1
Exhibit 1.1
__________ SHARES*
STOCKPOINT, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
_____________, 2000
XXXX CAPITAL PARTNERS, INCORPORATED
As Representative of the several Underwriters
c/o Roth Capital Partners, Incorporated
00 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Stockpoint, Inc., a Delaware corporation (the "Company"), proposes to issue and
sell ___________ shares (the "Firm Shares") of the Company's Common Stock, $.01
par value per share (the "Common Stock"), to you and to the several other
Underwriters named in Schedule I hereto (collectively, the "Underwriters"), for
whom you are acting as representative (the "Representative"). The Company has
also agreed to grant to you and the other Underwriters an option (the "Option")
to purchase up to an additional ________ shares of Common Stock (the "Option
Shares") on the terms and for the purposes set forth in Section 1(b). The
Company has also agreed to sell to Xxxx Capital Partners, Incorporated a Warrant
(the "Warrant") to purchase ________ of Common Stock (the "Warrant Shares") on
the terms and for the purposes set forth in Section 1(c) hereof. The Firm
Shares, the Option Shares and the Warrant Shares are hereinafter collectively
referred to as the "Shares."
The Company confirms as follows its agreements with the Representative and the
several other Underwriters.
_______________________
*Plus an option to purchase up to an additional ___________ shares to cover
over-allotments.
2
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and agreements of the
Company herein contained and subject to all the terms and conditions of this
Agreement, (i) the Company agrees to issue and sell the Firm Shares to the
several Underwriters and (ii) each of the Underwriters, severally and not
jointly, agrees to purchase from the Company the respective number of Firm
Shares set forth opposite that Underwriter's name in Schedule I hereto, at the
purchase price of $______ for each Company Share.
(b) Subject to all the terms and conditions of this Agreement, the Company
grants the Option to the several Underwriters to purchase, severally and not
jointly, up to the maximum number of Option Shares hereto at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement upon
written or telegraphic notice (the "Option Shares Notice") by the Representative
to the Company no later than 12:00 noon, California time, at least two and no
more than five business days before the date specified for closing in the Option
Shares Notice (the "Option Closing Date"), setting forth the aggregate number of
Option Shares to be purchased and the time and date for such purchase. On the
Option Closing Date, the Company will issue and sell to the Underwriters the
number of Option Shares set forth in the Option Shares Notice and each
Underwriter will purchase such percentage of the Option Shares as is equal to
the percentage of Firm Shares that such Underwriter is purchasing, as adjusted
by the Representative in such manner as they deem advisable to avoid fractional
shares.
(c) Subject to all the terms and conditions of this Agreement, the Company
agrees on the Closing Date (as defined in Section 2 below) to sell, for $100.00,
the Warrant to Xxxx Capital Partners, Incorporated to purchase, severally and
not jointly, the Warrant Shares from the Company at a price per share equal to
120% of the initial public offering price per share. On the Closing Date, the
Company shall issue the Warrant, in such denominations as shall be designated by
Xxxx Capital Partners, Incorporated, in the form attached hereto as Schedule II.
2. Delivery and Payment. Delivery of the Firm Shares shall be made to the
Representative for the accounts of the Underwriters against payment of the
purchase price by certified or official bank checks or by wire transfers payable
in same-day funds to the order of the Company for the Firm Shares to be sold by
it at the office of Xxxx Capital Partners, Incorporated, 00 Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, at 10:00 a.m., California time, on
the third (or, if the purchase price set forth in Section 1(b) hereof is
determined after 4:30 p.m., Washington D.C. time, the fourth) business day
following the commencement of the offering contemplated by this Agreement, or at
such time on such other date, not later than seven business days after the date
of this Agreement, as may be agreed upon by the Company and the Representative
(such date is hereinafter referred to as the "Closing Date").
-2-
3
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above for the
Company) will take place at the offices specified above for the Closing Date at
the time and date (which may be the Closing Date) specified in the Option Shares
Notice.
Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as the Representative shall
request at least two business days prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the Shares,
the Company agrees to make such certificates available for inspection at least
24 hours prior to the Closing Date or the Option Closing Date, as the case may
be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to the
respective Underwriters shall be borne by the Company. The Company will pay and
save each Underwriter and any subsequent holder of the Shares harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Shares.
3. Representations and Warranties of the Company. The Company represents,
warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No. 333-________) on Form S-1
relating to the Shares, including a preliminary prospectus and such amendments
to such registration statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The term "preliminary prospectus" as used herein means a preliminary
prospectus as contemplated by Rule 430 or Rule 430A of the Rules and Regulations
included at any time as part of the registration statement. Copies of such
registration statement and amendments and of each related preliminary prospectus
have been delivered to the Representative. If such registration statement has
not become effective, a further amendment to such registration statement,
including a form of final prospectus, necessary to permit such registration
statement to become effective will be filed promptly by the Company with the
Commission. If such registration statement has become effective, a final
prospectus containing information permitted to be omitted at the time of
effectiveness by Rule 430A of the Rules and Regulations will be filed promptly
by the Company with the Commission in accordance with Rule 424(b) of the Rules
and Regulations. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including financial statements and all exhibits and any information
deemed to be included by Rule 430A and includes any registration statement
relating to the offering contemplated by this Agreement and filed pursuant to
Rule 462(b) of the Rules and Regulations. The term "Prospectus" means the
prospectus as first filed with the Commission
-3-
4
pursuant to Rule 424(b) of the Rules and Regulations or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the Effective Date. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the filing
of any document under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") after the Effective Date, the date of any preliminary prospectus
or the date of the Prospectus, as the case may be, and deemed to be incorporated
therein by reference.
(b) No order preventing or suspending the use of any preliminary prospectus
has been issued by the Commission. On the Effective Date, the date the
Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times subsequent to and including the Closing Date and, if
later, the Option Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did and will comply with all applicable
provisions of the Act and the Rules and Regulations and will contain all
statements required to be stated therein in accordance with the Act and the
Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement, the Prospectus or any such amendment or supplement did
or will contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date and, if later, the Option Closing Date, the
Prospectus did not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representative specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto.
(c) The Company does not own, and at the Closing Date and, if later, the
Option Closing Date, will not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities of any corporation or have any
equity interest in any corporation, firm, partnership, joint venture,
association or other entity. The Company is, and at the Closing Date and, if
later, the Option Closing Date, will be, a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. The Company has, and at the Closing Date and, if later, the
Option Closing Date, will have, full power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Registration Statement and the
Prospectus. The Company is, and at the Closing Date and, if later, the Option
Closing Date, will be, duly licensed or qualified to do business and in good
standing as a foreign corporation in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or leased by
it makes such license or
-4-
5
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not materially and adversely affect the
Company or its business, properties, business prospects, condition (financial or
other) or results of operations. The Company is not, and at the Closing Date
and, if later, the Option Closing Date, will not be, engaged in any discussions
or a party to any agreement or understanding, written or oral, regarding the
acquisition of an interest in any corporation, firm, partnership, joint venture,
association or other entity where such discussions, agreements or understandings
would require amendment to the Registration Statement pursuant to applicable
securities laws other than as described in the Prospectus. Complete and correct
copies of the articles of incorporation and of the by-laws of the Company and
all amendments thereto have been delivered to the Representative, and no changes
therein will be made subsequent to the date hereof and prior to the Closing Date
or, if later, the Option Closing Date.
(d) All of the outstanding shares of capital stock of the Company have been
duly authorized, validly issued and are fully paid and nonassessable and were
issued in compliance with all applicable state and federal securities laws; the
Firm Shares and the Option Shares issued by the Company (if any) have been duly
authorized and when issued and paid for as contemplated herein will be validly
issued, fully paid and nonassessable; and no preemptive or similar rights exist
with respect to any of the Shares or the issue and sale thereof. The description
of the capital stock of the Company in the Registration Statement and the
Prospectus is, and at the Closing Date and, if later, the Option Closing Date,
will be, complete and accurate in all respects. Except as set forth in the
Prospectus, the Company does not have outstanding, and at the Closing Date and,
if later, the Option Closing Date, will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any shares of capital stock, or any such warrants, convertible securities or
obligations. No further approval or authority of stockholders or the Board of
Directors of the Company will be required for the transfer and sale of the Firm
Shares and the Option Shares as contemplated herein.
(e) The financial statements and schedules included in the Registration
Statement or the Prospectus present fairly the financial condition of the
Company as of the respective dates thereof and the results of operations and
cash flows of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise disclosed in
the Prospectus. No other financial statements or schedules of the Company are
required by the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. Deloitte & Touche LLP (the
"Accountants"), who have reported on such financial statements and schedules,
are independent accountants with respect to the Company as required by the Act
and the Rules and Regulations. The summary financial and statistical data
included in the Registration Statement present fairly the information shown
therein and have been compiled on a basis consistent with the financial
statements presented therein.
