EXHIBIT 1.1
DRAFT OF 10/27/99 #2
3,500,000 SHARES
XXXXX.XXX, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
October 28, 1999
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
BEAR, XXXXXXX & CO. INC.
XXXXX XXXXX XXXXXX & COMPANY LLC
E*OFFERING CORP.
DLJDIRECT INC.
As representatives of the several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxx.xxx, Inc., a Delaware corporation (the "COMPANY"), proposes to
issue and sell to the several underwriters named in SCHEDULE I hereto (the
"UNDERWRITERS"), and certain stockholders of the Company named in SCHEDULE II
hereto (the "SELLING STOCKHOLDERS") severally propose to sell to the several
Underwriters, an aggregate of 3,500,000 shares of the common stock, par value
$.001 per share, of the Company (the "FIRM SHARES"), of which 3,000,000 shares
are to be issued and sold by the Company and 500,000 shares are to be sold by
the Selling Stockholders, each Selling Stockholder selling the amount set forth
opposite such Selling Stockholder's name in SCHEDULE II hereto under the heading
"Number of Firm Shares Being Sold". The Company also proposes to issue and sell
to the several Underwriters, and the Selling Stockholders also severally propose
to sell to the several Underwriters, an aggregate of not more than an additional
525,000 shares of the common stock, par value $.001 per share, of the Company
(the "ADDITIONAL SHARES"), of which 410,000 shares are to be issued and sold by
the Company and 115,000 shares are to be sold by the Selling Stockholders, each
Selling Stockholder selling not more than the amount set forth opposite such
Selling Stockholder's name in SCHEDULE II hereto under the heading "Maximum
Number of Additional Shares Being Sold", in each case if requested by the
Underwriters as provided in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter referred to collectively as the "SHARES". The shares of
common stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK". The
Company and the Selling Stockholders are hereinafter sometimes referred to
collectively as the "SELLERS".
SECTION 1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "ACT"), a registration statement on
Form S-1, including a prospectus, relating to the Shares. The registration
statement, as amended at the time it became effective, including the information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to as
the "REGISTRATION STATEMENT"; and the prospectus in the form first used to
confirm sales of Shares is hereinafter referred to as the "PROSPECTUS". If the
Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Act registering
additional shares of Common Stock (a "RULE 462(B) REGISTRATION STATEMENT"),
then, unless otherwise specified, any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462(b) Registration Statement.
SECTION 2. AGREEMENTS TO SELL AND PURCHASE AND LOCK-UP AGREEMENTS. On
the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, (i) the Company agrees to issue and sell
3,000,000 Firm Shares, (ii) each Selling Stockholder agrees, severally and not
jointly, to sell the number of Firm Shares set forth opposite such Selling
Stockholder's name in SCHEDULE II hereto under the heading "Number of Firm
Shares Being Sold" and (iii) each Underwriter agrees, severally and not jointly,
to purchase from each Seller at a price per Share of $______ (the "PURCHASE
PRICE") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
total number of Firm Shares to be sold by such Seller as the number of Firm
Shares set forth opposite the name of such Underwriter in SCHEDULE I hereto
bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell up to 410,000 Additional Shares, (ii) each Selling Stockholder
agrees, severally and not jointly, to sell up to the number of Additional Shares
set forth opposite such Selling Stockholder's name in SCHEDULE II hereto under
the heading "Maximum Number of Additional Shares Being Sold" and (iii) the
Underwriters shall have the right to purchase, severally and not jointly, up to
525,000 Additional Shares from the Sellers at the Purchase Price. Additional
Shares may be purchased solely for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. The Underwriters may
exercise their right to purchase Additional Shares in whole or in part from time
to time by giving written notice thereof to the Company within 30 days after the
date of this Agreement. You shall give any such notice on behalf of the
Underwriters and such notice shall specify the aggregate number of Additional
Shares to be purchased pursuant to such exercise and the date for payment and
delivery thereof, which date shall be a business day (i) no earlier than two
business days after such notice has been given (and, in any event, no earlier
than the Closing Date (as hereinafter defined)) and (ii) no later than ten
business days after such notice has been given. If any Additional Shares are to
be purchased, (i) each Underwriter agrees, severally and not jointly, to
purchase from each Seller the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased from
the Seller as the number of Firm Shares set forth opposite the name of such
Underwriter in SCHEDULE I hereto bears to the total number of Firm Shares and
(ii) such Additional Shares shall be purchased (A) first, from each Selling
Stockholder according to the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine, and in no event
more than the number of Additional Shares set forth opposite the name of such
Selling Stockholder in SCHEDULE II hereto under the heading "Maximum Number of
Additional Shares Being Sold") that bears the same proportion to the total
number of Additional Shares to be purchased as the number of Additional Shares
set forth opposite the name of such Selling Stockholder in SCHEDULE II hereto
under the heading "Maximum Number of Additional Shares Being Sold" bears to the
maximum number of Additional Shares that may be sold by the Selling
Stockholders, and (B) then, from the Company. If on the Closing Date
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(as hereinafter defined) or any Option Closing Date (as hereinafter defined), as
the case may be, any Selling Stockholder shall fail to sell any of the Shares to
be sold by such Selling Stockholder hereunder, the Company hereby agrees that,
at the request of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, the
Company shall sell an equivalent number of shares of Common Stock to the
Underwriters in lieu thereof (which shares shall constitute Firm Shares or
Additional Shares, as the case may be, for purposes of this Agreement), PROVIDED
that any purchase of such Shares by the Underwriters from the Company shall not
relieve any such defaulting Selling Stockholder from liability in respect of any
default of such Selling Stockholder under this Agreement.
