1
EXHIBIT 1.1
DRAFT
3,000,000 Shares
E.piphany, Inc.
Common Stock, par value $0.0001 per share
UNDERWRITING AGREEMENT
January __, 2000
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX XXXXXXX & CO., INC.
XXXXXXXXX & XXXXX LLC
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
FLEETBOSTON XXXXXXXXX XXXXXXXX, INC.
As Representatives of the Several Underwriters,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. E.piphany, Inc., a Delaware corporation ("Company"),
proposes to issue and sell 1,500,000 shares of its Common Stock, $0.0001 par
value ("Securities"), and the stockholders listed in Schedule A hereto ("Selling
Stockholders") propose severally to sell an aggregate of 1,500,000 outstanding
shares of the Securities (such 3,000,000 shares of Securities being hereinafter
referred to as the "Firm Securities"). The Company also proposes to issue and
sell to the Underwriters, at the option of the Underwriters, an aggregate of not
more than 450,000 additional shares ("Optional Securities") of its Securities as
set forth below. The Firm Securities and the Optional Securities are herein
collectively called the "Offered Securities." The Company and the Selling
Stockholders hereby agree with the several Underwriters named in Schedule B
hereto ("Underwriters") as follows:
2. Representations and Warranties of the Company and the Selling
Stockholders.
(a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-_____) relating to
the Offered Securities, including a form of prospectus, has been
filed with the Securities and Exchange Commission ("Commission")
and either (A) has been declared effective under the Securities
Act of 1933 ("Act") and is not proposed to be amended or (B) is
proposed to be amended by amendment or post-effective amendment.
If such registration statement ("Initial Registration
Statement") has been declared effective, either (x) an
additional registration statement ("additional registration
statement") relating to the Offered Securities may have been
filed with the
1
2
Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Act
and, if so filed, has become effective upon filing pursuant to
such Rule and the Offered Securities all have been duly
registered under the Act pursuant to the initial registration
statement and, if applicable, the additional registration
statement or (y) such an additional registration statement is
proposed to be filed with the Commission pursuant to Rule 462(b)
and will become effective upon filing pursuant to such Rule and
upon such filing the Offered Securities will all have been duly
registered under the Act pursuant to the Initial Registration
Statement and such additional registration statement. If the
Company does not propose to amend the Initial Registration
Statement or if an additional registration statement has been
filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement
has been filed with the Commission prior to the execution and
delivery of this Agreement, the most recent amendment (if any)
to each such registration statement has been declared effective
by the Commission or has become effective upon filing pursuant
to Rule 462(c) ("Rule 462(c)") under the Act or, in the case of
the additional registration statement, Rule 462(b). For purposes
of this Agreement, "Effective Time" with respect to the initial
registration statement or, if filed prior to the execution and
delivery of this Agreement, the additional registration
statement means (aa) if the Company has advised the
Representatives that it does not propose to amend such
registration statement, the date and time as of which such
registration statement, or the most recent post-effective
amendment thereto (if any) filed prior to the execution and
delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule
462(c), or (bb) if the Company has advised the Representatives
that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as
of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is
declared effective by the Commission. If an additional
registration statement has not been filed prior to the execution
and delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "Effective Time"
with respect to such additional registration statement means the
date and time as of which such registration statement is filed
and becomes effective pursuant to Rule 462(b). "Effective Date"
with respect to the initial registration statement or the
additional registration statement (if any) means the date of the
Effective Time thereof. The initial registration statement, as
amended at its Effective Time, including all information
contained in the additional registration statement (if any) and
deemed to be a part of the initial registration statement as of
the Effective Time of the additional registration statement
pursuant to the General Instructions of the Form on which it is
filed and including all information (if any) deemed to be a part
of the initial registration statement as of its Effective Time
pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is
hereinafter referred to as the "Initial Registration Statement".
The additional registration statement, as amended at its
Effective Time, including the contents of the initial
registration statement incorporated by reference therein and
including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time
pursuant to Rule 430A(b), is hereinafter referred to as the
"Additional Registration Statement". The Initial Registration
Statement and the Additional Registration Statement are herein
referred to collectively as the "Registration Statements" and
individually as a "Registration Statement". The form of
prospectus relating to the Offered Securities, as first filed
with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, is
hereinafter referred to as the "Prospectus". No document has
been or will be prepared or distributed in reliance on Rule 434
under the Act.