(f) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus and prior to the Closing Date and,
if later, the Option
-5-
6
Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
change in the capitalization of the Company (other than in connection with the
exercise of options to purchase the Company's Common Stock granted pursuant to
the Company's stock option plans from the shares reserved therefor as described
in the Registration Statement), or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company, arising for any reason whatsoever, (ii)
the Company has not incurred nor will it incur, except in the ordinary course of
business as described in the Prospectus, any material liabilities or
obligations, direct or contingent, nor has the Company entered into nor will it
enter into, except in the ordinary course of business as described in the
Prospectus, any material transactions other than pursuant to this Agreement and
the transactions referred to herein, (iii) the Company has not sustained any
material loss or interference with the business or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance, (iv)
the Company has not and will not have paid or declared any dividends or other
distributions of any kind on any class of its capital stock and (v) there has
not been any issuance of warrants, options, convertible securities or other
rights to purchase or acquire capital stock of the Company.
(g) The Company is not, will not become as a result of the transactions
contemplated hereby, and does not intend to conduct its business in a manner
that would cause it to become, an "investment company" or an "affiliated person"
of; or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
(h) Except as set forth in the Registration Statement and the Prospectus,
there are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened or contemplated against or affecting the Company or any of
its officers in their capacity as such, nor any basis therefor, before or by any
Federal or state court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, wherein an unfavorable ruling,
decision or finding might, individually or in the aggregate, materially and
adversely affect the Company or the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company.
(i) The Company has, and at the Closing Date and, if later, the Option
Closing Date, will have, performed all the obligations required to be performed
by it, and is not, and at the Closing Date, and, if later, the Option Closing
Date, will not be, in default, under any contract or other instrument to which
it is a party or by which its property is bound or affected, which default might
materially and adversely affect the Company or the business, properties,
business prospects, condition (financial or other) or results of operations of
the Company. To the best knowledge of the Company, no other party under any
contract or other instrument to which it is a party is in default in any respect
thereunder, which default might materially and adversely affect the Company or
the business, properties, business prospects, condition (financial or other) or
results of operations of the Company. The Company is not and at the Closing Date
and, if later, the Option
- 6 -
7
Closing Date, will not be, in violation of any provision of its
articles of incorporation or by-laws or other organizational documents.
(j) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
execution and delivery by the Company of this Agreement and consummation by the
Company of the transactions on its part contemplated herein, except such as have
been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the by-laws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in connection with
the purchase and distribution by the Underwriters of the Shares.
(k) The Company has full corporate power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with the terms hereof. The
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company pursuant to the
terms or provisions of, or result in a breach or violation of any of the terms
or provisions of; or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, the articles of incorporation or by-laws of the Company, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which the Company is a party or by
which the Company or any of its properties is bound or affected, or violate or
conflict with any judgment, ruling, decree, order, statute, rule or regulation
of any court or other governmental agency or body applicable to the business or
properties of the Company.
(l) The Company has good and marketable title to all properties and assets
described in the Prospectus as owned by it, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in the
Prospectus or are not material to the business of the Company. The Company has
valid, subsisting and enforceable leases for the properties described in the
Prospectus as leased by it. The Company owns or leases all such properties as
are necessary to its operations as now conducted or as proposed to be conducted,
except where the failure to so own or lease would not materially and adversely
affect the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company.
(m) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company is a party have been duly
authorized, executed and delivered by the Company, constitute valid and binding
agreements of the Company and are enforceable against and by the Company in
accordance with the terms thereof.
-7-
8
(n) No statement, representation, warranty or covenant made by the Company
in this Agreement or made in any certificate or document required by Section 5
of this Agreement to be delivered to the Representative was or will be, when
made, inaccurate, untrue or incorrect in any material respect.
(o) Neither the Company nor any of its directors, officers or controlling
persons has taken, directly or indirectly, any action designed, or which might
reasonably be expected, to cause or result, under the Act or otherwise, in, or
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(p) No holder of securities of the Company has rights to the registration
of any securities of the Company because of the filing of the Registration
Statement, which rights have not been waived by the holder thereof as of the
date hereof.
(q) The Company has filed a registration statement pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
to register the Common Stock, and has filed an application to list the Shares to
be sold by the Company hereunder on the Nasdaq National Market ("NNM"), and has
received notification that the listing has been approved, subject to notice of
issuance of such Shares.
(r) Except as disclosed in or specifically contemplated by the Prospectus
(i) the Company has sufficient trademarks, trade names, patent rights, mask
works, copyrights, licenses, approvals and governmental authorizations to
conduct its business as now conducted, (ii) the Company has no knowledge of any
infringement by it of trademarks, trade name rights, patent rights, mask work
rights, copyrights, licenses, inventions, trade secrets or other similar rights
of others, where such infringement could have a material and adverse effect on
the Company or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company, (iii) the
Company has no knowledge of any infringement by any third party of the
trademarks, trade name rights, patent rights, mask work rights, copyrights,
licenses, inventions, trade secrets or other similar rights of the Company,
where such infringement could have a material and adverse effect on the Company
or the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company and (iv) there is no claim
being made against the Company, or to the best of the Company's knowledge, any
employee of the Company, regarding trademark, trade name, patent, mask work,
copyright, license, inventions, trade secret or other infringement which could
have a material and adverse effect on the Company or the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company.
(s) The Company has filed all federal, state, local and foreign income tax
returns which have been required to be filed and has paid all taxes and
assessments received by it to the extent that such taxes or assessments have
become due. The Company has no tax deficiency which has been or, to the best
knowledge of the Company, might be asserted or threatened against it which could
have a material and adverse effect on the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company.
-8-
9
(t) The Company owns or possesses all authorizations, approvals, orders,
licenses, registrations, other certificates and permits of and from all
governmental regulatory officials and bodies, foreign and domestic necessary to
conduct its business as contemplated in the Prospectus, except where the failure
to own or possess all such authorizations, approvals, orders, licenses,
registrations, other certificates and permits would not materially and adversely
affect the Company or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company. There is no
proceeding pending or threatened (or any basis there for known to the Company)
which may cause any such authorization, approval, order, license, registration,
certificate or permit to be revoked, withdrawn, canceled, suspended or not
renewed; and the Company is conducting its business in compliance with all laws,
rules and regulations applicable thereto (including, without limitation, all
applicable federal, state and local environmental laws and regulations) except
where such noncompliance would not materially and adversely affect the Company
or the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company.
(u) The Company maintains insurance of the types and in the amounts
generally deemed adequate for its business, and consistent with insurance
coverage maintained by similar companies and businesses, and as required by the
rules and regulations of all governmental agencies having jurisdiction over the
Company, including, but not limited to, insurance covering real and personal
property owned or leased by the Company against theft, damage, destruction, acts
of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(v) Neither the Company has nor, to the best of the Company's knowledge,
any of its employees or agents at any time during the last five years (i) made
any unlawful contribution to any candidate for foreign office, or failed to
disclose fully any contribution in violation of law, or (ii) made any payment to
any federal or state governmental officer or official, or other person charged
with similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
(w) The Company has obtained and delivered to the Representative written
agreements, in form and substance satisfactory to the Representative, of each of
its directors, executive officers and such other stockholders as requested by
the Representative that no offer, sale, assignment, transfer, encumbrance,
contract to sell, grant of an option to purchase or other disposition of any
Common Stock or other capital stock of the Company will be made for a period of
180 days after the date of the Prospectus (the "Lock-Up Period"), directly or
indirectly, by such holder otherwise than hereunder or with the prior written
consent of Xxxx Capital Partners, Incorporated, and that each such shareholder
will conduct all offers and sales of the Company's capital stock through Xxxx
Capital Partners, Incorporated during the Lock-Up Period and for 180 additional
days thereafter.
(x) The Company has not distributed and will not distribute any prospectus
or other offering material in connection with the offering and sale of the
Shares other than any preliminary
-9-
10
prospectus or the Prospectus or other materials permitted by the Act to be
distributed by the Company.
(y) The Company is in compliance with all provisions of Florida Statutes
Section 517.075 (Chapter 92-198, laws of Florida). The Company does not do any
business, directly or indirectly, with the government of Cuba or with any person
or entity located in Cuba.
(z) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are executed
in accordance with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to records is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(aa) Other than as contemplated by this Agreement, the Company has not
incurred any liability for any finder's or broker's fee or agent's commission in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
(bb) There has been no unlawful storage, treatment or disposal of waste by
the Company (or any of its predecessors-in-interest) at any of the facilities
owned or leased thereby, except for such violations which would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, affairs or business prospects of the Company; there has been no
material spill, discharge, leak, emission, ejection, escape, dumping or release
of any kind onto the properties owned or leased by the Company, or into the
environment surrounding those properties, of any toxic or hazardous substances,
as defined under any federal, state or local regulations, laws or statutes,
except for those releases permissible under such regulations, laws or statutes
or otherwise allowable under applicable permits and except for such releases
which would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, affairs or business prospects of the Company.
(cc) No material labor dispute with the employees of the Company exists or
is imminent.
