case in U.S. dollars by one or more
certified or official bank check or checks in same day funds. Such
payment shall be made upon delivery of certificates for the Stock to you
for the respective accounts of the several International
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Managers against receipt therefor signed by you. Certificates for the
Stock to be delivered to you shall be registered in such name or names and
shall be in such denominations as you may request at least one business
day before the Closing Date, in the case of Underwritten Stock, and at
least one business day prior to the purchase thereof, in the case of the
Option Stock. Such certificates will be made available to the Managers
for inspection, checking and packaging at the offices of Lewco Securities
Corporation, 00 Xxxxxxxx Xxxxx, Xxxxxxxxxx Xxxxxxxxx Xxxxx 0, Xxxxxx Xxxx,
XX 00000, on the business day prior to the Closing Date or, in the case of
the Option Stock, by 3:00 p.m., New York time, on the business day
preceding the date of purchase.
It is understood that you, individually and not on behalf of the
International Managers, may (but shall not be obligated to) make payment
to the Company and the Selling Securityholders for shares to be purchased
by any International Manager whose check shall not have been received by
you on the Closing Date or any later date on which Option Stock is
purchased for the account of such International Manager. Any such payment
by you shall not relieve such International Manager from any of its
obligations hereunder.
5. Further Agreements of the Company and the Selling Securityholders.
Each of the Company and the Selling Securityholders hereby makes with the
International Managers the same agreements as are set forth in Section 6 of the
U.S. Underwriting Agreement, which Section is incorporated herein by reference.
6. Indemnification and Contribution.
(a) Subject to the provisions of paragraph (f) of this Section 6,
the Company and the Significant Selling Securityholders jointly and
severally agree and the Selling Securityholders (other than the
Significant Selling Securityholders) severally and not jointly agree to
indemnify and hold harmless each International Manager and each person
(including each partner or officer thereof) who controls any
International Manager within the meaning of Section 15 of the Securities
Act from and against any and all losses, claims, damages or liabilities,
joint or several, to which such indemnified parties or any of them may
become subject under the Securities Act, the Exchange Act or the common
law or otherwise, and the Company and the Significant Selling
Securityholders jointly and severally agree and the Selling
Securityholders (other than the Significant Selling Securityholders)
severally and not jointly agree to reimburse each such International
Manager and controlling person for any legal or other expenses
(including, except as otherwise hereinafter provided, reasonable fees
and disbursements of counsel) incurred by the respective indemnified
parties in connection with defending against any such losses, claims,
damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the
respective indemnified parties, in each case arising out of or based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus
as part thereof and any Rule 462(b) registration statement) or any
post-effective amendment thereto (including any Rule 462(b) registration
statement), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not
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misleading, or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or the Prospectus
(as amended or as supplemented if the Company shall have filed with the
Commission and/or the Belgian Commission any amendment thereof or
supplement thereto) or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that (1) the indemnity agreements of the Company and
the Selling Securityholders contained in this paragraph (a) shall not
apply to any such losses, claims, damages, liabilities or expenses if such
statement or omission was made in reliance upon and in conformity with
information furnished as herein stated or otherwise furnished in writing
to the Company by or on behalf of any International Manager for use in any
Preliminary Prospectus or the Registration Statement or the Prospectus or
any such amendment thereof or supplement thereto, (2) the indemnity
agreement contained in this paragraph (a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any International Manager
from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof
(or to the benefit of any person controlling such International Manager)
if at or prior to the written confirmation of the sale of such Stock a
copy of the Prospectus (or the Prospectus as amended or supplemented) was
not sent or delivered to such person (excluding the documents incorporated
therein by reference) and the untrue statement or omission of a material
fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented) unless the
failure is the result of noncompliance by the Company with paragraph (c)
of Section 5 hereof (as incorporated from the U.S. Underwriting
Agreement), and (3) each Selling Securityholder (other than the
Significant Selling Securityholders) shall only be liable under this
paragraph with respect to (A) information pertaining to such Selling
Securityholder furnished by or on behalf of such Selling Securityholder
expressly for use in any Preliminary Prospectus or the Registration
Statement or the Prospectus or any such amendment thereof or supplement
thereto or (B) facts that would constitute a breach of any representation
or warranty of such Selling Securityholder set forth in Section 1 hereof.
The indemnity agreements of the Company and the Selling Securityholders
contained in this paragraph (a) and the representations and warranties of
the Company and the Selling Securityholders contained in Section1 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall
survive the delivery of and payment for the Stock.
