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Exhibit 99.3
AKAMAI TECHNOLOGIES, INC.
$250,000,000
Principal Amount
5-1/2% Convertible Subordinated Notes due 2007
Purchase Agreement
June 15, 2000
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX XXXXX XXXXXX INC.
XXXXXX XXXXXX PARTNERS LLC
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5-1/2% Convertible Subordinated Notes due 2007
of AKAMAI TECHNOLOGIES, INC.
PURCHASE AGREEMENT
June 15, 2000
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX XXXXX XXXXXX INC.
XXXXXX XXXXXX PARTNERS LLC
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
AKAMAI TECHNOLOGIES, INC., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation ("DLJ"), Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx Xxxxx Xxxxxx
Inc. and Xxxxxx Xxxxxx Partners LLC (each an "INITIAL PURCHASER" and,
collectively, the "INITIAL PURCHASERS") an aggregate of $250,000,000 in
principal amount of its 5.5% Convertible Subordinated Notes due 2007 (the "FIRM
NOTES"), subject to the terms and conditions set forth herein. The Company also
proposes to issue and sell to the Initial Purchasers not more than an additional
$50,000,000 principal amount of its 5-1/2% Convertible Subordinated Notes due
2007 (the "ADDITIONAL NOTES"), if requested by the Initial Purchasers as
provided in Section 2 hereof. The Firm Notes and the Additional Notes are herein
collectively referred to as the "NOTES". The Notes are to be issued pursuant to
the provisions of an indenture (the "INDENTURE"), to be dated as of the Closing
Date (as defined below), between the Company, and State Street Bank and Trust
Company, as trustee (the "TRUSTEE"), pursuant to which the Notes, as provided
therein, will be convertible at the option of the holders thereof into shares of
the Company's common stock, par value $0.01 per share (the "COMMON STOCK"). The
Notes and the Common Stock issuable upon conversion thereof are herein
collectively referred to as the "SECURITIES". The Securities and the Indenture
are more fully described in the Offering Memorandum (as hereinafter defined).
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Indenture.
1. OFFERING MEMORANDUM. The Notes will be offered and sold to the
Initial Purchasers pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "ACT"). The
Company has prepared a preliminary offering memorandum, dated June 12, 2000 (the
"PRELIMINARY OFFERING MEMORANDUM") and a final offering memorandum, dated June
15, 2000
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(the "OFFERING MEMORANDUM"), relating to the Notes. As used herein, the
term Offering Memorandum shall include each of the documents incorporated by
reference therein (the "Incorporated Documents").
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Notes (and all securities issued
in exchange therefor, in substitution thereof or upon conversion thereof) shall
bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A QUALIFIED INSTITUTIONAL BUYER, or
"QIB" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT
HAS ACQUIRED THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF THE COMPANY SO
REQUESTS AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST XXXXXX IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
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REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE.
(a) On the basis of the representations, warranties and
covenants contained in this Agreement, and subject to the terms and conditions
contained herein, the Company agrees to issue and sell to the Initial
Purchasers, and the Initial Purchasers agree, severally and not jointly, to
purchase from the Company, the principal amount of Firm Notes set forth opposite
its name as set forth on Schedule A hereto at a purchase price equal to 97% of
the principal amount thereof (the "Purchase Price").
(b) 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 the Additional Notes and (ii) the Initial
Purchasers shall have a right, but not the obligation, to purchase, severally
and not jointly, the Additional Notes, from the Company at the Purchase Price.
Additional Notes may be purchased solely for the purpose of covering
over-allotments made in connections with the Offering of the Firm Notes. The
Initial Purchasers may exercise their right to purchase Additional Notes at one
time in whole or in part by giving written notice thereof to the Company at any
time within 30 days after the date of this Agreement. Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation shall give any such notice on behalf of the
Initial Purchasers and such notice shall specify the aggregate principal amount
of Additional Notes to be purchased pursuant to such exercise and the date for
payment and delivery thereof. The date specified in any such notice shall be a
business day (i) no earlier than the Closing Date (as hereinafter defined), (ii)
no later than ten business days after such notice has been given and (iii) no
earlier than two business days after such notice has been given. If any
Additional Notes are to be purchased, each Initial Purchaser, severally and not
jointly, agrees to purchase from the Company the principal amount of Additional
Notes which bears the same proportion to the total principal amount of
Additional Notes to be purchased from the Company as the principal amount of
Firm Notes set forth opposite the name of such Initial Purchaser in Schedule A
bears to the total principal amount of Firm Notes.
3. TERMS OF OFFERING. The Initial Purchasers have advised the
Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of
the Notes purchased hereunder on the terms set forth in the Offering Memorandum,
as amended or supplemented, solely to persons whom the Initial Purchaser
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBS") and (ii) not more than five (5) other institutional
"accredited investors," as defined in Rule 501(a) (1),(2),(3) or (7) under the
Act, that make certain representations and agreements to the Company (each, an
"ACCREDITED INSTITUTION"), (such persons specified in clauses (i) and (ii) being
referred to herein as the "ELIGIBLE PURCHASERS"). The Initial Purchasers will
offer the Notes to Eligible Purchasers initially at a price equal to 100% of the
principal amount thereof. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Securities will have
the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Securities constitute
"TRANSFER RESTRICTED SECURITIES" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "COMMISSION")
under the circumstances set forth therein, a shelf registration statement
pursuant to Rule 415 under the Act (the "REGISTRATION STATEMENT") relating to
the resale by certain holders of the Securities and to use its reasonable best
efforts to cause such Registration Statements to be
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declared and remain effective and usable for the periods specified in the
Registration Rights Agreement. This Agreement, the Indenture, the Notes, and the
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "OPERATIVE DOCUMENTS"
4. DELIVERY AND PAYMENT
(a) Delivery of, and payment of the Purchase Price for,
the Firm Notes shall be made at the offices of Xxxx and Xxxx LLP or such other
location as may be mutually acceptable. Such delivery and payment shall be made
at 9:00 a.m. New York City time, on June 20, 2000 or at such other time on the
same date or such other date as shall be agreed upon by the Initial Purchasers
and the Company shall agree in writing. The time and date of such delivery and
the payment for the Firm Notes are herein called the "CLOSING DATE".
(b) Delivery of, and payment for, any Additional Notes to
be purchased by the Initial Purchasers shall be made at the offices of Xxxx and
Xxxx LLP at 9:00 a.m. New York City time, on the date specified in the exercise
notice given by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation pursuant to
Section 2(b) or such other time on the same or such other date as the Initial
Purchasers and the Company shall agree in writing. The time and date of delivery
and payment for any Additional Notes are hereinafter referred to as an "OPTION
CLOSING DATE".
(c) One or more of the Notes in definitive global form,
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the aggregate
principal amount of the Notes (collectively, the "GLOBAL NOTE"), shall be
delivered by the Company to the Initial Purchasers (or as the Initial Purchasers
direct), in each case with any transfer taxes thereon payable in connection with
the transfer of the Notes to the Initial Purchasers duly paid by the Company,
against payment by the Initial Purchasers of the Purchase Price thereof by wire
transfer in same day funds to the order of the Company. The Global Note shall be
made available to the Initial Purchasers for inspection not later than 9:30
a.m., New York City time, on the business day immediately preceding the Closing
Date.