(dd) Each employee benefit plan (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) ("Employee Benefit
Plan"), and each bonus, retirement, pension, profit sharing, stock bonus,
thrift, stock option, stock purchase, incentive, severance, deferred or other
compensation or welfare benefit plan, program, agreement or arrangement of, or
applicable to employees or former employees of, the Company or with respect to
which the Company could have any liability ("Benefit Plans"), was or has been
established, maintained and operated in all material respects in compliance with
all applicable federal, state, and local statutes, orders, governmental rules
and regulations, including, but not limited to, ERISA and the Internal Revenue
Code of 1986, as amended (the "Code"). No Benefit
-10-
11
Plan is or was subject to Title IV of ERISA or Section 302 of ERISA or Section
412 of the Code. The Company does not, either directly or indirectly as a member
of a controlled group within the meaning of Sections 414(b), (c), (rn) and (o)
of the Code ("Controlled Group"), have any material liability that remains
unsatisfied or arising under Section 502 of ERISA, Subchapter D of Chapter 1 of
Subtitle A of the Code or under Chapter 43 of Subtitle D of the Code. No action,
suit, grievance, arbitration or other matter of litigation or claim with respect
to any Benefit Plan (other than routine claims for benefits made in the ordinary
course of plan administration for which plan administrative procedures have not
been exhausted) is pending or, to the Company's knowledge, threatened or
imminent against or with respect to any Benefit Plan, any member of a Controlled
Group that includes the Company, or any fiduciary within the meaning of Section
3(21) of ERISA with respect to a Benefit Plan which, if determined adversely to
the Company, would have a material adverse effect on the condition, financial or
otherwise, or the earnings, affairs or business prospects of the Company.
Neither the Company nor any member of a Controlled Group that includes the
Company, has any knowledge of any facts that could give rise to any action,
suit, grievance, arbitration or any other manner of litigation or claim with
respect to any Benefit Plan.
(ee) The Company implemented a comprehensive, detailed program to analyze
and address the risk that its computer hardware and software might be unable to
recognize and properly execute date-sensitive functions involving any dates
after December 31, 1999 (the "Year 2000 Problem") and determined that its
computer hardware and software is, and will continue to be, able to process all
date information without any errors, aborts, delays or other interruptions in
operations associated with the Year 2000 Problem; and the Company believes,
after due inquiry, that each supplier, vendor, customer or financial service
organization used or serviced by the Company remedied the Year 2000 Problem,
except to the extent that a failure to remedy by any such supplier, vendor,
customer or financial service organization would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, affairs or
business prospects of the Company.
(ff) Neither the Company nor any of its or their properties or assets has
any immunity from the jurisdiction of any court or from any legal process
(whether through service or notice, attachment prior to judgment, attachment in
aid of execution or otherwise) under the laws of the State of Delaware.
4. Agreements of the Company. The Company covenants and agrees with the
several Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or thereafter
during such period as the Prospectus is required by law to be delivered in
connection with sales of the Shares by an Underwriter or dealer, file any
amendment or supplement to the Registration Statement or the Prospectus, unless
a copy thereof shall first have been submitted to the Representative within a
reasonable period of time prior to the filing thereof and the Representative
shall not have objected thereto in good faith.
-11-
12
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representative promptly, and
will confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (ii) of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose or the threat thereof; (iv) of the happening of any event
during the period that the Prospectus is required by law to be delivered in
connection with the offering or sale of the Shares that in the judgment of the
Company makes any statement made in the Registration Statement or the Prospectus
untrue or that requires the making of any changes in the Registration Statement
or the Prospectus in order to make the statements therein, in the light of the
circumstances in which they are made, not misleading and (v) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A of
the Rules and Regulations, the Company will comply with the provisions of and
make all requisite filings with the Commission pursuant to said Rule 430A and
notify the Representative promptly of all such filings.
(c) The Company will furnish to each Representative, without charge, one
signed copy of each of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto and will furnish to the Representative, without charge, for
transmittal to each of the other Underwriters, a copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the Company
will deliver to each of the Underwriters, without charge, as many copies of any
preliminary prospectus and the Prospectus or any amendment or supplement thereto
as the Representative may reasonably request. The Company consents to the use of
the Prospectus or any amendment or supplement thereto by the several
Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. During the period in which a prospectus is required by law
to be delivered by an Underwriter or dealer, the Company will comply with all
requirements imposed upon it by the Act and the Rules and Regulations, as from
time to time in force, so far as necessary to permit the continuance of sales of
or dealings in the Shares as contemplated by the provisions hereof or the
Prospectus. If during such period of time any event shall occur which in the
judgment of the Company or counsel to the Underwriters should be set forth in
the Prospectus in order to make any statement therein, in the light of the
-12-
13
circumstances under which it was made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and will deliver to each of the Underwriters, without charge,
such number of copies of such supplement or amendment to the Prospectus as the
Representative may reasonably request. The Company will not file any document
under the Exchange Act or the Exchange Act Rules and Regulations before the
termination of the offering of the Shares by the Underwriters, if such document
would be deemed to be incorporated by reference into the Prospectus, that is not
approved by the Representative after reasonable notice thereof. In case any
Underwriter is required to deliver a prospectus in connection with sales of any
Shares at any time nine months or more after the effective date of the
Registration Statement, upon the request of the Representative but at the
expense of such Underwriter, the Company will prepare and deliver to such
Underwriter as many copies as the Representative may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act.
(f) Prior to any public offering of the Shares, the Company will cooperate
with the Representative and counsel to the Underwriters in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representative may
request; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) The Company will, so long as required under the Rules and Regulations,
furnish to its stockholders as soon as practicable after the end of each fiscal
year an annual report (including a balance sheet and statements of income,
stockholders' equity and cash flow of the Company and its consolidated
Subsidiaries, if any, certified by independent public accountants) and, as soon
as practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company and its Subsidiaries, if any, for such quarter in reasonable detail.
(h) During the period of five years commencing on the Effective Date, the
Company will furnish to the Representative and each other Underwriter who may so
request copies of such financial statements and other periodic and special
reports as the Company may from time to time distribute generally to the holders
of any class of its capital stock, and will furnish to the Representative and
each other Underwriter who may so request a copy of each annual or other report
it shall be required to file with the NASD or any securities exchange pursuant
to the requirements of the NASD or with the Commission pursuant to the Act or
the Exchange Act.
(i) The Company will make generally available to holders of its securities
as soon as may be practicable but in no event later than the last day of the
fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after
-13-
14
the Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(j) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay or reimburse
if paid by the Representative, in such proportions as they may agree upon
themselves, all costs and expenses incident to the performance of the
obligations of the Company under this Agreement and in connection with the
transactions contemplated hereby, including but not limited to costs and
expenses of or relating to (i) the preparation, printing and filing of the
Registration Statement and exhibits to it, each preliminary prospectus,
Prospectus and any amendment or supplement to the Registration Statement or
Prospectus, (ii) the preparation and delivery of certificates representing the
Shares, (iii) the printing of this Agreement, the Agreement Among Underwriters,
any Selected Dealer Agreements, any Underwriters' Questionnaires, any
Underwriters' Powers of Attorney and any invitation letters to prospective
Underwriters, (iv) furnishing (including costs of shipping and mailing) such
copies of the Registration Statement, the Prospectus and any preliminary
prospectus, and all amendments and supplements thereto, as may be requested for
use in connection with the offering and sale of the Shares by the Underwriters
or by dealers to whom Shares may be sold, (v) the listing of the Shares on the
NNM, (vi) any filings required to be made by the Underwriters with the NASD, and
the fees, disbursements and other charges of counsel for the Underwriters in
connection therewith, (vii) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions
designated pursuant to Section 5(f), including the fees, disbursements and other
charges of counsel to the Underwriters in connection therewith, and the
preparation and printing of preliminary, supplemental and final Blue Sky
memoranda, (viii) fees, disbursements and other charges of counsel to the
Company (but not those of counsel for the Underwriters, except as otherwise
provided herein), (ix) accounting fees of the Company and (x) the transfer agent
for the Shares. In addition, the Company will pay all travel and lodging
expenses incurred by management of the Company in connection with any
informational "road show" meetings held in connection with the offering and will
also pay for the preparation of all materials used in connection with such
meetings. The Company shall not, however, be required to pay for any of the
Underwriters' expenses (other than those related to qualification of the Shares
under state securities or Blue Sky laws and those incident to securing any
required review by the NASD of the terms of the sale of the Shares) except that,
if this Agreement shall not be consummated because the conditions in Section 5
hereof are not satisfied, or because this Agreement is terminated by the
Representative pursuant to Section 8 hereof; or by reason of any failure,
refusal or inability on the part of the Company to perform any undertaking or
satisfy any condition of this Agreement or to comply with any of the terms
hereof on its part to be performed, unless such failure to satisfy said
condition or to comply with said terms shall be due to the default or omission
of any Underwriter, then the Company shall promptly upon request by the
Representative reimburse the several Underwriters for all out-of-pocket
accountable expenses, including fees and disbursements of counsel, incurred in
connection with investigating, marketing and proposing to market the Shares or
in contemplation of performing their obligations hereunder up to a maximum of
$100,000; but the Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the sale
by them of the Shares.
