Exhibit 1.1
Xxxxxxx Xxxx and Xxxx
Draft of June 2, 1998
4FRONT TECHNOLOGIES, INC.
3,200,000 Shares (1)
(1) Plus an option to purchase from the Company up to 480,000 additional
shares to cover over-allotments.
1
Common Stock
UNDERWRITING AGREEMENT
(U.S. Version)
_____ __, 1998
XXXXXXXXX & XXXXX LLC
First Albany Corporation
Wheat First Securities, Inc.
Xxxxxxx Bros., X.X.
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
4Front Technologies, Inc., a Delaware corporation (herein called the
Company), proposes to offer and sell 2,747,192 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 452,808 shares of Common Stock (said 3,200,000 shares of Common
Stock being herein called the Underwritten Stock). The Company proposes to
grant to the U.S. Underwriters (as hereinafter defined) an option to purchase
up to 480,000 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 U.S.
underwriters, for whom you are acting, named in Schedule I hereto (herein
collectively called the U.S. Underwriters, which term shall also include any
underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent
and warrant that you have been authorized by each of the other U.S.
Underwriters 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
"International Underwriting Agreement") providing for the sale of 800,000
shares of Common Stock in an offering to be conducted outside the United
States and Canada on EASDAQ (the "International Offering), through
arrangements with certain underwriters outside the United States and Canada,
Xxxxxxxxx & Xxxxx Euromarkets and Panmure Xxxxxx & Co. Limited (the
"International Managers") providing for the sale of 686,800 shares of Common
Stock by the Company and 113,200 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 International Underwriting Agreement are hereby
made expressly conditional on one another.
The U.S. Underwriters hereunder and the International 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 offering of the Common Stock and for the transfer of
Common Stock between the two syndicates.
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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.
1. Registration Statement. The Company has filed with the Securities
and Exchange Commission (herein called the Commission) a registration
statement on Form S-1 (No. 333-(), including the related preliminary
prospectus, for the registration of the Stock under the Securities Act of
1933, as amended (herein called the Securities Act). Copies of such
registration statement and of each amendment thereto, if any, including the
related preliminary prospectus (meeting the requirements of Rule 430A of the
rules and regulations of the Commission) heretofore filed by the Company with
the Commission, have been delivered to you.
The term Registration Statement as used in this Agreement shall mean such
registration statement, including all exhibits filed therewith or incorporated
by reference therein, all financial statements, all information omitted
therefrom in reliance upon Rule 430A and contained in the Prospectus referred
to below, in the form in which it became effective, and any registration
statement filed pursuant to Rule 462(b) of the rules and regulations of the
Commission with respect to the Stock (herein called a Rule 462(b) registration
statement), and, in the event of any amendment thereto after the effective
date of such registration statement (herein called the Effective Date), shall
also mean (from and after the effectiveness of such amendment) such
registration statement as so amended (including any Rule 462(b) registration
statement). The term U.S. Prospectus as used in this Agreement shall mean the
prospectus relating to the Stock first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in
the Registration Statement) and, in the event of any supplement or amendment
to such prospectus after the Effective Date, shall also mean (from and after
the filing with the Commission of such supplement or the effectiveness of such
amendment) such prospectus as so supplemented or amended. The term
Preliminary U.S. Prospectus as used in this Agreement shall mean each
preliminary prospectus, including the documents incorporated by reference
therein, included in such registration statement prior to the time it becomes
effective.
The Registration Statement has been declared effective under the Securities
Act, and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The Company has caused to be delivered
to you copies of each Preliminary Prospectus and has consented to the use of
such copies for the purposes permitted by the Securities Act.
2. Representations and Warranties of the Company and the Significant
Selling Securityholders.
(a) The Company and Xxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxx,
Xxxxxxx Xxxx, Xxxxxxx XxXxxxxxx and Xxxxxx Xxxxx Xxxx (the "Significant
Selling Shareholders") hereby represent and warrant as follows:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement
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and the Prospectus and as being conducted, and is duly qualified to
conduct business and (to the extent such concept has meaning in such
jurisdiction) in good standing in all U.S. jurisdictions or foreign
countries in which the character of the property owned or leased or
the nature of the business transacted by it makes qualification
necessary (except where the failure to be so qualified would not
have a material adverse effect on the business, properties,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, herein called a "Material Adverse
Affect").
(ii) Each of the subsidiaries of the Company as listed in Annex
A hereto (individually a "Subsidiary", and collectively the
"Subsidiaries"), has been duly organized and is an existing
corporation in good standing (to the extent such term has meaning in
the relevant jurisdiction) under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
and each Subsidiary of the Company is duly qualified to do business
as a foreign corporation in good standing (to the extent such term
has meaning in the relevant jurisdiction) in all other jurisdictions
in which its ownership or lease of property or the conduct of its
business requires such qualification; all of the issued and
outstanding share capital of each Subsidiary of the Company has been
duly authorized and validly issued and is fully paid and not subject
to any call for the payment of further capital; and, except as
otherwise indicated on such Annex A, the entire share capital of
each Subsidiary is owned by the Company, directly or through
Subsidiaries, free from liens, encumbrances and defects.
(iii) The Company and the Subsidiaries have filed all material
income tax returns which have been required to be filed under the
laws of the jurisdiction of their organization and any other country
or political subdivision thereof having taxing jurisdiction over the
Company and the Subsidiaries or any of their properties, or have
received an extension of the filing date thereof, and have paid all
taxes indicated by said returns and all assessments received by them
or any of them to the extent that such taxes have become due and are
not being contested in good faith. All tax liabilities of the
Company and the Subsidiaries have been adequately provided for in
the financial statements of the Company.
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has
not been any materially adverse change in the business, properties,
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, other than as set
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forth in the Registration Statement and the Prospectus, and since
such dates, except in the ordinary course of business, neither the
Company nor any of its Subsidiaries has entered into any material
transaction not referred to in the Registration Statement and the
Prospectus.
(v) No order preventing or suspending the use of any
Preliminary U.S. Prospectus has been issued by the Commission, and
each Preliminary U.S. Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder.
(vi) The Registration Statement and the U.S. Prospectus comply,
and on the Closing Date (as hereinafter defined) and any later date
on which Option Stock is to be purchased, the U.S. Prospectus will
comply, in all material respects, with the provisions of the
Securities Act and the Securities Exchange Act of 1934, as amended
(herein called the Exchange Act), and the rules and regulations of
the Commission thereunder; on the Effective Date, the Registration
Statement did not contain any untrue statement of a material fact
and did not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date the U.S. Prospectus did not
and, on the Closing Date and any later date on which Option Stock is
to be purchased, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, and the International
Prospectus (as defined below) conforms in all material respects to
the requirements of the Belgian Royal Decree No. 185 of 9 July 1935
on the Banking and Finance Commission, the Belgian Royal Decree of
31 October 1991 on the Prospectus to be published for Public Issues
of Securities and the EASDAQ Rule Book (collectively, the "EASDAQ
Rules"); provided, however, that none of the representations and
warranties in this subparagraph (vi) shall apply to statements in,
or omissions from, the Registration Statement or the Prospectus made
in reliance upon and in conformity with information herein or
otherwise furnished in writing to the Company by or on behalf of the
U.S. Underwriters for use in the Registration Statement or the
Prospectus.