2
3
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this
Agreement: (A) on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement conformed in all
respects to the requirements of the Act and the rules and
regulations of the Commission ("Rules and Regulations") and did
not include 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 not misleading, (B) on
the Effective Date of the Additional Registration Statement (if
any), each Registration Statement conformed, or will conform, in
all respects to the requirements of the Act and the Rules and
Regulations and did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not omit,
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (C)
on the date of this Agreement, the Initial Registration
Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of
this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant
to Rule 424(b) or (if no such filing is required) at the
Effective Date of the Additional Registration Statement in which
the Prospectus is included, each Registration Statement and the
Prospectus will conform, in all respects to the requirements of
the Act and the Rules and Regulations, and neither of such
documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the
Initial Registration Statement is subsequent to the execution
and delivery of this Agreement: on the Effective Date of the
Initial Registration Statement, the Initial Registration
Statement and the Prospectus will conform in all respects to the
requirements of the Act and the Rules and Regulations, neither
of such documents will include any untrue statement of a
material fact or will omit to state any material fact required
to be stated therein or necessary to make the statements therein
not misleading, and no Additional Registration Statement has
been or will be filed. The two preceding sentences do not apply
to statements in or omissions from a Registration Statement or
the Prospectus based upon written information furnished to the
Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed
that the only such information is that described as such in
Section 7(b) hereof.
(iii) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and
other) to own its properties and conduct its business as
described in the Prospectus; and the Company is duly qualified
to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification.
(iv) The Company has no subsidiaries.
(v) The Offered Securities and all other outstanding
shares of capital stock of the Company have been duly
authorized; all outstanding shares of capital stock of the
Company are, and, when the Offered Securities have been
delivered and paid for in accordance with this Agreement on each
Closing Date (as defined below), such Offered Securities will
have been, validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus;
and the stockholders of the Company have no preemptive rights
with respect to the Securities that have not been waived in
writing as of the date hereof.
3
4
(vi) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and
any person that would give rise to a valid claim against the
Company or any Underwriter for a brokerage commission, finder's
fee or other like payment in connection with this offering.
(vii) There are no contracts, agreements or
understandings between the Company and any person granting such
person the right to require the Company to include in the
securities registered pursuant to a Registration Statement any
securities of the Company owned or to be owned by such person,
which right has not expired or been waived, nor, except as filed
as an exhibit to a Registration Statement, to require the
Company to include any securities of the Company owned or to be
owned by such person in any securities being registered pursuant
to any other registration statement filed by the Company under
the Act, or to file any other registration statement under the
Act with respect to any such securities.
(viii) The Offered Securities are listed on The Nasdaq
Stock Market's National Market.
(ix) No consent, approval, authorization, or order of,
or filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated
by this Agreement in connection with the issuance and sale of
the Offered Securities by the Company, except such as have been
obtained and made under the Act and such as may be required
under state securities laws or the rules of the National
Association of Securities Dealers ("NASD").
(x) The execution, delivery and performance of this
Agreement, and the issuance and sale of the Offered Securities
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any
rule, regulation or order of any governmental agency or body or
any court, domestic or foreign, having jurisdiction over the
Company or any of its properties, or any agreement or instrument
to which the Company is a party or by which the Company is bound
or to which any of the properties of the Company is subject, or
the charter or by-laws of the Company, and the Company has full
power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement.
(xi) This Agreement has been duly authorized, executed
and delivered by the Company.
(xii) Except as disclosed in the Prospectus, the Company
has good and marketable title to all real properties and all
other properties and assets owned by it, in each case free from
liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be
made thereof by it; and except as disclosed in the Prospectus,
the Company holds any leased real or personal property under
valid and enforceable leases with no exceptions that would
materially interfere with the use made or to be made thereof by
it.
(xiii) The Company possesses adequate certificates,
authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now
operated by it and has not received any notice of proceedings
relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely
to the Company, would individually or in the aggregate have a
material adverse effect on the condition
4
5
(financial or other), business, properties or results of
operations of the Company ("Material Adverse Effect").
(xiv) No labor dispute with the employees of the Company
exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(xv) Except as disclosed in the prospectus, the Company
owns, possesses or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual
property rights") necessary to conduct the business now operated
by it, or presently employed by it, and have not received any
notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if
determined adversely to the Company, would individually or in
the aggregate have a Material Adverse Effect.
