______________ Shares
XXXXXXXX.XXX, INC.
Common Stock
($.0001 Par Value)
UNDERWRITING AGREEMENT
_______________, 2000
Deutsche Bank Securities Inc.
Xxxxxx Xxxxxx Partners LLC
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
SoundView Technology Group, Inc.
As Representatives of the
Several Underwriters
c/o Deutsche Bank Securities Inc.
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Xxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"),
proposes to sell to the several underwriters (the "Underwriters") named in
Schedule I hereto, for whom you are acting as representatives (the
"Representatives"), an aggregate of _______ shares (the "Firm Shares") of the
Company's Common Stock, $_____ par value (the "Common Stock"). The respective
amounts of the Firm Shares to be so purchased by the several Underwriters are
set forth opposite their names in Schedule I hereto. The Company and the selling
stockholders named in Schedule II hereto (the "Selling Stockholders") also
propose to sell at the Underwriters' option (the "Over-Allotment Option") an
aggregate of up to _______ additional shares of the Company's Common Stock (the
"Option Shares") as set forth below.
As the Representatives, you have advised the Company and the
Selling Stockholders (a) that you are authorized to enter into this Agreement on
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behalf of the several Underwriters, and (b) that the several Underwriters are
willing, acting severally and not jointly, to purchase the numbers of Firm
Shares set forth opposite their respective names in Schedule I, plus their pro
rata portion of the Option Shares if you elect to exercise the Over-Allotment
Option in whole or in part for the accounts of the several Underwriters. The
Firm Shares and the Option Shares (to the extent the aforementioned option is
exercised) are herein collectively called the "Shares."
As part of the offering of [ ] Firm Shares contemplated by
this Agreement, Deutsche Bank Securities Inc. ("Deutsche Bank") has agreed to
reserve out of the Firm Shares set forth opposite its name on Schedule I hereto,
up to [ ] Shares, for sale to certain directors, officers, employees, business
associates and related persons of the Company (collectively, the
"Participants"), as set forth in the Prospectus in the section entitled
"Underwriting" (the "Directed Share Program"). The Firm Shares to be sold by
Deutsche Bank pursuant to the Directed Share Program (the "Directed Shares")
will be sold by Deutsche Bank pursuant to this Agreement at the public offering
price. Any Directed Shares not orally con firmed for purchase by any
Participants by the end of the first business day after the date on which this
Agreement is executed will be offered to the public by Deutsche Bank as set
forth in the Prospectus.
In consideration of the mutual agreements contained herein and
of the interests of the parties in the transactions contemplated hereby, the
parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
---------------------------------------------
The Company represents and warrants to each of the
Underwriters as follows:
(a) A registration statement on Form S-1 (File No. 333-93533)
with respect to the Shares has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "Act"), and the
Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commis sion. Copies of such registration statement, including any amendments
thereto, the preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered by the
Company to you. Such
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registration statement, together with any registration statement filed by the
Company pursuant to Rule 462 (b) of the Act, herein referred to as the
"Registration Statement," which shall be deemed to include all information
omitted therefrom in reliance upon Rule 430A and contained in the Prospectus
referred to below, has become effective under the Act; no post-effective
amendment to the Registration Statement has been filed as of the date of this
Agreement; and no stop order suspend ing the effectiveness of the Registration
Statement has been issued and no proceed ing for that purpose has been initiated
or, to the best of the Company's knowledge, threatened by the Commission.
"Prospectus" means the form of prospectus first filed with the Commission
pursuant to Rule 424(b). Each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective is herein referred
to as a "Preliminary Prospectus."
(b) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement. The Company has
no direct or indirect subsidiaries. The Company is duly qualified to transact
business in all jurisdictions in which the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company or to prevent the consummation of the transactions contemplated
hereby (a "Material Adverse Effect").
(c) The outstanding shares of capital stock, including the
Common Stock and Preferred Stock, par value $0.0001 per share (the "Preferred
Stock"), of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; the Shares to be issued and sold by the Company
have been duly authorized and when issued and paid for as contemplated herein
will be validly issued, fully paid and non-assessable; and no preemptive rights
of stockholders exist with respect to any of the Shares or the issue and sale
thereof that have not been waived, complied with or terminated as of the date of
this Agreement. Neither the filing of the Registration Statement nor the
offering or sale of the Shares as contem plated by this Agreement gives rise to
any rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of Common Stock.
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(d) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. All of the Shares
conform to the description thereof contained in the Registration Statement in
all material respects.
(e) The Commission has not issued an order preventing or
suspending the use of any Preliminary Prospectus or Prospectus relating to the
proposed offering of the Shares nor, to the Company's best knowledge, instituted
proceedings for that purpose. The Registration Statement contains, and the
Prospectus and any amend ments or supplements thereto will contain, all
statements which are required to be stated therein by, and, in all material
respects, conforms and will conform, to the requirements of the Act and the
Rules and Regulations. The Registration Statement, in the form in which it
became effective, and any amendment thereto do not contain, and will not
contain, any untrue statement of a material fact and do not omit, and will not
omit, to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and any amendments
and supplements thereto do not contain, and will not contain, any untrue
statement of material fact; and do not omit, and will not 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; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from the Registration
Statement or the Prospectus, or any such amend ment or supplement, in reliance
upon, and in conformity with, written information furnished to the Company by or
on behalf of any Underwriter through the Represen tatives, specifically for use
in the preparation thereof.
(f) The financial statements of the Company with related
notes and schedules as set forth in the Registration Statement, present fairly
the financial position and the results of operations and cash flows of the
Company, at the indi cated dates and for the indicated periods. Such financial
statements and related schedules have been prepared in accordance with generally
accepted principles of accounting, consistently applied throughout the periods
involved, except as disclosed therein, and all adjustments necessary for a fair
presentation of such results for such periods have been made. The summary
financial and statistical data included in the Registration Statement present
fairly the information shown therein and such data have been compiled on a basis
consistent with the financial statements presented therein and the books and
records of the company.
(g) PricewaterhouseCoopers LLP, who have certified certain of
the financial statements filed with the Commission as part of the Registration
Statement,
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are independent public accountants as required by the Act and the Rules and
Regulations.