(b) Each International Manager severally agrees to indemnify and
hold harmless the Company, each of its officers who signs the Registration
Statement on his own behalf or pursuant to a power of attorney, each of
its directors, each other International Manager and each person (including
each partner or officer thereof) who
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controls the Company or any such other International Manager within the
meaning of Section 15 of the Securities Act, and the Selling
Securityholders from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of
them may become subject under the Securities Act, the Exchange Act, or the
common law or otherwise and to reimburse each of them for any legal or
other expenses (including, except as otherwise hereinafter provided,
reasonable fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the
respective indemnified parties, in each case arising out of or based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement) or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (as amended or as supplemented
if the Company shall have filed with the Commission any amendment thereof
or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, if such statement or omission was made in reliance upon and in
conformity with information furnished as herein stated or otherwise
furnished in writing to the Company by or on behalf of such indemnifying
International Manager for use in the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto. The
indemnity agreement of each International Manager contained in this
paragraph (b) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified
party and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 6 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it
or upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in
such paragraphs, it will promptly give written notice (herein called the
Notice) of such service or notification to the party or parties from whom
indemnification may be sought hereunder. No indemnification provided for
in such paragraphs shall be available to any party who shall fail so to
give the Notice if the party to whom such Notice was not given was unaware
of the action, suit, investigation, inquiry or proceeding to which the
Notice would have related and was prejudiced by the failure to give the
Notice, but the omission so to notify such indemnifying party or
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parties of any such service or notification shall not relieve such
indemnifying party or parties from any liability which it or they may have
to the indemnified party for contribution or otherwise than on account of
such indemnity agreement. Any indemnifying party shall be entitled at its
own expense to participate in the defense of any action, suit or
proceeding against, or investigation or inquiry of, an indemnified party.
Any indemnifying party shall be entitled, if it so elects within a
reasonable time after receipt of the Notice by giving written notice
(herein called the Notice of Defense) to the indemnified party, to assume
(alone or in conjunction with any other indemnifying party or parties) the
entire defense of such action, suit, investigation, inquiry or proceeding,
in which event such defense shall be conducted, at the expense of the
indemnifying party or parties, by counsel chosen by such indemnifying
party or parties and reasonably satisfactory to the indemnified party or
parties; provided, however, that (i) if the indemnified party or parties
reasonably determine that there may be a conflict between the positions of
the indemnifying party or parties and of the indemnified party or parties
in conducting the defense of such action, suit, investigation, inquiry or
proceeding or that there may be legal defenses available to such
indemnified party or parties different from or in addition to those
available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to
the extent reasonably determined by such counsel to be necessary to
protect the interests of the indemnified party or parties and (ii) in any
event, the indemnified party or parties shall be entitled to have counsel
chosen by such indemnified party or parties participate in, but not
conduct, the defense. If, within a reasonable time after receipt of the
Notice, an indemnifying party gives a Notice of Defense and the counsel
chosen by the indemnifying party or parties is reasonably satisfactory to
the indemnified party or parties, the indemnifying party or parties will
not be liable under paragraphs (a) through (c) of this Section 6 for any
legal or other expenses subsequently incurred by the indemnified party or
parties in connection with the defense of the action, suit, investigation,
inquiry or proceeding, except that (A) the indemnifying party or parties
shall bear the legal and other expenses incurred in connection with the
conduct of the defense as referred to in clause (i) of the proviso to the
preceding sentence and (B) the indemnifying party or parties shall bear
such other expenses as it or they have authorized to be incurred by the
indemnified party or parties. If, within a reasonable time after receipt
of the Notice, no Notice of Defense has been given, the indemnifying party
or parties shall be responsible for any legal or other expenses incurred
by the indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 6, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a
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result of the losses, claims, damages or liabilities referred to in
paragraph (a) or (b) of this Section 6 (i) in such proportion as is
appropriate to reflect the relative benefits received by each indemnifying
party from the offering of the Stock or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of each indemnifying party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as
any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Securityholders on the one hand
and the International Managers on the other shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of
the Stock received by the Company and the Selling Securityholders and the
total underwriting discount received by the International Managers, as set
forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Stock. Relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by each
indemnifying party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro
rata allocation (even if the International Managers were treated as one
entity for such purpose) or by any other method of allocation which does
not take into account the equitable considerations referred to in the
first sentence of this paragraph (d). The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities, or
actions in respect thereof, referred to in the first sentence of this
paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or
claim which is the subject of this paragraph (d). Notwithstanding the
provisions of this paragraph (d), no International Manager shall be
required to contribute any amount in excess of the underwriting discount
applicable to the Stock purchased by such International Manager. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
International Managers' obligations in this paragraph (d) to contribute
are several in proportion to their respective underwriting obligations and
not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted
against it in respect of which contribution may be sought, it will
promptly give written notice of such service to the party or parties from
whom contribution may be sought, but the omission so to notify such party
or parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise (except as specifically provided in paragraph (c) of this
Section 6).