(xvi) Except as disclosed in the Prospectus, the Company
is not in violation of any statute, any rule, regulation,
decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, "environmental
laws"); does not own or operate any real property contaminated
with any substance that is subject to any environmental laws; is
not liable for any off-site disposal or contamination pursuant
to any environmental laws; is not subject to any claim relating
to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a
Material Adverse Effect; and is not aware of any pending
investigation which might lead to such a claim.
(xvii) Except as disclosed in the Prospectus, there are
no pending actions, suits or proceedings against or affecting
the Company, or any of its respective properties that, if
determined adversely to the Company, would individually or in
the aggregate have a Material Adverse Effect, or would
materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are
otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are
threatened or, to the Company's knowledge, contemplated.
(xviii) The financial statements included in each
Registration Statement and the Prospectus present fairly the
financial position of the Company as of the dates shown and its
results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with
the generally accepted accounting principles in the United
States applied on a consistent basis, and the schedules included
in each Registration Statement present fairly the information
required to be stated therein.
(xix) Except as disclosed in the Prospectus, since the
date of the latest audited financial statements included in the
Prospectus there has been no material adverse change, nor any
development or event involving a prospective material adverse
change, in the condition (financial or other), business,
properties or results of operations of the Company, and, except
as disclosed in or contemplated by the Prospectus, there has
been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
5
6
(xx) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application
of the proceeds thereof as described in the Prospectus, will not
be an "investment company" as defined in the Investment Company
Act of 1940, as amended.
(xxi) All outstanding Securities held by offices and
directors of the Company, all Selling Stockholders and certain
other significant stockholders specified by Credit Suisse First
Boston Corporation ("CSFBC"), and all securities convertible
into or exercisable or exchangeable for Securities, are subject
to valid and binding agreements (collectively, "Lock-up
Agreements") that restrict the holders thereof from selling,
making any short sale of, granting option for the purchase of,
or otherwise transferring or disposing of, any of such
Securities, or any such securities convertible into or
exercisable or exchangeable for Securities, for a period of 90
days after the date of the Prospectus without the prior written
consent of CSFBC, and the Company has imposed a stop-transfer
instruction with the Company's transfer agent in order to
enforce the foregoing lock-up provision.
(b) Each Selling Stockholder severally represents and warrants to, and
agrees with, the several Underwriters that:
(i) Such Selling Stockholder has, and on each Closing
Date hereinafter mentioned will have, valid and unencumbered
title to the Offered Securities to be delivered by such Selling
Stockholder on such Closing Date and full right, power and
authority to enter into this Agreement and to sell, assign,
transfer and deliver the Offered Securities to be delivered by
such Selling Stockholder on such Closing Date hereunder; and
upon the delivery of and payment for the Offered Securities on
each Closing Date hereunder the several Underwriters will
acquire valid and unencumbered title to the Offered Securities
to be delivered by such Selling Stockholder on such Closing
Date.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this
Agreement: (A) on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement conformed in all
respects to the requirements of the Act and the Rules and
Regulations and did not include 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 not
misleading, (B) on the Effective Date of the Additional
Registration Statement (if any), each such Registration
Statement conformed, or will conform, in all respects to the
requirements of the Act and the Rules and Regulations did not
include, or will not include, any untrue statement of a material
fact and did not omit, or will not omit, to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, and (C) on the date of this
Agreement, the Initial Registration Statement and, if the
Effective Time of the Additional Registration Statement is prior
to the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing
of the Prospectus pursuant to Rule 424(b) or (if no such filing
is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will
include, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading. If the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration
Statement, the
6
7
Initial Registration Statement and the Prospectus will conform
in all respects to the requirements of the Act and the Rules and
Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading. The two preceding sentences
apply only to the extent that any non-conformity to, statements
in or omissions from a Registration Statement or the Prospectus
are based on written information furnished to the Company by
such Selling Stockholder specifically for use therein.
(iii) Except as disclosed in the Prospectus, there are
no contracts, agreements or understandings between such Selling
Stockholders and any person that would give rise to a valid
claim against such Selling Stockholder or any Underwriter for a
brokerage commission, finder's fee or other like payment in
connection with this offering.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company and each Selling
Stockholder agrees, severally and not jointly, to sell to the Underwriters, and
the Underwriters agree, severally and not jointly, to purchase from the Company
and each Selling Stockholder, at a purchase price of $_______ per share, that
number of Firm Securities (rounded up or down, as determined by CSFBC in its
discretion, in order to avoid fractions) obtained by multiplying __________ Firm
Securities in the case of the Company and the number of Firm Securities set
forth opposite the name of such Selling Stockholder in Schedule A hereto, in the
case of a Selling Stockholder, in each case by a fraction of the numerator of
which is the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule B hereto and the denominator of which is the total
number of Firm Securities.