(h) Except as described in the Prospectus, there is no action,
suit, claim or proceeding pending or, to the knowledge of the Company,
threatened against the Company before any court or administrative agency or
otherwise which if determined adversely to the Company might have a Material
Adverse Effect.
(i) The Company has good and marketable title to all of the
properties and assets reflected in the financial statements (or as described in
the Registration Statement) herein above described, subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those reflected in
such financial statements (or as described in the Registration Statement) or
which are not material in amount. The Company occupies its leased properties
under valid and binding leases conforming in all material respects to the
description thereof set forth in the Registration Statement.
(j) The Company has filed all Federal, state, local and
foreign tax returns which have been required to be filed and have paid all taxes
indicated by said returns and all assessments received by them to the extent
that such taxes have become due and are not being contested in good faith. All
tax liabilities have been adequately provided for in the financial statements of
the Company, and the Com pany does not know of any actual or proposed additional
material tax assessments.
(k) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or supplemented, there
has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise), or prospects of the Company, whether or not occurring in the
ordinary course of business, and there has not been any material transaction
entered into or any material transaction that is probable of being entered into
by the Company, other than transactions in the ordinary course of business and
changes and transactions described in the Registration Statement, as it may be
amended or supplemented. The Company has no material contingent obligations
which are not disclosed in the Company's financial statements which are included
in the Registration Statement.
(l) The Company is not nor with the giving of notice or lapse
of time or both, would it be, in violation of or in default under its Amended
and Restated Certificate of Incorporation or Amended and Restated Bylaws or
under any agree ment, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it, or any of its properties, is
bound and which default could reasonably be expected to result in a Material
Adverse Effect. The execution and delivery of this Agreement and the
consummation of the transactions herein contem plated and the Company's 3.5
-for- 1 stock split in the form of a stock dividend described in the Prospectus
and the conversion of the Series A Convertible Preferred Stock (such stock split
and conversion is herein called the "Split and Conversion") and the fulfillment
of the terms hereof do not and will not conflict with or result in a breach or
violation of any of the terms or provisions of, or (with the giving of notice,
the passage of time or both) constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company is
a party, or of the Amended and Restated Certificate of Incorporation, as amended
or Amended and Restated Bylaws of the Company or any order, rule or regulation
applicable to the Company of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
(m) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the Commission,
the National Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for public offering
by the Underwriters under state securities or Blue Sky laws) has been obtained
or made and is in full force and effect.
(n) The Company owns or has the right to use adequate patents,
patent rights, licenses, copyrights, know how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by them and, as described in the Prospectus, proposed to
be operated by them, except where the failure to own or have the right to use
such Intellectual Property would not result in a Material Adverse Effect, and
the Company has not received any notice nor is it otherwise aware of any
infringement of or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inade quacy, singly or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect; and the Company knows of no material infringement by others of any
Intellectual Property owned by or licensed to the Company.
(o) Neither the Company, nor to the Company's knowledge, any
of its affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares. The Company acknowledges that the Underwriters may engage in passive
market making transactions in the Shares on The Nasdaq National Market in
accordance with Regulation M under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(p) The Company is not, and upon the issuance and sale of the
Shares as contemplated by this Agreement and the application of the net proceeds
therefrom as described in the Prospectus will not be, an "investment company"
within the meaning of such term under the Investment Company Act of 1940, (as
amended, the "1940 Act") and the rules and regulations of the Commission
thereunder.
(q) The Company makes and keeps accurate books and records
reflecting its assets and maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (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.
(r) The Company carries, or is covered by, insurance in such
amounts and covering such risks as it reasonably believes to be adequate for the
conduct of its business and the value of its properties.
(s) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under
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(i) Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company would
have any liability that is intended to be qualified under Section 401 (a) of the
Code is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
(t) To the Company's knowledge, there are no affiliations or
associa tions between any member of the NASD and any of the Company's officers,
directors or securityholders, except as set forth in the Registration Statement.
(u) No labor dispute with the employees of the Company exists
or, to the knowledge of the Company, is threatened that is reasonably likely to
have a Material Adverse Effect.
(v) The Shares have been approved for listing subject to
notice of issuance on The Nasdaq National Market.
(w) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings which have not been satisfied or waived
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
(x) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with this
offering of the Shares.
(y) The Company possesses all material certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by it and has not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit
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that, if determined adversely to the Company, would individually or in the
aggregate be reasonably likely to have a Material Adverse Effect.
(z) The Company is currently conducting its businesses as
described in the Prospectus.
[(aa) There is no relationship, direct or indirect, that
exists between or among the Company on the one had, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand, of a
character required to be described in the Registration Statement or Prospectus
which is not described as required under the Act.]
(bb) The Company has not distributed and will not distribute
any offering material in connection with the offering and sale of the Shares
other than the Registration Statement, a Preliminary Prospectus, the Prospectus
and other material, if any, permitted by the Act.
(cc) In connection with the Directed Share Program, (i) the
Company has not offered or sold, and will not offer or sell, any Shares to any
person outside of the United States; (ii) the Company has not distributed and
will not distribute the Prospectus or the Preliminary Prospectus outside of the
United States; and (iii) the Company has not caused and will not cause any other
person to make any such offer, sale or distribution outside of the United
States.
(dd) The Company has not offered, or caused the Underwriters
to offer, Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business with the
Company, or (ii) a trade journalist or publication to write or publish favorable
information about the Com pany or its products.
(ee) This Agreement has been duly authorized, executed and
deliv ered by the Company.
(ff) The Company has reviewed its operations and has polled
all of its significant software vendors to evaluate the extent to which the
business or opera tions of the Company have been or will be affected by the Year
2000 Problem. As a result of such review, except as described in the Prospectus,
the Company has no reason to believe, and does not believe, that the Year 2000
Problem will have a
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Material Adverse Effect or result in any material disruption of the Company's
business or operations. The "Year 2000 Problem" as used herein means any signifi
cant 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, in the case of dates or time periods occurring after December
31, 1999, function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING
STOCKHOLDERS
Each Selling Stockholder listed on Schedule II, severally and not
jointly, represents and warrants to each Underwriter and the Company that:
(a) Such Selling Stockholder has, and on the Option Closing
Date will have, full right, power and authority to enter into this Agreement and
to sell, assign, transfer and deliver the Option Shares to be sold by such
Selling Stockholder hereunder. This Agreement and the Power of Attorney attached
hereto as Exhibit A (the "Power of Attorney") have been duly authorized,
executed and delivered by such Selling Stockholder, constitute the valid and
binding agreements of such Selling Stockholder, enforceable against such Selling
Stockholder in accordance with their respective terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization and moratorium
laws and other laws relating to or affecting the enforcement of creditors'
rights generally and to general equitable principles and except as the
enforcement of rights to indemnity and contribution under this Agree ment may be
limited under applicable securities laws or the public policy underlying such
laws.