5. AGREEMENTS OF THE COMPANY The Company hereby agrees with the Initial
Purchasers as follows:
(a) To advise the Initial Purchasers promptly upon
receipt by the Company of written notice, and, if requested by the Initial
Purchasers, confirm such advice in writing, (i) of the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of any Notes for offering or sale in any
jurisdiction designated by the Initial Purchasers pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose and (ii) of
the happening of any event during the period referred to in Section 5(c) below
that makes any statement of a material fact made in the Offering Memorandum
untrue or that requires any additions to or changes in the Offering Memorandum
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Company shall use its best efforts to
prevent the issuance of any stop order or order suspending the qualification or
exemption of any Notes under any state securities or Blue Sky laws and, if at
any time any state securities commission or other federal or state regulatory
authority shall issue an order suspending the qualification or exemption of any
Notes under any state securities or Blue Sky laws, the Company shall use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
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(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchasers may reasonably request for the
time period specified in Section 5(c). Subject to the Initial Purchasers'
compliance with its representations and warranties and agreements set forth in
Section 7 hereof, the Company consents to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) During such period as in the opinion of counsel for
the Initial Purchasers an Offering Memorandum is required by law to be delivered
in connection with Exempt Resales by the Initial Purchasers (i) not to make any
amendment or supplement to the Offering Memorandum of which the Initial
Purchasers shall not previously have been advised or to which the Initial
Purchasers shall reasonably object after being so advised and (ii) to prepare
promptly upon the Initial Purchasers' reasonable request, any amendment or
supplement to the Offering Memorandum which may be necessary or advisable in
connection with such Exempt Resales in order to make the statements therein, in
light of the circumstances under which they were made, not misleading or as
necessary to comply with applicable law.
(d) If, during the period referred to in Section 5(c)
above, any event shall occur or condition shall exist as a result of which, in
the opinion of counsel to the Initial Purchasers, it becomes necessary to amend
or supplement the Offering Memorandum in order to make the statements therein,
in the light of the circumstances when such Offering Memorandum is delivered to
an Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchasers, it is necessary to amend or supplement the Offering
Memorandum to comply with any applicable law, forthwith to prepare an
appropriate amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such Offering
Memorandum will comply with applicable law, and to furnish to the Initial
Purchasers and such other persons as the Initial Purchasers may designate such
number of copies thereof as the Initial Purchasers may reasonably request.
(e) Prior to the sale of all Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration or
qualification of the Notes for offer and sale to the Initial Purchasers and
pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
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 Preliminary Offering Memorandum, the Offering Memorandum or
Exempt Resales, in any jurisdiction in which it is not now so subject.
(f) So long as the Notes are outstanding, (i) to mail and
make generally available as soon as practicable after the end of each fiscal
year to the record holders of the Notes a financial report of the Company and
its subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
the Company's independent public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated
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statement of operations and a consolidated statement of cash flows (and similar
financial reports of all unconsolidated subsidiaries, if any) as of the end of
and for such period, and for the period from the beginning of such year to the
close of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(g) So long as the Notes are outstanding, to furnish to
the Initial Purchasers, upon their reasonable request, copies of all reports or
other communications furnished by the Company to its security holders or
furnished to or filed 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/or its subsidiaries as the
Initial Purchasers may reasonably request.
(h) So long as any of the Notes remain outstanding and
during any period in which the Company is not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to make
available to any holder of Securities in connection with any sale thereof and
any prospective purchaser of such Securities from such holder, the information
("RULE 144A INFORMATION") required by Rule 144A(d)(4) under the Act.
(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 obligations of the Company
under this Agreement, including: (i) the fees, disbursements and expenses of
counsel to the Company and accountants of the Company in connection with the
sale and delivery of the Notes to the Initial Purchasers and pursuant to Exempt
Resales, and all other fees and expenses in connection with the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum, the
Offering Memorandum and all amendments and supplements to any of the foregoing
(including financial statements), including the mailing and delivering of copies
thereof to the Initial Purchasers and persons designated by them in the
quantities specified herein, (ii) all costs and expenses related to the transfer
and delivery of the Notes to the Initial Purchasers, including any transfer or
other taxes payable thereon, (iii) all costs of printing or producing this
Agreement and the other Operative Documents, (iv) all expenses in connection
with the registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of the several states and all costs of
printing or producing any preliminary and supplemental Blue Sky memoranda in
connection therewith (including the filing fees and fees and disbursements of
counsel for the Initial Purchasers in connection with such registration or
qualification and memoranda relating thereto), (v) the cost of printing
certificates representing the Securities, (vi) all expenses and listing fees in
connection with the application for quotation of the Notes in the National
Association of Securities Dealers, Inc. ("NASD") Automated Quotation System -
PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee and the Trustee's
counsel in connection with the Indenture and the Notes, (viii) the costs and
charges of any transfer agent, registrar and/or depositary (including DTC), (ix)
any fees charged by rating agencies for the rating of the Notes, (x) all costs
and expenses of the Registration Statement, on the terms set forth in the
Registration Rights Agreement, (xi) all expenses and listing fees in connection
with the application for listing the Common Stock on the NASDAQ National Market
and (xii) and all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section. It is understood, however, that except as provided in this
Section, Section 8, and Section 11, the Initial Purchasers will pay all of its
costs and expenses, including fees and disbursements of its counsel, transfer
taxes payable on resale of any of the Notes by them and any advertising expenses
connected with any offers it may make.
(j) To use its reasonable best efforts to effect the
inclusion of the Notes in PORTAL and to maintain the listing of the Notes on
PORTAL for so long as the Notes are outstanding.
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(k) To obtain the approval of DTC for "book-entry"
transfer of the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company to DTC relating to the approval of the
Notes by DTC for "book-entry" transfer.
(l) To cause the Common Stock issuable upon conversion of
the Notes to be duly included for quotation on the Nasdaq Stock Market's
National Market (the "NASDAQ NATIONAL MARKET") prior to the Firm Closing Date
subject to notice of official issuance. The Company will use its reasonable best
efforts that such Common Stock remain included for quotation on the Nasdaq
National Market or any other national securities exchange following the Firm
Closing Date for so long as any shares of Common Stock remain registered under
the Exchange Act.
(m) The Company shall not (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 Initial Purchasers pursuant to
this Agreement, for a period of 90 days after the Closing Date without the prior
written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and
Xxxxxx Xxxxxxx & Co. Incorporated. Notwithstanding the foregoing, during such
period (i) the Company may grant stock options and issue shares of Common Stock
pursuant to the Company's existing stock option and stock purchase plans, the
Network24 Communications, Inc. 1997 Stock Option Plan, the Third Amended and
Restated 1998 Stock Option Plan of INTERVU Inc, the 1996 Stock Option Plan of
INTERVU Inc. and the Netpodium Inc. 1998 Stock Option/Stock Issuance Plan, (ii)
the Company may issue shares of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and (iii)
may issue shares in exchange for all of the equity or substantially all of the
equity or assets of a company in connection with a merger or acquisition by the
Company, so long as prior to any such issuance the Company shall have notified
the Initial Purchasers and the recipients of such shares shall have agreed with
the Initial Purchasers in writing to be bound by the terms of the lock-up
agreement in the form attached hereto as Exhibit B for a period of 90 days after
the date of the Offering Memorandum. The Company also agrees not to file any
registration statement (other than as contemplated by the Registration Rights
Agreement) 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 Closing Date without the prior written consent of Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation and Xxxxxx Xxxxxxx & Co. Incorporated.