The Company and the Custodian (as such term is defined below) will
deliver the Firm Securities to the Representatives for the accounts of the
Underwriters, against payment of the purchase price in Federal (same day) funds
by official bank check or checks or wire transfer to an account at a bank
acceptable to CSFBC drawn to the order of the Company in the case of 1,500,000
shares of Firm Securities and to the Custodian for the respective accounts of
the Selling Stockholders in the case of 1,5000,000 shares of Firm Securities, at
the office of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, at
10:00 A.M., New York time, on January ___, 2000, or at such other time not later
than seven full business days thereafter as CSFBC and the Company determine,
such time being herein referred to as the "First Closing Date". For purposes of
Rule 15c6-1 under the Securities Exchange Act of 1934, the First Closing Date
(if later than the otherwise applicable settlement date) shall be the settlement
date for payment of funds and delivery of securities for all the Offered
Securities sold pursuant to the offering. The certificates for the Firm
Securities so to be delivered will be in definitive form if required by CSFBC,
in such denominations and registered in such names as CSFBC requests and will be
made available for checking and packaging at the office of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation at least 24 hours prior to the First
Closing Date.
Certificates in negotiable form for the Offered Securities to be sold by
the Selling Stockholders hereunder have been placed in custody, for delivery
under this Agreement, under custody agreements ("Custody Agreements") made with
BankBoston, N.A., as custodian ("Custodian"). Each Selling Stockholder agrees
that the shares represented by the certificates held in custody for the Selling
Stockholders under such Custody Agreements are subject to the interests of the
Underwriters hereunder, that the arrangements made by the Selling Stockholders
for such custody are to that extent irrevocable, and that the obligations of the
Selling Stockholders hereunder shall not be terminated by operation of law,
whether by the death of any individual Selling Stockholder or the occurrence of
any other event, or in the
7
8
case of a trust, by the death of any trustee or trustees or the termination of
such trust. If any individual Selling Stockholder or any such trustee or
trustees should die, or if any other such event should occur, or if any such
trusts should terminate, before the delivery of the Offered Securities
hereunder, certificates for such Offered Securities shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death or other event or termination had not occurred, regardless of whether
or not the Custodian shall have received notice of such death or other event or
termination.
In addition, upon written notice from CSFBC given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of shares of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Securities set forth opposite such Underwriter's name
bears to the total number of shares of Firm Securities (subject to adjustment by
CSFBC to eliminate fractions) and may be purchased by the Underwriters only for
the purpose of covering over-allotments made in connection with the sale of the
Firm Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to
the order of the Company, at the office of Wilson, Sonsini, Xxxxxxxx & Xxxxxx,
Professional Corporation. The certificates for the Optional Securities being
purchased on each Optional Closing Date will be in definitive form, in such
denominations and registered in such names as CSFBC requests upon reasonable
notice prior to such Optional Closing Date and will be made available for
checking and packaging at the office of Wilson, Sonsini, Xxxxxxxx & Xxxxxx,
Professional Corporation at a reasonable time in advance of such Optional
Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. The
Company agrees with the several Underwriters and the Selling Stockholders that:
(a) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement, the Company
will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to
by CSFBC, subparagraph (4)) of Rule 424(b) not later than the earlier of
(A) the second business day following the execution and delivery of this
Agreement or (B) the fifteenth business day after the Effective Date of
the Initial Registration Statement.
8
9
The Company will advise CSFBC promptly of any such filing
pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to
register a portion of the Offered Securities under the Act but the
Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement
or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior to
10:00 P.M., New York time, on the date of this Agreement or, if earlier,
on or prior to the time the Prospectus is printed and distributed to any
Underwriter, or will make such filing at such later date as shall have
been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to
amend or supplement the initial or any additional registration statement
as filed or the related prospectus or the Initial Registration
Statement, the Additional Registration Statement (if any) or the
Prospectus and will not effect such amendment or supplementation without
CSFBC's consent, which consent shall not be unreasonably withheld; and
the Company will also advise CSFBC promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect
of a Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly notify CSFBC of such event and will promptly
prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CSFBC's consent to,
nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
6.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to
its securityholders an earnings statement covering a period of at least
12 months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional
Registration Statement) which will satisfy the provisions of Section
11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such Effective
Date, except that, if such fourth fiscal quarter is the last quarter of
the Company's fiscal year, "Availability Date" means the 90th day after
the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
each Registration Statement (four of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so long
as a prospectus relating to the Offered Securities is required to be
delivered under the Act in connection with sales by any Underwriter or
dealer, the Prospectus and all amendments and supplements to such
documents, in each case in such quantities as CSFBC reasonably requests.
