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Exhibit 1
- SHARES
QUANTUM BRIDGE COMMUNICATIONS, INC.
COMMON STOCK, PAR VALUE $0.001 PER SHARE
UNDERWRITING AGREEMENT
- , 2001
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- , 2001
Xxxxxx Xxxxxxx & Co. Incorporated
Chase Securities, Inc.
X.X. Xxxxxx Securities Inc.
Xxxxxxxxx Xxxxxxxx, Inc.
Xxxxxx Freres & Co. LLC
UBS Warburg LLC
c/o Morgan Xxxxxxx & Co.
Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Quantum Bridge Communications, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "UNDERWRITERS") - shares (the "FIRM SHARES") of its
common stock, par value $0.001 per share. The Company and certain stockholders
of the Company named in Schedule II hereto (the "SELLING STOCKHOLDERS") also
severally propose to issue and sell to the several Underwriters not more than an
additional - shares (the "ADDITIONAL SHARES") of common stock, par value
$0.001 per share, of the Company if and to the extent that you, as Managers of
the offering, shall have determined to exercise, on behalf of the Underwriters,
the right to purchase such shares of common stock granted to the Underwriters in
Section 3 hereof. Of the Additional Shares, - shares are to be issued and
sold by the Company and shares are to be sold by the Selling Stockholders, each
Selling Stockholder selling the number of shares set forth opposite his or her
name on Schedule II hereto. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES." The shares of common
stock, par value $0.001 per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"COMMON STOCK." The Company and the Selling Stockholders are hereinafter
sometimes collectively referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement, including a prospectus, relating to
the Shares. The registration statement as amended at the time it becomes
effective, including the information, if any, deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS."
The term "preliminary prospectus" means each prospectus included in the
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Registration Statement prior to the time it becomes effective. If the Company
has filed an abbreviated registration statement to register additional shares of
Common Stock pursuant to Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462 Registration Statement.
Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX") has agreed to
reserve up to - of the Shares to be purchased by it under this Agreement
for sale to the directors, officers, employees and business associates of the
Company and other parties related to the Company (collectively, the
"PARTICIPANTS"), as set forth in the Prospectus under the heading "Underwriters"
(the "DIRECTED SHARE PROGRAM"). The Shares to be sold by Xxxxxx Xxxxxxx and its
affiliates pursuant to the Directed Share Program are referred to hereinafter as
the "DIRECTED SHARES" and will be sold by Xxxxxx Xxxxxxx and its affiliates
pursuant to the terms of this Agreement at the Public Offering Price. Any
Directed Shares not confirmed for purchase by any Participants by the beginning
of the first business day after the date on which this Agreement is executed
will be offered to the public by the Underwriters as set forth in the
Prospectus.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by
the Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any 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 not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (iii) the
Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
do not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own its property and to conduct its
business as
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described in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
Company.
(d) The Company has only one subsidiary, Quantum Bridge
Communications Limited, which does not constitute a "significant
subsidiary" of the Company within the meaning of Rule 1-02(w) of
Regulation S-X promulgated by the Commission and the operations of which
are not material to the Company.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the issuance of
the Shares to be sold by the Company have been duly authorized and are
validly issued, fully paid and non-assessable.
(h) The Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights.
(i) There are no outstanding options or warrants to acquire shares
of capital stock of the Company except as otherwise disclosed in the
Registration Statement and the Prospectus and, with respect to options,
except as otherwise have been granted under the stock plans described in
the Prospectus.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law, the certificate of
incorporation or by-laws of the Company, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the
Company, or conflict with, result in a breach of any of the terms and
provisions of, or constitute a default under, any agreement or other
instrument binding upon the Company that is material to the Company, and
no consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
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(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company from that set forth in the Prospectus, exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement.
(l) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company is a party
or to which any of the properties of the Company is subject that are
required to be described in the Registration Statement or the Prospectus
and are not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(m) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
(n) The Company is not and, after giving effect to the offering and
sale of the Shares to be sold by the Company and the application of the
proceeds thereof as described in the Prospectus, will not be required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(o) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its business
and (iii) is in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate, have
a material adverse effect on the Company.
(p) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company.
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(q) Except as otherwise described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement. The Company has obtained waivers with respect to all such
rights as they relate to the offering of the Shares and the Registration
Statement.
(r) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) the Company
has not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary
course of business; (2) the Company has not purchased any of its
outstanding capital stock (other than repurchases from former employees in
amounts not material to the Company) nor declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (3) there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company, except in each case as described in the Prospectus.