Each Seller hereby agrees not to (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
(ii) enter into any swap or other arrangement that transfers all or a portion of
the economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 90 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. Notwithstanding
the foregoing, during such period (i) the Company may grant stock options to
purchase, or offer to sell or issue, or sell or issue, shares of Common Stock
pursuant to the Company's Amended and Restated 1998 Stock Option/Stock Issuance
Plan, 1999 Non-Officer Stock Option/Stock Issuance Plan and 1999 Employee Stock
Purchase Plan, (ii) the Company may issue shares of Common Stock upon the
exercise of an option or warrant outstanding on the date hereof and (iii) the
Company may issue shares of Common Stock (and options and/or warrants to
purchase Common Stock) in connection with acquisitions of other companies or
businesses and other strategic business arrangements, PROVIDED that prior to
such issuance each recipient shall have executed and delivered a lock-up
agreement to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation in the form of
the lock-up agreement delivered by other stockholders of the Company pursuant to
this paragraph. The Company also agrees not to file any registration statement
with respect to any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock for a period of 90 days after the
date of the Prospectus without the prior written consent of Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, except for a registration statement to register
for resale the 400,000 shares of Common Stock reserved for issuance under the
Company's 1999 Non-Officer Stock Option/Stock Issuance Plan. In addition, each
Selling Stockholder agrees that, for a period of 90 days after the date of the
Prospectus without the prior written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, it will not make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock. The
Company shall, prior to or concurrently with the execution of this Agreement,
deliver a lock-up agreement executed by (i) each Selling Stockholder listed on
ANNEX I hereto and (ii) each of the directors and officers of the Company listed
on ANNEX I hereto who is not a Selling Stockholder, to the effect that such
person will not, during the period commencing on the date such person signs such
agreement and ending 90 days after the date of the Prospectus, without the prior
written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, (A)
engage in any of the transactions described in the first sentence of this
paragraph, except that such person may transfer any or all of the Common Stock
currently owned or held by such person or issued to such person upon the
exercise of options without the prior written consent of Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, (1) by bona fide gift, will or intestacy, (2)
in the event such person is an individual, to any member or members of his or
her immediate family or to a trust the beneficiaries of which are exclusively
such person and/or any member or members of his or her immediate family or (3)
in the event such person is a partnership, corporation or other legal entity, in
a distribution to its limited partners, members or stockholders, PROVIDED that
prior to such transfer or distribution each transferee or distributee shall have
executed and delivered an identical lock-up
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agreement to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, or (B) make
any demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.
SECTION 3. TERMS OF PUBLIC OFFERING. The Sellers are advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. DELIVERY AND PAYMENT. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
shall request not later than 5:00 P.M., New York City time, on the second
business day prior to the Closing Date or the applicable Option Closing Date (as
defined below), as the case may be. The Shares shall be delivered by or on
behalf of the Sellers, with any transfer taxes thereon duly paid by the
respective Sellers, to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
through the facilities of The Depository Trust Company ("DTC") for the
respective accounts of the several Underwriters, against payment to the Sellers
of the Purchase Price therefor by wire transfer of federal or other funds
immediately available in New York City. The certificates representing the Shares
shall be made available for inspection not later than 9:30 A.M., New York City
time, on the business day prior to the Closing Date or the applicable Option
Closing Date, as the case may be, at the office of DTC or its designated
custodian (the "DESIGNATED OFFICE"). The time and date of delivery and payment
for the Firm Shares shall be 9:00 A.M., New York City time, on November 3, 1999
or such other time on the same or such other date as Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation and the Company shall agree in writing. The time
and date of delivery and payment for the Firm Shares are hereinafter referred to
as the "CLOSING DATE". The time and date of delivery and payment for any
Additional Shares to be purchased by the Underwriters shall be 9:00 A.M., New
York City time, on the date specified in the applicable exercise notice given by
you pursuant to Section 2 or such other time on the same or such other date as
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and the Company shall agree
in writing. The time and date of delivery and payment for any Additional Shares
are hereinafter referred to as an "OPTION CLOSING DATE".
The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 9 of this Agreement
shall be delivered at the offices of Xxxxxxx, Phleger & Xxxxxxxx LLP, 0000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and the Shares shall be delivered
at the Designated Office, all on the Closing Date or such Option Closing Date,
as the case may be.
SECTION 5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, (iii) when any amendment to the
Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective and
(v) of the happening of any event during the period referred to in Section 5(d)
below that makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or that requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
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suspending the effectiveness of the Registration Statement, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish to you seven signed copies of the Registration Statement
as first filed with the Commission and of each amendment to it, including all
exhibits, and to furnish to you and each Underwriter designated by you such
number of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the Commission
within the applicable period specified in Rule 424(b) under the Act; during the
period specified in Section 5(d) below, not to file any further amendment to the
Registration Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to which you
shall reasonably object after being so advised; and, during such period, to
prepare and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or amendment or supplement to the
Prospectus that may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause any such
amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the reasonable opinion
of counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the reasonable opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare and file with the Commission an appropriate amendment or
supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with
applicable law, and to furnish to each Underwriter and to any dealer as many
copies thereof as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; PROVIDED, HOWEVER, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its stockholders as soon as
practicable an earnings statement covering the twelve-month period ending
December 31, 2000 that shall satisfy the provisions of
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Section 11(a) of the Act and any rules of the Commission thereunder, including
Rule 158 under the Act, and to advise you in writing when such statement has
been so made available.