The Prospectus shall be so furnished on or prior to 3:00 P.M., New York
time, on the business day
9
10
following the later of the execution and delivery of this Agreement or
the Effective Time of the Initial Registration Statement. All other
documents shall be so furnished as soon as available. The Company will
pay the expenses of printing and distributing to the Underwriters all
such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as
CSFBC reasonably designates and will continue such qualifications in
effect so long as required for the distribution.
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year,
a copy of its annual report to stockholders for such year; and the
Company will furnish to the Representatives (i) as soon as available, a
copy of each report and any definitive proxy statement of the Company
filed with the Commission under the Securities Exchange Act of 1934 or
mailed to stockholders, and (ii) from time to time, such other
information concerning the Company as CSFBC may reasonably request.
(h) The Company and each Selling Stockholder agree with the
Underwriters that the Company and such Selling Stockholder will pay all
expenses incident to the performance of the obligations of the Company
and such Selling Stockholder, as the case may be, under this Agreement,
for any filing fees and other expenses (including fees and disbursements
of counsel) incurred in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and the printing of memoranda relating thereto, for the
filing fee incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the
National Association of Securities Dealers, Inc. of the Offered
Securities, for any travel expenses of the Company's officers and
employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of the Offered
Securities and for expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and
supplements thereto) to the Underwriters and for any transfer taxes on
the sale by the Selling Stockholders of the Offered Securities to the
Underwriters.
(i) For a period of 90 days after the date of the initial public
offering of the Offered Securities, the Company and each Selling
Stockholder agree that they will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to, any
additional shares of its Securities or securities convertible into or
exchangeable or exercisable for any shares of its Securities, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of CSFBC,
except issuances of Securities pursuant to the conversion or exchange of
convertible or exchangeable securities or the exercise of warrants or
options, in each case outstanding on the date hereof, grants of employee
stock options or sales of shares pursuant to the terms of a stock option
or employee stock purchase plan in effect on the date hereof, and
issuances of Securities pursuant to the exercise of such options.
(j) The Company will (i) enforce the terms of each Lock-up
Agreement, and (ii) to the extent it has not already done so, issue
stop-transfer instructions to the transfer agent for the Securities with
respect to any transaction or contemplated transaction that would
constitute a breach of or default under the applicable Lock-up
Agreement. In addition, except with the prior written consent of CSFBC,
the Company agrees (i) not to amend or terminate, or waive any right
under,
10
11
any Lock-up Agreement, or take any other action that would directly or
indirectly have the same effect as an amendment or termination, or
waiver of any right under any Lock-up Agreement, that would permit any
holder of Securities, or any securities convertible into, or exercisable
or exchangeable for Securities, to make any short sale of, grant any
option for the purpose of, or otherwise transfer or dispose of, any such
Securities or other securities, prior to the expiration of the 90 days
after the date of the Prospectus and (ii) not to consent to any sale,
short sale, grant of an option for the purchase of, or other disposition
or transfer of shares of Securities or securities convertible into or
exercisable or exchangeable for Securities, subject to a Lock-up
Agreement.