(s) The Company owns all material patents, patent rights,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
currently employed by it in connection with the business now operated by
it, or possesses adequate licenses or other rights to use the same; and
the Company has not received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing which
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a material adverse effect on the
Company.
(t) The Company does not own any real property; the Company has good
and marketable title to all personal property owned by it which is
material to the business of the Company, free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere in any material respect with the use made and currently proposed
to be made of such property by the Company; and any real property and
buildings held under lease by the Company are held by it under valid,
subsisting and enforceable leases with such exceptions as are not material
and do not interfere in any material respect with the use made and
currently proposed to be made of such property and buildings by the
Company, in each case except as described in the Prospectus.
(u) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as, in
the
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reasonable judgment of the Company, are prudent and customary in the
business in which it is engaged; the Company has not been refused any
insurance coverage sought or applied for; and the Company has no reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a material adverse effect on the Company, except as
described in the Prospectus.
(v) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (1) transactions are
executed in accordance with the general or specific authorizations of
management; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (3) access to
assets is permitted only in accordance with the general or specific
authorization of management; and (4) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(w) The Company possesses all material certificates, authorizations
and permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct its businesses, and the Company has not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the Company.
(x) No material labor dispute with the employees of the Company
exists, or, to the knowledge of the Company, is imminent; and the Company
is not aware of any existing, threatened or imminent labor disturbance by
the employees of any of its principal suppliers, manufacturers or
contractors that could reasonably be expected to have a material adverse
effect on the Company.
(y) Xxxxxx Xxxxxxxx LLP are, and during the periods covering their
report included in the Registration Statement and the Prospectus were,
independent accountants with respect to the Company as required by the
Securities Act.
(z) The Registration Statement, the Prospectus and any preliminary
prospectus comply, and any amendments or supplements thereto will comply,
with any applicable laws or regulations of foreign jurisdictions in which
the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share
Program.
(aa) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other than those
obtained, is required in
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connection with the offering of the Directed Shares in any jurisdiction
where the Directed Shares are being offered.
(bb) The Company has not offered, or caused Xxxxxx Xxxxxxx or its
affiliates to offer, Shares to any person pursuant to the Directed Share
Program with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or
type of business with the Company or (ii) a trade journalist or
publication to write or publish favorable information about the Company or
its products.
2. Representations and Warranties of the Selling Stockholders. Each
of the Selling Stockholders, severally and not jointly, represents and warrants
to and agrees with each of the Underwriters that:
(a) This Agreement has been duly executed and delivered by or on
behalf of such Selling Stockholder.
(b) The execution and delivery by such Selling Stockholder of, and
the performance by such Selling Stockholder of its obligations under, this
Agreement, the Custody Agreement signed by such Selling Stockholder and -
, as Custodian, relating to the deposit of the Shares to be sold by
such Selling Stockholder (the "Custody Agreement") and the Power of
Attorney appointing certain individuals as such attorneys-in-fact of such
Selling Stockholder to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the
"Power of Attorney") will not contravene any provision of applicable law
or any judgment, order or decree of any governmental body, agency or court
having jurisdiction over such Selling Stockholder, or conflict with,
result in a breach of any of the terms and provisions of, or constitute a
default under, any agreement or other instrument binding upon such Selling
Stockholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by such Selling Stockholder of its obligations under this
Agreement, the Custody Agreement or the Power of Attorney of such Selling
Stockholder, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares.
(c) Such Selling Stockholder now has, and on the Option Closing Date
will have, valid title to the Shares to be sold by such Selling
Shareholder, free and clear of any liens, encumbrances, equities and other
claims, and the legal right and power, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement and
the Power of Attorney and to sell, transfer and deliver the Shares to be
sold by such Selling Stockholder; and delivery of the Shares to be sold by
the Selling Stockholder, assuming payment therefor in accordance with the
terms of this Agreement, will pass title to such Shares, free and clear of
any adverse claims, as defined in Section 8-102 of the
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Uniform Commercial Code as in effect in The Commonwealth of Massachusetts,
and any other liens, encumbrances, equities and claims attributable to
such Selling Stockholder.
(d) The Shares to be sold by such Selling Stockholder pursuant to
this Agreement have been duly authorized and are validly issued, fully
paid and non-assessable.
(e) The Custody Agreement and the Power of Attorney have been duly
executed and delivered by such Selling Stockholder and are valid and
binding agreements of such Selling Stockholder.