-14-
15
(k) If prior to closing on the initial public offering that is the subject
of this Agreement, the Company agrees to be acquired, merges, sells all or
substantially all of its assets or otherwise effects a corporate reorganization
or consolidation with any other entity, or enters into a financing agreement
and, as a result, the offering as contemplated hereby is abandoned by the
Company, Xxxx Capital Partners, Incorporated shall be entitled to receive from
the Company a cash fee of one percent (1.0%) of the total consideration or
commitment received by the Company and its stockholders for such merger, sale,
reorganization, consolidation, or financing, to be payable at closing of such a
transaction and receipt of consideration. In the event that the Company engages
the Xxxx Capital Partners, Incorporated in a formal advisory assignment, this
advisory fee will apply against fees that would be incurred as part of that
formal advisory assignment. The expenses and fees reimbursed to the Underwriters
under section (j) above shall be deducted from the fee otherwise payable to Xxxx
Capital Partners, Incorporated in this section.
(l) The Company will not at any time, directly or indirectly, take any
action designed or which might reasonably be expected to cause or result in, or
which will constitute, stabilization of the price of the shares of Common Stock
to facilitate the sale or resale of any of the Shares.
(m) The Company will apply the net proceeds from the offering and sale of
the Shares to be sold by the Company substantially in the manner set forth in
the Prospectus under "Use of Proceeds" and shall file such reports with the
Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.
(n) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, without the prior
written consent of Xxxx Capital Partners, Incorporated, the Company will not
offer, sell, contract to sell, grant options to purchase or otherwise dispose of
any of the Company's equity securities of the Company or any other securities
convertible into or exchangeable with its Common Stock or other equity security
(other than pursuant to employee stock option plans or the conversion of
convertible securities or the exercise of warrants outstanding on the date of
this Agreement).
(o) During the period of 180 days after the date of the Prospectus, the
Company will not, without the prior written consent of Xxxx Capital Partners,
Incorporated, grant options to purchase shares of Common Stock that will vest in
such period at a price less than the initial public offering price. During the
period of 180 days after the date of the Prospectus, the Company will not file
with the Commission or cause to become effective any registration statement
(including a registration statement on Form S-8) relating to any securities of
the Company without the prior written consent of Xxxx Capital Partners,
Incorporated.
(p) The Company will cause each of its officers, directors and certain
stockholders designated by the Representative to enter into lock-up agreements
with the Representative in substantially the form of Schedule III hereto to the
effect that they will not for a period of 180 days after the date of the
Prospectus, without the prior written consent of Xxxx Capital Partners,
-15-
16
Incorporated, sell, contract to sell or otherwise dispose of any shares of
Common Stock or rights to acquire such shares.
5. Conditions of the Obligations of the Underwriters. The obligations of
each Underwriter hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become effective shall
be received by the Representative not later than 5:00 p.m., California time, on
the date of this Agreement or at such later date and time as shall be consented
to in writing by the Representative and all filings required by Rule 424 and
Rule 430A of the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities and (iv)
after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Representative and the Representative do not object thereto in
good faith, and the Representative shall have received certificates, dated the
Closing Date and, if later, the Option Closing Date and signed by the Chief
Executive Officer and the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii) and (iii) of this paragraph.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company, whether or not arising from transactions in the
ordinary course of business, in each case other than as described in or
contemplated by the Registration Statement and the Prospectus, and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not described in the
Registration Statement and the Prospectus, if in the judgment of the
Representative any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares by the Underwriters at the
initial public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any of its officers or
directors in their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other
-16-
17
governmental body, domestic or foreign, in which litigation or proceeding an
unfavorable ruling, decision or finding would, in the judgment of the
Representative, materially and adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company.
(e) Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects at the Closing Date
and, with respect to the Option Shares, at the Option Closing Date, and all
covenants and agreements contained herein to be performed on the part of the
Company and all conditions contained herein to be fulfilled or complied with by
the Company at or prior to the Closing Date and, with respect to the Option
Shares, at or prior to the Option Closing Date, shall have been duly performed,
fulfilled or complied with.
(f) The Representative shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to the Representative and counsel for the
Underwriters from Xxxxxx & Xxxxxxx LLP, counsel to the Company, with respect to
the following matters:
(i) The Company is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation; has
full corporate power and authority to conduct all the activities conducted
by it, to own or lease all the assets owed or leased by it and to conduct
its business as described in the Registration Statement and Prospectus; and
is duly licensed or qualified to do business and is in good standing as a
foreign corporation in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or leased
by it makes such license or qualification necessary and where the failure
to be licensed or qualified would have a material and adverse effect on the
business or financial condition of the Company.
(ii) All of the outstanding shares of capital stock of the Company
have been duly authorized, validly issued and are fully paid and
nonassessable, to such counsel's knowledge, were issued pursuant to
exemptions from the registration and qualification requirements of federal
and applicable state securities laws, and were not issued in violation of
or subject to any preemptive or, to such counsel's knowledge, similar
rights;
(iii) The specimen certificate evidencing the Common Stock filed as an
exhibit to the Registration Statement is in due and proper form under
Delaware law, the Shares to be sold by the Company hereunder have been duly
authorized and, when issued and paid for as contemplated by this Agreement,
will be validly issued, fully paid and nonassessable; and no preemptive or
similar rights exist with respect to any of the Shares or the issue and
sale thereof.
(iv) To such counsel's knowledge, the Company does not own or control,
directly or indirectly, any shares of stock or any other equity or
long-term debt securities of
-17-
18
any corporation or have any equity interest in any corporation, firm,
partnership, joint venture, association or other entity.
(v) The number of shares of authorized and outstanding capital stock
of the Company is as set forth in the Registration Statement and the
Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to this
Agreement or pursuant to reservations, agreements, employee benefit plans
or the exercise of convertible securities, options or warrants referred to
in the Prospectus). To such counsel's knowledge, except as disclosed in or
specifically contemplated by the Prospectus, there are no outstanding
options, warrants of other rights calling for the issuance of; and no
commitments, plans or arrangements to issue, any shares of capital stock of
the Company or any security convertible into or exchangeable or exercisable
for capital stock of the Company. The description of the capital stock of
the Company in the Registration Statement and the Prospectus conforms in
all material respects to the terms thereof.
(vi) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened to which the Company is a party or to
which any of its properties is subject that are required to be described in
the Registration Statement or the Prospectus but are not so described.
(vii) No consent, approval, authorization or order of; or any filing
or declaration with, any court or governmental agency or body is required
for the consummation by the Company of the transactions on its part
contemplated under this Agreement, except such as have been obtained or
made under the Act or the Rules and Regulations and such as may be required
under state securities or Blue Sky laws or the by-laws and rules of the
NASD in connection with the purchase and distribution by the Underwriters
of the Shares.
(viii) The Company has full corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The execution and delivery of this Agreement, the compliance by
the Company with all of the terms hereof and the consummation of the
transactions contemplated hereby does not contravene any provision of
applicable law or the Articles of Incorporation or By-Laws of the Company,
and will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company pursuant to the terms and
provisions of; result in a breach or violation of any of the terms or
provisions of; or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of
any obligation under, any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other
evidence of indebtedness, lease, contract or other agreement or instrument
known to such counsel to which the Company is a party or by which the
Company or any of its properties is bound or affected, or violate or
conflict with (i) any judgment, ruling, decree or order
-18-
19
known to such counsel or (ii) any statute, rule or regulation of any court
or other governmental agency or body, applicable to the business or
properties of the Company except for such liens, charges, encumbrances,
breaches, violations or terminations as would not reasonably be expected to
have a material and adverse effect on business, properties or results of
operations of the Company.
(x) To such counsel's knowledge, there is no document or contract of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which
is not described or filed or incorporated by reference as required, and
each description of such contracts and documents that is contained in the
Registration Statement and Prospectus fairly presents in all material
respects the information required under the Act and the Rules and
Regulations.
(xi) The statements under the captions "Risk Factors - Substantial
sales of our common stock, or the perception that substantial sales may
occur, could cause our stock price to fall and make it difficult for us to
sell additional securities," "Management - Employment Agreements,"
"Management - Stock Option Plans," "Management - Indemnification of
Directors and Executive Officers and Limitation of Liability," "Certain
Transactions," "Description of Capital Stock" and "Shares Eligible for
Future Sale" in the Prospectus, insofar as the statements constitute a
summary of documents referred to therein or matters of law, are accurate
summaries and fairly and correctly present, in all material respects, the
information called for with respect to such documents and matters
(provided, however, that such counsel may rely on representations of the
Company with respect to the factual matters contained in such statements,
and provided further that such counsel shall state that nothing has come to
the attention of such counsel which leads them to believe that such
representations are not true and correct in all material respects).