(vii) Each of (A) the Preliminary U.S. Prospectus and (B) the
preliminary international prospectus (the "Preliminary International
Prospectus" and, together with the Preliminary U.S. Prospectus, the
"Preliminary Prospectus") at the respective dates thereof, did not
and will not, and each of (A) the U.S. Prospectus and (B) the final
international prospectus (the "International Prospectus" and,
together with the U.S. Prospectus, the "Prospectus") at the
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respective dates thereof, does or did or will not, and any further
amendment or supplement thereto, as of the date of any such
amendment or supplement, will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an U.S. Underwriter through
Xxxxxxxxx & Xxxxx LLC expressly for use therein or by a Selling
Securityholder expressly for use therein; references herein to
prospectus, Preliminary Prospectus or Prospectus shall mean each and
every relevant prospectus, unless the context otherwise requires.
(viii) The Stock is duly and validly authorized; the shares of
the Stock to be sold by the Company will be, when issued and sold to
the U.S. Underwriters as provided herein, duly and validly issued,
fully paid and nonassessable; and the Stock conforms to the
description thereof in the Prospectus. No approval or authority of
the shareholders or the Board of Directors of the Company will be
required for the transfer and sale of the Stock to be sold by the
Selling Securityholders or the issuance and sale of the Stock as
contemplated herein, except such as has been obtained.
(ix) Prior to the Closing Date the Stock to be issued and sold
by the Company and the Stock to be sold by the Selling
Securityholders will be authorized for listing by EASDAQ and by the
Nasdaq National Market, upon official notice of issuance.
(x) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or
any U.S. Underwriter for a brokerage commission, finder's fee or
other like payment.
(xi) Except as disclosed 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 Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to a Registration Statement or in any securities
being registered pursuant to any other registration statement filed
by the Company under the Act.
(xii) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by
this Agreement in connection with the
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issuance and sale of the Stock by the Company, except such as have
been obtained and made under the Act, the Exchange Act, the EASDAQ
Rules and such as have been obtained and made under the securities
laws of any state of the United States or any other jurisdiction.
(xiii) The execution, delivery and performance of this Agreement
and the issuance and sale of the Stock will not result in a breach
or violation of any of the terms and provisions of, or, constitute a
default under, (i) any statute, rule, regulation or order of any
governmental agency or body or any court, having jurisdiction over
the Company or any Subsidiary or any of their respective properties,
or (ii) any agreement or instrument to which the Company or any such
Subsidiary is a party or by which the Company or any Subsidiary is
bound or to which any of their respective properties is subject, or
(iii) the charter or by-laws of the Company or any such Subsidiary,
other than (with respect to clauses (i), (ii) and (iii) above)
breaches, violations or defaults which would not, individually or in
the aggregate, have a Material Adverse Effect; and the Company has
full power and authority to authorize, issue and sell the Stock
being issued by the Company, as contemplated by this Agreement.
(xiv) This Agreement has been duly authorized, executed and
delivered by the Company.
(xv) Except as disclosed in the Prospectus, the Company and the
Subsidiaries have good and marketable title to all properties and
assets owned by them, in each case free from liens, encumbrances and
defects that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by them; and
except as disclosed in the Prospectus, the Company and the
Subsidiaries hold any leased real or personal property under valid
and enforceable leases with no exceptions that would materially
interfere with the use made or to be made thereof by them.
(xvi) The Company and the Subsidiaries possess certificates,
authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by them and
neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to
the Company or any of the Subsidiaries would have a Material Adverse
Effect.
(xvii) No labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent
that might have a Material Adverse Effect.
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(xviii) Except as disclosed in the Prospectus, including under the
section "Risk Factors - Intellectual Property", the Company and the
Subsidiaries own, possess or can acquire on reasonable terms,
adequate trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information, licenses,
software code, audiovisual works, formats, algorithms, underlying
data and other intellectual property (collectively, "Intellectual
Property Rights") necessary to conduct the business now operated by
them, and neither the Company nor any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others
with respect to any Intellectual Property Rights that, if determined
adversely to the Company or any Subsidiary, would individually or in
the aggregate have a Material Adverse Effect.
(xix) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the
Company or any Subsidiary, or any of their respective properties
that, if determined adversely to the Company or any Subsidiary,
would individually or in the aggregate have a Material Adverse
Effect, or would materially and adversely affect the ability of the
Company to perform its obligations under this Agreement, or which
are otherwise material in the context of the sale of the Stock; and
no such actions, suits or proceedings are, to the Company's
knowledge, threatened or contemplated.
(xx) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position
of the Company and its consolidated Subsidiaries as of the dates
shown and their results of operations and cash flows for the periods
shown; and such financial statements (except as otherwise expressly
indicated) have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent
basis.
(xxi) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus
there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the
financial condition, business, properties or results of operations
of the Company and the Subsidiaries taken as a whole, and, except as
disclosed in or contemplated by the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its share capital.
(xxii) The Company is not and, after giving effect to the
offering and sale of the Offered Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the United States Investment
Company Act of 1940.
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(xxiii) All material transactions during the Company's current or
last three fiscal years between the Company (including its
Subsidiaries) and any Selling Shareholder or any officer, director
or 10% securityholder of the Company have been accurately disclosed
in the Prospectus, in each case to the extent required by the Act.
(xxiv) Neither the Company nor, to the Company's knowledge, any
of its officers or directors or any of the Selling Securityholders,
has taken, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the
price of the Stock to facilitate the sale or resale of the Stock.
(xxv) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization, and (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with U.S. generally accepted accounting principles and to
maintain accountability for assets.
(xxvi) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the
value of their respective properties and as is customary for
companies engaged in similar industries.
(xxvii) To the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's
officers or directors or any of the Selling Securityholders, except
as set forth in the Registration Statement or as otherwise disclosed
in writing to the Representatives.
(b) Each of the Selling Securityholders hereby severally, and not
jointly, represents and warrants as follows:
(i) Such Selling Securityholder has (or will have upon
exercise of currently exercisable options or warrants) good and
marketable title to all the shares of Stock to be sold by such
Selling Securityholder hereunder, free and clear of all liens,
encumbrances, equities, security interests and claims whatsoever,
with full right and authority to deliver the same hereunder,
subject, in the case of each Selling Securityholder, to the rights
of the Company, as Custodian (herein called the Custodian), and that
upon the delivery of and payment for such shares of the Stock
hereunder, the several U.S. Underwriters will receive good and
marketable title thereto, free and clear of all liens, encumbrances,
equities, security interests and claims whatsoever.
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(ii) Certificates in negotiable form for the shares of the
Stock to be sold by such Selling Securityholder have been placed in
custody under a Custody Agreement for delivery under this Agreement
with the Custodian (or, if such Selling Securityholder is selling
shares that are the subject of options or warrants, such Selling
Securityholder has placed in custody duly executed and irrevocable
option exercise instructions, which provide for delivery of the
shares to be purchased thereunder to the Underwriters pursuant to
this Agreement); such Selling Securityholder specifically agrees
that the shares of the Stock represented by the certificates so held
in custody for such Selling Securityholder (or to be issued in
accordance with the option or warrant exercise instructions so held
in custody) are subject to the interests of the several U.S.
Underwriters and the Company, that the arrangements made by such
Selling Securityholder for such custody, including the Power of
Attorney provided for in such Custody Agreement, are to that extent
irrevocable, and that the obligations of such Selling Securityholder
shall not be terminated by any act of such Selling Securityholder or
by operation of law, whether by the death or incapacity of such
Selling Securityholder (or, in the case of a Selling Securityholder
that is not an individual, the dissolution or liquidation of such
Selling Securityholder) or the occurrence of any other event; if any
such death, incapacity, dissolution, liquidation or other such event
should occur before the delivery of such shares of the Stock
hereunder, certificates for such shares of the Stock shall be
delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death, incapacity,
dissolution, liquidation or other event had not occurred, regardless
of whether the Custodian shall have received notice of such death,
incapacity, dissolution, liquidation or other event.