(h) During the period of three years after the date of this Agreement,
to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished to
or filed, on a publicly-available basis, with the Commission or any national
securities exchange on which any class of securities of the Company is listed
and such other publicly available information concerning the Company and its
subsidiaries as you may reasonably request.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Sellers' obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company's
counsel, the Company's accountants and any Selling Stockholder's counsel (in
addition to the Company's counsel) in connection with the registration and
delivery of the Shares under the Act and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement and any other agreements or documents in
connection with the offering, purchase, sale or delivery of the Shares, (iv) all
expenses in connection with the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of the several states of
the United States and the provinces of Canada, and all costs of printing or
producing any Preliminary and Supplemental Blue Sky Memoranda or Canadian
"wrapper" documents in connection therewith (including the filing fees and
reasonable fees and disbursements of counsel for the Underwriters in the United
States and Canada in connection with such registration, qualification, memoranda
or documents relating thereto), (v) the filing fees and disbursements of counsel
for the Underwriters in connection with the review and clearance of the offering
of the Shares by the National Association of Securities Dealers, Inc., (vi) all
costs and expenses incident to the listing of the Shares on the Nasdaq National
Market, (vii) the cost of printing certificates representing the Shares, (viii)
the costs and charges of any transfer agent, registrar and/or depositary and
(ix) all other costs and expenses incident to the performance of the obligations
of the Company and the Selling Stockholders hereunder (other than the
indemnification and contribution obligations of the Selling Stockholders under
Section 8 below) for which provision is not otherwise made in this Section. The
provisions of this Section shall not supersede or otherwise affect any agreement
that the Company and the Selling Stockholders may otherwise have for allocation
of such expenses among themselves.
(j) To use its best efforts to maintain the listing of the Shares on
the Nasdaq National Market for a period of three years after the date of this
Agreement.
(k) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so covered
in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the date of
this Agreement and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule
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111(b) under the Act.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement and any amendments thereto, when they become effective (A) will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (B) will comply in all material respects with the Act and (iv)
the Prospectus does not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in any
preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(d) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole (a "MATERIAL ADVERSE EFFECT").
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(e) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued by
the Company or any of its subsidiaries relating to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of the Company
or any of its subsidiaries, except as otherwise disclosed in the Registration
Statement.
(f) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights; and the Shares to be issued and sold by the
Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
(g) All of the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature.
(h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, except for such violations
or defaults that would not, singly or in the aggregate, have a Material Adverse
Effect.
(j) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as have been obtained under
the Act and the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and as may be required under the securities or Blue Sky laws of the
various states or the rules and regulations of the National Association of
Securities Dealers, Inc.), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or by-laws of the
Company or any of its subsidiaries, or any indenture, loan agreement, mortgage,
lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound, except for such conflicts or defaults that
would not, singly or in the aggregate, have a Material Adverse Effect, (iii)
violate or conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their respective
property, or (iv) result in the suspension, termination or revocation of any
Authorization (as defined below) of the Company or any of its subsidiaries or
any other impairment of the rights of the holder of any such Authorization,
except for such suspensions, terminations, revocations or impairments that would
not, singly or in the aggregate, have a Material Adverse Effect.
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is or, to the
knowledge of the Company, could be a party or to which any of their respective
property is or, to the knowledge of the Company, could be subject that are
required to be described
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in the Registration Statement or the Prospectus and are not so described; nor
are there any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not so described or
filed as required. No relationship, direct or indirect, exists between the
Company or any of its subsidiaries on the one hand, and the officers, directors,
stockholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, that is required to be described in the Registration
Statement or the Prospectus that is not so described.
(l) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or any provisions
of the Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations that, singly or in the aggregate, would
not have a Material Adverse Effect.
(m) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body) that
allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or that has resulted or,
after notice or lapse of time or both, would result in any other impairment of
the rights of the holder of any such Authorization; except where such failure to
be valid and in full force and effect or to be in compliance or the occurrence
of any such event would not, singly or in the aggregate, have a Material Adverse
Effect.
(n) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any Authorization, any related constraints on operating activities and
any potential liabilities to third parties) that would, singly or in the
aggregate, have a Material Adverse Effect.
(o) This Agreement has been duly authorized, executed and delivered by
the Company.
(p) KPMG LLP are independent public accountants with respect to the
Company and its subsidiaries as required by the Act.
(q) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with the related schedule and notes, present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and its subsidiaries on the basis stated therein at the respective dates or for
the respective periods to which they apply; such statements and the related
schedule and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; the supporting schedule included in the
Registration Statement presents fairly in accordance
9
with generally accepted accounting principles the information required to be
stated therein; and the other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(r) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(s) The Company and its subsidiaries own no real property and have good
and marketable title to all personal property owned by them that is material to
the business of the Company and its subsidiaries, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries. Any real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, taken as a whole, in each case except as described
in the Prospectus.