(xii) The Company is not an "investment company or an affiliated
person" of, or "promoter" or "principal underwriter" for, and immediately
upon completion of the sale of Shares contemplated hereby will not be, an
"investment company," as such terms are defined in the Investment Company
Act of 1940, as amended.
(xiii) The Shares have been duly authorized for listing on the NNM,
subject to notice of issuance.
(xiv) To such counsel's knowledge, no holder of securities of the
Company has rights, which have not been waived, to require the Company to
register with the Commission shares of Common Stock or other securities, as
part of the offering contemplated hereby.
(xv) The Registration Statement has become effective under the Act,
and to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or is pending, threatened
or contemplated.
-19-
20
(xvi) The Registration Statement and the Prospectus comply as to form
in all material respects with the requirement of the Act and the Rules and
Regulations (other than the financial statements, schedules and other
financial and statistical data contained in the Registration Statement or
the Prospectus, as to which such counsel need express no opinion).
(xvii) Such counsel has participated in the preparation of the
Registration Statement and Prospectus and has no reason to believe that, as
of the Effective Date, the Registration Statement, or any amendment or
supplement thereto, (other than the financial statements, schedules and
other financial and statistical data contained therein, as to which such
counsel need express no opinion) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or that the
Prospectus, or any amendment or supplement thereto, as of its date and the
Closing Date and, if later, the Option Closing Date, contained or contains
any untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than the
financial statements, schedules and other financial and statistical data
contained therein, as to which such counsel need express no opinion). Such
counsel may express the statements set forth in this clause (xvii) in a
letter separate from its opinion.
(xviii) To the knowledge of such counsel, the Company holds and is
operating in compliance with all licenses, approvals, certificates and
permits from governmental and regulatory authorities, foreign and domestic,
which are necessary to the conduct of its business as currently being
conducted and as described in the Prospectus. To the knowledge of such
counsel, the Company has not received notice of or has knowledge of any
basis for any proceeding or action relating specifically to the Company for
the revocation or suspension of any such consent, authorization, approval,
order, license, certificate, permit or any other action or proposed action
by any regulatory authority having jurisdiction over the Company that would
have a material adverse effect on the Company.
(xix) To the knowledge of such counsel, the Company owns or licenses
all patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and other similar rights necessary for the
conduct of its business as currently being conducted and as described in
the Prospectus. To the knowledge of such counsel, no aspect of the business
of the Company involves or gives rise to any infringement of or license or
similar fees for any patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets or other similar rights of
others, and the Company has not received any notice or claim of conflict
with the asserted rights of others with respect to any of the foregoing.
-20-
21
In rendering the opinions as to matters of fact, such counsel may rely upon
certificates of officers of the Company and governmental officials and the
representations and warranties of the Company contained in this Agreement,
provided that the opinion of counsel to the Company shall state that they are
doing so, that they have no reason to believe that they and the Underwriters are
not entitled to rely on such opinions or certificates and that copies of such
certificates are attached to the opinion.
In rendering such opinion, such counsel may rely upon as to matters of
local law on opinions of counsel satisfactory in form and substance to the
Representative and counsel for the Underwriters, provided that the opinion of
counsel to the Company shall state that they are doing so, that they have no
reason to believe that they and the Underwriters are not entitled to rely on
such opinions and that copies of such opinions are attached to the opinion.
(g) The Representative shall have received an opinion, dated the Closing
Date and the Option Closing Date, from Xxxxxxxx & Xxxxxx P.A., counsel to the
Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to the
Representative.
(h) Concurrently with the execution and delivery of this Agreement, the
Accountants shall have furnished to the Representative a letter, dated the date
of its delivery, addressed to the Representative and in form and substance
satisfactory to the Representative, confirming that they are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations and with respect to certain financial and statistical information
contained in the Registration Statement. At the Closing Date and, as to the
Option Shares, the Option Closing Date, the Accountants shall have furnished to
the Representative a letter, dated the date of its delivery, which shall
confirm, on the basis of a review in accordance with the procedures set forth in
the letter from the Accountants, that nothing has come to their attention during
the period from the date of the letter referred to in the prior sentence to a
date (specified in the letter) not more than five days prior to the Closing Date
and the Option Closing Date, as the case may be, which would require any change
in their letter dated the date hereof if it were required to be dated and
delivered at the Closing Date and the Option Closing Date.
(i) Concurrently with the execution and delivery of this Agreement and at
the Closing Date and, as to the Option Shares, the Option Closing Date, there
shall be furnished to the Representative a certificate, dated the date of its
delivery, signed by each of the Chief Executive Officer and the Chief Financial
Officer of the Company, in form and substance satisfactory to the
Representative, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, such documents are true and correct in all material respects
and do not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not untrue or misleading, (B) in
the case of the certificate delivered at the Closing Date and the Option
Closing Date, since the Effective
-21-
22
Date no event has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in light
of the circumstances under which they were made, not untrue or misleading,
(C) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, the Company has not incurred
any material liabilities or obligations, direct or contingent, or entered
into any material transactions, not in the ordinary course of business, or
declared or paid any dividends or made any distribution of any kind with
respect to its capital stock, and except as disclosed in the Prospectus,
there has not been any change in the capital stock (other than a change in
the number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants), or any
material change in the short-term or long-term debt, or any issuance of
options, warrants, convertible securities or other rights to purchase the
capital stock, of the Company, or any material adverse change or any
development involving a prospective material adverse change (whether or not
arising in the ordinary course of business), in the general affairs,
condition (financial or otherwise), business, key personnel, property,
prospects, net worth or results of operations of the Company, and (D)
except as stated in the Registration Statement and the Prospectus, there is
not pending, or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company is a
party before or by any court or governmental agency, authority or body, or
any arbitrator, which might result in any material adverse change in the
condition (financial or otherwise), business, prospects or results of
operations of the Company.
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct.
(iii) Each of the covenants required to be performed by the Company
herein on or prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be satisfied or
fulfilled on or prior to the date of such certificate has been duly, timely
and fully satisfied or fulfilled.
(j) The Shares shall be qualified for sale in such jurisdictions as the
Representative may reasonably request and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
or the Option Closing Date.
(k) Prior to the Closing Date, the Shares shall have been duly authorized
for listing on the NNM upon official notice of issuance.
(l) The Company shall have furnished to the Representative such
certificates, in addition to those specifically mentioned herein, as the
Representative may have reasonably requested as to the accuracy and completeness
at the Closing Date and the Option Closing Date of any statement in the
Registration Statement or the Prospectus, as to the accuracy at the Closing Date
and the Option Closing Date of the representations and warranties of the Company
herein, as
-22-
23
to the performance by the Company of its obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to the obligations
hereunder of the Representative.
If any of the conditions hereinabove provided for in this Section 5 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representative by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be. In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Section 6 hereof).
6. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of; any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus, or the omission or alleged omission to
state in such document a material fact required to be stated in it or necessary
to make the statements in it not misleading in the light of the circumstances in
which they were made, or (ii) any act or failure to act or any alleged act or
failure to act by any Underwriter in connection with, or relating in any manner
to, the Common Stock or the offering contemplated hereby, and which is included
as part of or referred to in any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arising out of or based upon matters
covered by clause (i) above, and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such action or claim as such expenses are incurred; or arise out
of or are based in whole or in part on any inaccuracy in the representations and
warranties of the Company contained herein or any failure of the Company to
perform its obligations hereunder or under law in connection with the
transactions contemplated hereby; provided, however, that (i) the Company will
not be liable to the extent that such loss, claim, liability, expense or damage
arises from the sale of the Shares in the public offering to any person by an
Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representative, on behalf of any Underwriter, expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus; and (ii)
the Company will not be liable to any Underwriter, the directors, officers,
employees or agents of such Underwriter or any person controlling such
Underwriter with respect to any loss, claim, liability, expense, or damage
arising out of or based on any untrue statement or omission or alleged untrue
statement or omission or
-23-
24
alleged omission to state a material fact in the preliminary prospectus which is
corrected in the Prospectus if the person asserting any such loss, claim,
liability, charge or damage purchased Shares from such Underwriter but was not
sent or given a copy of the Prospectus at or prior to the written confirmation
of the sale of such Shares to such person. This indemnity agreement will be in
addition to any liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each
director of the Company, each officer of the Company who signs the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, but only insofar as
losses, claims, liabilities, expenses or damages arise out of or are based on
any untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representative, on behalf of such
Underwriter, expressly for use in the Registration Statement, the preliminary
prospectus or the Prospectus. The Company acknowledges that the only information
relating to any Underwriter furnished in writing to the Company by the
Representative on behalf of the Underwriters expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus is as set
forth in Section 10 below. This indemnity will be in addition to any liability
that each Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section 6 shall, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the loss of substantive
rights or defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (ii)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the
-24-
25
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (iv) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. Any indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld).