(iii) Such Selling Securityholder has duly authorized (if not an
individual), executed and delivered this Agreement, the Custody
Agreement (as hereinafter defined), and the Power of Attorney (as
hereinafter defined). Such Selling Securityholder has full right,
power and authority to execute and deliver this Agreement, the power
of Attorney and the Custody Agreement and to perform his or its
obligations under such documents. The execution and delivery of
this Agreement, the Power of Attorney and the Custody Agreement and
the consummation by such Selling Securityholder of the transaction
herein and therein contemplated and the fulfillment by such Selling
Securityholder of the terms hereof and thereof will not require any
consent, approval, authorization, or other order of any court,
regulatory body, administrative agency or other government body
(except as may be required under the Act, the Exchange Act, state
securities laws or Blue Sky laws of any other jurisdiction) and will
not conflict with or result in a breach of any of the terms and
provisions of, or constitute a default under, the organizational
documents of such Selling
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Securityholder, if not an individual, or any indenture, mortgage,
deed of trust or other agreement or instrument to which such Selling
Securityholder is a party, or of any order, rule or regulation
applicable to such Selling Securityholder of any court or of any
regulatory body or administrative agency or other government body
having jurisdiction.
(iv) In connection with the distribution of the shares of the
Stock in the Offering, such Selling Securityholder has not taken and
will not take, directly or indirectly, any action designed to, or
which has constituted, or which might reasonably be expected to
cause or result in the stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Stock and,
other than as permitted by the Act, such Selling Securityholder will
not distribute any prospectus or other offering material in
connection with the offering of the Stock. The Representatives
shall notify the Selling Securityholder promptly in writing
following the completion of the distribution of the Offering that
such distribution has been completed.
(v) Without having undertaken to determine independently the
accuracy or completeness of the representations and warranties of
the Company contained herein, such Selling Securityholder has no
reason to believe that the representations and warranties of the
Company contained in Section 2(a) are not true and correct.
(vi) Such Selling Securityholder has reviewed the Registration
Statement and Prospectus and, although such Selling Securityholder
has not independently verified the accuracy or completeness of all
the information contained therein, nothing has come to the attention
of such Selling Securityholder that would lead such Selling
Securityholder to believe that: (A) on the Effective Date, the
Registration Statement contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, (B) on the Effective Date, the Prospectus contained
and, on the Closing Date, contains any untrue statement of a
material fact or omitted or omits to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
3. Purchase of the Stock by the U.S. Underwriters.
(a) On the basis of the representations and warranties and subject
to the terms and conditions herein set forth, the Company agrees to issue
and sell 2,747,192 shares of the Underwritten Stock to the several U.S.
Underwriters, each Selling Securityholder agrees to sell to the several
U.S. Underwriters the number of shares of
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the Underwritten Stock set forth in Schedule II opposite the name of such
Selling Securityholder, and each of the U.S. Underwriters agrees to
purchase from the Company and the Selling Securityholders the respective
aggregate number of shares of Underwritten Stock set forth opposite its
name in Schedule I. The price at which such shares of Underwritten Stock
shall be sold by the Company and the Selling Securityholders and
purchased by the several U.S. Underwriters shall be $___ per share. The
obligation of each U.S. Underwriter to the Company and each of the
Selling Securityholders shall be to purchase from the Company and the
Selling Securityholders that number of shares of the Underwritten Stock
which represents the same proportion of the total number of shares of the
Underwritten Stock to be sold by each of the Company and the Selling
Securityholders pursuant to this Agreement as the number of shares of the
Underwritten Stock set forth opposite the name of such U.S. Underwriter
in Schedule I hereto represents of the total number of shares of the
Underwritten Stock to be purchased by all U.S. Underwriters pursuant to
this Agreement, as adjusted by you in such manner as you deem advisable
to avoid fractional shares. In making this Agreement, each U.S.
Underwriter is contracting severally and not jointly; except as provided
in paragraphs (b) and (c) of this Section 3, the agreement of each U.S.
Underwriter is to purchase only the respective number of shares of the
Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the U.S. Underwriters shall
fail or refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 8 or 9
hereof) to purchase and pay for the number of shares of the Stock agreed
to be purchased by such U.S. Underwriter or U.S. Underwriters, the
Company or the Selling Securityholders shall immediately give notice
thereof to you, and the non-defaulting U.S. Underwriters shall have the
right within 24 hours after the receipt by you of such notice to
purchase, or procure one or more other U.S. Underwriters to purchase, in
such proportions as may be agreed upon between you and such purchasing
U.S. Underwriter or U.S. Underwriters and upon the terms herein set
forth, all or any part of the shares of the Stock which such defaulting
U.S. Underwriter or U.S. Underwriters agreed to purchase. If the
non-defaulting U.S. Underwriters fail so to make such arrangements with
respect to all such shares and portion, the number of shares of the Stock
which each non-defaulting U.S. Underwriter is otherwise obligated to
purchase under this Agreement shall be automatically increased on a pro
rata basis to absorb the remaining shares and portion which the
defaulting U.S. Underwriter or U.S. Underwriters agreed to purchase;
provided, however, that the non-defaulting U.S. Underwriters shall not be
obligated to purchase the shares and portion which the defaulting U.S.
Underwriter or U.S. Underwriters agreed to purchase if the aggregate
number of such shares of the Stock exceeds 10% of the total number of
shares of the Stock which all U.S. Underwriters agreed to purchase
hereunder. If the total number of shares of the Stock which the
defaulting U.S. Underwriter or U.S. Underwriters agreed to purchase shall
not be purchased or absorbed in accordance with the two preceding
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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 U.S. Underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms
herein set forth. In any such case, either you or the Company and the
Selling Securityholders shall have the right to postpone the Closing Date
determined as provided in Section 5 hereof for not more than seven
business days after the date originally fixed as the Closing Date
pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or
arrangements may be made. If neither the non-defaulting U.S.
Underwriters nor the Company and the Selling Securityholders shall make
arrangements within the 24hour periods stated above for the purchase of
all the shares of the Stock which the defaulting U.S. Underwriter or U.S.
Underwriters agreed to purchase hereunder, this Agreement shall be
terminated without further act or deed and without any liability on the
part of the Company or the Selling Securityholders to any non-defaulting
U.S. Underwriter and without any liability on the part of any
non-defaulting U.S. Underwriter to the Company or the Selling
Securityholders. Nothing in this paragraph (b), and no action taken
hereunder, shall relieve any defaulting U.S. Underwriter from liability
in respect of any default of such U.S. Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set
forth, the Company grants an option to the several U.S. Underwriters to
purchase, severally and not jointly, up to 480,000 shares in the
aggregate of the Option Stock from the Company at the same price per
share as the U.S. Underwriters shall pay for the Underwritten Stock.
Said option may be exercised only to cover over-allotments in the sale of
the Underwritten Stock by the U.S. Underwriters and may be exercised in
whole or in part at any time (but not more than once) on or before the
thirtieth day after the date of this Agreement upon written or
telegraphic notice by you to the Company setting forth the aggregate
number of shares of the Option Stock as to which the several U.S.