(b) Such Selling Stockholder will convey good and valid title
to the Shares to be delivered by such Selling Stockholder hereunder, free and
clear of allliens, encumbrances, equities and claims whatsoever. Certificates
in negotiable form for the aggregate number of Shares to be sold by such Selling
Stockholder have been placed in custody, under a Custody Agreement with [ ] as
custodian in substantially the form attached hereto as Exhibit B (the "Custody
Agreement").
(c) The information with respect to such Selling Stockholder
included in the Registration Statement and the Prospectus under the captions
"Principal and Selling Stockholders" does not contain any untrue statement of a
material fact or
8
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by such Selling
Stockholder of the transaction contemplated herein, except such as may have been
obtained under the Act or otherwise and such as may be required under state
securi ties or the "Blue Sky" laws.
(e) The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations under, this
Agreement will not (with or without the giving of notice or the passage of time
or both) (i) conflict with any term or provision of such Selling Stockholder's
articles of incorpo ration or bylaws or other organizational documents, as
amended (if such Selling Stockholder is a corporation, limited liability
company, partnership or other entity), (ii) result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Selling Stockholder is a party or to which its properties or assets
is subject or (iii) conflict with or violate any law, statute, rule or
regulation or any order, judgment or decree of any court or governmental agency
or body having jurisdiction over such Selling Stockholder or any of such Selling
Stockholder's properties or assets.
(f) Such Selling Stockholder has not (i) taken, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased or paid anyone any compensation for soliciting purchases of, the
Shares or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(g) Such statements in the Registration Statement, the
Prospectus or any post-effective amendment or supplement thereto made in
reliance upon and in conformity with written information furnished to the
Company by such Selling Stockholder expressly for use therein will (when they
become effective or are filed with the Commission, as the case may be) conform
in all material respects to the requirements of the Act and the rules and
regulations promulgated thereunder and
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not 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.
3. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES
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AND OPTION SHARES.
-----------------
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set forth, the
Company agrees to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a price of $__ per share, the number
of Firm Shares set forth opposite the name of each Underwriter in Schedule I
hereof, subject to adjustments in accordance with Section 11 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be
made in same day funds against delivery of certificates therefor to the
Representatives for the several accounts of the Underwriters. Such delivery is
to be made through the facilities of The Depository Trust Company, New York, New
York at 10:00 a.m., New York time, on the third business day after the date of
this Agreement or at such other time and date not later than five business days
thereafter as you and the Company shall agree upon, such time and date being
herein referred to as the "Closing Date." (As used herein, "business day" means
a day on which the New York Stock Exchange is open for trading and on which
banks in New York are open for business and are not permitted by law or
executive order to be closed, it being understood that, in the event that this
Agreement is signed after 4:30 p.m., the first business day after the date of
this Agreement shall be the day after the date of this Agreement.) To the extent
the Firm Shares are represented by physical certificates, the certificates for
the Firm Shares will be delivered in such denominations and in such
registrations as the Representatives request in writing not later than the
second full business day prior to the Closing Date, and will be made available
for inspection by the Representatives at least one full business day prior to
the Closing Date.
(c) In the event and to the extent that the Underwriters shall
exercise the election to purchase Option Shares as provided below, each Selling
Stockholder agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Selling Stockholders, at a price of $__ per share,
that portion of the number of Option Shares as to which such election shall have
been exercised. (If the Underwriter's exercise the Over-Allotment Option for
less than the total number of Option Shares, the
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number of Option Shares to be sold by each of the Selling Stockholders shall be
reduced on a pro rata basis.)
(d) The Company and each Selling Stockholder, severally and
not jointly, hereby grants to the Underwriters the right to purchase at their
election up to an aggregate of the number of Option Shares set forth opposite
their respective names as set forth in Schedule II attached hereto, at $__ per
share, for the sole purpose of covering overallotments in the sale of the Firm
Shares. Any such election to purchase Option Shares may be exercised only by
written notice from the Repre sentatives to the Company and the agent(s) for the
Selling Stockholders, given prior to the Closing Date or within a period of 30
calendar days after the date of this Agreement, setting forth the aggregate
number of Option Shares to be purchased, the names and denominations in which
the Option Shares are to be registered and the time and date on which such
Option Shares are to be delivered.
(e) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, in the event that the Underwriters elect to exercise their option to
purchase Option Shares in an amount in excess of ____ Option Shares (the
aggregate number of Shares which the Selling Stockholders have agreed to sell),
the Company hereby grants an option to the several Underwriters to purchase up
to _______ Option Shares at the price per share as set forth in the first
paragraph of this Section 3. The option granted hereby may be exercised as set
forth in this Section 3.
(f) The time and date at which certificates for Option Shares
are to be delivered shall be determined by the Representatives but shall not be
earlier than three nor later than 10 full business days after the exercise of
such option, nor in any event prior to the Closing Date (such time and date
being herein referred to as the "Option Closing Date"). If the date of exercise
of the option is before the Closing Date, the notice of exercise shall be given
at least one full business day prior to the Closing Date and shall set the
Closing Date as the Option Closing Date. The number of Option Shares to be
purchased by each Underwriter shall be in the same propor tion to the total
number of Option Shares being purchased as the number of Firm Shares purchased
by such Underwriter bears to the total number of Firm Shares purchased, adjusted
by you in such a manner as to avoid fractional shares. The option with respect
to the Option Shares granted hereunder may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters. You, as
Representatives of the several Underwriters, may cancel such option at any time
prior to its expiration by giving written notice of such cancellation to the
Company
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and the Selling Stockholders. To the extent, if any, that the Over-Allotment
Option is exercised, payment for the Option Shares shall be made on the Option
Closing Date in Federal (same day) funds drawn to the order of the respective
Selling Stockholders and/or the Company, as the case may be.