(t) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged. Neither the Company nor any of its subsidiaries (i) has received notice
from any insurer or agent of such insurer that substantial capital improvements
or other material expenditures will have to be made in order to continue such
insurance or (ii) has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers at a cost that would not have a Material
Adverse Effect.
(u) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries before the National
Labor Relations Board or any state or local labor relations board, (ii) strike,
labor dispute, slowdown or stoppage pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries or (iii) union
representation question existing with respect to the employees of Company and
its subsidiaries, except for such actions specified in clauses (i), (ii) or
(iii) above that, singly or in the aggregate, would not have a Material Adverse
Effect. To the best of the Company's knowledge, no collective bargaining
organizing activities are taking place with respect to the Company or any of its
subsidiaries.
(v) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(w) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all
10
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names ("INTELLECTUAL PROPERTY") currently employed by it in connection
with the business now operated by it, except where the failure to own or possess
or otherwise be able to acquire such intellectual property would not, singly or
in the aggregate, have a Material Adverse Effect. Neither the Company nor any of
its subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of such intellectual property
that, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.
(x) The Company and its subsidiaries have reviewed their operations and
those of any third parties with which the Company or any of its subsidiaries has
a material relationship to evaluate the extent to which the business or
operations of the Company or its subsidiaries could be affected by the Year 2000
Problem (as defined below). The Company believes that such review was reasonable
under the circumstances. As a result of such review, neither the Company nor any
of its subsidiaries has any reason to believe, and they do not believe, that any
Year 2000 Problem, or combination of Year 2000 Problems, will have a Material
Adverse Effect. The "YEAR 2000 PROBLEM" as used herein means any risk that
computer hardware or software used in the receipt, transmission, processing,
manipulation, storage, retrieval, retransmission or other utilization of data or
in the operation of mechanical or electrical systems of any kind will not be
able to reliably distinguish dates on or after January 1, 2000 from dates before
January 1, 2000.
(y) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(z) 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 or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement, except as set forth in the
Second Amended and Restated Investor Rights Agreement dated as of March 25,
1999, filed as Exhibit 10.3 to the Registration Statement. The Company has
complied with all rights under such agreement to include any securities with the
Shares registered pursuant to the Registration Statement and with all other
material provisions of such agreement that have not been duly waived.
(aa) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there has not occurred any material adverse change or any development
involving a prospective material adverse change in the condition, financial
or otherwise, or the earnings, business, management or operations of the
Company and its subsidiaries, taken as a whole, (ii) there has not been any
material adverse change or any development involving a prospective material
adverse change in the capital stock (except for the exercise of options and
warrants described in the Prospectus) or in the long-term debt of the Company
or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent.
(ab) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to the Underwriters as to
the matters covered thereby.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
Each Selling
11
Stockholder represents and warrants to each Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has, and on the
Closing Date will have, valid title to such Shares, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever.
(b) The Shares to be sold by such Selling Stockholder have been duly
authorized and are validly issued, fully paid and non-assessable.
(c) Such Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement signed by
such Selling Stockholder and the Company, as Custodian, relating to the deposit
of the Shares to be sold by such Selling Stockholder (the "CUSTODY AGREEMENT")
and the Power of Attorney of such Selling Stockholder appointing certain
individuals as such Selling Stockholder's attorneys-in-fact (the "ATTORNEYS") to
the extent set forth therein, relating to the transactions contemplated hereby
and by the Registration Statement and the Custody Agreement (the "POWER OF
ATTORNEY") and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Stockholder in the manner provided herein and therein.
(d) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder.
(e) The Custody Agreement of such Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and is a valid
and binding agreement of such Selling Stockholder, enforceable in accordance
with its terms, except as limited by applicable bankruptcy, moratorium,
insolvency, or other similar laws affecting generally the rights of creditors,
by principles of equity or by public policy.
(f) The Power of Attorney of such Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and is a valid
and binding instrument of such Selling Stockholder, enforceable in accordance
with its terms, except as limited by applicable bankruptcy, moratorium,
insolvency, or other similar laws affecting generally the rights of creditors,
by principles of equity or by public policy, and, pursuant to such Power of
Attorney, such Selling Stockholder has, among other things, authorized the
Attorneys, or any one of them, to execute and deliver on such Selling
Stockholder's behalf this Agreement and any other document that they, or any one
of them, may deem necessary or desirable in connection with the transactions
contemplated hereby and thereby and to deliver the Shares to be sold by such
Selling Stockholder pursuant to this Agreement.
(g) Upon delivery of and payment for the Shares to be sold by such
Selling Stockholder pursuant to this Agreement, valid title to such Shares will
pass to the Underwriters, free of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims whatsoever.
(h) The execution, delivery and performance of this Agreement and the
Custody Agreement and Power of Attorney of such Selling Stockholder by or on
behalf of such Selling Stockholder, the compliance by such Selling Stockholder
with all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as have been obtained under the Act and
the Exchange Act and as may be required under the securities or Blue Sky laws of
the various states and the rules and regulations of the National Association of
Securities Dealers, Inc.), (ii) violate or conflict with the organizational
documents of such Selling Stockholder, if such Selling Stockholder is not
12
an individual, (iii) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, any indenture, loan agreement, mortgage,
lease or other agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder or any property of such Selling
Stockholder is bound or (iv) violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over such Selling Stockholder or any property
of such Selling Stockholder.