(f) The information relating to such Selling Stockholder furnished
to the Company in writing by or on behalf of such Selling Stockholder for
use in the Registration Statement or the Prospectus is, and on the Option
Closing Date will be, true and correct.
(g) Such Selling Stockholder has read and is familiar with the
Registration Statement and the Prospectus and, to the knowledge of such
Selling Stockholder, (i) the Registration Statement, when it became
effective, did not contain and, as amended or supplemented, if applicable,
will not contain any 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 not misleading and (ii) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. Agreements to Sell and Purchase. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective number of Firm Shares set forth in Schedule I hereto
opposite its name at $ - a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, each Seller, severally and
not jointly, agrees to sell to the Underwriters the Additional Shares, and the
Underwriters shall have a one-time right to purchase, severally and not jointly,
at the Purchase Price from the Company up to - Additional Shares and from
each Selling Stockholder up to the number of Additional Shares set forth
opposite his or her name on Schedule II hereto. If you, on behalf of the
Underwriters, elect to exercise such option, you shall so notify the Company in
writing not later than thirty (30) days after the date of this Agreement, which
notice shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the
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Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase from each Seller the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of Firm
Shares. In the event such option is exercised for less than all of the
Additional Shares, the Additional Shares to be purchased shall be purchased
first from the Selling Stockholders, pro rata on the basis of the respective
numbers of shares set forth opposite the names of the Selling Stockholders in
Schedule II (subject to such adjustments to eliminate fractional shares as you
may determine), and then, to the extent more than ________ Additional Shares are
to be purchased, from the Company.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
ending 180 days after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or other securities, in cash
or otherwise. The foregoing sentence shall not apply to: (A) the Shares to be
sold hereunder; (B) the issuance by the Company of shares of Common Stock upon
the exercise of an option or warrant or the conversion of a security outstanding
on the date hereof that is disclosed in the Prospectus or of which the
Underwriters have been advised in writing; (C) the issuance by the Company of
shares of Common Stock, or options or warrants exercisable therefor, in
connection with an acquisition of assets or stock of another company or in
connection with the sale of the Company pursuant to a merger, sale of stock or
otherwise or (D) the grant of shares of Common Stock or an option to purchase
Common Stock, or the issuance of shares of Common Stock upon exercise of
options, under the stock plans described in the Prospectus, provided, however,
that prior to the issuance of any shares of Common Stock as contemplated by
clause (C) or (D), including shares of Common Stock to be issued upon exercises
of options or warrants contemplated by either of such clauses, the recipient of
such shares executes and delivers to you on or prior to the date of such
issuance a "lock-up" agreement in the form of Exhibit A-2 hereto.
4. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to
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be offered to the public initially at $ - a share (the "PUBLIC OFFERING
PRICE") and to certain dealers selected by you at a price that represents a
concession not in excess of $ - a share under the Public Offering Price.
5. Payment and Delivery. Payment for the Firm Shares shall be made
to the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on -, 2001, or at such other
time on the same or such other date, not later than -, 2001, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "CLOSING DATE".
Payment for any Additional Shares to be sold by each Seller shall be
made to such Seller in Federal or other funds immediately available in New York
City against delivery of such Additional Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on the date
specified in the notice described in Section 3 or at such other time on the same
or on such other date, in any event not later than -, 2001, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "OPTION CLOSING DATE".