4. OFFERING BY THE UNDERWRITERS.
----------------------------
It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representatives deem it
advisable to do so. The Firm Shares are to be initially offered to the public at
the initial public offering price set forth in the Prospectus. The
Representatives may from time to time thereafter change the public offering
price and other selling terms. To the extent, if at all, that any Option Shares
are purchased pursuant to Section 3 hereof, the Under writers will offer them to
the public on the foregoing terms.
It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of the Shares in
accordance with a Master Agreement Among Underwriters entered into by you and
the several other Under writers.
5. COVENANTS OF THE COMPANY
The Company covenants and agrees with each of the several
Under writers that:
(a) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule 430A of
the Rules and Regulations is followed, to prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a form
approved by the Repre sentatives containing information previously omitted at
the time of effectiveness of the Registration Statement in reliance on Rule 430A
of the Rules and Regulations and (B) not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not in
compliance, in all material respects, with the Rules and Regulations and (C)
file on a timely basis all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission subsequent to
the date of the Prospectus and prior to the termination of the offering of the
Shares by the Underwriters.
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(b) The Company will advise the Representatives promptly (A)
when the Registration Statement or any post-effective amendment thereto shall
have become effective, (B) of receipt of any comments from the Commission, (C)
of any request of the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, and (D) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the use of the Prospectus or of the institution of
any proceedings for that purpose. The Company will use its best efforts to
prevent the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(c) The Company will cooperate with the Representatives in
endeav oring to qualify the Shares for sale under the securities laws of such
jurisdictions as the Representatives may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdic tion where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other docu ments, as are or
may be required to continue such qualifications in effect for so long a period
as the Representatives may reasonably request for distribution of the Shares.
(d) The Company will deliver to, or upon the order of, the
Represen tatives, will deliver from time to time, as many copies of any
Preliminary Prospectus as the Representatives may reasonably request. The
Company will deliver to, or upon the order of, the Representatives during the
period when delivery of a Prospec tus is required under the Act, as many copies
of the Prospectus in final form, or as thereafter amended or supplemented, as
the Representatives may reasonably request. The Company will deliver to the
Representatives at or before the Closing Date, four signed copies of the
Registration Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Representatives such number of copies of the
Registration Statement (including such number of copies of the exhibits filed
therewith that may reasonably be requested), and of all amendments thereto, as
the Representatives may reasonably request.
(e) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of the
Commission thereunder, so as to permit the completion of the distribution of the
Shares as contemplated in this Agreement and the Prospectus. If during the
period in which a
13
prospectus is required by law to be delivered by an Underwriter or dealer, any
event shall occur as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, in all material respects, the
Company promptly will so notify the Representa tives and will prepare and file
with the Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with the law, in
all material respects. The Company will furnish without charge to the
Underwriters and any dealer required to so deliver a prospectus as many copies
of the post-effective amendment to the Registration Statement and the amended or
supplemented Prospec tus complying with Section 10(a)(3) of the Act as they may
reasonably request.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later than
15 months after the effective date of the Registration Statement, an earnings
statement (which need not be audited) in reasonable detail, covering a period of
at least 12 consecutive months beginning after the effective date of the
Registration Statement, which earning statement shall satisfy the requirements
of Section 11 (a) of the Act and Rule 158 of the Rules and Regulations.
(g) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other securities convertible into or
exchangeable or exercisable for shares of Common Stock or derivative of Common
Stock or of other securities that represent the right to receive Common Stock or
the right to receive securities convertible into or exchangeable or exercisable
for shares of Common Stock (or any agreement for such) will be made for a period
of 180 days after the date of this Agreement, directly or indirectly, by the
Company otherwise than hereunder or with the prior written consent of Deutsche
Bank (except for the grant of options pursuant to employee stock option plans
that are in existence on the date hereof and described in the Prospectus),
except that the Company may without such consent issue shares upon the exercise
of options outstanding on the date of this Agreement pursuant to the Company's
stock option or stock purchase plans or as consideration for acquisitions or in
connection with strategic investment or corporate relationships, provided that
any shares so is sued cannot be offered, sold or otherwise disposed of by the
recipient thereof during the 180-day period referred to above.
14
(h) The Company will use its best efforts to have the Shares,
subject to notice of issuance, approved for quotation on The Nasdaq National
Market.
(i) The Company has caused each officer, each director and
substantially all of the securityholders of the Company to furnish to the
Representatives, on or prior to the date of this agreement, a letter or letters,
in form and substance satisfactory to the Underwriters, pursuant to which each
such person shall agree not to offer, sell, sell short or otherwise dispose of
any shares of Common Stock of the Company or other capital stock of the Company,
or any other securities convertible, exchangeable or exercisable for Common
Shares or derivative of Common Shares owned by such person or request the
registration for the offer or sale of any of the foregoing (or as to which such
person has the right to direct the disposition of) for a period of 180 days
after the date of this Agreement, directly or indirectly, except with the prior
written consent of Deutsche Bank or as contemplated in such letters (the "Lockup
Agreements").
(j) During a period of three years from the effective date of
the Registration Statement, to furnish to the Representatives copies of all
reports or other communications (financial or other) furnished to stockholders,
and to deliver to the Representatives (i) as soon as they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as the Representatives may from
time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company are consolidated in
reports furnished to its stockholders generally or to the Commission).
(k) If the Company elects to rely upon Rule 462(b), the
Company shall file as promptly as practicable a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b), and the Company
shall at the time of filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
(l) The Company shall apply the net proceeds of its sale of
the Shares as set forth in the Prospectus and shall include in reports filed
with the Commission such information with respect to the sale of the Shares and
the application of the proceeds therefrom as may be required in accordance with
Rule 463 under the Act.
15
(m) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a manner as
would require the Company to register as an investment company under the 1940
Act.
(n) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for the Common Stock.