(d) If the indemnification provided for in this Section 6 is applicable in
accordance with its terms but for any reason is held to be unavailable to or
insufficient to hold harmless an indemnified party under paragraphs (a), (b) and
(c) of this Section 6 in respect of any losses, claims, liabilities, expenses
and damages referred to therein, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of; any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for contribution) by such indemnified party as a result of
such losses, claims, liabilities, expenses and damages in such proportion as
shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Underwriters, on the other hand. The relative benefits
received by the Company, on the one hand, and the Underwriters, on the other
hand, shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. If,
but only if, the allocation provided by the foregoing sentence is not permitted
by applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits referred
to in the foregoing sentence but also the relative fault of the Company, on the
one hand, and the Underwriters, on the other hand, with respect to the
statements or omissions which resulted in such loss, claim, liability, expense
or damage, or action in respect thereof; as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Representative on behalf of the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable
-25-
26
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof referred to above in this Section 6(d) shall be deemed to
include, for purposes of this Section 6(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts received by it and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 6(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 6(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against any such party in respect of which a claim for
contribution may be made under this Section 6(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 7(d). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section 6
and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii) acceptance of
any of the Shares and payment therefor or (iii) any termination of this
Agreement.
7. Reimbursement of Certain Expenses. In addition to its other obligations
under Section 6(a) of this Agreement, the Company hereby agrees to reimburse on
a quarterly basis the Underwriters for all reasonable legal and other expenses
incurred in connection with investigating or defending any claim, action,
investigation, inquiry or other proceeding arising out of or based upon, in
whole or in part, any statement or omission or alleged statement or omission, or
any inaccuracy in the representations and warranties of the Company contained
herein or failure of the Company to perform its or his respective obligations
hereunder or under law, all as described in Section 6(a), notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligations under this Section 7 and the possibility that such payment might
later be held to be improper; provided, however, that, to the extent any such
payment is ultimately held to be improper, the persons receiving such payments
shall promptly refund them.
8. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Shares, on or prior to the Option Closing Date), by
notice to the Company from the Representative, without liability on the part of
any Underwriter to the Company if; prior to delivery and payment for the Firm
Shares or Option Shares, as the case may be, in the sole
-26-
27
judgment of the Representative, (i) trading in any of the equity securities of
the Company shall have been suspended by the Commission or by The Nasdaq Stock
Market, (ii) trading in securities generally on the New York Stock Exchange
and/or The Nasdaq Stock Market shall have been suspended or limited or minimum
or maximum prices shall have been generally established on such exchange or
market, or additional material governmental restrictions, not in force on the
date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange, by order of the Commission or any court or other
governmental authority, or by the New York Stock Exchange, (iii) a general
banking moratorium shall have been declared by either Federal or Delaware state
authorities or (iv) any material adverse change in the financial or securities
markets in the United States or in political, financial or economic conditions
in the United States or any outbreak or material escalation of hostilities or
other calamity or crisis shall have occurred, the effect of which is such as to
make it, in the sole judgment of the Representative, impracticable or
inadvisable to proceed with completion of the public offering or the delivery of
and payment for the Shares.
If this Agreement is terminated pursuant to Section 8 hereof, the Company
shall not be under any liability to any Underwriter except as provided in
Sections 4(j) and (k), 6 and 7 hereof.
9. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Firm Shares which it or they have
agreed to purchase hereunder, and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Firm Shares, the other
Underwriters shall be obligated, severally, to purchase the Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so agreed
to purchase, or in such other proportions as the Representative may specify;
provided that in no event shall the maximum number of Firm Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by more than one-ninth of such number of Firm Shares
without the prior written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Firm Shares and the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase exceeds one-tenth of the aggregate number of
the Firm Shares and arrangements satisfactory to the Representative and the
Company for the purchase of such Firm Shares are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company for the purchase or sale of any Shares
under this Agreement. In any such case either the Representative or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or in any other documents or arrangements may be
effected. The term "Underwriter" includes any person substituted for a
defaulting Underwriter. Any action taken pursuant to this Section 9 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
-27-
28
10. Written Information. For all purposes under this Agreement, the Company
understands and agrees with each of the Underwriters that the following
constitutes the only written information furnished to the Company by or through
the Representative specifically for use in preparation of the Registration
Statement, any preliminary prospectus, the Prospectus, or any amendment or
supplement thereto: (i) the per share "Public offering price" and per share
"Underwriting discount" set forth on the cover page of the Prospectus and (ii)
the information set forth under the caption "Underwriting" in the preliminary
prospectus and the Prospectus.
11. Miscellaneous. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, 0000 Xxxxxxxxx
Xxxx, Xxxxxxxxxx, Xxxx 00000, Attention: Xxxxxxx X. Xxxxx, Chief Executive
Officer, with a copy to Xxxxxx & Whitney LLP, Pillsbury Center South, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx Xxxxxx, Esq., or
(b) if to the Underwriters, to the Representative at the offices of Xxxx Capital
Partners, Incorporated, 00 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000, Attention: Corporate Finance Department, with a copy to Xxxxxxxx & Xxxxxx
P.A., 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxxx, Esq. Any such notice shall be effective only upon
receipt. Any notice under such Section 8 or 9 may be made by telex or telephone,
but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, and the controlling persons, directors and officers
referred to in Section 6, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Shares from any of the several
Underwriters.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota applicable to contracts made and to be performed
entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby waive any right they may have
to a trial by jury in respect of any claim based upon or arising out of this
Agreement or the transactions contemplated hereby.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
-28-
29
The reimbursement, indemnification and contribution agreements contained in
this Agreement and the representations, warranties and covenants in this
Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof; or by or on behalf of the Company or
its directors and officers and (c) delivery of and payment for the Shares under
this Agreement.
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the several Underwriters.
Very truly yours,
STOCKPOINT, INC.
By:_________________________________________
Xxxxxxx X. Xxxxx,
Chief Executive Officer
Confirmed as of the date first above mentioned:
XXXX CAPITAL PARTNERS, INCORPORATED
Acting on behalf of itself and as the Representative of the other
several Underwriters named in Schedule I hereto.
By: XXXX CAPITAL PARTNERS, INCORPORATED
By:________________________________________
Title: Managing Director
-29-
30
SCHEDULE I
UNDERWRITERS
Number of
Firm Shares
Underwriters to be Purchased
------------ ----------------
Xxxx Capital Partners, Incorporated.................................................... _________
TOTAL................................................
=========
-30-
31
SCHEDULE II
WARRANT
THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.
THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED, EXCEPT UPON SUCH REGISTRATION OR
UPON DELIVERY TO MAKER OF AN OPINION OF COUNSEL SATISFACTORY TO MAKER THAT
REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
STOCKPOINT, INC.
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
NO. [ ] [_______] SHARES
FOR VALUE RECEIVED, STOCKPOINT, INC., a Delaware corporation (the
"Company"), hereby certifies that ______________________ _______________ or its
permitted assigns, is entitled to purchase from the Company, at any time or from
time to time commencing on [ , 2001] and prior to 5:00 P.M., California time, on
[ , 2005], ___________________ (_________) fully paid and non-assessable shares
of the common stock, $.01 par value per share, of the Company for an aggregate
purchase price of $[ ] (computed on the basis of $___ per share). Hereinafter,
(i) said common stock, together with any other equity securities which may be
issued by the Company with respect thereto or in substitution therefor, is
referred to as the "Common Stock," (ii) the shares of the Common Stock
purchasable hereunder or under any other Warrant (as hereinafter defined) are
referred to individually as a "Warrant Share" and collectively as the "Warrant
Shares," (iii) the aggregate purchase price payable for the Warrant Shares
hereunder is referred to as the "Aggregate Warrant Price," (iv) the price
payable for each of the Warrant Shares hereunder is referred to as the "Per
Share Warrant Price," (v) this Warrant, all similar Warrants issued on the date
hereof and all Warrants hereafter issued in exchange or substitution for this
Warrant or such similar Warrants are referred to as the "Warrants" and (vi) the
holder of this Warrant is referred to as the "Holder" and the holder of this
Warrant and all other Warrants or Warrant Shares issued upon the exercise of any
Warrant are referred to as the "Holders." The Aggregate Warrant Price is not
subject to adjustment. The Per Share Warrant Price is subject to adjustment as
hereinafter provided, and in the event of any such adjustment, the number of
Warrant Shares shall be adjusted to equal the number determined by dividing the
Aggregate Warrant Price by the Per Share Warrant Price in effect immediately
after such adjustment.