(e) Neither the Company nor the Selling Securityholders will,
without the prior written consent of each International Manager, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding
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in respect of which indemnification may be sought hereunder (whether or
not such International Manager or any person who controls such
International Manager within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding) unless such settlement, compromise or consent includes
an unconditional release of such International Manager and each such
controlling person from all liability arising out of such claim, action,
suit or proceeding.
(f) The liability of each Selling Securityholder (other than the
Significant Selling Securityholders) under such Selling Securityholder's
representations and warranties contained in Section 1 hereof and under the
indemnity and reimbursement agreements contained in the provisions of this
Section 6 and Section 10 hereof shall be limited to an amount equal to the
net proceeds from the Stock sold by such Selling Securityholder to the
International Managers. The Company and the Selling Securityholders may
agree, as among themselves and without limiting the rights of the
International Managers under this Agreement, as to the respective amounts
of such liability for which they each shall be responsible.
7. Termination. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and the
Selling Securityholders if after the date of this Agreement trading in the
Common Stock shall have been suspended on Nasdaq or EASDAQ, or if there shall
have occurred (i) the engagement in hostilities or an escalation of major
hostilities by the United States or any member country of the European Union or
the declaration of war or a national emergency by the United States or any
member country of the European Union on or after the date hereof, (ii) any
outbreak of hostilities or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
calamity, crisis or change in economic or political conditions in the financial
markets of the United States would, in the International Managers' reasonable
judgment, make the offering or delivery of the Stock impracticable,
(iii) suspension of trading in securities generally or a material adverse
decline in value of securities generally on the New York Stock Exchange, the
American Stock Exchange, The Nasdaq Stock Market or EASDAQ, or limitations on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such exchange or system, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
International Managers' reasonable opinion materially and adversely affects or
will materially or adversely affect the business or operations of the Company,
(v) declaration of a banking moratorium by The Bank of England or any U.S.
federal or New York State authorities or (vi) the taking of any action by The
Bank of England or any U.S. federal, state or local government or agency in
respect of its monetary or fiscal affairs which in the International Managers'
reasonable opinion has a material adverse effect on the securities markets in
the United States or the European Union. If this Agreement shall be terminated
12
pursuant to this Section 7, there shall be no liability of the Company or the
Selling Securityholders to the International Managers and no liability of the
International Managers to the Company or the Selling Securityholders; provided,
however, that in the event of any such termination the Company and the Selling
Securityholders agree to indemnify and hold harmless the International Managers
from all costs or expenses incident to the performance of the obligations of
the Company and the Selling Securityholders under this Agreement, including all
costs and expenses referred to in paragraphs (i) and (j) of Section 6 of the
U.S. Underwriting Agreement.
8. Conditions of International Managers' Obligations. Subject to the
Agreement Between Syndicates, the obligations of the several International
Managers to purchase and pay for the Stock shall be subject to the performance
by the Company and by the Selling Securityholders of all their respective
obligations to be performed hereunder at or prior to the Closing Date or any
later date on which Option Stock is to be purchased, as the case may be, and
additional conditions identical to those set forth in Section 9 of the U.S.
Underwriting Agreement, which Section is incorporated herein by this reference;
provided that the reference in Section 9(k) of the U.S. Underwriting Agreement
to the International Underwriting Agreement shall be deemed to refer to the
U.S. Underwriting Agreement and the reference therein to Sections 8 and 9 shall
be deemed to refer to Sections 9 and 10.
9. Conditions of the Obligation of the Company and the Selling
Securityholders. The obligation of the Company and the Selling Securityholders
to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective, (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission, (c) the
International Prospectus shall have become effective on EASDAQ and no
suspension thereof shall be in effect, and (d) the U.S. Underwriting Agreement
shall not have been terminated and all of the conditions set forth in Sections
9 and 10 thereof shall have been satisfied or waived.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by the Company and the Selling
Securityholders by giving notice to you. Any such termination shall be without
liability of the Company and the Selling Securityholders to the International
Managers and without liability of the International Managers to the Company or
the Selling Securityholders; provided, however, that in the event of any such
termination the Company and the Selling Securityholders jointly and severally
agree to indemnify and hold harmless the International Managers from all costs
or expenses incident to the performance of the obligations of the Company and
the Selling Securityholders under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 6 of the U.S.