The Company shall, prior to or concurrently with the execution of this
Agreement, deliver (i) an agreement in the form of Exhibit B here executed by
each of the directors and executive officers of the Company and (ii) an
agreement in the form of Exhibit C hereto executed by each stockholder listed on
Annex I hereto to the effect that, except as specifically set forth in those
agreements, such person will not, during the period commencing on the date such
person signs in each case such agreement and ending 90 days after the date
specified therein without the prior written consent of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation and Xxxxxx Xxxxxxx & Co. Incorporated, (A)
engage in any of the transactions described in the first sentence of this
paragraph 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.
(n) Assuming compliance by the Initial Purchasers with
their obligations hereunder, not to sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined
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in the Act) that would be integrated with the sale of the Notes to the Initial
Purchasers or pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Notes under the Act.
(o) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Notes.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(q) To use its reasonable best efforts to do and perform
all things required or necessary to be done and performed under this Agreement
by it prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Notes.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. As
of the date hereof, the Company represents and warrants to, and agrees with, the
Initial Purchasers that:
(a) The Offering Memorandum does not, and any supplement
or amendment to them will 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, except that the representations and warranties
contained in this paragraph (a) shall not apply to statements in or omissions
from the Preliminary Offering Memorandum or the Offering Memorandum (or any
supplement or amendment thereto) based upon information relating to the Initial
Purchasers furnished to the Company in writing by the Initial Purchasers
expressly for use therein. No stop order preventing the use of the Preliminary
Offering Memorandum or the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act, has been
issued. The Incorporated Documents, at the time they were or hereafter are filed
or last amended, as the case may be, with the Commission, complied and will
comply in all material respects with the requirements of the Exchange Act.
(b) 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 own its property and to conduct its business as described in the
Preliminary Offering Memorandum and the Offering Memorandum and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, financial condition or
results of operations of the Company and its subsidiaries taken as a whole (a
"MATERIAL ADVERSE EFFECT").
(c) All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid,
non-assessable.
(d) The entities listed on Schedule B hereto are the only
subsidiaries, direct or indirect, of the Company. 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 (each, a "LIEN").
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
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(f) The Indenture has been duly authorized by the Company
and, on the Closing Date, will have been validly executed and delivered by the
Company. When the Indenture has been duly executed and delivered by the Company,
the Indenture will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "TIA" or "TRUST INDENTURE ACT"), and the rules and regulations of
the Commission applicable to an indenture which is qualified thereunder.
(g) The Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Notes have been issued, executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Notes will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the Notes
will conform as to legal matters to the description thereof contained in the
Offering Memorandum.
(h) The Notes are convertible into Common Stock in
accordance with the terms of the Indenture; the shares of Common Stock initially
issuable upon conversion of the Notes have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such conversion, will be
validly issued, fully paid and nonassessable, will conform to the description
thereof contained in the Offering Memorandum and will be duly authorized for
listing on the Nasdaq National Market, subject to notice of official issuance;
the Company has the authorized and outstanding capital stock as set forth in the
Offering Memorandum; the issuance of the Notes is not, and the Common Stock
issuable upon conversion thereof will not be subject to any preemptive or
similar rights.
(i) The Registration Rights Agreement has been duly
authorized by the Company and, on the Closing Date, will have been duly executed
and delivered by the Company. When the Registration Rights Agreement has been
duly executed and delivered, the Registration Rights Agreement will be a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally, (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability and
(iii) the indemnification provisions of the Registration Rights Agreement may be
unenforceable as a matter of public policy. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Operative Documents
will not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any of its subsidiaries or any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken as a
whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any of its subsidiaries, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under the Operative Documents, except
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such as may be required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Shares.
(k) There are no legal or governmental proceedings
pending or, to the Company's knowledge, threatened to which the Company or any
of its subsidiaries is or could be a party or to which any of their respective
property is or could be subject, which might result, singly or in the aggregate,
in a Material Adverse Effect.
(l) Each of the Company and its subsidiaries (i) is in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct
its business and (iii) is in compliance with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a Material
Adverse Effect.
(m) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a Material Adverse Effect.
(n) The Company and its subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct its business, other
than those which, if not so possessed, would not have a Material Adverse Effect,
and neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect,
except as described the Offering Memorandum.
(o) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which 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 Offering Memorandum
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; and 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 Offering Memorandum.
(p) PricewaterhouseCoopers LLP are independent public
accountants with respect to the Company and Network 24 Communications, Inc. and
Ernst & Young, LLP were, for the year ended December 31, 1999, independent
public accountants for INTERVU Inc., as required by the Act and the Exchange
Act.
(q) The historical financial statements, together with
related schedules and notes incorporated by reference in the Offering Memorandum
(and any amendment or supplement thereto),
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present fairly the consolidated financial position, results of operations and
changes in financial position of the Company and its subsidiaries at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data set forth or incorporated by reference in the
Offering Memorandum (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 pro forma financial information of the Company
included in the Offering Memorandum have been prepared on a basis consistent
with the historical financial statements of the Company and its subsidiaries and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein and present fairly the historical and proposed
transactions contemplated by the Preliminary Offering Memorandum and the
Offering Memorandum The other pro forma financial and statistical information
and data included in the Offering Memorandum are, in all material respects,
accurately presented and prepared on a basis consistent with the pro forma
financial statements.
(s) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(t) The Company or its subsidiaries own or possess, or
can acquire on reasonable terms, all material 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 currently employed by it
in connection with the business now operated by it, and neither the Company nor
any of its subsidiaries have received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would be reasonably likely to have a Material Adverse Effect.
(u) No material labor dispute with the employees of the
Company or any of its subsidiaries exists, except as described in the Offering
Memorandum, or, to the knowledge of the Company, is imminent; and the Company is
not aware of any existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors that
could have a Material Adverse Effect.
(v) The Company and its subsidiaries are insured by the
insurers of recognized financial responsibility against such losses and risks
and in such amounts as, in the Company's reasonable judgment, are prudent and
customary in the businesses in which they are engaged; neither the Company nor
any of its subsidiaries has been refused any insurance coverage sought or
applied for; and neither the Company nor any of its subsidiaries 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 as may be necessary to continue its business at a cost that would not
have a Material Adverse Effect, except as described in the Offering Memorandum.
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(w) The Company is not and, after giving effect to the
offering and sale of the Notes and the application of the net proceeds thereof
as described in the Offering Memorandum, will not be, an "investment company,"
as such term is defined in the Investment Company Act of 1940, as amended.
(x) Other than (a) the Fourth Amended and Restated
Registration Rights Agreement, dated September 20, 1999, (b) the Declaration of
Registration Rights, dated January 24, 2000, (c) the INTERVU, Inc. and Josepthal
& Co. Inc. and Cruttenden Xxxx Incorporated Advisors Warrant Agreement dated as
of June 18, 1998 (the "1998 Intervu Agreement") and (d) the INTERVU, Inc. and
Xxxxxxxxx Lyon & Xxxx Incorporated and Cruttenden Xxxx Incorporated Advisors
Warrant Agreement dated as of November 19, 1997 (the "1997 Intervu Agreement"),
in each case by and among the Company and the persons named therein, 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. No such
contract, agreement or understanding contains a provision requiring the Company
to include such securities with the Notes registered pursuant to any
Registration Statement, except as has been waived or, in the case of the 1998
Intervu Agreement and the 1997 Intervu Agreement, which the Company will use its
best efforts to have waived by the parties thereto.