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of
the Company to sell the Shares to the Underwriters and the several obligations
of the Underwriters to purchase and pay for the Shares on the Closing Date and
the Option Closing Date, as the case may be, are subject to the condition that
the Registration Statement shall have become effective not later than - p.m.,
New York City time on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date and the Option Closing Date, as the case may be:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any
securities of the Company by
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any "nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date and the
Option Closing Date, as the case may be, a certificate, dated such date
and signed by an executive officer of the Company, to the effect set forth
in Section 6(a)(i) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct
as of such date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be performed
or satisfied hereunder on or before such date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date and the
Option Closing Date, as the case may be, an opinion of Xxxx and Xxxx LLP,
outside counsel for the Company, dated such date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Delaware, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing
in the Commonwealths of Massachusetts and Virginia and the States of
California, Colorado, Florida, New Hampshire and Ohio;
(ii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
(iii) the shares of Common Stock outstanding prior to the
issuance of the Shares to be sold by the Company have been duly
authorized and are validly issued, fully paid and non-assessable;
(iv) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the
terms of
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this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject
to any statutory preemptive right under the General Corporation Law
of the State of Delaware or, to the knowledge of such counsel,
similar contractual rights, except for such contractual rights as
have been waived with respect to such Shares prior to the Closing
Date;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not (A) contravene any provision of applicable law, the
certificate of incorporation or by-laws of the Company, or, to the
knowledge of such counsel, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or (B) conflict with, result in a breach of any of the terms
and provisions of, or constitute a default under, any agreement or
other instrument binding upon the Company that is filed as an
exhibit to the Registration Statement; and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its
obligations under this Agreement, except such as may be required by
the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares;
(vii) the statements (A) in the Prospectus under the caption
"Description of Capital Stock" and in the first, second, fourth,
sixth, seventh, ninth, tenth and eleventh paragraphs under the
caption "Underwriters" and (B) in the Registration Statement in
Items 14 and 15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information required with respect to
such legal matters, documents and proceedings and fairly summarize
in all material respects the matters referred to therein;
(viii) to the knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened to which the Company
is a party or to which any of the properties of the Company is
subject that are required by the Securities Act or the applicable
rules and regulations of the Commission thereunder to be described
in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents
that are required by the Securities Act or the applicable rules and
regulations of the Commission thereunder to be described in the
Registration Statement or the Prospectus or to be filed as
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exhibits to the Registration Statement that are not described or
filed as required;
(ix) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended; and
(x) (A) the Registration Statement and Prospectus (except for
financial statements and schedules and other financial and
statistical data included therein as to which such counsel need not
express any opinion) comply as to form in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder; and (B) nothing has come to the attention of
such counsel that causes such counsel to believe that (1) the
Registration Statement (except for financial statements and
schedules and other financial and statistical data as to which such
counsel need not express any belief) at the time it became effective
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (2) the Prospectus
(except for financial statements and schedules and other financial
and statistical data as to which such counsel need not express any
belief) contained as of its date, or contains as of the date of such
opinion, any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(d) The Underwriters shall have received on the Closing Date and the
Option Closing Date, as the case may be, an opinion of Ropes & Xxxx,
counsel for the Underwriters, dated such date, covering the matters
referred to in Sections 6(c)(iv), 6(c)(v), 6(c)(vii) (but only as to the
statements in the Prospectus under "Description of Capital Stock" and
"Underwriters") and 6(c)(x) above.
With respect to Section 6(c)(x) above, Xxxx and Xxxx LLP and Ropes &
Xxxx may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified.
(e) The Underwriters shall have received on the Option Closing Date
an opinion of Xxxx and Xxxx LLP, counsel for the Selling Stockholders,
dated the Option Closing Date, to the effect that:
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(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Stockholders;
(ii) the Power of Attorney of each Selling Stockholder has
been duly executed and delivered by such Selling Stockholder, the
Custody Agreement has been duly executed and delivered by or on
behalf of such Selling Stockholder, and such Power of Attorney and
the Custody Agreement are valid and binding agreements of such
Selling Stockholder;
(iii) each Selling Stockholder has the legal right to enter
into this Agreement, the Custody Agreement and the Power of Attorney
and to sell, transfer and deliver the Shares to be sold by such
Selling Stockholder, subject to such approvals as may be required by
the securities or Blue Sky laws of the various states in connection
with the offer and sale of such Shares; and
(iv) upon the Underwriters obtaining control of the Shares to
be sold by the Selling Stockholders and assuming the Underwriters
purchase such Shares for value and without notice of an adverse
claim to such Shares within the meaning of Section 8-102 of the
Uniform Commercial Code as in effect in The Commonwealth of
Massachusetts, the Underwriters will have acquired all rights of the
Selling Stockholders in such Shares free of any adverse claim, any
lien in favor of the Company and any restrictions on transfer
imposed by the Company.
The opinions of Xxxx and Xxxx LLP described in Section 6(c) above
and this Section 6(e) shall be rendered to the Underwriters at the request
of the Company and shall so state therein.
(f) The Underwriters shall have received, on each of the date hereof
and the Closing Date and Option Closing Date, as the case may be, a letter
dated the date hereof or the Closing Date and Option Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from
Xxxxxx Xxxxxxxx LLP, independent public accountants, 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; provided, however, that the letter delivered on the
Closing Date shall use a "cut-off date" not earlier than the date hereof.