(o) In connection with the Directed Share Program, to help
ensure that the Directed Shares will be restricted, to the extent required by
the NASD or the NASD rules and regulations, including but not limited to, the
"Free-Riding and Withholding" Interpretation, from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date of the
effectiveness of the Registra tion Statement, at the request of Deutsche Bank,
the Company will direct the transfer agent to place stop transfer restrictions
upon the securities of those Partici pants notified for the Company by Deutsche
Bank for such period of time Deutsche Bank.
(p) The Company will not (i) take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company or (ii) sell, bid for, purchase or pay
anyone any compensation for soliciting purchases of, the Shares.
6. COVENANTS OF SELLING STOCKHOLDERS.
---------------------------------
Each Selling Stockholder agrees with the several Underwriters
as follows:
(a) Such Selling Stockholder will cooperate to the extent
reasonably necessary to cause the Registration Statement or any post-effective
amendment thereto to become effective at the earliest possible time.
(b) Such Selling Stockholder will use such Selling
Stockholder's reasonable best efforts to do or perform all things required to be
done or performed by it prior to the Closing Date to satisfy all conditions
precedent to the delivery of the Shares.
16
(c) Except for the sale of Option Shares, such Selling
Stockholder will not offer, sell, contract to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or any interests therein, or
any securities convertible into, or exchangeable for, shares of Stock or rights
to acquire the same, (i) except as permitted under the terms of the agreement
specified in Section 5(j) ("Lock-up Agreement"), or (ii) if such Selling
Stockholder shall not have executed a Lock-up Agreement, prior to the expiration
of the Lock-up Period without the prior written consent of the Deutsche Bank.
(d) Such Selling Stockholder will not take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabili zation or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares in violation of the Exchange Act or
any applicable rules of The Nasdaq National Market.
(e) Each Selling Stockholder agrees to notify the Underwriters
promptly of any information that comes to such Selling Stockholder's attention
that would cause such Selling Stockholder to have reason to believe that his,
her or its representations, warranties and statements in this Agreement are not
accurate in all material respects.
(f) Except as herein contemplated with respect to the Shares
to be included in the Registration Statement, each Selling Stockholder agrees to
waive any registration rights to which such Selling Stockholder may be entitled
in connection with the public offering herein contemplated.
7. COSTS AND EXPENSES.
------------------
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Company; the cost of printing and delivering to, or as reasonably requested by,
the Underwriters copies of the Registration Statement, Preliminary Prospectuses,
the Prospectus, this Agree ment, the Underwriters' Selling Memorandum, the
Underwriters' Invitation Letter, the Listing Application, the Blue Sky Survey
and any supplements or amendments thereto; the filing fees and expenses
(including legal fees and disbursements) incident to securing any required
review by the NASD of the terms of the sale of the Shares; the Listing Fee of
The Nasdaq National Market; the expenses, including the fees and
17
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Shares under State securities or Blue Sky laws; the cost of
preparing stock certificates; and the fees and disbursements of the transfer
agent and registrar. The Company also agrees to pay all costs and expenses of
the Underwrit ers, including the reasonable fees and disbursements of counsel
for the Underwriters, incurred in connection with the Directed Share Program.
The Company shall not, however, be required to pay for any of the Underwriters
expenses (other than those related to qualification under NASD regulation and
State securities or Blue Sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Representatives pursuant to Section
13 hereof, or by reason of any failure, refusal or inability on the part of the
Company to perform any undertaking or satisfy any condition of this Agreement or
to comply with any of the terms hereof on its part to be performed, unless such
failure to satisfy said condition or to comply with said terms be due to the
default or omission of any Underwriter, then the Company shall reimburse the
several Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigat ing,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Company shall not in any event be liable to
any of the several Underwriters for damages on account of loss of anticipated
profits from the sale by them of the Shares. The Company also agrees to pay the
reasonable fees and disbursements of one counsel for all Selling Stockholders
(the "Selling Stockholders' Counsel"). Each Selling Stockholder shall pay the
costs and expenses incident to the performance by it of its obligations
hereunder and in connection with the offer, sale and delivery of the shares to
be sold by it, including any stock transfer taxes payable upon the sale of the
shares to the Underwriters, the fees and expenses of any counsel, other than
Selling Stockholders' Counsel, retained by it and the underwriting discounts and
commissions payable to the Underwriters.
8. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
----------------------------------------------
The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on the Option
Closing Date are subject to the accuracy, as of the Closing Date or the Option
Closing Date, as the case may be, of the representations and warranties of the
Company and the Selling Stockholders contained herein, as the case may be, and
to the performance by the Company and the Selling Stockholders of its covenants
and obligations hereun der and to the following additional conditions:
18
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all filings required
by Rule 424 and Rule 430A of the Rules and Regulations shall have been made, and
any request of the Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed to the
Representatives and complied with to their reasonable satisfaction. No stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings for that purpose
shall have been taken or, to the knowledge of the Company, shall be contemplated
by the Commission and no injunction, restraining order, or order of any nature
by a Federal or state court of competent jurisdiction shall have been issued as
of the Closing Date which would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing
Date and on the Option Closing Date, in the event the Over-Allotment Option is
exercised, the opinion of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for the
Company, dated the Closing Date or the Option Closing Date, as the case may be,
addressed to the Underwriters (and stating that it may be relied upon by counsel
to the Underwriters), in form and substance reasonably satisfactory to the
Representatives, to the effect set forth in Exhibit 8(b) to this Agreement.
(c) The Selling Stockholders shall have furnished to you the
opinion of Loeb & Loeb or of such counsel to the Selling Stockholders as shall
be reasonably satisfactory to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
("Skadden, Arps"), counsel for the Underwriters, dated Closing Date and the
Option Closing Date, to the effect set forth in Exhibit 8(c) to this Agreement.
(d) The Representatives shall have received from Skadden,
Arps, counsel for the Underwriters, an opinion dated the Closing Date or the
Option Closing Date, as the case may be, with respect to the valid existence and
good standing of the Company, the validity of the Shares being delivered, the
Registration Statement, the Prospectus, and other related matters as the
Representatives may reasonably request, and the Company shall have furnished to
Skadden, Arps such documents as they request for the purpose of enabling them to
pass upon such matters.