(y) To the Company's knowledge, no officer or director of
the Company or any of its subsidiaries is in breach or violation of any
employment agreement, non-competition agreement, confidentiality agreement, or
other agreement restricting the nature or scope of employment to which such
officer or director is a party, and, to the Company's knowledge, the conduct of
the business, as described in the Offering Memorandum, will not result in a
breach or violation of any such agreement.
(z) There are no outstanding options to acquire shares of
capital stock of the Company except as disclosed in the Offering Memorandum and
except as have been granted under (i) the Second Amended and Restated 1998 Stock
Incentive Plan, (ii) the Network24 Communications, Inc. 1997 Stock Option Plan,
(iii) the Third Amended and Restated 1998 Stock Option Plan of INTERVU Inc.,
(iv) the 1996 Stock Option Plan of INTERVU Inc. and (v) the Netpodium Inc. 1998
Stock Option/Stock Issuance Plan, and (v) the 1999 Employee Stock Purchase Plan.
(aa) There are no outstanding warrants to acquire shares
of capital stock of the Company except as disclosed in the Offering Memorandum
and except as have been granted under the 15% Senior Subordinated Notes and
Warrants to Purchase Common Stock Purchase Agreement dated as of May 7, 1999.
(bb) Neither the Company nor any of its subsidiaries nor
any agent thereof acting on the behalf of it has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Notes to violate Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part
221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System.
(cc) No "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under the
Act (i) has imposed (or has informed the Company that it is considering
imposing) any condition (financial or otherwise) on the Company's retaining any
rating assigned to the Company or any securities of the Company or (ii) has
indicated to the Company that it is considering (a) the downgrading, suspension,
or withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any change in
the outlook for any rating of the Company, or any securities of the Company.
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(dd) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (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 or operations of
the Company and its subsidiaries, taken as a whole, (ii) neither the Company nor
any of its subsidiaries has incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (iii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock other than ordinary and customary
dividends; and (iv) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company or any of its subsidiaries,
except in each case as described in the Offering Memorandum.
(ee) The Offering Memorandum, as of its date, contains all
the information specified in, and meeting the requirements of, Rule 144A(d)(4)
under the Act.
(ff) When the Notes are issued and delivered pursuant to
this Agreement, the Notes will not be of the same class (within the meaning of
Rule 144A under the Act) as any security of the Company that is listed on a
national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated inter-dealer quotation system.
(gg) No form of general solicitation or general
advertising (as defined in Regulation D under the Act) was used by the Company,
or any of its representatives (other than the Initial Purchasers, as to whom the
Company makes no representation) in connection with the offer and sale of the
Notes contemplated hereby, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
securities of the same class as the Securities have been issued and sold by the
Company within the six-month period immediately prior to the date hereof, except
under the Company's stock option and stock purchase plan and in connection with
the acquisitions of Network 24 and INTERVU (including stock option plans of such
companies assumed in connection with such acquisitions).
(hh) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the TIA.
(ii) No registration under the Act of the Securities is
required for the sale of the Securities to the Initial Purchasers as
contemplated hereby or for the Exempt Resales assuming the accuracy of the
Initial Purchasers' representations and warranties and agreements set forth in
Section 7 hereof.
(jj) Each certificate signed by any officer of the Company
and delivered to the Initial Purchasers or counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Company to the
Initial Purchasers as to the matters covered thereby.
The Company acknowledges that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial Purchasers
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each
Initial Purchaser, severally and not jointly, represents and warrants to, and
agrees with, the Company:
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(a) Such Initial Purchaser is a QIB with such knowledge
and experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Notes.
(b) Such Initial Purchaser (A) is not acquiring the
Securities with a view to any distribution thereof or with any present intention
of offering or selling any of the Securities in a transaction that would violate
the Act or the securities laws of any state of the United States or any other
applicable jurisdiction and (B) will be reoffering and reselling the Securities
only to (x) QIBs in reliance on the exemption from the registration requirements
of the Act provided by Rule 144A and (y) not more than five (5) Accredited
Institutions that execute and deliver a letter containing certain
representations and agreements in the form attached as Annex A to the Offering
Memorandum. Such Initial Purchaser agrees that it will provide each person to
whom it offers the Securities a copy of the Offering Memorandum prior to the
acceptance of any consideration for such Securities from such person.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Securities pursuant
hereto, including, but not limited to, articles, notices or other communications
published in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection
with Exempt Resales, such Initial Purchaser will solicit offers to buy the
Securities only from, and will offer to sell the Securities only to, Eligible
Purchasers. Each Initial Purchaser further agrees that it will offer to sell the
Securities only to, and will solicit offers to buy the Securities only from (A)
Eligible Purchasers that Such Initial Purchaser reasonably believes are QIBs,
(B) Accredited Institutions who make the representations contained in, and
execute and return to the Initial Purchaser, a certificate in the form of Annex
A attached to the Offering Memorandum, that agree that (x) the Securities
purchased by them may be resold, pledged or otherwise transferred other than
pursuant to the Registration Statement or upon furnishing evidence satisfactory
to the Company that the Securities are exempt from the registration requirement
under the Act, only (I) to the Company or any of its subsidiaries, (II) to a
person whom the seller reasonably believes is a QIB purchasing for its own
account or for the account of a QIB in a transaction meeting the requirements of
Rule 144A under the Act, (III) in an offshore transaction (as defined in Rule
902 under the Act) meeting the requirements of Rule 904 of the Act, (IV) in a
transaction meeting the requirements of Rule 144 under the Act, (V) to an
Accredited Institution that, prior to such transfer, furnishes the Trustee a
signed letter containing certain representations and agreements relating to the
registration of transfer of such Securities (the form of which is substantially
the same as Annex B to the Offering Memorandum) and, if requested by the
Company, an opinion of counsel acceptable to the Company that such transfer is
in compliance with the Act, (VI) in accordance with another exemption from the
registration requirements of the Act (and based upon an opinion of counsel
acceptable to the Company) or (VII) pursuant to an effective registration
statement and, in each case, in accordance with the applicable securities laws
of any state of the United States or any other applicable jurisdiction and (y)
they will deliver to each person to whom such Securities or an interest therein
is transferred a notice substantially to the effect of the foregoing.
(e) Such Initial Purchaser further represents and agrees
that (1) it has not offered or sold and will not offer or sell any Securities to
persons in the United Kingdom prior to the expiration of the period of six
months from the issue date of the Securities, except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted and will not result in an
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offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (ii) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issuance of the Notes to a person who is of a kind described
in Article 11(3) of the Financial Services Act of 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom the document may
otherwise lawfully be issued or passed on.
(f) Such Initial Purchaser agrees that it will not offer,
sell or deliver any of the Securities in any jurisdiction outside the United
States except under circumstances that will result in compliance with the
applicable laws thereof, and that it will take at its own expense whatever
action is required to permit its purchase and resale of the Securities in such
jurisdictions. Such Initial Purchaser understands that no action has been taken
to permit a public offering in any jurisdiction outside the United States where
action would be required for such purpose.
Each Initial Purchaser acknowledges that the Company,
for purposes of the opinions to be delivered to each Initial Purchaser pursuant
to Section 9 hereof, counsel to the Company and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and each Initial Purchaser hereby consents to such reliance.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless
each Initial Purchaser, its directors, its officers and each person, if any, who
controls such Initial Purchaser (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 Offering Memorandum (or any
amendment or supplement thereto) or the Preliminary Offering Memorandum 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 Initial Purchaser
furnished in writing to the Company by such Initial Purchaser; provided,
however, that the foregoing indemnity agreement with respect to any Preliminary
Offering Memorandum shall not inure to the benefit of any Initial Purchaser who
failed to deliver a Final Offering Memorandum, as then amended or supplemented,
(so long as such Final Offering Memorandum and any amendment or supplement
thereto was provided by the Company to the several Initial Purchasers 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 Offering Memorandum,
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 Final Offering Memorandum, as so
amended or supplemented.