1. Exercise of Warrant.
(a) This Warrant may be exercised in whole at any time or in part from time
to time, during the period commencing on [ , 2001] and ending prior to 5:00
P.M., California time, on [
- 31 -
32
, 2005] (such period, the "Exercise Period"), by the Holder by the surrender of
this Warrant (with the subscription form at the end of this Warrant duly
executed) at the address set forth in Section 10(a) hereof, together with proper
payment of the Aggregate Warrant Price, or the proportionate part thereof if
this Warrant is exercised in part. Payment for Warrant Shares shall be made by
certified or official bank check payable to the order of the Company. If this
Warrant is exercised in part, this Warrant must be exercised for a number of
whole shares of the Common Stock, and the Holder is entitled to receive a new
Warrant covering the Warrant Shares in respect of which this Warrant has not
been exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares. Upon such exercise and surrender of
this Warrant, the Company will (i) issue a certificate or certificates in the
name of the Holder for the largest number of whole shares of the Common Stock to
which the Holder shall be entitled and, if this Warrant is exercised in whole,
in lieu of any fractional share of the Common Stock to which the Holder shall be
entitled, pay to the Holder cash in an amount equal to the fair value of such
fractional share (determined in such reasonable manner as the Board of Directors
of the Company shall determine) and (ii) deliver the other securities and
properties receivable upon the exercise of this Warrant, or the proportionate
part thereof if this Warrant is exercised in part, pursuant to the provisions of
this Warrant.
(b) In lieu of exercising this Warrant in the manner set forth in Section
1(a) above, this Warrant may be exercised in whole at any time or in part from
time to time during the Exercise Period, by the Holder by surrendering the
Warrant at the address set forth in Section 10(a) hereof, without payment of any
other consideration, commission or remuneration, together with the subscription
form at the end of this Warrant, duly executed. The number of shares of the
Common Stock to be issued by the Company shall be calculated using the following
formula:
X= (Y (A - B)) /A
Where X= the number of shares of the Common
Stock to be issued to the Holder
Y= the number of shares of the Common
Stock purchasable under this
Warrant or, if this Warrant is
being exercised in part, under the
portion of the Warrant being
exercised (at the date of the
surrender of this Warrant and the
subscription form)
A= the Market Price (at the date of
the surrender of this Warrant and
the subscription form)
-32-
33
B= the Per Share Warrant Price (as
adjusted to the date of the
surrender of this Warrant and the
subscription form)
If this Warrant is exercised in part pursuant to this Section 1(b), this Warrant
must be exercised for a number of whole shares of the Common Stock, and the
Holder is entitled to receive a new Warrant covering the Warrant Shares in
respect of which this Warrant has not been exercised and setting forth the
proportionate part of the Aggregate Warrant Price applicable to such Warrant
Shares. Upon such exercise and surrender of this Warrant, the Company will (i)
issue a certificate or certificates in the name of the Holder for the largest
number of whole shares of the Common Stock to which the Holder shall be entitled
and, if this Warrant is exercised in whole, in lieu of any fractional share of
the Common Stock to which the Holder shall be entitled, pay cash equal to the
fair value of such fractional share (determined in such reasonable manner as the
Board of Directors of the Company shall determine) and (ii) deliver the other
securities and properties receivable upon the exercise of this Warrant, or the
proportionate part thereof if this Warrant is exercised in part, pursuant to the
provisions of this Warrant.
(c) The market price of a share of the Common Stock (the "Market Price") on
any date of determination shall be (i) the last reported sale price per share of
the Common Stock on the business day immediately preceding the date of
determination as reported on the Nasdaq National Market (the "Nasdaq National
Market"), or (ii) if there is no such reported sale on the date in question, the
average of the closing bid and asked quotations as so reported on the Nasdaq
National Market, or (iii) if the Common Stock is not then listed on the Nasdaq
National Market, the last reported sale price per share of the Common Stock on
such national securities exchange upon which the Common Stock is then listed or
(iv) if the Common Stock is not then listed on any national securities exchange,
the average of the closing bid and asked quotations in the over-the-counter
market as reported by Nasdaq, or if not so reported, as reported by the National
Quotations Bureau or a similar organization. In the absence of such quotations,
the Board of Directors of the Company shall determine in good faith the fair
market value per share of the Common Stock, which shall for these purposes be
deemed to be the Market Price, which determination shall be set forth in a
certificate executed by an officer of the Company showing the facts upon which
the Market Price is based.
2. Reservation of Warrant Shares; Listing.
The Company agrees that, prior to the expiration of this Warrant, the
Company will at all times (a) have authorized and in reserve, and will keep
available, solely for issuance or delivery upon the exercise of this Warrant,
the shares of the Common Stock and other securities and properties as from time
to time shall be receivable upon the exercise of this Warrant, free and clear of
all restrictions on sale or transfer and free and clear of all preemptive rights
and rights of first refusal and (b) if the Company has listed or hereafter lists
the Common Stock on the Nasdaq Stock Market or any national securities exchange,
use its best efforts to keep the shares of the Common
-33-
34
Stock receivable upon the exercise of this Warrant authorized for listing on
such market or exchange upon notice of issuance.
3. Protection Against Dilution.
(a) If, at any time or from time to time after the date of this Warrant,
the Company shall issue or distribute to the holders of shares of the Common
Stock (i) securities, other than shares of the Common Stock, or (ii) property,
other than cash, without payment therefor, with respect to the Common Stock,
then, and in each such case, the Holder, upon the exercise of this Warrant,
shall be entitled to receive the securities and property which the Holder would
hold on the date of such exercise if, on the date of this Warrant, the Holder
had been the holder of record of the number of shares of the Common Stock
subscribed for upon such exercise and, during the period from the date of this
Warrant to and including the date of such exercise, had retained such shares and
the securities and properties receivable by the Holder during such period.
Notice of each such distribution shall be forthwith mailed to the Holder.
(b) If, at any time or from time to time after the date of this Warrant,
the Company shall (i) pay a dividend or make a distribution on its capital stock
in shares of the Common Stock, (ii) subdivide its outstanding shares of the
Common Stock into a greater number of shares, (iii) combine its outstanding
shares of the Common Stock into a smaller number of shares or (iv) issue by
reclassification of the Common Stock any shares of capital stock of the Company,
the Per Share Warrant Price shall be adjusted so that the Holder upon the
exercise hereof shall be entitled to receive the number of shares of the Common
Stock or other capital stock of the Company which the Holder would have owned
immediately following such action had such Warrant been exercised immediately
prior thereto. An adjustment made pursuant to this Section 3(b) shall become
effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification.
(c) In case of any consolidation or merger to which the Company is a party
other than a merger or consolidation in which the Company is the continuing
corporation, or in case of any sale or conveyance to another entity of the
property of the Company as an entirety or substantially as an entirety, or in
the case of any statutory exchange of securities with another entity (including
any exchange effected in connection with a merger of another corporation with
the Company), the Holder of this Warrant shall have the right thereafter to
receive on the exercise of this Warrant the kind and amount of securities, cash
or other property which the Holder would have owned or have been entitled to
receive immediately after such consolidation, merger, statutory exchange, sale
or conveyance had this Warrant been exercised immediately prior to the effective
date of such consolidation, merger, statutory exchange, sale or conveyance and,
in any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 3 with respect to the
rights and interests thereafter of the Holder of this Warrant to the end that
the provisions set forth in this Section 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the exercise of
this Warrant. The above provisions of this Section 3(c) shall
-34-
35
similarly apply to successive consolidations, mergers, statutory exchanges,
sales or conveyances. The issuer of any shares of stock or other securities or
property thereafter deliverable on the exercise of this Warrant shall be
responsible for all of the agreements and obligations of the Company hereunder.
Notice of any such consolidation, merger, statutory exchange, sale or conveyance
and of said provisions so proposed to be made, shall be mailed to the Holders of
the Warrants not less than 30 days prior to such event. A sale of all or
substantially all of the assets of the Company for a consideration consisting
primarily of securities shall be deemed a consolidation or merger for the
foregoing purposes.
(d) No adjustment in the Per Share Warrant Price shall be required unless
such adjustment would require an increase or decrease of at least $0.05 per
share of the Common Stock; provided, however, that any adjustments which by
reason of this Section 3(d) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment; and provided further,
however, that adjustments shall be required and made in accordance with the
provisions of this Section 3 (other than this Section 3(d)) not later than such
time as may be required in order to preserve the tax-free nature of a
distribution to the Holder of this Warrant or the Common Stock issuable upon
exercise hereof. All calculations under this Section 3 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be. Anything
in this Section 3 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Per Share Warrant Price, in addition to those
required by this Section 3, as it in its discretion shall deem to be advisable
in order that any stock dividend, subdivision of shares or distribution of
rights to purchase stock or securities convertible or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.
(e) Whenever the Per Share Warrant Price is adjusted as provided in this
Section 3 and upon any modification of the rights of a Holder of Warrants in
accordance with this Section 3, the Company shall promptly prepare a notice (the
"Adjustment Notice"), which shall be certified by the Company's Chief Executive
Officer to be true and correct. The Adjustment Notice shall set forth the Per
Share Warrant Price and the number of Warrant Shares after such adjustment or
the effect of such modification, a brief statement of the facts requiring such
adjustment or modification and the manner of computing the same, and copies of
such notice shall be mailed to the Holders of the Warrants not later than thirty
(30) days following the occurrence of the event giving rise to the adjustment.