(e) The Representatives shall have received, on the Closing
Date and the Option Closing Date, in the event the Over-Allotment Option is
exercised, a letter dated the date hereof, the Closing Date or the Option
Closing Date, as the case
19
may be, in form and substance satisfactory to you, of PricewaterhouseCoopers LLP
confirming that they are independent public accountants within the meaning of
the Act and the applicable published Rules and Regulations thereunder and
stating that in their opinion the financial statements and schedules examined by
them and included in the Registration Statement comply in form in all material
respects with the applicable accounting requirements of the Act and the related
published Rules and Regulations; and containing such other statements and
information as is ordi narily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial and
statistical information contained in the Registration Statement and Prospectus.
(f) The Representatives shall have received on the Closing
Date and the Option Closing Date, in the event the Over-Allotment Option is
exercised, a certificate or certificates of the Chief Executive Officer and the
principal financial officer of the Company to the effect that, as of the Closing
Date or the Option Closing Date, as the case may be, each of them severally
represents as follows:
(1) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness of the
Registrations Statement has been issued, and no proceedings for such
purpose have been taken or are, to his knowledge, contemplated by the
Commission;
(2) The representations and warranties of the Company
contained in Section 1 hereof are true and correct as of the Closing
Date or the Option Closing Date, as the case may be;
(3) The Company has performed, in all material
respects, all covenants and agreements and satisfied all conditions
contained in this Agreement required to be performed or satisfied by
the Company as of the Closing Date or the Option Closing Date, as the
case may be;
(4) He carefully examined the Registration Statement
and the Prospectus and, in his opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration
Statement were true and correct in all material respects, and such
Registration Statement and Prospectus did not omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, in the case of the Prospectus, in
light of the circumstances under which they were made, and since the
effective date of the Registration Statement, no event has
20
occurred which is required to be set forth in a supplement to or an
amend ment of the Prospectus which has not been so set forth in such
supplement or amendment; and
(5) Since the respective dates as of which
information is given in the Registration Statement and Prospectus,
there has not been any material adverse change or any development
involving a prospective material adverse change in or affecting the
earnings, business, management, proper ties, assets, rights,
operations, condition (financial or otherwise) or prospects of the
Company, whether or not arising in the ordinary course of business.
(g) The Representatives shall have received on the Option
Closing Date, a certificate or certificates of the Selling Stockholders to the
effect that, as of the Option Closing Date, each of them generally represents
that the representations and warranties of the Selling Stockholders contained n
Section 1 hereof are true and correct as of the Option Closing Date.
(h) The Company and the Selling Stockholders shall have
furnished to the Representatives such further certificates and documents
confirming the representations and warranties, covenants and conditions
contained herein and related matters as the Representatives may reasonably have
requested.
(i) The Firm Shares and Option Shares, if any, have been ap
proved for quotation, subject to official notice of issuance, on The Nasdaq
National Market.
(j) The Lockup Agreements described in Section 5 (j) are in
full force and effect.
(k) The Company shall have effected the Split and Conversion.
(l) The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects reasonably satisfactory to the Representatives and to
Skadden, Arps, counsel for the Underwriters.
(m) If any of the conditions hereinabove provided for in this
Section 8 shall not have been fulfilled when and as required by this Agreement
to be ful filled, the obligations of the Underwriters hereunder may be
terminated by the
21
Representatives by notifying the Company and the Selling Stockholders of such
termination in writing or by telegram at or prior to the Closing Date or the
Option Closing Date, as the case may be.
In such event, the Company, the Selling Stockholders and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 7 and 10 hereof).
9. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY AND
SELLING STOCKHOLDERS.
The obligations of the Company and the Selling Stockholders to
sell and deliver the portion of the Shares required to be delivered as and when
specified in this Agreement are subject to the conditions that at the Closing
Date or the Option Closing Date, as the case may be, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and be in
effect or proceedings therefor initiated or threatened.
10. INDEMNIFICATION.
---------------
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the
meaning of the Act and each Selling Stockholder and their
representative heirs and assigns, directors, officers and each person
who controls such persons within the meaning of the Act, against any
losses, claims, damages or liabilities to which such Underwriter or any
such controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabili ties (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto, (ii) the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in the case of the Prospectus, in light of the
circumstances in which they were made, or (iii) any alleged act or
failure to act by any Underwriter in connection with, or relating in
any manner to, the Shares or the offering contemplated hereby, and
which is included as part of or referred to in any loss, claim, damage,
liability or
22
action arising out of or based upon matters covered by clause (i) or
(ii) above (provided, that the Company shall not be liable under this
clause (iii) to the extent that it is determined in a final judgment by
a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its
gross negligence or willful misconduct); provided, however, that the
Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged
omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to
the Company by or through the Representatives specifically for use in
the preparation thereof, as set forth in Section 15 hereof and;
provided further, that with respect to any untrue statement or omission
of a material fact made in any Preliminary Prospectus, the indemnity
agreement contained in this Section 10(a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such
loss, claim, damage or liability purchased the securities concerned, to
the extent that any such loss, claim, damage or liability of such
Underwriter occurs under the circumstance where it shall have been
determined by a court of competent jurisdiction by final and
nonappealable judgment (unless the Company and the Underwriter other
wise agree) that (w) the Company had previously furnished copies of
the Prospectus to the Representatives or the Selling Stockholders, as
applicable, (x) delivery of the Prospectus was required by the Act to
be made to such person, (y) the untrue statement or omission of a
material fact contained in the Preliminary Prospectus was corrected in
the Prospectus and (z) there was not sent or given to such person, at
or prior to the written confirmation of the sale of such securities to
such person, a copy of the Prospectus.
(2) to reimburse each Underwriter and each such
control ling person upon demand for any legal or other out-of-pocket
expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss,
claim, damage or liability, action or proceeding or in responding to a
subpoena or governmental inquiry related to the offering of the Shares,
whether or not such Underwriter or controlling person is a party to any
action or proceeding. In the event that it is finally judicially
determined (unless the Company and the Underwriter otherwise agree)
that the Underwriters were not entitled to receive payments
23
for legal and other expenses pursuant to this subparagraph, the
Underwriters will promptly return all sums that had been advanced
pursuant hereto.