(b) Each Initial Purchaser, severally and not jointly,
agrees to indemnify and hold harmless the Company and its directors and officers
and each person, if any, who controls (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) the Company to the same extent as the
foregoing indemnity from the Company to the Initial Purchasers but only with
reference to information
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relating to such Initial Purchaser furnished in writing to the Company by such
Initial Purchaser expressly for use in the Preliminary Offering Memorandum or
the Offering Memorandum.
(c) In case any action shall be commenced involving any
person in respect of which indemnity may be sought pursuant to Section 8(a) or
8(b) (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 Sections 8(a) and 8(b), the Initial Purchasers shall not
be required to assume the defense of such action pursuant to this Section 8(c),
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 the Initial Purchasers). 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 or more legal
defenses available to it which 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 the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, in the case of the parties indemnified pursuant to Section 8(a),
and by the Company, in the case of parties indemnified pursuant to Section 8(b).
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 effected with the written consent of
the indemnifying party. 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.
(d) 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
Company, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Securities or (ii) if the allocation provided by clause
8(d)(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(d)(i) above but also the relative fault of the Company, on the one hand, and
the Initial Purchasers, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
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judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities (after Initial Purchaser's
discounts or commissions, but before deducting expenses) received by the
Company, and the total discounts and commissions received by the Initial
Purchasers bear to the total price to investors of the Securities, in each case
as set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company, on the one hand, and the Initial Purchasers, 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, on the one hand, or the Initial Purchasers, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Initial Purchasers 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 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, the Initial Purchasers shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchasers exceeds the amount of any damages which the Initial
Purchasers 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 Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Securities purchased by each of the Initial Purchasers
hereunder, and not joint.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The obligations
of the Initial Purchasers to purchase the Firm Notes under this Agreement on the
Closing Date and the Additional Notes, if any, on any Option Closing Date 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, or on
the Option Closing Date, if any, with the same force and effect as if made on
and as of the Closing Date or on the Option Closing Date, if any.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Company or any securities of the Company (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the
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Act, (ii) there shall not have occurred any change, nor shall any notice have
been given of any potential or intended change, in the outlook for any rating of
the Company or any securities of the Company by any such rating organization and
(iii) no such rating organization shall have given notice that it has assigned
(or is considering assigning) a lower rating to the Notes than that on which the
Notes were marketed.
(c) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (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(c)(i), 9(c)(ii) or 9(c)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Securities on the terms and in the manner contemplated in the Offering
Memorandum.
(d) You shall have received on the Closing Date a
certificate, dated the Closing Date, and on an Option Closing Date, if any,
dated such Option Closing Date, signed by the President and the Chief Financial
Officer of the Company, confirming the matters set forth in Sections 6(dd), 9(a)
and 9(b) and stating that the Company has complied with all the agreements and
satisfied all of the conditions herein contained and required to be complied
with or satisfied on or prior to the Closing Date or Option Closing Date, as the
case may be.
(e) You shall have received on the Closing Date and each
Option Closing Date, if any, an opinion (satisfactory to you and counsel for the
Initial Purchasers), dated the Closing Date or such Option Closing Date, as the
case may be, of Xxxx and Xxxx, LLP, counsel for the Company, 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 own its property and to
conduct its business as described in the Offering
Memorandum;
(ii) the Company is duly qualified and is in good
standing as a foreign corporation authorized to do
business in The Commonwealth of Massachusetts and the
State of California, which, to such counsel's
knowledge, are the only states in which the Company
owns or leases any real property in the United
States;
(iii) all the outstanding shares of capital stock of
the Company have been duly authorized and validly
issued and are fully paid and non-assessable;
(iv) 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, free
and clear of any Liens (it being understood that
counsel acceptable to the Initial Purchasers may
provide such opinion in lieu of Xxxx and Xxxx LLP);
(v) the Notes have been duly authorized and, when
executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid
for by
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the Initial Purchasers in accordance with the terms
of this Agreement, will be entitled to the benefits
of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance
with their terms except as (x) the enforceability
thereof may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors'
rights generally and (y) rights of acceleration and
availability of equitable remedies may be limited by
equitable principles of general applicability;
(vi) the Indenture has been duly authorized, executed
and delivered by the Company and is a valid and
binding agreement of the Company, enforceable against
the Company in accordance with its terms except as
(x) the enforceability thereof may be limited by
applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (y) rights
of acceleration and the availability of equitable
remedies may be limited by equitable principles of
general applicability;
(vii) the Notes are convertible into Common Stock in
accordance with the terms of the Indenture; the
shares of Common Stock initially issuable upon
conversion of the Notes have been duly authorized and
reserved for issuance upon such conversion and, when
issued upon such conversion in accordance with the
terms of the Notes, will be validly issued, fully
paid and nonassessable; the issuance of the Notes,
and the Common Stock issuable upon conversion
thereof, will not be subject to any pre-emptive
rights under the Delaware General Corporate Law, the
certificate of incorporation or by-laws of the
Company or, to such counsel's knowledge, similar
rights granted by contract;
(viii) the authorized capital stock of the Company
conforms as to legal matters to the description
thereof contained in the Offering Memorandum;
(ix) this Agreement has been duly authorized,
executed and delivered by the Company;
(x) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company
enforceable against the Company in accordance with
its terms, except as (x) the enforceability thereof
may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally, (y)
rights of acceleration and the availability of
equitable remedies may be limited by equitable
principles of general applicability and (z) except as
to indemnification and contribution provisions under
the Registration Rights Agreement may be limited
under applicable law;
(xi) the statements under the captions "Description
of Convertible Notes," "Description of Capital
Stock," "Summary of Certain United States Federal
Income Tax Consequences," "Plan of Distribution,"
"Notice to Investors," and in the first, second,
third, fourth, sixth and seventh paragraphs of "Plan
of Distribution" in the Offering Memorandum, insofar
as such statements constitute a summary of the legal
matters, documents or proceedings referred to
therein, fairly summarize in all material respects
such legal matters, documents and proceedings;
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(xii) the execution, delivery and performance of this
Agreement and the other Operative Documents by the
Company, the compliance by the Company with all
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 may be
required under the securities or Blue Sky laws of the
various states and by Federal and state securities
laws with respect to the Company's obligation under
the Registration Rights Agreement), (ii) contravene
any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any
indenture, loan agreement, mortgage, lease or other
agreement or instrument that is filed as an exhibit
to any of the Company's filings with the Securities
and Exchange Commission, under the Exchange Act which
are incorporated by reference in the Offering
Memorandum, (iii) violate any applicable law or any
rule or regulation, or, to such counsel's knowledge,
judgment, order or decree naming the Company or any
subsidiary of any United States or Massachusetts
court or any governmental body or agency having
jurisdiction over the Company or its property;
(xiii) such counsel does not know of any legal or
governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is or
could be a party or to which any of its property is
or could be subject, which such counsel believes are
likely to result, singly or in the aggregate, in a
Material Adverse Effect;
(xiv) the Company is not and, after giving effect to
the offering and sale of the Notes and the
application of the net proceeds thereof as described
in the Offering Memorandum, will not be, an
"investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(xv) the Indenture complies as to form in all
material respects with the requirements of the TIA,
and the rules and regulations of the Commission
applicable to an indenture which is qualified
thereunder. Based upon and assuming the accuracy of
the representations warranties of the Company and the
Initial Purchasers, it is not necessary in connection
with the offer, sale and delivery of the Notes to the
Initial Purchasers in the manner contemplated by this
Agreement or in connection with the Exempt Resales in
the manner contemplated by this Agreement to qualify
the Indenture under the TIA, it being understood that
no opinion is expressed as to any subsequent resale
of the Notes or the Common Stock;
(xvi) it is not necessary in connection with the
offer, sale and delivery of the Securities to the
Initial Purchasers as contemplated by this Agreement
or for the Exempt Resales to register the Securities
under the Securities Act of 1933, assuming that the
accuracy of, and compliance with, the Initial
Purchasers' representations and agreements contained
in Section 7 of this Agreement and (ii) the accuracy
of the representations of the Company set forth in
Sections 6(gg) of this Agreement.