Underwriters are exercising the option. Delivery of certificates for the
shares of Option Stock, and payment therefor, shall be made as provided
in Section 5 hereof. The number of shares of the Option Stock to be
purchased by each U.S. Underwriter shall be the same percentage of the
total number of shares of the Option Stock to be purchased by the several
U.S. Underwriters as such U.S. Underwriter is purchasing of the
Underwritten Stock, as adjusted by you in such manner as you deem
advisable to avoid fractional shares.
4. Offering by U.S. Underwriters.
(a) The terms of the initial public offering by the U.S.
Underwriters of the Stock to be purchased by them shall be as set forth
in the Prospectus. The U.S. Underwriters may from time to time change
the public offering price after the closing of
13
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 U.S.
Underwriters) constitutes the only information furnished by the U.S.
Underwriters to the Company for inclusion in the Registration Statement,
any Preliminary Prospectus, and the Prospectus, and you on behalf of the
respective U.S. Underwriters represent and warrant to the Company that
the statements made therein are correct.
5. Delivery of and Payment for the Stock.
(a) Delivery of certificates for the shares of the Underwritten
Stock and the Option Stock (if the option granted by Section 3(c) hereof
shall have been exercised not later than 7:00 A.M., 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 3(b) hereof) are herein
called the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be exercised
after 7:00 a.m., 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 U.S. Underwriters against
receipt therefor signed by you. Certificates for the Stock to be
delivered to you shall be registered in such name or names and shall be
in such denominations as you may request at least one business day before
the Closing Date, in the case of Underwritten Stock, and at least one
business day prior to the purchase
14
thereof, in the case of the Option Stock. Such certificates will be made
available to the U.S. Underwriters 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
U.S. Underwriters, may (but shall not be obligated to) make payment to
the Company and the Selling Securityholders for shares to be purchased by
any U.S. Underwriter whose check shall not have been received by you on
the Closing Date or any later date on which Option Stock is purchased for
the account of such U.S. Underwriter. Any such payment by you shall not
relieve such U.S. Underwriter from any of its obligations hereunder.
6. Further Agreements of the Company and the Selling Securityholders.
Each of the Company and the Selling Securityholders respectively covenants and
agrees as follows:
(a) The Company will (i) prepare and timely file with the
Commission under Rule 424(b) a Prospectus containing information
previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A and file the International Prospectus
with the Belgian Banking and Finance Commission (the "Belgian
Commission") for approval not later than the filing of the U.S.
Prospectus as aforesaid, and (ii) not file any amendment to the
Registration Statement or supplement to the Prospectus of which you shall
not previously have been advised and furnished with a copy or to which
you shall have reasonably objected in writing or which is not in
compliance with the Securities Act or the rules and regulations of the
Commission with respect to the U.S. Prospectus or with the EASDAQ Rules
with respect to the International Prospectus.
(b) The Company will promptly notify each U.S. Underwriter in the
event of (i) the request by the Commission or the Belgian Commission for
amendment of the Registration Statement or for supplement to the
Prospectus or for any additional information, (ii) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended
institution of any action or proceeding for that purpose, (iv) the
suspension of approval of the International Prospectus by the Belgian
Commission, (v) the receipt by the Company of any notification with
respect to the suspension of the qualification of the Stock for sale in
any jurisdiction, or (vi) the receipt by it of notice of the initiation
or threatening of any proceeding for such purpose. The Company and the
Selling Securityholders will make every reasonable effort to prevent the
issuance of such a stop order and, if such an order shall at any time be
issued, to obtain the withdrawal thereof at the earliest possible moment.
15
(c) The Company will (i) on or before the Closing Date, deliver to
you a signed copy of the Registration Statement as originally filed and
of each amendment thereto filed prior to the time the Registration
Statement becomes effective and, promptly upon the filing thereof, a
signed copy of each post-effective amendment, if any, to the Registration
Statement (together with, in each case, all exhibits thereto unless
previously furnished to you) and will also deliver to you, for
distribution to the U.S. Underwriters, a sufficient number of additional
conformed copies of each of the foregoing (but without exhibits) so that
one copy of each may be distributed to each U.S. Underwriter, (ii) as
promptly as possible deliver to you and send to the several U.S.
Underwriters, at such office or offices as you may designate, as many
copies of the Prospectus as you may reasonably request, and
(iii) thereafter from time to time during the period in which a
prospectus is required by law to be delivered by an U.S. Underwriter or
dealer, likewise send to the U.S. Underwriters as many additional copies
of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended prospectus, filed by the Company with the Commission
and, to the extent required with the Belgian Commission, as you may
reasonably request for the purposes contemplated by the Securities Act
and the EASDAQ Rules.
(d) If at any time during the period in which a prospectus is
required by law to be delivered by an U.S. Underwriter or dealer any
event relating to or affecting the Company, or of which the Company shall
be advised in writing by you, shall occur as a result of which it is
necessary, in the opinion of counsel for the Company or of counsel for
the U.S. Underwriters, to supplement or amend the Prospectus in order to
make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser of the Stock, the
Company will forthwith prepare and file with the Commission and, to the
extent required, the Belgian Commission a supplement to the Prospectus or
an amended prospectus so that the Prospectus as so supplemented or
amended will not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time such
Prospectus is delivered to such purchaser, not misleading. If, after the
initial public offering of the Stock by the U.S. Underwriters and during
such period, the U.S. Underwriters shall propose to vary the terms of
offering thereof by reason of changes in general market conditions or
otherwise, you will advise the Company in writing of the proposed
variation, and, if in the opinion either of counsel for the Company or of
counsel for the U.S. Underwriters such proposed variation requires that
the Prospectus be supplemented or amended, the Company will forthwith
prepare and file with the Commission and, to the extent required, with
the Belgian Commission a supplement to the Prospectus or an amended
prospectus setting forth such variation. The Company authorizes the U.S.
Underwriters and all dealers to whom any of the Stock may be sold by the
several U.S. Underwriters to use the Prospectus, as from time to time
amended or supplemented, in connection
16
with the sale of the Stock in accordance with the applicable provisions
of the Securities Act and the applicable rules and regulations thereunder
for such period.
(e) Prior to the filing thereof with the Commission or the Belgian
Commission, the Company will submit to you, for your information, a copy
of any post-effective amendment to the Registration Statement and any
supplement to the Prospectus or any amended prospectus proposed to be
filed.
(f) The Company will cooperate, when and as requested by you, in
the qualification of the Stock for offer and sale under the securities or
blue sky laws of such jurisdictions as you may designate and, during the
period in which a prospectus is required by law to be delivered by an
U.S. Underwriter or dealer, in keeping such qualifications in good
standing under said securities or blue sky laws; provided, however, that
the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified. The Company will, from time to time,
prepare and file such statements, reports, and other documents as are or
may be required to continue such qualifications in effect for so long a
period as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof,
the Company will furnish to you, and to each U.S. Underwriter who may so
request in writing, copies of all periodic and special reports furnished
to shareholders of the Company and of all information, documents and
reports filed with the Commission and the Belgian Commission or EASDAQ.
(h) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the Effective
Date, the Company will make generally available to its security holders
an earnings statement in accordance with Section 11(a) of the Securities
Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to
the performance of their obligations under this Agreement, including all
costs and expenses incident to (i) the preparation, printing and filing
with the Commission, the National Association of Securities Dealers, Inc.
("NASD"), and the Belgian Commission of the Registration Statement, any
Preliminary Prospectus and the Prospectus, (ii) the listing application
fees of `the Nasdaq National Market and EASDAQ, (iii) the furnishing to
the U.S. Underwriters of copies of any Preliminary Prospectus and of the
several documents required by paragraph (c) of this Section 6 to be so
furnished, (iv) the printing of this Agreement and related documents
delivered to the U.S. Underwriters, (v) the preparation, printing and
filing of all supplements and amendments to the Prospectus referred to in
paragraph (d) of this Section 6, (vi) the furnishing to you and the U.S.