(b) The Company will indemnify and hold harmless Deutsche Bank
against any losses, claims, damages or liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (i) that arises out of or
is based upon any untrue statement or alleged untrue statement of any material
fact contained in the prospectus wrapper material prepared by or with the
consent of the Company for distribution in foreign jurisdictions in connection
with the Directed Share Program attached to the Prospectus or Preliminary
Prospectus or any amendment or supplement thereto or caused by any omission of
or alleged omission to state in the Prospectus or Prelimi nary Prospectus or any
amendment or supplement thereto, a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) caused by the
failure of any Participant to pay for and accept delivery of the Shares that,
immediately following the effectiveness of the Registration Statement, were
subject to a properly confirmed agreement to purchase, or (iii) related to,
arising out of, or in connection with the Directed Share Program; provided that
the Company shall not be responsible under this Section 10(b) for any losses,
claims, damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
Deutsche Bank.
(c) Each Selling Stockholder will, severally but not jointly,
indemnify and hold harmless the Company and each Underwriter against any
losses, claims, damages or liabilities to which the Company, Underwriter or
controlling person may become subject under the Act, the Exchange Act, or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) (i) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or (ii) arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, in each case only to
the extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by any Selling Stockholder specifi cally
for use therein; and, subject to the limitation set forth immediately preceding
this clause, will reimburse, as incurred, any legal or other expenses reasonably
incurred by the Company or Underwriter or controlling person in connection with
investigating or defending any such action or claim as such expenses are
incurred;
24
provided, however, that with respect to any untrue statement or omission of a
material fact made in any Preliminary Prospectus, the indemnity agreement con
tained in this Section 10(c) shall not inure to the benefit of any Underwriter
from whom the person asserting any such loss, claim, damage or liability
purchased the securities concerned, to the extent that any such loss, claim,
damage or liability of such Underwriter occurs under the circumstance where it
shall have been determined by a court of competent jurisdiction by final and
nonappealable judgment that (w) the Company had previously furnished copies of
the Prospectus to the Representatives, (x) delivery of the Prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such securities to such
person, a copy of the Prospectus; provided further, that each Selling Stock
holder shall not be liable under this Section 10 for any amounts in excess of
the product of the purchase price per share set forth in Section 3 hereof and
the number of shares being sold by such Selling Stockholder hereunder.
(d) Each Underwriter severally and not jointly will indemnify
and hold harmless the Company, each Selling Stockholder (and its heirs, and
assigns), each of their respective directors, and each of the Company's officers
and each person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages or liabilities to which the Company or any
such director, officer, or controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Prelimi nary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances under
which they were made; and will reimburse any legal or other expenses reasonably
incurred by the Company, such Selling Stockholder (and its heirs, and assigns)
or any such director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that each Underwriter will be liable in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the prepara tion thereof. This indemnity agreement will
be in addition to any liability which such Underwriter may otherwise have.
(e) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 10, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 10(a), (b), (c) or (d) shall be
available to any party who shall fail to give notice as provided in this Section
10(e) if the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was materially prejudiced by the
failure to give such notice, but the failure to give such notice shall not
relieve the indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of the provisions of Section 10(a), (b), (c) or (d). In case any such proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commence ment thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party and
shall pay as incurred the reasonably fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel at its own expense. Notwithstand ing
the foregoing, the indemnifying party shall pay as incurred (or within 30 days
of presentation) the reasonable fees and expenses of the counsel retained by the
indem nified party in the event (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them or (iii) the indemnifying party shall have
failed to assume the defense and employ counsel acceptable to the indemnified
party within a reasonable period of time after notice of commencement of the
action. It is understood that the indemni fying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by you in the case
of parties indemnified pursuant to Section 10(a) and by the Company in the case
of parties indemnified pursuant to Section 10(b), (c) or (d).
25
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. In addition, the indemnifying party will not,
without the prior written consent of the indemnified party, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action or proceeding of which indemnification may be sought hereunder (whether
or not any indemnified party is an actual or potential party to such claim,
action or proceeding) unless such settlement, compromise or consent (i) includes
an unconditional release of each indemnified party from all liability arising
out of such claim, action or proceeding 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
any indemnified party.
(f) If the indemnification provided for in this Section 10 is
unavail able to or insufficient to hold harmless an indemnified party under
Section 10(a), (b), (c) or (d) above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company, the
Selling Stockholders, and the Underwriters, respectively, from the offering of
the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, the Selling Stockholders, and the
Underwriter, respectively, in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Selling
Stockholders, and the Underwriters shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deduct ing expenses)
received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged
26
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Selling
Stockhold ers, or the Underwriters and the parties' relative intent, knowledge,
access to informa tion and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 10(f) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 10(f). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to above in this Section 10(f) shall be
deemed to include any legal or other expenses reason ably incurred by such
indemnified party in connection with investigating or defend ing any such action
or claim. Notwithstanding the provisions of this subsection (f), (x) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, (y) no Selling Stockholder shall be required to contribute any
amount in excess of the product of the purchase price per share set forth in
Section 3 hereof and the number of shares being sold by such Selling Stockholder
hereunder, and (z) 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.
(g) In any proceeding relating to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this Section
10 hereby consents to the jurisdiction of any court having jurisdiction over any
other contribut ing party, agrees that process issuing from such court may be
served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
(h) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 10 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribu tion agreements contained in this Section 10 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force
27
and effect, regardless of (x) any investigation made by or on behalf of any
Under writer or any person controlling any Underwriter, the Company, its
directors or officers or any persons controlling the Company, or Selling
Stockholders or any persons controlling the Selling Stockholders (y) acceptance
of any Shares and payment therefor hereunder, and (z) any termination of this
Agreement. A successor to any Underwriter, to the Company, its directors or
officers, or any person control ling the Company, or Selling Stockholders or any
persons controlling the Selling Stockholders shall be entitled to the benefits
of the indemnity, contribution and reimbursement agreements contained in this
Section 10.