(g) The "lock-up" agreements, substantially in the forms of (i)
Exhibit A-1 hereto between you and each officer and director of the
Company and (ii) Exhibit A-2 hereto between you and each other
stockholder, option holder and warrant holder of the Company, relating to
sales and certain other dispositions of
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shares of Common Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on the Closing
Date and Option Closing Date.
(h) The Shares shall have been accepted for listing and trading on
the Nasdaq National Market, subject to official notice of issuance.
(i) The Underwriters shall have received on the Option Closing Date
a certificate dated the Option Closing Date and signed by or on behalf of
each of the Selling Stockholders to the effect that the representations
and warranties of such Selling Stockholder contained in this Agreement are
true and correct as of the Option Closing Date and that such Selling
Stockholder has complied with all of the agreements and satisfied all of
the conditions to be performed or satisfied on the part of such Selling
Stockholder hereunder on or before the Option Closing Date.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such other documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares and other matters related to the issuance of the Additional Shares.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, seven signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 7(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any
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event shall occur or condition exist as a result of which it is necessary
to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the opinion of counsel
for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company) to
which Shares may have been sold by you on behalf of the Underwriters and
to any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided, however, that the Company shall not be required to
qualify in any jurisdiction where it would be required to (i) give a
general consent to the service of process or submit to general personal
jurisdiction or (ii) assume any ongoing reporting obligation to the
authorities in such jurisdiction.
(e) To make generally available to the security holders of the
Company and to you as soon as practicable an earning statement covering
the twelve-month period ending -, 2002 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of
legal counsel and accountants of the Company in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program
and stamp duties, similar taxes or duties or other taxes, if any, incurred
by the Underwriters in connection with the Directed Share Program, (iv)
the cost of printing or producing any Blue Sky memorandum in connection
with the offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as provided in Section 7(d)
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hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky memorandum, (v) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred
in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., including
all fees and reasonable disbursements of counsel to the Underwriters
incurred on behalf of Xxxxxx Xxxxxxx in its capacity as "qualified
independent underwriter" (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating
to the Common Stock and all costs and expenses incident to listing the
Shares on the Nasdaq National Market, (vii) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (ix) the costs and expenses of
the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
the cost of any aircraft chartered in connection with the road show, and
(x) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise
made in this Section. It is understood, however, that except as provided
in this Section, Section 8 entitled "Indemnity and Contribution", Section
9 entitled "Directed Share Program Indemnification", and the last
paragraph of Section 11 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them and
any advertising expenses connected with any offers they may make. Each
Selling Stockholder, severally and not jointly, agrees to pay or cause to
be paid (i) all taxes, if any, on the transfer and sale of the Shares
being sold by such Selling Stockholder and (ii) the fees, disbursements
and expenses of such Selling Stockholder of its own counsel if separate
from the counsel to the Company. The provisions of this Section 7(f) shall
not supersede or otherwise affect any agreement that such Selling
Stockholder may otherwise have for the allocation of expenses among
themselves.
(g) To place stop transfer orders on any Directed Shares that have
been sold to Participants subject to the three month restriction on sale,
transfer, assignment, pledge or hypothecation imposed by NASD Regulation,
Inc. under its Interpretative Material 2110-1 on free-riding and
withholding to the extent necessary to ensure compliance with the three
month restrictions.
(h) To comply with all applicable securities and other applicable
laws, rules and regulations in each jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
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(i) To enforce the lock-up provisions of the Second Amended and
Restated Registration Rights Agreement by and among the Company and
certain of its stockholders dated as of April 10, 2000, and to place stop
transfer orders on any shares of its Common Stock necessary to ensure
compliance with any lock-up provision between the Company and its
stockholders, including, without limitation, the lock-up provisions
contained in the Second Amended and Restated Registration Rights
Agreement.
8. Indemnity and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from which the person
asserting any such losses, claims, damages or liabilities purchased Shares, or
any person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Company with Section 7(a) hereof. The Company
also agrees to indemnify and hold harmless Xxxxxx Xxxxxxx and each person, if
any, who controls Xxxxxx Xxxxxxx within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and judgments incurred as a result of the
participation of Xxxxxx Xxxxxxx as a "qualified independent underwriter" within
the meaning of Rule 2720 of the National Association of Securities Dealers'
Conduct Rules in connection with the offering of the Common Stock, except for
any losses, claims, damages, liabilities, and judgments resulting from the
willful misconduct of Xxxxxx Xxxxxxx or such controlling person.