(xvii) each document filed under the Exchange Act
incorporated by reference in the Offering Memorandum
(except for financial statements and other financial
and
-21-
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statistical data included therein, as to which such
counsel need not express any opinion), complied as to
form when filed with the Commission in all material
respects with the Exchange Act and the rules and
regulations of the Commission thereunder.
Such counsel shall also state that it has no reason
to believe that, as of the date of the Offering
Memorandum or as of the Closing Date or the Option
Closing Date, as the case may be, the Offering
Memorandum, as amended or supplemented, if applicable
(except for the financial statements and other
financial and statistical data included therein, as
to which such counsel need not express any belief)
contains any untrue statement of a material fact or
omits to state a material fact necessary in order to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading.
The opinion of Xxxx and Xxxx LLP described in Section 9(e)
above shall be rendered to you at the request of the Company and shall so state
therein. In giving such opinion with respect to the matters covered by the
immediately preceding paragraph, Xxxx and Xxxx LLP may state that their opinion
and belief are based upon their participation in the preparation of the Offering
Memorandum and any amendments or supplements thereto and review and discussion
of the contents thereof, but are without independent check or verification
except as specified.
(f) The Initial Purchasers shall have received on the
Closing Date an opinion of Xxxxxx & Xxxx, patent counsel to the Company, dated
the Closing date, in form and substance reasonably acceptable to them.
(g) The Initial Purchasers shall have received on the
Closing Date the opinion of Xxxxxxx X. Xxxxxx, General Counsel to the Company,
to the effect that the execution, delivery and performance of this Agreement and
the other Operative Documents by the Company, the compliance by the Company with
all provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not contravene any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company.
(h) The Initial Purchasers shall have received on the
Closing Date and on each Option Closing Date, an opinion, dated the Closing
Date, of Ropes & Gray, counsel for the Initial Purchasers, in form and substance
reasonably satisfactory to the Initial Purchasers.
(i) The Initial Purchasers shall have received, at the
time this Agreement is executed and at the Closing Date and each Option Closing
Date, letters dated the date hereof or the Closing Date or an Option Closing
Date, as the case may be, in the form and substance satisfactory to the Initial
Purchasers from each of PricewaterhouseCoopers, LLP, independent public
accountants to the Company and Network24 Communications, Inc., containing the
information and statements of the type ordinarily included in accountants'
"comfort letters" to the Initial Purchasers with respect to the Initial
Purchasers with respect to the financial statements and certain financial
information contained in the Offering Memorandum.
(j) The Notes shall have been approved by the NASD for
trading and duly listed in PORTAL.
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(k) Application shall have been made for the approval for
quotation on the Nasdaq National Market for the Securities.
(l) The Initial Purchasers shall have received a
counterpart, conformed as executed, of the Indenture which shall have been
entered into by the Company and the Trustee.
(m) The Company shall have executed the Registration
Rights Agreement and the Initial Purchasers shall have received an original copy
thereof, duly executed by the Company.
(n) The Company shall not have failed at or prior to the
Closing Date or the Option Closing Date, as the case may be, to perform or
comply with any of the agreements herein contained and required to be performed
or complied with by the Company at or prior to the Closing Date or Option
Closing Date, as the case may be.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement may
be terminated at any time on or prior to the Closing Date by the Initial
Purchasers by written notice to the Company 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 the Initial
Purchasers' judgment, is material and adverse and, in the Initial Purchasers'
judgment, makes it impracticable to market the Securities on the terms and in
the manner contemplated in the Offering Memorandum, (ii) the suspension or
material limitation of trading in securities generally 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 which 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 which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date or the Option Closing Date, as the case
may be, any one or more of the Initial Purchasers shall fail or refuse to
purchase the Notes which it or they have agreed to purchase hereunder on such
date and the aggregate principal amount of the Notes which such defaulting
Initial Purchaser or Initial Purchasers, as the case may be, agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of the Notes to be purchased on such date by all Initial Purchasers, each
non-defaulting Initial Purchaser shall be obligated severally, in the proportion
which the principal amount of the Notes set forth opposite its name in Schedule
A bears to the aggregate principal amount of the Notes which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to purchase,
or in such other proportion as you may specify, to purchase the Notes which such
defaulting Initial Purchaser or Initial Purchasers, as the case may be, agreed
but failed or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of the Notes which any Initial Purchaser 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 principal amount of the
Notes without the written consent of such Initial Purchaser. If on the Closing
Date, or an Option Closing Date, as the case may be, any Initial Purchaser or
Initial Purchasers shall fail or refuse to purchase the Notes and the aggregate
principal amount of the Notes with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of the
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Notes to be purchased by all Initial Purchasers and arrangements satisfactory to
the Initial Purchasers and the Company for purchase of such the Notes are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Initial Purchaser and the Company.
In any such case which does not result in termination of this Agreement, either
you or the Company shall have the right to postpone the Closing Date, or such
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Offering Memorandum or
any other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Initial Purchaser from liability in
respect of any default of any such Initial Purchaser under this Agreement.
11. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company to 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxxx, XX 00000, Attention: General Counsel and (ii) if to the
Initial Purchasers, Xxxxxxxxx, Xxxxxx & 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 and the Initial
Purchasers 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 Securities regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Initial Purchasers; the officers or
directors of the Initial Purchasers, any person controlling the Initial
Purchasers, the Company, the officers or directors of the Company, or any person
controlling the Company, (ii) acceptance of the Securities and payment for them
hereunder and (iii) termination of the Agreement.
If for any reason the Notes are not delivered by or on behalf
of the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Company agrees to reimburse the
Initial Purchasers 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 which it has agreed
to pay pursuant to Section 5(i) hereof. The Company also agrees to reimburse the
Initial Purchasers and its officers, directors and each person, if any, who
controls such Initial Purchasers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act for any and all fees and expenses (including
without limitation the fees and expenses of counsel) incurred by them in
connection with enforcing their rights under this Agreement (including without
limitation its rights under Section 8).
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Initial Purchasers, the Initial Purchasers' directors and officers, any
controlling persons referred to herein, the officers and directors of the
Company 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 Securities from the Initial Purchasers
merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
-24-
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Please confirm that the foregoing correctly sets forth the
agreement among the Company, and the Initial Purchasers.
Very truly yours,
AKAMAI TECHNOLOGIES, INC.
By:
------------------------------
Name:
Title:
26
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX XXXXX XXXXXX INC.