(k) Each Selling Stockholder agrees to deliver to CSFBC,
attention: Transactions Advisory Group, on or prior to the First Closing
Date, a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to
the execution and delivery of this Agreement, shall be prior to the
filing of the amendment or post-effective amendment to the registration
statement to be filed shortly prior to such Effective Time), of Xxxxxx
Xxxxxxxx LLP confirming that they are independent public accountants
within the meaning of the Act and the applicable published Rules and
Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and schedules
examined by them and included in the Registration Statements
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review
of interim financial information as described in Statement of
Auditing Standards No. 71, Interim Financial Information, on the
unaudited financial statements included in the Registration
Statements;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company
who have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that
caused them to believe that:
(A) the unaudited financial statements included
in the Registration Statements do not comply as to form
in all material respects with the applicable accounting
requirements of the Act and the related published Rules
and
11
12
Regulations or any material modifications should be made
to such unaudited financial statements for them to be in
conformity with generally accepted accounting
principles;
(B) at the date of the latest available balance
sheet read by such accountants, or at a subsequent
specified date not more than three business days prior
to the date of such letter, there was any change in the
capital stock or any increase in short-term indebtedness
or long-term debt of the Company or, at the date of the
latest available balance sheet read by such accountants,
there was any decrease in consolidated net current
assets or net assets or any increase in stockholders'
deficit, as compared with amounts shown on the latest
balance sheet included in the Prospectus; or
(C) for the period from the closing date of the
latest income statement included in the Prospectus to
the closing date of the latest available income
statement read by such accountants there were any
decreases, as compared with the corresponding period of
the previous year and with the period of corresponding
length ended the date of the latest income statement
included in the Prospectus, in consolidated net sales,
increases in loss from operations, consolidated net
operating income, or in the total or per share amounts
of consolidated net loss;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the
general accounting records of the Company subject to the
internal controls of the Company's accounting system or are
derived directly from such records by analysis or computation)
with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages and
other financial information to be in agreement with such
results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration is subsequent to such
execution and delivery, "Registration Statements" shall mean the Initial
Registration Statement and the additional registration statement as
proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration
Statements.
12
13
(b) If the Effective Time of the Initial Registration Statement
is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or such later date as shall have
been consented to by CSFBC. If the Effective Time of the Additional
Registration Statement (if any) is not prior to the execution and
delivery of this Agreement, such Effective Time shall have occurred not
later than 10:00 P.M., New York time, on the date of this Agreement or,
if earlier, the time the Prospectus is printed and distributed to any
Underwriter, or shall have occurred at such later date as shall have
been consented to by CSFBC. If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of any Selling Stockholder, the Company or the
Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Company
which, in the judgment of a majority in interest of the Underwriters
including the Representatives, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities; (ii) any
material suspension or material limitation of trading in securities
generally on the New York Stock Exchange or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iii) any banking moratorium declared by U.S. Federal or New
York authorities; or (iv) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of
war by Congress or any other substantial national or international
calamity or emergency if, in the judgment of a majority in interest of
the Underwriters including the Representatives, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional
Corporation, counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business as
a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except
where the failure to be so qualified would not have a Material
Adverse Effect;
(ii) The Offered Securities delivered on such Closing
Date and all other outstanding shares of the Common Stock of the
Company have been duly authorized and validly issued, are fully
paid and nonassessable and conform to the description thereof
contained in the Prospectus; and the stockholders of the Company
have no statutory and, to such counsel's knowledge, no
contractual preemptive rights with respect to the
13
14
Securities. The Offered Securities and all other outstanding
shares of capital stock of the Company have been duly
authorized; all outstanding shares of capital stock of the
Company are, and, when the Offered Securities have been
delivered and paid for in accordance with this Agreement on each
Closing Date (as defined below), such Offered Securities will
have been, validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus;
and the stockholders of the Company have no preemptive rights
with respect to the Securities that have not been waived in
writing as of the date hereof, nor are any such preemptive
rights set forth in the Company's Articles of Incorporation or
Bylaws as currently in effect;
(iii) To such counsel's knowledge, there are no
contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company
to include in the securities registered pursuant to a
Registration Statement any securities of the Company owned or to
be owned by such person, which right has not expired or been
waived, nor, except as filed as an exhibit to a Registration
Statement, to require the Company to include any securities of
the Company owned or to be owned by such person in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act, or to file any
other registration statement under the Act with respect to any
such securities;
(iv) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application
of the proceeds thereof as described in the Prospectus, will not
be an "investment company" as defined in the Investment Company
Act of 1940;
(v) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated
by this Agreement in connection with the issuance or sale of the
Offered Securities by the Company, except such as have been
obtained and made under the Act and such as may be required
under state securities laws or the rules of the NASD;
(vi) The execution, delivery and performance of this
Agreement and the issuance and sale of the Offered Securities
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any
rule, regulation or, to such counsel's knowledge, order of any
governmental agency or body or any court having jurisdiction
over the Company or any of its properties, or any agreement or
instrument required to be filed as an exhibit to the
Registration Statement to which the Company is a party or by
which the Company is bound or to which any of the properties of
the Company is subject, or the certificate of incorporation or
by-laws of the Company, and the Company has full power and
authority to authorize, issue and sell the Offered Securities as
contemplated by this Agreement;
(vii) The Initial Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any) was
filed and became effective under the Act as of the date and time
(if determinable) specified in such opinion, the Prospectus
either was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the
date specified therein or was included in the Initial
Registration Statement or the
14
15
Additional Registration Statement (as the case may be), and, to
the knowledge of such counsel, no stop order suspending the
effectiveness of a Registration Statement or any part thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and
each Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Act and the Rules and
Regulations;
(viii) This Agreement has been duly authorized, executed
and delivered by the Company;
(ix) The statements set forth under the heading
"Description of Capital Stock" in the Prospectus, insofar as
such statements purport to summarize certain provisions of the
capital stock of the Company, provide a fair summary of such
provisions;
(x) The statements set forth under the heading
"Business--Intellectual Property and Other Proprietary Rights,"
when read in conjunction with the risk factors in the
Registration Statements with the captions "If others claim that
we are infringing their intellectual property, we could incur
significant expenses or be prevented from selling our products"
and "If we are unable to protect our intellectual property
rights, this inability could weaken our competitive position,
reduce our revenues and increase our costs," insofar as such
statements constitute a summary of legal matters, documents or
proceedings referred to therein, provide a fair summary of such
legal matters, documents and proceedings.