(b) Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any
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Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the liability of each Selling
Stockholder under this Agreement shall be limited to an amount equal to the
Public Offering Price less related underwriting discounts and commissions
multiplied by the number of Additional Shares sold by such Selling Stockholder.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Selling Stockholders and the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnities from the Selling Stockholders and the Company, as the case may be,
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 8(a), 8(b) or 8(c), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay 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, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (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 representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm, in
addition to any local counsel, for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) the fees and expenses of
more than one separate firm, in addition to
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any local counsel, for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act and (iii) the fees and expenses of more than one separate firm, in
addition to any local counsel, for all Selling Stockholders, and that all such
fees and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Underwriters and the control persons of any
Underwriters, such firm shall be designated in writing by Xxxxxx Xxxxxxx. In the
case of any such separate firm for the Company, and such directors, officers and
control persons of the Company, such firm shall be designated in writing by the
Company. In the case of any such separate firm for the Selling Stockholders,
such firm shall be designated in writing by the persons named as
attorneys-in-fact for the Selling Stockholders under the Powers of Attorney.
Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to Section 8(a) hereof in respect of such action or proceeding,
then in addition to such separate firm for the all Underwriters and all persons,
if any, who control any Underwriter within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, the indemnifying party
shall be liable for the reasonable fees and expenses of not more than one
separate firm, in addition to any local counsel, for Xxxxxx Xxxxxxx in its
capacity as a "qualified independent underwriter" and all persons, if any, who
control Xxxxxx Xxxxxxx within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act. 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
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(e) To the extent the indemnification provided for in Section 8(a),
8(b) or 8(c) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Sellers on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 8(e)(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
8(e)(i) above but also the relative fault of the Sellers on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Sellers on the one hand and the Underwriters on the other hand in
connection with the
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offering of the Shares shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Shares (before deducting expenses)
received by the Sellers and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Sellers on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Sellers or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 8 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 that does not take account of the
equitable considerations referred to in Section 8(e). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no Selling Stockholder shall be required to contribute
any amount in excess of the Public Offering Price less related underwriting
discounts and commissions multiplied by the number of Additional Shares sold by
such Selling Stockholder. 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 remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company and the Selling Stockholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter or by or on behalf of the Selling
Stockholders or the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
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9. Directed Share Program Indemnification. (a) The Company agrees to
indemnify and hold harmless Xxxxxx Xxxxxxx and its affiliates and each person,
if any, who controls Xxxxxx Xxxxxxx or its affiliates within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act (the
"XXXXXX XXXXXXX ENTITIES"), from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) (i) caused by any untrue statement or alleged untrue statement
of a material fact contained in any material prepared by or with the consent of
the Company for distribution to Participants in connection with the Directed
Share Program, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) caused by the failure of any Participant to pay for
and accept delivery of Directed Shares that the Participant has agreed to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program other than losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of Xxxxxx Xxxxxxx Entities.
(b) In case any proceeding (including any governmental
investigation) shall be instituted involving any Xxxxxx Xxxxxxx Entity in
respect of which indemnity may be sought pursuant to Section 9(a), the Xxxxxx
Xxxxxxx Entity seeking indemnity shall promptly notify the Company in writing
and the Company, upon request of the Xxxxxx Xxxxxxx Entity, shall retain counsel
reasonably satisfactory to the Xxxxxx Xxxxxxx Entity to represent the Xxxxxx
Xxxxxxx Entity and any other indemnified party that the Company may designate in
such proceeding and shall pay the fees and disbursements of such counsel related
to such proceeding. In any such proceeding, any Xxxxxx Xxxxxxx Entity shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Xxxxxx Xxxxxxx Entity unless (i) the Xxxxxx
Xxxxxxx Entities and the Company 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 Company and the Xxxxxx Xxxxxxx Entity and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. The Company shall not, in
respect of the legal expenses of the Xxxxxx Xxxxxxx Entities in connection with
any proceeding or related proceedings the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Xxxxxx Xxxxxxx Entities. Any such firm for the Xxxxxx Xxxxxxx
Entities shall be designated in writing by Xxxxxx Xxxxxxx. The Company 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 Company agrees to indemnify the Xxxxxx Xxxxxxx Entities from
and against any loss or liability by reason of such settlement or judgment. The
Company shall not, without the prior written consent of Xxxxxx Xxxxxxx, effect
any settlement of any pending or threatened proceeding in respect of which any
Xxxxxx Xxxxxxx Entity is or could have been a party and indemnity could have
been sought hereunder by such Xxxxxx Xxxxxxx Entity, unless such settlement
includes an unconditional release of the Xxxxxx Xxxxxxx Entities from all
liability on claims that are the subject matter of such proceeding.