(i) The information in the Registration Statement under the caption
"Principal and Selling Stockholders" which specifically relates to such Selling
Stockholder does not, and will not on the Closing Date, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(j) At any time during the period described in Section 5(d), if there
is any change in the information referred to in Section 7(i), such Selling
Stockholder will immediately notify you of such change.
(k) Each certificate signed by or on behalf of such Selling Stockholder
and delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Stockholder to the
Underwriters as to the matters covered thereby.
SECTION 8. INDEMNIFICATION.
(a) The Company and the Selling Stockholders identified by an asterisk
in SCHEDULE II hereto (herein collectively the "AFFILIATED SELLING
STOCKHOLDERS"), severally and not jointly, agree to indemnify and hold harmless
each Underwriter, its directors, its officers and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein; PROVIDED, HOWEVER, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter who failed to deliver a Prospectus, as then
amended or supplemented, (so long as the Prospectus and any amendment or
supplement thereto was provided by the Company to the several Underwriters in
the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims, damages,
liabilities or judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in such preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured in the Prospectus, as so amended or supplemented, and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person. Notwithstanding the foregoing, the
aggregate liability of any Affiliated Selling Stockholder pursuant to this
Section 8(a) shall be limited to an amount equal to the total proceeds (before
deducting underwriting discounts and commissions and expenses) received by
13
such Selling Stockholder from the Underwriters for the sale of the Shares sold
by such Selling Stockholder hereunder.
(b) The Selling Stockholders (other than the Affiliated Selling
Stockholders), severally and not jointly, agree to indemnify and hold harmless
each Underwriter, its directors, its officers and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, and only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement (or any amendment thereto), the
Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus in reliance upon and in conformity with written information furnished
to the Company or any Underwriter by such Selling Stockholder expressly for use
therein. Notwithstanding the foregoing, the aggregate liability of any Selling
Stockholder pursuant to this Section 8(b) shall be limited to an amount equal to
the total proceeds (before deducting underwriting discounts and commissions and
expenses) received by such Selling Stockholder from the Underwriters for the
sale of the Shares sold by such Selling Stockholder hereunder.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Stockholder and each person, if any, who controls such Selling Stockholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Sellers to such Underwriter
but only with reference to information relating to such Underwriter furnished in
writing to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(d) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a), 8(b) or 8(c)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both (i) Sections 8(a) and/or 8(b) and (ii) Section 8(c), the
Underwriter shall not be required to assume the defense of such action pursuant
to this Section 8(d), but may employ separate counsel and participate in the
defense thereof, but the fees and expenses of such counsel, except as provided
below, shall be at the expense of such Underwriter). Any indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one
14
or more legal defenses available to it that are different from or additional to
those available to the indemnifying party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for (i) the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all Underwriters, their
officers and directors and all persons, if any, who control any Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act, (ii) the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and all persons, if any, who control the Company
within the meaning of either such Section and (iii) the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all Selling Stockholders and all persons, if any, who control any Selling
Stockholder within the meaning of either such Section, and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In the case of any such
separate firm for the Company and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company. In the
case of any such separate firm for the Selling Stockholders and such control
persons of any Selling Stockholders, such firm shall be designated in writing by
the Attorneys. The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the reasonable fees and expenses of counsel (in any case where such fees and
expenses are at the expense of the indemnifying party) and, prior to the date of
such settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(e) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, 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 such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Sellers on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 8(e)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 8(e)(i) above but also the
relative fault of the Sellers on the one hand and the Underwriters on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Sellers on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions, but before deducting expenses) received
by the Sellers, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers
15
on the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholders on
the one hand or the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(e) were determined by PRO
RATA allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8(e) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(f) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to any
indemnified party at law or in equity.
(g) Each Selling Stockholder hereby designates Xxxxx.xxx, Inc., 000
Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized agent,
upon which process may be served in any action that may be instituted in any
state or federal court in the State of New York by any Underwriter, any director
or officer of any Underwriter or any person controlling any Underwriter
asserting a claim for indemnification or contribution under or pursuant to this
Section 8, and each Selling Stockholder will accept the jurisdiction of such
court in such action, and waives, to the fullest extent permitted by applicable
law, any defense based upon lack of personal jurisdiction or venue. A copy of
any such process shall be sent or given to such Selling Stockholder, at the
address for notices specified in Section 12 hereof.
SECTION 9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
16
(c) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by Xxxxx X. Xxxxxx and Xxxx X. Xxxxx, in their respective
capacities as the President and Chief Executive Officer of the Company and Chief
Financial Officer of the Company, confirming the matters set forth in Sections
6(aa), 9(a) and 9(b) and that the Company has complied with all of the
agreements and satisfied all of the conditions herein contained and required to
be complied with or satisfied by the Company on or prior to the Closing Date.
(d) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(d)(i),
9(d)(ii) or 9(d)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(e) All the representations and warranties of each Selling Stockholder
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date and you shall
have received on the Closing Date a certificate dated the Closing Date from each
Selling Stockholder to such effect and to the effect that such Selling
Stockholder has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by
such Selling Stockholder on or prior to the Closing Date.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the Company and the Selling
Stockholders, to the effect that:
(i) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to conduct its business and to own, lease
and operate its properties as described in the Prospectus.
(ii) The Company is duly qualified to transact business and is
in good standing as a foreign corporation authorized to do business in
the states of California, Georgia, Minnesota and New York.