Such opinion shall also contain a statement to the effect that such
counsel have participated in conferences with officials and other
representatives of the Company, the Representatives, counsel for the
Underwriters and the independent certified public accountants of the
Company, at which conferences the contents of the Registration
Statements and related matters were discussed; and that based on such
meetings such counsel have no reason to believe that any part of a
Registration Statement or any amendment thereto, as of its effective
date or as of such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any amendment or supplement
thereto, as of its issue date or as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; the
descriptions in the Registration Statements and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown; and
that such counsel do not know of any legal or governmental proceedings
required to be described in a Registration Statement or the Prospectus
which are not described as required or of any contracts or documents of
a character required to be described in a Registration Statement or the
Prospectus or to be filed as exhibits to a Registration Statement which
are not described and filed as required; it being understood that such
counsel need express no opinion as to the financial statements, the
notes thereto, financial schedules or other financial data (and
statistical data derived therefrom) contained in the Registration
Statements or the Prospectus.
(e) The Representatives shall have received the opinion
contemplated in the Power of Attorney executed and delivered by each
Selling Stockholder and an opinion, dated such Closing
15
16
Date, of Xxxxxx Xxxxxxx Xxxxxxxx and Xxxxxx, Professional Corporation,
counsel for the Selling Stockholder[s], to the effect that:
(i) Each Selling Stockholder had valid and unencumbered
title to the Offered Securities delivered by such Selling
Stockholder on such Closing Date and had full right, power and
authority to sell, assign, transfer and deliver the Offered
Securities delivered by such Selling Stockholder on such Closing
Date hereunder; and the several Underwriters have acquired valid
and unencumbered title to the Offered Securities purchased by
them from the Selling Stockholders on such Closing Date
hereunder;
(ii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required to be obtained or made by any Selling Stockholder for
the consummation of the transactions contemplated by the Custody
Agreement or this Agreement in connection with the sale of the
Offered Securities sold by the Selling Stockholders, except such
as have been obtained and made under the Act and such as may be
required under state securities laws;
(iii) The execution, delivery and performance of the
Custody Agreement and this Agreement and the consummation of the
transactions therein and herein contemplated will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over any Selling Stockholder or any of their
properties or any agreement or instrument to which any Selling
Stockholder is a party or by which any Selling Stockholder is
bound or to which any of the properties of any Selling
Stockholder is subject, or the charter or by-laws of any Selling
Stockholder which is a corporation;
(iv) The Power of Attorney and related Custody Agreement
with respect to each Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder
and constitute valid and legally binding obligations of each
such Selling Stockholder enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; and
(v) This Agreement has been duly authorized, executed
and delivered by each Selling Stockholder.
(f) The Representatives shall have received from Xxxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the
Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statements, the Prospectus and other
related matters as the Representatives may require, and the Company and
the Selling Stockholders shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(g) The Representatives shall have received a certificate, dated
such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable investigation,
shall state that: the representations and warranties of the Company in
this Agreement are true and correct; the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date; no stop order
suspending the effectiveness
16
17
of any Registration Statement has been issued and no proceedings for
that purpose have been instituted or are contemplated by the Commission;
the Additional Registration Statement (if any) satisfying the
requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing fee
in accordance with Rule 111(a) or (b) under the Act, prior to the time
the Prospectus was printed and distributed to any Underwriter; and,
subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of the Company except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated such
Closing Date, of Xxxxxx Xxxxxxxx LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three days prior to
such Closing Date for the purposes of this subsection.