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(c) To the extent the indemnification provided for in Section 8(a)
is unavailable to a Xxxxxx Xxxxxxx Entity or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then the Company, in
lieu of indemnifying the Xxxxxx Xxxxxxx Entity thereunder, shall contribute to
the amount paid or payable by the Xxxxxx Xxxxxxx Entity as a result of such
losses, claims, damages or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the
Xxxxxx Xxxxxxx Entities on the other hand from the offering of the Directed
Shares or (ii) if the allocation provided by clause 9(c)(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 9(c)(i) above but also the
relative fault of the Company on the one hand and of the Xxxxxx Xxxxxxx Entities
on the other hand in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and of the Xxxxxx Xxxxxxx Entities on the other hand in connection with
the offering of the Directed Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Directed Shares (before
deducting expenses) and the total underwriting discounts and commissions
received by the Xxxxxx Xxxxxxx Entities for the Directed Shares, bear to the
aggregate Public Offering Price of the Shares. If the loss, claim, damage or
liability is caused by an untrue or alleged untrue statement of a material fact,
the relative fault of the Company on the one hand and the Xxxxxx Xxxxxxx
Entities on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement or the omission or
alleged omission relates to information supplied by the Company or by the Xxxxxx
Xxxxxxx Entities and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(d) The Company and the Xxxxxx Xxxxxxx Entities agree that it would
not be just or equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Xxxxxx Xxxxxxx Entities were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 9(c). The amount paid or payable by the Xxxxxx Xxxxxxx Entities as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
the Xxxxxx Xxxxxxx Entities in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 9, no
Xxxxxx Xxxxxxx Entity shall be required to contribute any amount in excess of
the amount by which the total price at which the Directed Shares distributed to
the public were offered to the public exceeds the amount of any damages that
such Xxxxxx Xxxxxxx Entity has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. The remedies
provided for in this Section 8 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any Xxxxxx Xxxxxxx Entity at law
or in equity.
-23-
25
(e) The indemnity and contribution provisions contained in this
Section 9 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Xxxxxx Xxxxxxx Entity or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Directed Shares.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 10(a)(i) through 10(a)(iv), such event, singly
or together with any other such event, makes it, in your judgment, impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case either you or
-24-
26
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
-25-
27
Very truly yours,
QUANTUM BRIDGE COMMUNICATIONS INC.
By:____________________________
Name:
Title:
EACH OF THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE II HERETO
By:____________________________
Name:
Title: Attorney-in-Fact
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
CHASE SECURITIES, INC.
X.X. XXXXXX SECURITIES INC.
XXXXXXXXX XXXXXXXX, INC.
XXXXXX FRERES & CO. LLC
UBS WARBURG LLC
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto.
By: XXXXXX XXXXXXX & CO. INCORPORATED
By:__________________________
Name:
Title:
-26-
28
SCHEDULE I
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated
Chase Securities, Inc.
X.X. Xxxxxx Securities Inc.
Xxxxxxxxx Xxxxxxxx, Inc.
Xxxxxx Freres & Co. LLC
UBS Warburg LLC
--------------
Total ............
==============
29
SCHEDULE II
NUMBER OF
ADDITIONAL SHARES
SELLING STOCKHOLDER TO BE PURCHASED
---------------
Total ............
==============
30
EXHIBIT A-1
FORM OF LOCK-UP LETTER
FOR
DIRECTORS AND OFFICERS
December __, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Chase Securities, Inc.
X.X. Xxxxxx Securities Inc.
Xxxxxxxxx Xxxxxxxx, Inc.