(iii) The authorized capital stock of the Company as of June
30, 1999 is as set forth in the Prospectus under the heading "Actual"
under the caption "Capitalization". All the shares of capital stock of
the Company outstanding immediately before the issuance and sale of the
Shares (including the Shares to be sold by the Selling Stockholders)
have been duly authorized and validly issued, are fully paid and
non-assessable, and were not issued in violation of (A) any preemptive
rights arising under the certificate of incorporation or by-laws of the
Company or the Delaware General Corporation Law or (B) to the knowledge
of such counsel, similar rights that entitled or will entitle any
person to acquire any shares of capital stock of the Company.
(iv) The Shares to be issued and sold by the Company hereunder
have been duly
17
authorized and, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable, and will not have
been issued in violation of (A) any preemptive rights arising under the
certificate of incorporation or by-laws of the Company or the Delaware
General Corporation Law or (B) to the knowledge of such counsel,
similar rights that entitle or will entitle any person to acquire any
shares of capital stock of the Company, upon the issuance and sale of
the Shares to be sold by the Company.
(v) All of the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly issued
and are fully paid and non-assessable, and are owned by the Company,
directly or indirectly through one or more subsidiaries, free and clear
of any security interest, claim, lien, encumbrance or adverse interest
of any nature.
(vi) The Company has corporate power and authority to enter
into this Agreement and to issue, sell and deliver the Shares to be
sold by the Company to the Underwriters in accordance with the terms of
this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and by or on behalf of each Selling
Stockholder.
(vii) The authorized capital stock of the Company conforms in
all material respects as to legal matters to the description thereof
contained in the Prospectus.
(viii) The Registration Statement has become effective under
the Act. To the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission.
(ix) The statements set forth under the captions "Risk
Factors--Future sales of common stock by our existing stockholders
could adversely affect our stock price", "Business--Government
Regulation and Legal Uncertainties", "Management--Employment, Severance
and Other Agreements", "Management--Amended and Restated 1998 Stock
Option/Stock Issuance Plan", "Management--1999 Non-Officer Stock
Option/Stock Issuance Plan", "Management--1999 Employee Stock Purchase
Plan", "Certain Transactions--Amended and Restated Investor Rights
Agreement", "Description of Capital Stock" and "Underwriting" in the
Prospectus and Items 14 and 15 of Part II of the Registration
Statement, insofar as such statements purport to constitute a summary
of the legal matters, documents or proceedings referred to therein,
provide a fair summary of such legal matters, documents and proceedings
in all material respects.
(x) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws and, to the knowledge of
such counsel, neither the Company nor any of its subsidiaries is in
default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease
or other agreement or instrument that is material to the Company and
its subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound.
(xi) The execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions
hereof and the consummation by the Company of the transactions
contemplated hereby do not and will not (A) require any consent,
approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as have been obtained
under the Act and the Exchange Act and as may be required
18
under the securities or Blue Sky laws of the various states and the
rules and regulations of the National Association of Securities Dealers
Inc.), (B) violate or conflict with the charter or by-laws of the
Company or any of its subsidiaries, (C) conflict with or constitute a
breach of, or a default under, any indenture, loan agreement, mortgage,
lease or other agreement or instrument filed as an exhibit to the
Registration Statement or (D) violate any existing laws or regulations
(other than applicable state securities and Blue Sky laws, as to which
such counsel need not express an opinion), or any ruling, judgment,
injunction, order or decree known to such counsel and applicable to the
Company, any of its subsidiaries or any of their respective properties.
(xii) To the knowledge of such counsel, (A) there are no legal
or governmental proceedings pending or threatened before any court or
by any public, regulatory or governmental agency or body against, or
involving the properties or business of, the Company or any of its
subsidiaries that are of a character required to be disclosed in the
Registration Statement or the Prospectus by the Act, that are not so
disclosed, (B) there are no agreements, contracts, leases or other
instruments that are required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement that are not so described or filed, as the case may be, and
(C) the description in the Registration Statement and Prospectus of
statutes fairly presents in all material respects the information
required to be presented by the Act.
(xiii) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, an "investment company"
as such term is defined in the Investment Company Act of 1940, as
amended.
(xiv) To the knowledge of such counsel (A) 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 or to require the Company to include such securities with
the Shares registered pursuant to the Registration Statement, except as
set forth in the Second Amended and Restated Investor Rights Agreement
dated as of March 25, 1999, filed as Exhibit 10.3 to the Registration
Statement, and (B) except as described in the Prospectus, no person has
the right, not effectively satisfied or waived, to require inclusion of
shares of Common Stock or any other security of the Company in the
Registration Statement.
(xv) Each Selling Stockholder is the sole registered owner of
the Shares to be sold by such Selling Stockholder pursuant to this
Agreement.
(xvi) Each Selling Stockholder has full legal right, power and
authority, and all authorization and approval required by law, to enter
into this Agreement and the Custody Agreement and the Power of Attorney
of such Selling Stockholder and to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder in the manner
provided herein and therein.
(xvii) The Custody Agreement of each Selling Stockholder has
been duly authorized, executed and delivered by such Selling
Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms (except as
limited by applicable bankruptcy, moratorium, insolvency or other
similar laws affecting generally the rights of creditors, by principles
of equity or by public policy).