Underwriters of the reports and information referred to in paragraph (g)
of this Section 6
17
and (vii) the printing and issuance of stock certificates, including the
transfer agent's fees. The Selling Securityholders will pay any transfer
taxes incident to the transfer to the U.S. Underwriters of the shares of
the Stock being sold by the Selling Securityholders.
(j) The Company agrees to reimburse you, for the account of the
several U.S. Underwriters, for blue sky fees and related disbursements
(including counsel fees and disbursements and cost of printing memoranda
for the U.S. Underwriters) paid by or for the account of the U.S.
Underwriters or their counsel in qualifying the Stock under state and
foreign securities or blue sky laws and in the review of the offering by
the NASD, the Belgian Commission and EASDAQ.
(k) The provisions of paragraphs (i) and (j) of this Section are
intended to relieve the U.S. Underwriters from the payment of the
expenses and costs which the Company and the Selling Securityholders
hereby agree to pay and shall not affect any agreement which the Company
and the Selling Securityholders may make, or may have made, for the
sharing of any such expenses and costs.
(l) The Company and each of the Selling Securityholders hereby
agrees that, without the prior written consent of Xxxxxxxxx & Xxxxx LLC
on behalf of the U.S. Underwriters, the Company or such Selling
Securityholder, as the case may be, will not, for a period of 90 days
following the commencement of the public offering of the Stock by the
U.S. Underwriters, directly or indirectly, (i) sell, offer, contract to
sell, make any short sale, pledge, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any
shares of Common Stock or any securities convertible into or exchangeable
or exercisable for or any rights to purchase or acquire Common Stock or
(ii) enter into any swap or other agreement that transfers, in whole or
in part, any of the economic consequences or ownership of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (A) the Stock to
be sold to the U.S. Underwriters pursuant to this Agreement, (B) the
purchase by the Selling Securityholders of shares of Common Stock issued
by the Company upon the exercise of options granted under the stock
option plans of the Company (the "Option Plans") or upon the exercise of
warrants outstanding as of the date hereof, all as described in
footnote (1) to the table under the caption "The Offering" in the
Preliminary Prospectus, and (C) the grant by the Company of options to
purchase Common Stock under the Option Plans.
(m) The Company shall not invest or otherwise use the proceeds
received by the Company from its sale of the Stock in such manner as
would require the Company
18
or any of the Subsidiaries to register as an investment company under the
United States Investment Company Act of 1940.
(n) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company.
7. Indemnification and Contribution.
(a) Subject to the provisions of paragraph (f) of this Section 7,
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 U.S. Underwriter and each person
(including each partner or officer thereof) who controls any U.S.
Underwriter within the meaning of Section 15 of the Securities Act from
and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may become
subject under the Securities Act, the 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 U.S. Underwriter 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 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 U.S. Underwriter 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 U.S.
19
Underwriter 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 U.S.
Underwriter) if at or prior to the written confirmation of the sale of
such Stock a copy of the Prospectus (or the Prospectus as amended or
supplemented) was not sent or delivered to such person (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 6 hereof, 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 2(b) hereof. The indemnity agreements
of the Company and the Selling Securityholders contained in this
paragraph (a) and the representations and warranties of the Company and
the Selling Securityholders contained in Section 2 hereof shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified party and shall survive the
delivery of and payment for the Stock.
(b) Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, each of its officers who signs the Registration
Statement on his own behalf or pursuant to a power of attorney, each of
its directors, each other U.S. Underwriter and each person (including
each partner or officer thereof) who controls the Company or any such
other U.S. Underwriter within the meaning of Section 15 of the Securities
Act, and the Selling Securityholders from and against any and all losses,
claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the
Securities Act, the Exchange Act, or the common law or otherwise and to
reimburse each of them for any legal or other 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
20
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 U.S. Underwriter for
use in the Registration Statement or the Prospectus or any such amendment
thereof or supplement thereto. The indemnity agreement of each U.S.
Underwriter contained in this paragraph (b) shall remain operative and in
full force and effect regardless of any investigation made by or on
behalf of any indemnified party and shall survive the delivery of and
payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a)
and (b) of this Section 7 agrees that, upon the service of a summons or
other initial legal process upon it in any action or suit instituted
against it or upon its receipt of written notification of the
commencement of any investigation or inquiry of, or proceeding against,
it in respect of which indemnity may be sought on account of any
indemnity agreement contained in such paragraphs, it will promptly give
written notice (herein called the Notice) of such service or notification
to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be
available to any party who shall fail so to give the Notice if the party
to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have
related and was prejudiced by the failure to give the Notice, but the
omission so to notify such indemnifying party or parties of any such
service or notification shall not relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified
party for contribution or otherwise than on account of such indemnity
agreement. Any indemnifying party shall be entitled at its own expense
to participate in the defense of any action, suit or proceeding against,
or investigation or inquiry of, an indemnified party. Any indemnifying
party shall be entitled, if it so elects within a reasonable time after
receipt of the Notice by giving written notice (herein called the Notice
of Defense) to the indemnified party, to assume (alone or in conjunction
with any other indemnifying party or parties) the entire defense of such
action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or
parties, by counsel chosen by such indemnifying party or parties and
reasonably satisfactory to the indemnified party or parties; provided,
however, that (i) if the indemnified party or parties reasonably
determine that there may be a conflict between the positions of the
indemnifying party or parties and of the indemnified party or parties in
conducting the defense of such action, suit, investigation, inquiry or
proceeding or that there may be legal defenses available to such
indemnified party or parties different from or in addition to those
available to the indemnifying party
21
or parties, then counsel for the indemnified party or parties shall be
entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified
party or parties and (ii) in any event, the indemnified party or parties
shall be entitled to have counsel chosen by such indemnified party or
parties participate in, but not conduct, the defense. If, within a
reasonable time after receipt of the Notice, an indemnifying party gives
a Notice of Defense and the counsel chosen by the indemnifying party or
parties is reasonably satisfactory to the indemnified party or parties,
the indemnifying party or parties will not be liable under paragraphs (a)
through (c) of this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or
proceeding, except that (A) the indemnifying party or parties shall bear
the legal and other expenses incurred in connection with the conduct of
the defense as referred to in clause (i) of the proviso to the preceding
sentence and (B) the indemnifying party or parties shall bear such other
expenses as it or they have authorized to be incurred by the indemnified
party or parties. If, within a reasonable time after receipt of the
Notice, no Notice of Defense has been given, the indemnifying party or
parties shall be responsible for any legal or other expenses incurred by
the indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in paragraph (a) or
(b) of this Section 7 (i) in such proportion as is appropriate to reflect
the relative benefits received by each indemnifying party from the
offering of the Stock or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of each indemnifying party
in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, or actions in respect thereof, as
well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Securityholders on the
one hand and the U.S. Underwriters on the other shall be deemed to be in
the same respective proportions as the total net proceeds from the
offering of the Stock received by the Company and the Selling
Securityholders and the total underwriting discount received by the U.S.