XXXXXX XXXXXX PARTNERS LLC
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:
----------------------------------
Name:
Title:
By: XXXXXX XXXXXXX & CO. INCORPORATED
By:
----------------------------------
Name:
Title:
On behalf of the Initial Purchasers
27
SCHEDULE A
Principal Amount
Initial Purchaser of Notes
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation $100,000,000
Xxxxxx Xxxxxxx & Co. Incorporated $100,000,000
Xxxxxxx Xxxxx Xxxxxx $ 25,000,000
Inc.
Xxxxxx Xxxxxx Partners LLC $ 25,000,000
------------
Total $250,000,000
1
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SCHEDULE B
SUBSIDIARIES OF AKAMAI TECHNOLOGIES, INC.
INTERVU Inc.
Network 24 Communications, Inc.
Akamai Securities Corporation
Network Associates, Inc.
Netpodium Inc.
Videolinx Communications, Inc.
1
29
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
A-1
30
EXHIBIT B
MANAGEMENT/DIRECTOR FORM
June ___, 2000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxx Xxxxxx Partners LLC
Dear Sirs and Mesdames:
The undersigned understands that each of Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation, Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx Xxxxx Xxxxxx
Inc. and Xxxxxx Xxxxxx Partners LLC (each a "PURCHASER") proposes to enter into
a Purchase Agreement (the "PURCHASE AGREEMENT") with Akamai Technologies, Inc.,
a Delaware corporation (the "COMPANY") providing for the offering (the
"OFFERING") of $250,000,000 in principal amount of Convertible Notes Due 2007 of
the Company (the "NOTES").
To induce the Purchasers that may participate in the Offering to
continue their efforts in connection with the Offering, the undersigned hereby
agrees that, without the prior written consent and waiver of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation and Xxxxxx Xxxxxxx & Co. Incorporated, acting on
behalf of the Underwriters, the undersigned will not, during the period
commencing on the date hereof and ending 90 days after the date of the pricing
of the Notes, (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock, par value $0.01 per share,
of the Company (the "COMMON STOCK") or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to transactions relating to shares of Common Stock or other
securities acquired by the undersigned in open market transactions or the sale
or transfer of shares to the acquiror in connection with the sale of the Company
pursuant to a merger, sale of stock, sale of assets or otherwise. In addition,
the undersigned agrees that, without the prior written consent of Xxxxxx Xxxxxxx
& Co. Incorporated and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, it
will not, during the period commencing on the date hereof and ending 90 days
after the date of the pricing of the Notes, make any demand for or exercise any
right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
Notwithstanding the above, beginning after the 60th day after the date of the
pricing of the Notes, 5% of the shares of Common Stock held by the undersigned
shall cease to be subject to the terms of this lock-up.
Notwithstanding the foregoing: (i) gifts and transfers by will or
intestacy; or (ii) transfers to (A) the undersigned's members, partners,
stockholders, affiliates or immediate family, (B) a trust, the beneficiaries of
which are the undersigned and/or members of the undersigned's immediate family,
or (C) a trust or other entity for charitable and/or estate or financial
planning purposes, shall not be prohibited by this agreement; provided, that (x)
the donee or transferee agrees in writing to be bound by the foregoing in the
same manner as it applies to the undersigned, and (y) if the donor or transferor
is a reporting person subject to Section 16(a) of the Securities Exchange Act of
1934 (the "Exchange Act"), any gifts or transfers made in accordance with this
paragraph shall not require such person to, and such person shall not
voluntarily, file a report of such transaction on Form 4 under the
B-1
31
Exchange Act. For purposes hereof, "immediate family" shall mean spouse, lineal
descendants, father, mother, brother or sister of the transferor and father,
mother, brother or sister of the transferor's spouse.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Xxxxxx Xxxxxxx &
Co. Incorporated, acting on behalf of the Underwriters, may in their sole
discretion waive or amend any restriction contained in any lock-up agreement
with a shareholder of the Company; provided, that, if any shareholder listed on
Exhibit A hereto (the "Permitted Seller") sells in excess of an aggregate of
5,000 shares of Common Stock pursuant to any such waiver or amendment, the
undersigned shall be permitted to sell that percentage of his, her or its total
number of shares of Common Stock that equals the percentage obtained by dividing
(x) the number of shares of Common Stock in excess of 5,000 that are sold by the
Permitted Seller pursuant to such waiver or amendment, by (y) the total number
of shares of Common Stock held by the Permitted Seller prior to such sale. The
undersigned agrees that the terms of this lock-up supercedes the terms of any
and all other lock-ups relating to Common Stock of the Company entered into by
the undersigned prior to the date hereof.
The undersigned agrees that the terms of this lock-up supercede the terms
of any and all other lock-ups relating to Common Stock of the Company entered
into by the undersigned prior to the date hereof. This agreement shall
automatically terminate if any of the persons listed on Schedule A hereto fail
to sign a lock-up substantially in the form hereof prior to the date of the
closing of the Offering, if the Purchase Agreement is not entered into by June
23, 2000 or if the Purchasers do not purchase the Notes and the Purchase
Agreement is terminated pursuant to its terms.
Very truly yours,
---------------------------------------------
(Print Name - Individual or Entity)
---------------------------------------------
(Signature)
---------------------------------------------
(Title, if applicable)
---------------------------------------------
---------------------------------------------
---------------------------------------------
(Address)
B-2
32
SCHEDULE A
Xxxxxx X. Xxxxxxxx
Xxxx Xxxxx
X. Xxxxxxx Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxxxxx Xxxxxx
Xxxxxx X. Xxxx III
Xxxx X. Xxxxxxxx XXX
Xxxxxx X. Xxxxxxxx
Xxxxxxxx Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxx X. Xxxxxx
Xxxxxxxx X. XxXxxxx
Xxxxxx X. Xxxxx
Battery Ventures IV, L.P.
Battery Investment Partners IV, LLC
Xxxxx Communications Fund, L.P.
Polaris Venture Management Co. II., L.L.C.
Polaris Venture Partners II L.P.
Polaris Venture Partners Founders' Fund II X.X.
XXXXX Partners L.P.
B-3
33
EXHIBIT C-1
TRUST VERSION
June __, 2000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxx Xxxxxx Partners LLC
Dear Sirs and Mesdames:
The undersigned understands that each of Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation, Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx Xxxxx Xxxxxx
Inc. and Xxxxxx Xxxxxx Partners LLC (each a "PURCHASER") proposes to enter into
a Purchase Agreement (the "PURCHASE AGREEMENT") with Akamai Technology, Inc., a
Delaware corporation (the "COMPANY") providing for the offering (the "OFFERING")
of $250,000,000 in principal amount of Convertible Notes Due 2007 of the Company
(the "NOTES").
To induce the Purchasers that may participate in the Offering to
continue their efforts in connection with the Offering, the undersigned hereby
agrees that, without the prior written consent and waiver of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation and Xxxxxx Xxxxxxx & Co. Incorporated, acting on
behalf of the Underwriters, the undersigned will not, during the period
commencing on the date of the expiration of the undersigned's existing lock-up
with any of the Purchasers and ending 90 days after the date of the pricing of
the Notes, (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock, par value $0.01 per share,
of the Company (the "COMMON STOCK") or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (a) transactions relating to shares of Common Stock or other
securities acquired by the undersigned in open market transactions, (b)
transactions relating to shares of Common Stock that were subject to the partial
early release granted to the undersigned by Xxxxxx Xxxxxxx & Co. Incorporated
effective on March 29, 2000, or (c) the sale or transfer of shares to the
acquiror in connection with the sale of the Company pursuant to a merger, sale
of stock, sale of assets or otherwise. In addition, the undersigned agrees that,
without the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated and
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, it will not, during the
period commencing on the date hereof and ending 90 days after the date of the
pricing of the Notes, make any demand for or exercise any right with respect to
the registration of any shares of Common Stock or any security convertible into
or exercisable or exchangeable for Common Stock. Notwithstanding the above
restrictions, beginning after July 25, 2000, 20% of the shares of Common Stock
held by the undersigned shall cease to be subject to the terms of this lock-up.