(xviii) The Power of Attorney of each Selling Stockholder has
been duly authorized,
19
executed and delivered by such Selling Stockholder and is a valid and
binding instrument of such Selling Stockholder, enforceable in
accordance with its terms (except as limited by applicable bankruptcy,
moratorium, insolvency or other similar laws affecting generally the
rights of creditors, by principles of equity or by public policy).
(xix) Upon delivery of and payment for the Shares to be sold
by each Selling Stockholder pursuant to this Agreement, each of the
Underwriters will receive valid marketable title to the Shares
purchased by it from such Selling Stockholder, free of any adverse
claim, assuming the Underwriters purchase such Shares for value, in
good faith and without notice of any adverse claim, as such terms are
defined in the Uniform Commercial Code in effect in the State of New
York.
(xx) The execution, delivery and performance of this
Agreement, the Custody Agreement and Power of Attorney of each Selling
Stockholder by such Selling Stockholder, the compliance by such Selling
Stockholder with all the provisions of, and the consummation of the
transactions contemplated by, this Agreement, the Custody Agreement and
the Power of Attorney will not (A) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as have been obtained and are
in full force and effect under the Act, such as may be required under
the securities or Blue Sky laws of the various states in connection
with the purchase and distribution of the Shares by the Underwriters
and the clearance of such offering with the National Association of
Securities Dealers Inc. (as to which such counsel need not express an
opinion)), (B) violate or conflict with the organizational documents of
such Selling Stockholder, if such Selling Stockholder is not an
individual, or (C) to the knowledge of such counsel, violate or
conflict with any applicable law or any rule, regulation, ruling,
judgment, injunction, order or decree of any court or any governmental
body or agency having jurisdiction over such Selling Stockholder or any
property of such Selling Stockholder.
In addition, such counsel shall state that such counsel has
participated in conferences with your representatives and with officials and
other representatives of the Company, counsel for the Underwriters and the
independent public accountants of the Company, at which conferences the contents
of the Registration Statement and Prospectus and related matters were discussed,
and although they have not passed upon, do not assume any responsibility for,
and have not independently checked or verified, the accuracy, completeness or
fairness of the information contained in the Registration Statement or the
Prospectus, such counsel shall state that, based upon their participation as
described above, the Registration Statement and the Prospectus (except the
financial statements, including the notes and schedule thereto, and other
financial or statistical data included therein, as to which such counsel need
express no view), as of the effective date of the Registration Statement,
complied as to form in all material respects with the requirements of the Act.
Such counsel shall confirm that they have no reason to believe that (i) at the
time the Registration Statement became effective, the Registration Statement, as
amended as of the date of this Agreement (except the financial statements,
including the notes and schedule thereto, and other financial and statistical
information included therein, as to which such counsel need express no view),
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) as of the date thereof and the date of such opinion
letter, the Prospectus, as amended or supplemented as of the date of this
Agreement (except the financial statements, including the notes and schedule
thereto, and other financial and statistical information included therein, as to
which such counsel need express no view), 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 the light of the
circumstances under which they were made, not misleading.
20
The opinion of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP described in Section
9(f) above shall be rendered to you at the request of the Company and the
Selling Stockholders and shall so state therein.
(g) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Xxxxx, Xxxx & Xxxxx LLP, counsel for the Underwriters, as to
the matters referred to in Sections 9(f)(iv), 9(f)(vi) (but only with respect to
the Company) and 9(f)(ix) (but only with respect to the statements under the
caption "Description of Capital Stock" and "Underwriting").
In addition, such counsel shall state that such counsel has
participated in conferences and telephone conversations with your
representatives and representatives of the Company, counsel for the Company and
the independent public accountants of the Company, during which conferences and
conversations the contents of the Registration Statement and the Prospectus and
related matters were discussed, and although they are not passing upon, and do
not assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statements or the Prospectus and make
no representation that they have verified independently, the accuracy,
completeness or fairness of such statements, (i) the Registration Statement
(except the financial statements, including the notes and schedule thereto, and
other financial and statistical information included therein, as to which such
counsel need express no view), at the time it became effective, and the
Prospectus (except as aforesaid), as of its date, appeared on their face to be
appropriately responsive in all material respects to the requirements of the
Securities Act and (ii) no information has come to their attention that causes
them to believe that (A) the Registration Statement (except the financial
statements, including the notes and schedule thereto, and other financial and
statistical information included therein, as to which such counsel need express
no view), at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (B) the
Prospectus (except the financial statements, including the notes and schedule
thereto, and other financial and statistical information included therein, as to
which such counsel need express no view), as of its date or the date of such
opinion letter, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from KPMG LLP, independent public
accountants, containing the information and statements of the type ordinarily
included in accountants' "comfort letters" to Underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(i) The Company shall have delivered to you the agreements specified in
Section 2 hereof, and all of such agreements shall be in full force and effect
on the Closing Date.
(j) The Shares shall have been duly listed for quotation on the Nasdaq
National Market.
(k) The Company and the Selling Stockholders shall not have failed on
or prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Company or
the Selling Stockholders, as the case may be, on or prior to the Closing Date.