Underwriters, as set forth in the table on the cover page of the
Prospectus, bear to the aggregate public offering price of the Stock.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by each indemnifying party and the parties' relative
22
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 U.S. Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to in the first
sentence of this paragraph (d). The amount paid by an indemnified party
as a result of the losses, claims, damages or liabilities, or actions in
respect thereof, referred to in the first sentence of this paragraph (d)
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of this paragraph (d). Notwithstanding the provisions of this
paragraph (d), no U.S. Underwriter shall be required to contribute any
amount in excess of the underwriting discount applicable to the Stock
purchased by such U.S. Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The U.S. Underwriters' obligations
in this paragraph (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of
a summons or other initial legal process upon it in any action instituted
against it in respect of which contribution may be sought, it will
promptly give written notice of such service to the party or parties from
whom contribution may be sought, but the omission so to notify such party
or parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise (except as specifically provided in paragraph (c) of this
Section 7).
(e) Neither the Company nor the Selling Securityholders will,
without the prior written consent of each U.S. Underwriter, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such U.S.
Underwriter or any person who controls such U.S. Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act is a party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of
such U.S. Underwriter and each such controlling person from all liability
arising out of such claim, action, suit or proceeding.
(f) The liability of each Selling Securityholder under such Selling
Securityholder's representations and warranties contained in paragraph
(b) of Section 2 hereof and under the indemnity and reimbursement
agreements contained in the provisions of this Section 7 and Section 11
hereof shall be limited to an amount equal to the net proceeds from the
Stock sold by such Selling Securityholder to the U.S. Underwriters. The
Company and the Selling Securityholders may agree, as among themselves
and without limiting the rights of the U.S. Underwriters under this
Agreement, as to the respective amounts of such liability for which they
each shall be responsible.
23
8. Termination. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and the
Selling Securityholders if after the date of this Agreement trading in the
Common Stock shall have been suspended 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 U.S. Underwriters'
reasonable judgment, make the offering or delivery of the Stock impracticable,
(iii) suspension of trading in securities generally or a material adverse
decline in value of securities generally on the New York Stock Exchange, the
American Stock Exchange, 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 U.S.
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company,
(v) declaration of a banking moratorium by 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 U.S. Underwriters'
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 pursuant to this Section 8, there shall be no liability of the
Company or the Selling Securityholders to the U.S. Underwriters and no
liability of the U.S. Underwriters to the Company or the Selling
Securityholders; provided, however, that in the event of any such termination
the Company and the Selling Securityholders agree to indemnify and hold
harmless the U.S. Underwriters from all costs or expenses incident to the
performance of the obligations of the Company and the Selling Securityholders
under this Agreement, including all costs and expenses referred to in
paragraphs (i) and (j) of Section 6 hereof.
9. Conditions of U.S. Underwriters' Obligations. The obligations of
the several U.S. Underwriters 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 to the following further conditions:
(a) The Registration Statement shall have become effective, and no
stop order suspending the effectiveness thereof shall have been issued
and no proceedings therefor shall be pending or threatened by the
Commission.
24
(b) The legality and sufficiency of the sale of the Stock hereunder
and the validity and form of the certificates representing the Stock, all
corporate proceedings and other legal matters incident to the foregoing,
and the form of the Registration Statement and of the Prospectus (except
as to the financial statements contained therein), shall have been
approved at or prior to the Closing Date by Xxxxxxx Xxxx and Xxxx
International, counsel for the U.S. Underwriters.
(c) You shall have received from Fulbright & Xxxxxxxx L.L.P., U.S.
counsel for the Company and certain of the Selling Securityholders, an
opinion, addressed to the U.S. Underwriters and dated the Closing Date,
covering the matters set forth in Annex B hereto, and if Option Stock is
purchased at any date after the Closing Date, an additional opinion from
such counsel, addressed to the U.S. Underwriters and dated such later
date, confirming that the statements expressed as of the Closing Date in
such opinion remain valid as of such later date.
(d) You shall have received from Xxxxxxxxx Xxxxxx & Xxxxx, U.K.
counsel for the Company, an opinion, addressed to the U.S. Underwriters
and dated the Closing Date, covering the matters set forth in Annex C
hereto, and if Option Stock is purchased at any date after the Closing
Date, an additional opinion from such counsel, addressed to the U.S.
Underwriters and dated such later date, confirming that the statements
expressed as of the Closing Date in such opinion remain valid as of such
later date.
(e) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were
true and correct and neither the Registration Statement nor the
Prospectus omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein,
respectively, not misleading, (ii) since the Effective Date, no event has
occurred which should have been set forth in a supplement or amendment to
the Prospectus which has not been set forth in such a supplement or
amendment, (iii) since the respective dates as of which information is
given in the Registration Statement in the form in which it originally
became effective and the Prospectus contained therein, there has not been
any material adverse change or any development involving a prospective
material adverse change in or affecting the business, properties,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, and, since such dates, except in the
ordinary course of business, neither the Company nor any of its
subsidiaries has entered into any material transaction not referred to in
the Registration Statement in the form in which it originally became
effective and the Prospectus contained therein, (iv) neither the Company
nor any of its subsidiaries has any material contingent obligations which
are not disclosed in the Registration Statement and the Prospectus,
(v) there are not any pending or known threatened legal proceedings to
which the Company or any of its subsidiaries is a party or of which
property of the Company or any of its subsidiaries is the subject which
are material and which are not disclosed in the Registration Statement
25
and the Prospectus, (vi) there are not any franchises, contracts, leases
or other documents which are required to be filed as exhibits to the
Registration Statement which have not been filed as required, (vii) the
representations and warranties of the Company and the Selling
Securityholders herein are true and correct in all material respects as
of the Closing Date or any later date on which Option Stock is to be
purchased, as the case may be, and (viii) there has not been any material
change in the market for securities in general or in political, financial
or economic conditions from those reasonably foreseeable at the time of
execution of this Agreement as to render it impracticable in your
reasonable judgment to make a public offering of the Stock, or a material
adverse change in market levels for securities in general (or those of
companies in particular) or financial or economic conditions which render
it inadvisable to proceed.
(f) You shall have received on the Closing Date and on any later
date on which Option Stock is purchased a certificate, dated the Closing
Date or such later date, as the case may be, and signed by the Chief
Executive Officer and the Chief Financial Officer of the Company, stating
that the respective signers of said certificate have carefully examined
the Registration Statement in the form in which it originally became
effective and the Prospectus contained therein and any supplements or
amendments thereto, and that the statements included in clauses (i)
through (vii) of paragraph (e) of this Section 9 are true and correct.
(g) You shall have received from KPMG a letter, addressed to the
U.S. Underwriters and dated the Closing Date and any later date on which
Option Stock is purchased, confirming that they are independent public
accountants with respect to the Company within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder and based upon the procedures described in their letter
delivered to you concurrently with the execution of this Agreement
(herein called the Original Letter), but carried out to a date not more
than three business days prior to the Closing Date or such later date on
which Option Stock is purchased (i) confirming, to the extent true, that
the statements and conclusions set forth in the Original Letter are
accurate as of the Closing Date or such later date, as the case may be,
and (ii) setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter which are necessary to
reflect any changes in the facts described in such Original Letter since
the date of such Original Letter or to reflect the availability of more
recent financial statements, data or information. The letters shall not
disclose any change, or any development involving a prospective change,
in or affecting the business or properties of the Company or any of its
subsidiaries which, in your sole judgment, makes it impractical or
inadvisable to proceed with the public offering of the Stock or the
purchase of the Option Stock as contemplated by the Prospectus.
26
(h) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several
jurisdictions, or other evidence satisfactory to you, of the
qualification referred to in paragraph (f) of Section 6 hereof.
(i) Prior to the Closing Date, the Stock to be issued and sold by
the Company and sold by the Selling Securityholders in the U.S. Offering
shall have been duly authorized for listing by the Nasdaq National Market
upon official notice of issuance and the Stock to be issued and sold by
the Company and sold by the Selling Securityholders in the International
Offering shall have been duly authorized for listing by EASDAQ.