Notwithstanding the foregoing, transfers to (i) the undersigned's
beneficiaries or affiliates, (ii) a trust, the beneficiaries of which are the
undersigned, any beneficiary of the undersigned and/or immediate family members
of any beneficiaries of the undersigned or (iii) a trust or other entity for
charitable and/or estate or financial planning purposes, shall not be prohibited
by this agreement; provided, that (x) the donee or transferee agrees in writing
to be bound by the foregoing in the same manner as it applies to the undersigned
and (y) if the donor or transferor is a reporting person subject to Section
16(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), any gifts or
transfers made in accordance with this paragraph shall not require such person
to, and such person shall not
C-1
34
voluntarily, file a report of such transaction on Form 4 under the Exchange Act.
For purposes hereof, "immediate family" shall mean spouse, lineal descendants,
father, mother, brother or sister of the transferor and father, mother, brother
or sister of the transferor's spouse.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Xxxxxx Xxxxxxx &
Co. Incorporated, acting on behalf of the Underwriters, may in their discretion
waive or amend any restriction contained in any lock-up agreement with a
shareholder of the Company; provided that if any shareholder listed on Schedule
A hereto (the "Permitted Seller") sells, distributes or otherwise transfers in
excess of an aggregate of 5,000 shares of Common Stock pursuant to any such
waiver or amendment, the undersigned shall be permitted to sell that percentage
of his, her or its total number of shares of Common Stock that equals the
percentage obtained by dividing (x) the number of shares of Common Stock in
excess of 5,000 that are sold by the Permitted Seller pursuant to such waiver or
amendment, by (y) the total number of shares of Common Stock held by the
Permitted Seller prior to such sale.
The undersigned agrees that the terms of this lock-up supercedes the
terms of any and all other lock-ups relating to Common Stock of the Company
entered into by the undersigned prior to the date hereof.
C-2
35
This agreement shall automatically terminate if the Purchase Agreement is
not entered into by June 23, 2000 or if the Purchasers do not purchase the Notes
and the Purchase Agreement is terminated pursuant to its terms.
Very truly yours,
---------------------------------------------
(Print Name of Trust)
---------------------------------------------
(Authorized Signature)
---------------------------------------------
(Title)
---------------------------------------------
---------------------------------------------
---------------------------------------------
(Address and Telephone Number)
C-3
36
SCHEDULE A
ATREL Trust
Mallard Trust
Xxxxxx Xxxxxxxx Trust
AKME Trust
Xxxxxx Xxxxxx 1996 Trust
C-4
37
EXHIBIT C-2
CHARITABLE TRUST VERSION
June __, 2000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxx Xxxxxx Partners LLC
Dear Sirs and Mesdames:
The undersigned understands that each of Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation, Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx Xxxxx Xxxxxx
Inc. and Xxxxxx Xxxxxx Partners LLC (each a "PURCHASER") proposes to enter into
a Purchase Agreement (the "PURCHASE AGREEMENT") with Akamai Technology, Inc., a
Delaware corporation (the "COMPANY") providing for the offering (the "OFFERING")
of $250,000,000 in principal amount of Convertible Notes Due 2007 of the Company
(the "NOTES").
To induce the Purchasers that may participate in the Offering to
continue their efforts in connection with the Offering, the undersigned hereby
agrees that, without the prior written consent and waiver of either Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation or Xxxxxx Xxxxxxx & Co. Incorporated,
acting on behalf of the Underwriters, the undersigned will not, during the
period commencing on the date of the expiration of the undersigned's existing
lock-up with any of the Purchasers and ending 90 days after the date of the
pricing of the Notes, (1) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock, par value $0.01 per share,
of the Company (the "COMMON STOCK") or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to transactions relating to shares of Common Stock or other
securities acquired by the undersigned in open market transactions or the sale
or transfer of shares to the acquiror in connection with the sale of the Company
pursuant to a merger, sale of stock, sale of assets or otherwise. In addition,
the undersigned agrees that, without the prior written consent of Xxxxxx Xxxxxxx
& Co. Incorporated and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, it
will not, during the period commencing on the date hereof and ending 90 days
after the date of the pricing of the Notes, make any demand for or exercise any
right with respect to the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
Notwithstanding the above, beginning after July 25, 2000, 50% of the shares of
Common Stock held by the undersigned shall cease to be subject to the terms of
this lock-up.
Notwithstanding the foregoing, transfers to (i) the undersigned's
beneficiaries or affiliates, (ii) a trust, the beneficiaries of which are the
undersigned, any beneficiary of the undersigned and/or immediate family members
of any beneficiaries of the undersigned or (iii) a trust or other entity for
charitable and/or estate or financial planning purposes, shall not be prohibited
by this agreement; provided, that (x) the donee or transferee agrees in writing
to be bound by the foregoing in the same manner as it applies to the undersigned
and (y) if the donor or transferor is a reporting person subject to Section
16(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), any gifts or
transfers made in accordance with this paragraph shall not require such person
to, and such person shall not voluntarily, file a report of such transaction on
Form 4 under the Exchange Act. For purposes hereof, "immediate family" shall
mean spouse, lineal descendants, father, mother, brother or sister of the
transferor and father, mother, brother or sister of the transferor's spouse.
C-5
38
The undersigned agrees that the terms of this lock-up supercedes the
terms of any and all other lock-ups relating to Common Stock of the Company
entered into by the undersigned prior to the date hereof.
This agreement shall automatically terminate if the Purchase Agreement is
not entered into by June 23, 2000 or if the Purchasers do not purchase the Notes
and the Purchase Agreement is terminated pursuant to its terms.
Very truly yours,
---------------------------------------------
(Print Name of Trust)
---------------------------------------------
(Authorized Signature)
---------------------------------------------
(Title)
---------------------------------------------
---------------------------------------------
---------------------------------------------
(Address and Telephone Number)
C-6
39
ANNEX 1
MANAGEMENT/DIRECTOR LOCK-UP (EXHIBIT B)
Xxxxxx X. Xxxxxxxx
Xxxx Xxxxx
X. Xxxxxx Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxxxxx Xxxxxx
Xxxxxx X. Xxxx XXX
Xxxx X. Xxxxxxxx III
Xxxxxx X. Xxxxxxxx
Xxxxxxxx Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxx X. Xxxxxx
Xxxxxxxx X. XxXxxxx
Xxxxxx X. Xxxxx
Battery Ventures IV, L.P.
Battery Investment Partners IV, LLC
Xxxxx Communications Fund, L.P.
Polaris Venture Management Co. II., L.L.C.
Polaris Venture Partners Founders' Fund II X.X.
XXXXX Partners L.P.
TRUST LOCK-UP (EXHIBIT C-1)
ATREL Trust
Mallard Trust
Xxxxxx Xxxxxxxx Trust
AKME Trust
Xxxxxx Xxxxxx 1996 Trust
CHARITABLE TRUST LOCK-UP (EXHIBIT C-2)
New TAB Trust
Aurora Trust