(l) You shall have received on the Closing Date, a certificate of each
Selling Stockholder who is not a U.S. Person (as defined under applicable U.S.
federal tax legislation) to the effect that such Selling Stockholder is not a
U.S. Person, which certificate may be in the form of a properly completed and
executed
21
United States Treasury Department Form W-8 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
(m) You shall have received on the Closing Date such further
information, certificates and documents as you may reasonably request.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
SECTION 10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Sellers if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority that in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs that in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, that it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion that
the number of Firm Shares set forth opposite its name in SCHEDULE I bears to the
total number of Firm Shares that all the non-defaulting Underwriters have agreed
to purchase, or in such other proportion as you may specify, to purchase the
Firm Shares or Additional Shares, as the case may be, that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; PROVIDED that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, that any Underwriter has agreed to purchase pursuant
to Section 2 hereof be increased pursuant to this Section 10 by an amount in
excess of one-ninth of such number of Firm Shares or Additional Shares, as the
case may be, without the written consent of such Underwriter. If on the Closing
Date any Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm
22
Shares to be purchased by all Underwriters and arrangements satisfactory to you,
the Company and the Selling Stockholders for purchase of such Firm Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Stockholders. In any such case that does not result in termination
of this Agreement, either you or the Sellers shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
such Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.
SECTION 11. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Selling
Stockholder to the Underwriters.
(b) To do and perform all things to be done and performed by such
Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares to be sold by
such Selling Stockholder pursuant to this Agreement.
SECTION 12. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to
Xxxxx.xxx, Inc., 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
(ii) if to the Selling Stockholders, to Xxxxx X. Xxxxxx and Xxxx X. Xxxxx, c/o
Xxxxx.xxx, Inc., 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
(iii) if to any Underwriter or to you, to you c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department, or in any case to such other address as the person to be
notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company, any person controlling the
Company, any Selling Stockholder or any person controlling such Selling
Stockholder, (ii) acceptance of the Shares and payment for them hereunder and
(iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), the Sellers agree, jointly and severally, to
reimburse the several Underwriters for all out-of-pocket expenses (including the
fees and disbursements of counsel) incurred by them. Notwithstanding any
termination of this Agreement, the Company shall be liable for all expenses that
it has agreed to pay pursuant to Section 5(i) hereof. The Sellers also agree,
jointly and severally, to reimburse the several Underwriters, their directors
and officers and any
23
persons controlling any of the Underwriters for any and all fees and expenses
(including, without limitation, the reasonable fees and disbursements of
counsel) incurred by them in connection with enforcing their rights hereunder
(including, without limitation, pursuant to Section 8 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the Company's directors and the
Company's officers who sign the Registration Statement, and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "SUCCESSORS AND ASSIGNS" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
* * *
24
This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument. Please confirm that the foregoing
correctly sets forth the agreement among the Company, the Selling Stockholders
and the several Underwriters.
Very truly yours,
XXXXX.XXX, INC.
By
-------------------------------------
Xxxxx X. Xxxxxx, President and Chief
Executive Officer
THE SELLING STOCKHOLDERS NAMED IN
SCHEDULE II HERETO, ACTING SEVERALLY
By
-------------------------------------
Attorney-in-fact
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
BEAR, XXXXXXX & CO. INC.
XXXXX XXXXX XXXXXX & COMPANY LLC
E*OFFERING CORP.
DLJDIRECT INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By
---------------------------------
25
SCHEDULE I
NUMBER OF
FIRM SHARES
UNDERWRITERS TO BE PURCHASED
------------------------------------------------------------------------------------------ ------------------
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation.......................................
BancBoston Xxxxxxxxx Xxxxxxxx Inc.........................................................
Bear, Xxxxxxx & Co. Inc...................................................................
Xxxxx Xxxxx Xxxxxx & Company LLC..........................................................
E*Offering Corp...........................................................................
DLJDIRECT Inc.............................................................................
---------
Total............................................................................ 3,500,000
---------
---------
SCHEDULE II
MAXIMUM NUMBER
NUMBER OF FIRM OF ADDITIONAL
SELLING STOCKHOLDERS SHARES BEING SOLD SHARES BEING SOLD
--------------------------------------------------------------------- ----------------- -----------------
Xxxxx X. Xxxxxx*..................................................... 85,000 65,000
C-Max Capital Limited Partnership--I.................................. 88,000 --
Crystal Internet Venture Fund, L.P................................... 140,000 50,000
Prospect Street NYC Discovery Fund, L.P.............................. 70,000 --
Xxxxxxx X. Day*...................................................... 35,000 --
Infotech Ventures Ltd................................................ 25,000 --
Xxxxxx Xxxxxxxx*..................................................... 4,000 --
Xxxx Xxxxx........................................................... 10,000 --
Xxx Xxxxxxxx......................................................... 15,000 --
Xxxx Xxxxxxx......................................................... 5,000 --
Xxxxxxx X. Day....................................................... 13,000 --
Xxxxx Xxxxxxxxx...................................................... 10,000 --
------- -------
Total....................................................... 500,000 115,000
------- -------
------- -------
Annex I
NUMBER OF
OUTSTANDING SHARES
SUBJECT TO
PARTIES SUBJECT TO LOCK-UP AGREEMENTS LOCK-UP AGREEMENTS(1)
--------------------------------------------------------------------- --------------------
--------
(1)Does not include shares subject to options, warrants or other rights to
acquire shares of Common Stock, all of which are subject to such Lock-up
Agreements. Outstanding shares sold to the Underwriters pursuant to this
Agreement shall be deducted from the numbers stated in this table.