(j) On or prior to the Closing Date, you shall have received from
all Selling Securityholders and all directors and officers of the Company
agreements, in form reasonably satisfactory to Xxxxxxxxx & Xxxxx LLC,
stating that without the prior written consent of Xxxxxxxxx & Xxxxx LLC
on behalf of the U.S. Underwriters, such person or entity will not, for a
period of 90 days following the commencement of the public offering of
the Stock by the U.S. Underwriters, directly or indirectly, (i) sell,
offer, contract to sell, make any short sale, pledge, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of
any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire
Common Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences or
ownership of Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise.
(k) The International Underwriting Agreement shall not have been
terminated and all of the conditions set forth in Sections 8 and 9
thereof shall have been satisfied or waived.
All the agreements, opinions, certificates and letters mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance
with the provisions hereof only if Xxxxxxx Xxxx and Xxxx International,
counsel for the U.S. Underwriters, shall be satisfied that they comply in
form and scope.
In case any of the conditions specified in this Section 9 shall not
be fulfilled, this Agreement may be terminated by you by giving notice to
the Company and to the Selling Securityholders. Any such termination
shall be without liability of the Company or the Selling Securityholders
to the U.S. Underwriters and without liability of the U.S. Underwriters
to the Company or the Selling Securityholders; provided, however, that
(i) in the event of such termination, the Company agrees to indemnify and
hold harmless the U.S. Underwriters from all costs or expenses incident
to the performance of the obligations of the Company and the Selling
Securityholders under this Agreement, including all costs and expenses
referred to in paragraphs (i) and (j) of Section 6 hereof, and (ii) if
this Agreement is terminated by you because of any refusal, inability or
failure on the part of the Company or the Selling Securityholders to
perform any agreement herein, to fulfill any of the conditions herein, or
to
27
comply with any provision hereof other than by reason of a default by any
of the U.S. Underwriters, the Company will reimburse the U.S.
Underwriters severally upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have
been incurred by them in connection with the transactions contemplated
hereby.
10. Conditions of the Obligation of the Company and the Selling
Securityholders. The obligation of the Company and the Selling
Securityholders to deliver the Stock 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 International Underwriting
Agreement shall not have been terminated and all of the conditions set forth
in Sections 8 and 9 thereof shall have been satisfied or waived.
In case any of the conditions specified in this Section 10 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 U.S.
Underwriters and without liability of the U.S. Underwriters to the Company or
the Selling Securityholders; provided, however, that in the event of any such
termination the Company agrees to indemnify and hold harmless the U.S.
Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Selling Securityholders under this
Agreement, including all costs and expenses referred to in paragraphs (i) and
(j) of Section 6 hereof.
11. Reimbursement of Certain Expenses. In addition to their other
obligations under Section 7 of this Agreement (and subject, in the case of a
Selling Securityholder, to the provisions of paragraph (f) of Section 7), the
Company and the Selling Securityholders hereby jointly and severally agree to
reimburse on a quarterly basis the U.S. Underwriters for all reasonable legal
and other expenses incurred in connection with investigating or defending any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in paragraph (a) of Section 7 of this Agreement, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligations under this Section 11 and the possibility that such payments
might later be held to be improper; provided, however, that (i) to the extent
any such payment is ultimately held to be improper, the persons receiving such
payments shall promptly refund them and (ii) such persons shall provide to the
Company, upon request, reasonable assurances of their ability to effect any
refund, when and if due.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of the Company, the Selling Securityholders and the
several U.S. Underwriters and, with respect to the provisions of Section 7
hereof, the several parties (in addition to the Company, the Selling
Securityholders and the several U.S. Underwriters) indemnified under the
provisions of said Section 7, and their respective personal representatives,
successors and
28
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 U.S.
Underwriters.
13. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the U.S.
Underwriters, shall be mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx
LLC, Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, X.X.X.; 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.
14. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless
of (a) any termination of this Agreement, (b) any investigation made by or on
behalf of any U.S. Underwriter or controlling person thereof, or by or on
behalf of the Company or the Selling Securityholders or their respective
directors or officers, and (c) delivery and payment for the Stock under this
Agreement; provided, however, that if this Agreement is terminated prior to
the Closing Date, the provisions of paragraphs (l) of Section 6 hereof shall
be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California.
Please sign and return to the Company and to the Selling Securityholders in
care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Securityholders and the several U.S. Underwriters in accordance with its
terms.
Very truly yours,
4FRONT TECHNOLOGIES, INC.
By
--------------------------
[Name]
[Title]
29
SELLING SECURITYHOLDERS:
[List Names]
By
--------------------------
[Attorney-in-Fact]
30
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
First Albany Corporation
Wheat First Securities, Inc.
Xxxxxxx Bros., L.P.
By Xxxxxxxxx & Xxxxx LLC
By
--------------------------
Managing Director
Acting on behalf of the several U.S. Underwriters,
including themselves, named in Schedule I hereto.
31
SCHEDULE I
U.S. UNDERWRITERS
Number of
Shares to be
U.S. Underwriters Purchased
----------------- ------------
Xxxxxxxxx & Xxxxx LLC . . . . . . . . . . . . . . . . . . .
First Albany Corporation . . . . . . . . . . . . . . . . .
Wheat First Securities, Inc. . . . . . . . . . . . . . . .
Xxxxxxx Bros., L.P. . . . . . . . . . . . . . . . . . . . .