Underwriting Agreement.
10. Reimbursement of Certain Expenses. Each of the Company and the
Selling Securityholders hereby jointly and severally agree to pay or cause to
be paid certain expenses
13
on the same terms as are set forth in Section 11 of the U.S. Underwriting
Agreement, which Section is incorporated herein by this Reference.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of the Company, the Selling Securityholders and the several
International Managers and, with respect to the provisions of Section 6 hereof,
the several parties (in addition to the Company, the Selling Securityholders
and the several International Managers) indemnified under the provisions of
said Section 6, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give
to any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser,
as such purchaser, of any of the Stock from any of the several International
Managers.
12. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the International
Managers, shall be mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx
Euromarkets, The Registry, Royal Mint Court, London EC3N 4EY, England; and if
to the Company, shall be mailed, telegraphed or delivered to 4Front
Technologies, 4Front Technologies, Inc., 00X Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX,
Xxxxxxx; and if to the Selling Securityholders, shall be mailed, telegraphed or
delivered to the Selling Securityholders in care of Xxxx Xxxxx at 4Front
Technologies, Inc. at the above address. All notices given by telegraph shall
be promptly confirmed by letter.
13. 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 International Manager or controlling person thereof, or by or on
behalf of the Company or the Selling Securityholders or their respective
directors or officers, and (c) delivery and payment for the Stock under this
Agreement; provided, however, that if this Agreement is terminated prior to the
Closing Date, the provisions of paragraphs (l) of Section 6 of the U.S.
Underwriting Agreement shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of California.
Please sign and return to the Company and to the Selling Securityholders in
care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Securityholders and the several International Managers in accordance with its
terms.
Very truly yours,
14
4FRONT TECHNOLOGIES, INC.
By
--------------------------
[Name]
[Title]
SELLING SECURITYHOLDERS:
[List Names]
By
--------------------------
[Attorney-in-Fact]
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX EUROMARKETS
Panmure Xxxxxx & Co. Limited
By Xxxxxxxxx & Xxxxx Euromarkets
By
---------------------------
Managing Director
Acting on behalf of the several International Managers,
including themselves, named in Schedule I hereto.
15
SCHEDULE I
INTERNATIONAL MANAGERS
Number of
Shares to be
Managers Purchased
-------- ------------
Xxxxxxxxx & Xxxxx Euromarkets
Panmure Xxxxxx & Co. Limited . . . . . . . . . . ________
Total. . . . . . . . . . . . . . . . . . 800,000
16
SCHEDULE II
SELLING SECURITYHOLDERS
Number of
Name of Shares
Selling Securityholders to be Sold
----------------------- ----------
The Claudius Trust . . . . . . . . . . . . . . . . . . . . . . . 16,000
Xxxx Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000
Xxxxx Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 8,460
Xxxxxxx Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Xxxxxxx Xxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Xxxxxx Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Xxxx XxXxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Xxx Xxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,800
Xxxxxx & Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . 4,540
Xxxxx Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 4,000
Xxxxx Xxxxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . 3,200
Xxxxx Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
Xxxxx Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 2,500
Xxxxxx Xxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 2,500
Xxxxxxx Xxxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . 2,500
Xxxxxx Xxxxx Xxxx. . . . . . . . . . . . . . . . . . . . . . . . 2,000
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Xxxxxx Xxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Xxxxxxx XxXxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . 2,000
Xxxxxx Xxxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Xxxxxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 1,500
Xxxx Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
Xxxxx Xxxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 800
Xxxx Xxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Xxxxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 500
Xxxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 350
Xxxxxx XxXxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 350
Xxxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 350
Xxxxxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 300
Xxxxxxx Xxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 300
Xxx Xxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Xxxxx Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Xxxxxxx XxXxx. . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxxxx Xxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 150
17
Number of
Name of Shares
Selling Securityholders to be Sold
----------------------- ----------
Xxxxxx Xxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxxxx Xxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxxx Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxxx Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxx Xxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxxx Xxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxxxxxx Xxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . 150
Xxxxx Xxxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 100
Total . . . . . . . . . . . . . . . . . . . . . . . . . 113,200
--------
--------
18