The Company and the Selling Stockholders will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. CSFBC may in its sole discretion waive
on behalf of the Underwriters compliance with any conditions to the obligations
of the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below.
The Company agrees to indemnify and hold harmless each Designated
Underwriter and each person, if any, who controls a Designated Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (the "Designated Entities"), from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii)
17
18
related to, arising out of, or in connection with the Directed Share Program,
other than losses, claims, damages or liabilities (or expenses relating thereto)
that are finally judicially determined to have resulted from the bad faith or
gross negligence of the Designated Entities.
[(b) The Selling Stockholders, severally and not jointly, will indemnify
and hold harmless each Underwriter, its partners, directors and officers and
each person who controls such Underwriter within the meaning of Section 15 of
the Act, against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Selling Stockholders will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by an Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below; and provided further that
the liability of each Selling Stockholder pursuant to this subsection shall not
exceed the product of the number of shares of Securities sold by such Selling
Stockholder and the price of per share of Securities set forth in Section 3
hereof.]
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, and the
Selling Stockholders, against any losses, claims, damages or liabilities to
which the Company or such Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company and
each Selling Stockholder in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of (i) the following information in the Prospectus
furnished on behalf of each Underwriter: the concession and reallowance figures
appearing in the fourth paragraph under the caption "Underwriting" and the
information contained in the seventh and fourteenth paragraphs under the caption
"Underwriting."
(d) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a), (b) or (c) above. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
of
18
19
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are 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 an indemnified party.
(e) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (e). Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section shall be in addition to any liability which the Company and the
Selling Stockholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act (provided, further, that the liability of each Selling
Stockholder shall not exceed the product of the number of shares of Securities
sold by such Selling Stockholder and the price per share of
19
20
Securities set forth in Section 3 hereof); and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed a Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company and the Selling Stockholders for
the purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Stockholders, except as provided in Section 9 (provided
that if such default occurs with respect to Optional Securities after the First
Closing Date, this Agreement will not terminate as to the Firm Securities or any
Optional Securities purchased prior to such termination). As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholders, the Company or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 5 and the respective obligations of the Company and the Underwriters
pursuant to Section 7 shall remain in effect, and if any Offered Securities have
been purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Underwriters is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 8
or the occurrence of any event specified in clause (ii), (iii) or (iv) of
Section 6(c), the Company will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representatives, c/o Credit Suisse First Boston Corporation, Eleven
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention: Investment Banking
Department--Transactions Advisory Group, or, if sent to the Company or any of
the Selling
20
21
Stockholders, will be mailed, delivered or telegraphed and confirmed to them at
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxx Xxxxxx, or, if sent to the Selling Stockholders, any such notice shall be
addressed to the Selling Stockholders at the addresses set forth in the records
of the Company's transfer agent or in the Custody Agreement executed by such
Selling Stockholders; provided, however, that any notice to an Underwriter
pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to
such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CSFBC will be binding
upon all the Underwriters. __________ will act for the Selling Stockholders in
connection with such transactions, and any action under or in respect of this
Agreement taken by __________ will be binding upon all the Selling Shareholders.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
21
22
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
E.PIPHANY, INC.
By__________________________________
Title:___________________________
SELLING SHAREHOLDERS
By__________________________________
Attorney-in-Fact
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first
above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX XXXXXXX & CO. INC.
XXXXXXXXX & XXXXX LLC
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
FLEETBOSTON XXXXXXXXX XXXXXXXX, INC.
Acting on behalf of themselves and as the Representatives of
the several Underwriters
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By_________________________________
Title:_____________________________
22
23
SCHEDULE A
Number of Offered
Selling Stockholder Securities to be Sold
------------------- ---------------------
---------------------
Total..........................................................
23
24
SCHEDULE B
Number of
Underwriter Firm Securities
----------- ---------------
Credit Suisse First Boston Corporation......................
Xxxxxx Xxxxxxx & Co., Inc. .................................
Xxxxxxxxx & Xxxxx LLC.......................................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated..........
FleetBoston Xxxxxxxxx Xxxxxxxx, Inc.........................
---------------
Total.................................
===============
24