---------
Total. . . . . . . . . . . . . . . . . . . . . . 3,200,000
---------
---------
32
SCHEDULE II
SELLING SECURITYHOLDERS
Number of
Name of Shares
Selling Securityholders to be Sold
----------------------- ----------
The Claudius Trust . . . . . . . . . . . . . . . . . . . . . . . 64,000
Xxxx Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,000
Xxxxx Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 33,840
Xxxxxxx Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 32,000
Xxxxxxx Xxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000
Xxxxxx Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000
Xxxx XxXxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Xxx Xxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,200
Xxxxxx & Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . 18,168
Xxxxx Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 16,000
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 16,000
Xxxxx Xxxxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . 12,800
Xxxxx Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
Xxxxx Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Xxxxxx Xxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Xxxxxxx Xxxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . 10,000
Xxxxxx Xxxxx Xxxx. . . . . . . . . . . . . . . . . . . . . . . . 8,000
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Xxxxxx Xxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Xxxxxxx XxXxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . 8,000
Xxxxxx Xxxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Xxxxxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 6,000
Xxxx Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,800
Xxxxx Xxxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 4,000
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 3,200
Xxxx Xxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Xxxxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Xxxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400
Xxxxxx XxXxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 1,400
Xxxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400
Xxxxxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
Xxxxxxx Xxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
Xxx Xxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
Xxxxx Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 800
Xxxxxxx XxXxx. . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxxxx Xxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 600
33
Number of
Name of Shares
Selling Securityholders to be Sold
-----------------------
----------
Xxxxxx Xxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxxxx Xxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxx Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxxx Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxxx Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxx Xxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxxx Xxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxxxxxx Xxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . 600
Xxxxx Xxxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 400
Total . . . . . . . . . . . . . . . . . . . . . . . 452,808
-------
-------
34
ANNEX A
SUBSIDIARIES OF THE COMPANY
Name Jurisdiction
ANNEX B
Matters to be Covered in the Opinion of
Fulbright & Xxxxxxxx, L.L.P.,
U.S. Counsel for the Company
and certain of the Selling Securityholders
i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified as a foreign corporation and in good standing
in each state of the United States of America in which its ownership or
leasing of property requires such qualification, and has full corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement;
ii) the authorized capital stock of the Company is as set forth in the
Prospectus; proper corporate proceedings have been taken validly to authorize
such authorized capital stock; all of the outstanding shares of such capital
stock (including the Underwritten Stock and the shares of Option Stock issued,
if any) have been duly and validly issued and are fully paid and
nonassessable; any Option Stock purchased after the Closing Date, when issued
and delivered to and paid for by the U.S. Underwriters as provided in the
Underwriting Agreement, will have been duly and validly issued and be fully
paid and nonassessable; and no preemptive rights of, or rights of refusal in
favor of, shareholders exist with respect to the Stock, or the issue and sale
thereof, pursuant to the Certificate of Incorporation or Bylaws of the Company
and, to the knowledge of such counsel, there are no contractual preemptive
rights that have not been waived, rights of first refusal or rights of co-sale
which exist with respect to the Stock being sold by the Selling
Securityholders or the issue and sale of the Stock being sold by the Company;
iii) the Registration Statement has become effective under the Securities
Act and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the
use of the Prospectus is in effect and no proceedings for that purpose have
been instituted or are pending or contemplated by the Commission;
iv) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial data contained therein,
as to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act and the Exchange
Act and with the rules and regulations of the Commission thereunder;
B-36
v) the information required to be set forth in the Registration
Statement in answer to Items 9 and 10 (insofar as it relates to such counsel)
of Form S-1 is to the best of such counsel's knowledge accurately and
adequately set forth therein in all material respects or no response is
required with respect to such Items, and, the description of the Company's
stock option plans and the options granted thereunder and the options granted
otherwise than under such plans set forth in the Prospectus accurately and
fairly presents the information required to be shown with respect to said
plans and options to the extent required by the Securities Act and the rules
and regulations of the Commission thereunder;
vi) such counsel does not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
vii) each of the U.S. Underwriting Agreement and the International
Underwriting Agreement has been duly authorized, executed and delivered by the
Company;
viii) each of the U.S. Underwriting Agreement and the International
Underwriting Agreement has been duly executed and delivered by or on behalf of
the Selling Securityholders and the Custody Agreement between the Selling
Securityholders and the Company, as Custodian, and the Power of Attorney
referred to in such Custody Agreement and, if applicable, the relevant option
exercise instructions, have been duly executed and delivered by the several
Selling Securityholders;
ix) the issue and sale by the Company of the shares of Stock sold by the
Company as contemplated by the U.S. Underwriting Agreement and the
International Underwriting Agreement will not conflict with, or result in a
breach of, the Certificate of Incorporation or Bylaws of the Company or any
agreement or instrument known to such counsel to which the Company or any of
its subsidiaries is a party or any applicable law or regulation, or so far as
is known to such counsel, any order, writ, injunction or decree, of any
jurisdiction, court or governmental instrumentality;
x) to such counsel's knowledge, all holders of securities of the
Company having rights to the registration of shares of Common Stock, or other
securities, because of the filing of the Registration Statement by the Company
are set forth on the schedule attached to such opinion. Such securityholders
have waived such rights or such rights have expired by reason of lapse of time
following notification of the Company's intent to file the Registration
Statement or the securityholders having such rights are including all or a
portion of such securities in the Registration Statement;
xi) upon delivery of the shares of Stock to be sold by the Selling
Securityholders pursuant to the U.S. Underwriting Agreement and the
International Underwriting Agreement,
B-37
and payment therefor as contemplated therein, and assuming for the purpose of
this opinion that the U.S. Underwriters and International Managers purchased
the same in good faith without notice of any adverse claims, within the
meaning of the Uniform Commercial Code in effect in the State of New York (the
"UCC"), the U.S. Underwriters and International Managers will acquire title to
the Stock purchased by them from the Selling Securityholders free and clear of
any adverse claim (within the meaning of section 8-302 of the UCC);
xii) based insofar as factual matters with respect to the stock to be
sold by the Selling Securityholders are concerned solely upon certificates of
the Selling Securityholders, the accuracy of which such counsel have no reason
to question, no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated in the Underwriting Agreement, except such as have
been obtained under the Securities Act, the EASDAQ Rules and such as may be
required under state securities or blue sky laws in connection with the
purchase and distribution of the Stock by the U.S. Underwriters; and
xiii) the Stock issued and sold by the Company and the Selling
Securityholders in the U.S. Offering will be duly authorized for listing by
the Nasdaq National Market upon official notice of issuance.
------------------------------------
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States or of the State of California, upon
opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
Representatives and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel.
In addition to the matters set forth above, counsel rendering the foregoing
opinion shall also include a statement to the effect that nothing has come to
the attention of such counsel that leads them to believe that the Registration
Statement (except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference therein,
as to which such counsel need not express any opinion or belief) at the
Effective Date contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, that the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
not express any opinion or belief) as of its date or at the Closing Date (or
any later date on which Option Stock is purchased), contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
B-38
ANNEX C
Matters to be Covered in the Opinion of
Xxxxxxxxx Xxxxxx & Xxxxx,
U.K. Counsel for the Company
(i) Each of [list UK subsidiaries] (the "U.K. Subsidiaries") is duly
incorporated or organized under the laws of England and Wales with full power
and authority under its Memorandum and Articles of Association to own or lease
its properties and conduct its business as described in the Registration
Statement; no order or resolution for the winding-up of any of the U.K.
Subsidiaries has been issued and no notice of appointment in respect of any of
the U.K. Subsidiaries of a liquidator, receiver, administrative receiver or
administrator has been given; the U.K. Subsidiaries are duly qualified to
transact business in the United Kingdom; the issued share capital of each of
the U.K. Subsidiaries has been duly authorised and validly issued and is fully
paid and not subject to further calls for funds and the issued share capital
of each of the U.K. Subsidiaries is owned by the Company; the issued share
capital of each of the U.K. Subsidiaries is owned free and clear of all liens,
encumbrances and equities and claims; and there are no options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into any share capital or of ownership
interests in any of the U.K. Subsidiaries;
(ii) The execution and delivery by the Company of the Underwriting
Agreement and the issue and sale by the Company of the shares of Stock sold by
the Company as contemplated thereby will not conflict with, or result in a
breach of, the Memorandum and Articles of Association of any of the U.K.
Subsidiaries or any agreement or instrument known to such counsel to which any
of the U.K. subsidiaries is a party or any applicable U.K.or European Union
law or regulation, or so far as is known to such counsel, any order, writ,
injunction or decree, of any jurisdiction, court or governmental
instrumentality and no consent, approval authorization, filing or order of, or
qualification with, any U.K. Governmental body or agency is required for the
performance by the Company of its obligations under the Underwriting
Agreement.
(iii) The Prospectus has been approved by the Belgian Commission and
has become effective under the EASDAQ Rules and, to the best of such counsel's
knowledge, no withdrawal of the approval of the International Prospectus or
suspension preventing the use of the International Prospectus is in effect and
no proceedings for that purpose have been instituted or are pending or
contemplated by the Belgian Commission;
(iv) The Prospectus (except as to the financial statements and
schedules and other financial data contained therein, as to which such counsel
need express no opinion) complies as to form in all material respects with the
requirements of the Belgian Commission and the EASDAQ Rules; and
(v) The Stock to be issued and sold by the Company and to be sold by
the Selling Securityholders in the International Offering has been duly
authorized for listing by EASDAQ.
C-39