11. DEFAULT BY UNDERWRITERS.
-----------------------
If on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the portion of the
Shares which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company), you, as
Representatives of the Underwriters, shall use your reasonable efforts to
procure within 36 hours thereafter one or more of the other Underwriters, or any
others, to purchase from the Company or the Selling Stockholders, as the case
maybe, such amounts as may be agreed upon and upon the terms set forth herein,
the Firm Shares or Option Shares, as the case may be, which the defaulting
Underwriter or Underwriters failed to purchase. If during such 36 hours you, as
such Representatives, shall not have procured such other Underwriters, or any
others, to purchase the Firm Shares or Option Shares, as the case may be, agreed
to be purchased by the defaulting Underwriter or Underwrit ers, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Firm Shares or Option Shares, as the case may be,
which they are obligated to purchase hereunder, to purchase the Firm Shares or
Option Shares, as the case may be, which such defaulting Underwriter or Under
writers failed to purchase, or (b) if the aggregate number of shares of Firm
Shares or Option Shares, as the case may be, with respect to which such default
shall occur exceeds 10% of the Firm Shares or Option Shares, as the case may be,
covered hereby, the Company or you as the Representatives of the Underwriters
will have the right, by written notice given within the next 36-hour period to
the parties to this Agreement, to terminate this Agreement without liability on
the part of the non defaulting Underwriters or of the Company except to the
extent provided in Section 10 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 11, the Closing Date
or Option Closing Date, as the case may be, may
28
be postponed for such period, not exceeding seven days, as you, as
Representatives, may determine in order that the required changes in the
Registration Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriter" includes any person
substituted for a defaulting Underwriter. Any action taken under this Section 11
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
12. NOTICES.
-------
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows:
(a) If to the Underwriters, to Deutsche Bank Securities Inc.,
Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: [Registration
Department]; with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times
Square, New York, New York, Attention: Xxxxx X. Xxxxxx, fax no.: 000 000 0000;
and
(b) If to the Company, to Xxxxxxxx.xxx, Inc., 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxx, General
Counsel, fax no.: 000 000 0000; with a copy to Xxxxxxx, Phleger & Xxxxxxxx LLP,
0000 Xxxxx xxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X.
Xxxxxxx, fax no.: 000 000 0000; and
(c) If to the Selling Stockholder with a copy to Loeb & Loeb,
000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxx Xxxxxxxx, fax
no.: 000 000 0000.
13. TERMINATION.
-----------
(a) This Agreement may be terminated by you by notice to the
Company at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
earnings, busi ness, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company, whether or not
arising in the ordinary course of business, (ii) any outbreak or escalation of
hostilities or declaration of war or national emergency or other national or
international calamity or crisis or change
29
in economic or political conditions if the effect of such outbreak, escalation,
declara tion, emergency, calamity, crisis or change on the financial markets of
the United States would, in your reasonable judgment, make it impracticable or
inadvisable to market the Shares or to enforce contracts for the sale of the
Shares, or (iii) suspension of trading in securities generally on the New York
Stock Exchange or the American Stock Exchange or limitation on prices (other
than limitations on hours or numbers of days of trading) for securities on
either such Exchange, (iv) the enactment, publication, decree or other
promulgation of any statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects or
may materially and adversely affect the business or operations of the Company,
(v) declaration of a banking moratorium by United States or New York State
authorities, (vi) any downgrading, or placement on any watch list for possible
downgrading, in the rating of the Company's debt securities, if any, by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Exchange Act); (vii) the suspension of trading of the
Com pany's common stock by The Nasdaq National Market, the Commission, or any
other governmental authority or, (viii) the taking of any action by any
governmental body or agency in respect of its monetary or fiscal affairs which
in your reasonable opinion has a material adverse effect on the securities
markets in the United States; or
(b) This Agreement may otherwise be terminated as provided in
Sections 8 and 11 of this Agreement.
14. SUCCESSORS.
----------
This Agreement has been and is made solely for the benefit of
the Underwriters, the Company, the Selling Stockholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and control ling persons referred to herein, and no other person will
have any right or obligation hereunder. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign merely because of such
purchase.
15. INFORMATION PROVIDED BY UNDERWRITERS AND SELL
---------------------------------------------
ING STOCKHOLDERS.
----------------
(a) The Company and the Underwriters acknowledge and agree
that the only information furnished or to be furnished by any Underwriter to the
Com pany for inclusion in any Prospectus or the Registration Statement consists
of the
30
following information, furnished by the Representatives on behalf of the
Underwrit ers to the Company, set forth under the caption "Underwriting" in the
Prospectus: (i) the list of Underwriters, (ii) the fifth and sixth paragraphs,
and the first sentence in the seventh paragraph under the table listing the
Underwriters, (iii) the first para graph under the subheading "Commissions and
Discounts," (iv) the fourth paragraph under the subheading "Nasdaq National
Market Quotation," and (v) all of the paragraphs under the subheading "Price
Stabilization, Short Positions and Penalty Bids."
(b) The Company and the Selling Stockholders acknowledge and
agree that the only information furnished or to b furnished by any Selling Stock
holder to the Company for inclusion in any Prospectus or the Registration
Statement consists of the information as to the number of Option Shares such
Selling Stock holder has a greed to sell as set forth under the caption
"Principal and Selling Stockholder."
16. MISCELLANEOUS.
-------------
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers, or by or on behalf of the Selling stockholders (and
their heirs on and assigns) or their directors or officers and (c) delivery of
and payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
principles of conflicts of law thereof.
31
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
XXXXXXXX.XXX, INC.
By:
-------------------------------
Name:
Title:
SELLING STOCKHOLDERS,
Listed on Schedule II
By:
-------------------------------
Attorney-in-fact
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
DEUTSCHE BANK SECURITIES INC.
XXXXXX XXXXXX PARTNERS LLC
XXXX XXXXX XXXX XXXXXX, INCORPORATED
SOUNDVIEW TECHNOLOGY GROUP, INC.
As Representatives of the several
Underwriters listed on Schedule I
By: DEUTSCHE BANK SECURITIES INC.
By:
-------------------------------
Name:
Title:
32
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
Deutsche Bank Securities Inc.
Xxxxxx Xxxxxx Partners, LLC
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
SoundView Technology Group, Inc.
----------
Total
----------
33
SCHEDULE II
LIST OF SELLING STOCKHOLDERS
Stockholder Number of Shares Entitled to Sell
Xxxxxxx X. Xxxxxx 300,470
Xxxx X. Xxxxxxx 96,000
Concentric Network Corporation 87,501
Hikari Tsushin Inc. 35,000
Xxxx Xxxxxxx 8,750
34