Xxxxxx Freres & Co. LLC
UBS Warburg LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Quantum Bridge Communications, Inc. a Delaware
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Xxxxxx Xxxxxxx (the
"UNDERWRITERS"), of shares (the "SHARES") of the common stock, par value $0.001
per share, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, he or she will not, during the period
commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (a) the sale of any Shares to the Underwriters pursuant to the Underwriting
Agreement, (b) transactions relating to shares of Common Stock or other
31
securities acquired in open market transactions after the completion of the
Public Offering and (c) shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock (i) transferred to members
of the undersigned's immediate family or trust or limited partnership for their
benefit, (ii) transferred as a bona fide gift or gifts, or (iii) transferred or
distributed to partners, members, stockholders or other similar affiliates of
the undersigned; provided, however, that in the case of any transfer or
distribution pursuant to this clause (c), (i) each transferee, donee or
distributee shall execute and deliver to Xxxxxx Xxxxxxx a duplicate form of this
Lock-up Letter and (ii) no filing by any party, including any donor, donee,
transferor or transferee, under Section 16(a) of the Securities Exchange Act of
1934, as amended, shall be required or shall be made voluntarily in connection
with such transfer or distribution, other than a filing on a Form 5 made after
the expiration of the 180-day period referred to above. In addition, the
undersigned agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock. The undersigned also agrees and consents to the entry of stop
transfer instructions with the transfer agent and registrar of the Company
against the transfer of the undersigned's shares of Common Stock except in
compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
This Agreement shall automatically terminate and be of no further effect
if (i) the Registration Statement for the Public Offering is not declared
effective by the Securities and Exchange Commission by July 31, 2001 or (ii) the
Underwriting Agreement is terminated.
Very truly yours,
-------------------------
(Name)
-------------------------
(Address)
32
EXHIBIT A-2
FORM OF LOCK-UP LETTER
FOR
OTHER STOCKHOLDERS, OPTION HOLDERS AND WARRANT HOLDERS
December __, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Chase Securities, Inc.
X.X. Xxxxxx Securities Inc.
Xxxxxxxxx Xxxxxxxx, Inc.
Xxxxxx Freres & Co. LLC
UBS Warburg LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Quantum Bridge Communications Inc., a Delaware
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Xxxxxx Xxxxxxx (the
"UNDERWRITERS"), of shares (the "SHARES") of the common stock, par value $0.001
per share, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, he, she or it will not, during the period
commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common
33
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. Notwithstanding the foregoing, if the last reported sale price of the
Common Stock on the Nasdaq National Market is at least two times the Public
Offering Price on the 90th day after the date of the Prospectus and for any
twenty (20) of the thirty (30) trading days ending on the trading day
immediately preceding the 90th day after the date of the Prospectus, then twenty
five percent (25%) of the shares of Common Stock, including shares of Common
Stock issuable pursuant to securities convertible into or exercisable or
exchangeable for Common Stock, held by the undersigned on the date of the
Prospectus shall be released from the 180-day restriction described above. This
early release shall occur on: (a) the 91st day after the date of the Prospectus,
if the Company makes a public release of its quarterly or annual results during
the period beginning on the eleventh trading day after the date of the
Prospectus and ending on the day prior to the 90th day after the date of the
Prospectus or (b) if otherwise, the second trading day after the first public
release by the Company of its quarterly or annual results occurring on or after
the 91st day after the date of the Prospectus.
The restrictions in the preceding paragraph shall not apply to (a) the
sale of any Shares to the Underwriters pursuant to the Underwriting Agreement,
(b) transactions relating to shares of Common Stock or other securities acquired
in open market transactions after the completion of the Public Offering and (c)
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (i) transferred to members of the undersigned's
immediate family or trust or limited partnership for their benefit, (ii)
transferred as a bona fide gift or gifts, or (iii) transferred or distributed to
partners, members, stockholders or other similar affiliates of the undersigned;
provided, however that in each case of any transfer or distribution pursuant to
clause (c), (i) each transferee, donee or distributee shall execute and deliver
to Xxxxxx Xxxxxxx a duplicate form of this Lock-up Letter and (ii) no filing by
any party, including any donor, donee, transferor or transferee, under Section
16(a) of the Securities Exchange Act of 1934, as amended, shall be required or
shall be made voluntarily in connection with such transfer or distribution,
other than a filing on a Form 5 made after the expiration of the 180-day period
referred to above. In addition, the undersigned agrees that, without the prior
written consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 180 days after the
date of the Prospectus, make any demand for or exercise any right with respect
to, the registration of any shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock. The undersigned also
agrees and consents to the entry of stop transfer instructions with the transfer
agent and registrar of the Company against the transfer of the undersigned's
shares of Common Stock except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering.
34
The undersigned further understands that this Lock-Up Agreement is irrevocable
and shall be binding upon the undersigned's heirs, legal representatives,
successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
This Agreement shall automatically terminate and be of no further effect
if (i) the Registration Statement for the Public Offering is not declared
effective by the Securities and Exchange Commission by July 31, 2001 or (ii) the
Underwriting Agreement is terminated.
Very truly yours,
-------------------------
(Name)
-------------------------
(Address)