(f) If the Board of Directors of the Company shall (i) declare any dividend
or other distribution with respect to the Common Stock, other than a cash
dividend payable otherwise than out of earnings or earned surplus, (ii) offer to
the holders of shares of the Common Stock any additional shares of the Common
Stock, any securities convertible into or exercisable for shares of the Common
Stock or any rights to subscribe thereto or (iii) propose a dissolution,
liquidation or winding up of the Company, the Company shall mail notice thereof
to the Holders of the Warrants not less than 15 days prior to the record date
fixed for determining stockholders entitled to participate in such dividend,
distribution, offer or subscription right or to vote on such dissolution,
liquidation or winding up.
-35-
36
(g) If, as a result of an adjustment made pursuant to this Section 3, the
Holder of any Warrant thereafter surrendered for exercise shall become entitled
to receive shares of two or more classes of capital stock or shares of the
Common Stock and other capital stock of the Company, the Board of Directors of
the Company (whose determination shall be conclusive and shall be described in a
written notice to the Holder of any Warrant promptly after such adjustment)
shall determine the allocation of the adjusted Per Share Warrant Price between
or among shares or such classes of capital stock or shares of the Common Stock
and other capital stock and any subsequent adjustments made pursuant to this
Section 3 shall apply equally to each such resulting class of capital stock.
4. Fully Paid Stock; Taxes.
The Company agrees that the shares of the Common Stock represented by each
and every certificate for Warrant Shares delivered on the exercise of this
Warrant shall, at the time of such delivery, be validly issued and outstanding,
fully paid and nonassessable, and not subject to preemptive rights, rights of
first refusal or other contractual rights to purchase securities of the Company,
and the Company will take all such actions as may be necessary to assure that
the par value or stated value, if any, per share of the Common Stock is at all
times equal to or less than the then Per Share Warrant Price. The Company
further covenants and agrees that it will pay, when due and payable, any and all
federal and state stamp, original issue or similar taxes which may be payable in
respect of the issue of any Warrant Share or certificate therefor.
5. Registration Rights.
(a) The Company agrees that if, at any time during the period commencing on
[_________, 2000] and ending on [_________, 2005], (i) the Holder and/or the
Holders of any other Warrants and/or Warrant Shares who or which shall hold,
collectively, not less than 50% of the Warrants and/or Warrant Shares
outstanding at such time and not previously sold pursuant to this Section 5
shall request that the Company file a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), covering not less
than 50% of the Warrant Shares issued or issuable upon the exercise of the
Warrants, and not so previously sold, the Company will (i) promptly notify each
Holder of the Warrants and each holder of Warrant Shares not so previously sold
that such registration statement will be filed and that the Warrant Shares which
are then held, and/or may be acquired upon exercise of the Warrants by the
Holder and such Holders, will be included in such registration statement at the
Holder's and such Holders' request, (ii) cause such registration statement to
cover all Warrant Shares which it has been so requested to include, (iii) use
its best efforts to cause such registration statement to become effective as
soon as practicable and (iv) take all other action necessary under any federal
or state law or regulation of any governmental authority to permit all Warrant
Shares which it has been so requested to include in such registration statement
to be sold or otherwise disposed of, and will maintain such compliance with each
such federal and state law and regulation of any governmental authority for the
period necessary for such Holders to effect the proposed sale or other
disposition. The Company shall be required to effect a registration or
qualification pursuant to this Section 5(a) on one occasion only and shall be
required to effect such registration only at such time as the
-36-
37
Company is eligible to use Form S-3 (or any successor form) for the resale of
shares by persons other than the Company. The Company agrees to exercise its
best efforts to obtain eligibility to use Form S-3 at the earliest possible
time, and to maintain such eligibility through the term of this Warrant.
(b) The Company agrees that if, at any time and from time to time during
the period commencing [__________, 2000] and ending on [___________, 2007], the
Board of Directors of the Company shall authorize the filing of a registration
statement (any such registration statement being hereinafter called a
"Subsequent Registration Statement") under the Securities Act (otherwise than
pursuant to Section 5(a) hereof, and other than a registration statement on Form
X-0, Xxxx X-0 or other form which does not permit secondary sales or include
substantially the same information as would be required in a form for the
general registration of securities) in connection with the proposed offer of any
of its securities by it or any of its stockholders, the Company will (i)
promptly notify the Holder and each of the Holders, if any, of other Warrants
and/or Warrant Shares not previously sold pursuant to this Section 5 that such
Subsequent Registration Statement will be filed and that the Warrant Shares
which are then held, and/or which may be acquired upon the exercise of the
Warrants, by the Holder and such Holders, will, at the Holder's and such
Holders' request, be included in such Subsequent Registration Statement, (ii)
upon the written request of a Holder made within 20 days after the giving of
such notice by the Company, include in the securities covered by such Subsequent
Registration Statement all Warrant Shares which it has been so requested to
include, (iii) use its best efforts to cause such Subsequent Registration
Statement to become effective as soon as practicable and (iv) take all other
action necessary under any federal or state law or regulation of any
governmental authority to permit all Warrant Shares which it has been so
requested to include in such Subsequent Registration Statement to be sold or
otherwise disposed of, and will maintain such compliance with each such federal
and state law and regulation of any governmental authority for the period
necessary for the Holder and such Holders to effect the proposed sale or other
disposition.
(c) Whenever the Company is required pursuant to the provisions of this
Section 5 to include Warrant Shares in a registration statement or a
post-effective amendment to a registration statement, the Company shall (i)
furnish each Holder of any such Warrant Shares and each underwriter of such
Warrant Shares with such copies of the prospectus, including the preliminary
prospectus, conforming to the Securities Act (and such other documents as each
such Holder or each such underwriter may reasonably request) in order to
facilitate the sale or distribution of the Warrant Shares, (ii) use its best
effort to register or qualify such Warrant Shares under the blue sky laws (to
the extent applicable) of such jurisdiction or laws (to the extent applicable)
of such jurisdiction or jurisdictions as the Holders of any such Warrant Shares
and each underwriter of Warrant Shares being sold by such Holders shall
reasonably request and (iii) take such other actions as may be reasonably
necessary or advisable to enable such Holders and such underwriters to
consummate the sale or distribution in such jurisdiction or jurisdictions in
which such Holders shall have reasonably requested that the Warrant Shares be
sold, provided that the Company shall not be required to execute a general
consent to service of process or qualify to do business as a foreign corporation
in any jurisdiction where it is not so qualified.
-37-
38
(d) The Company shall have the right to defer the filing of any
registration statement pursuant to Section 5(a) hereof and to suspend the
ability of Holders to sell Warrant Shares pursuant to any registration statement
declared effective under Section 5(a) or 5(b) hereof, in either case for up to
60 days, if (i) in the opinion of counsel for the Company, the Company would
thereby be required to disclose nonpublic information relating to pending
corporate developments or business transactions involving the Company or its
subsidiaries not otherwise then required by law to be publicly disclosed and
(ii) in the good faith judgment of the Company's Board of Directors, such
disclosure at such time would adversely affect the Company or such corporate
development or business transaction contemplated by the Company or its
subsidiaries. Such period shall be referred to herein as the "Black-Out Period,"
and the Company shall not be entitled to implement more than two such Black-Out
Periods during any 12-month period. In the event that notice of a Black-Out
Period is given, each Holder shall keep the fact and subject matter of such
notice confidential and refrain from any further sales or other transfers of
Warrant Shares pursuant to the registration statement until the Holder receives
either copies of a supplemented or amended prospectus or a notice from the
Company advising the Holder that the use of the existing prospectus may be
resumed.
(e) Notwithstanding any provision in this Section 5 to the contrary, the
Company shall not be required to include in any registration requested pursuant
to this Section 5 any Warrant Shares issued or issuable upon exercise of a
Warrant and then held by any Holder who is able at such time to sell all such
Warrant Shares in one three-month period pursuant to Rule 144 under the
Securities Act.
(f) The Company shall pay all expenses incurred in connection with any
registration or other action pursuant to the provisions of this Section, other
than underwriting discounts and applicable transfer taxes relating to the
Warrant Shares and fees and disbursements of counsel and accountants for the
Holders.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each selling holder
(including, for purposes of this Section 6, any Holder) of Warrant Shares and
each person who controls any such selling holder within the meaning of Section
15 of the Securities Act, and each and all of them, from and against any and all
losses, claims, damages, liabilities or actions, joint or several, to which any
selling holder of Warrant Shares or they or any of them may become subject under
the Securities Act or otherwise and to reimburse the persons indemnified above
for any legal or other expenses (including the cost of any investigation and
preparation) reasonably incurred by them in connection with any litigation or
threatened litigation, whether or not resulting in any liability, but only
insofar as such losses, claims, damages, liabilities or actions arise out of, or
are based upon, any untrue statement or alleged untrue statement of a material
fact contained in any registration statement pursuant to which Warrant Shares
were registered under the Securities Act (hereinafter called a "Registration
Statement"), any preliminary prospectus, the final prospectus or any amendment
or supplement thereto (or in any application or document filed in connection
therewith) or the omission or alleged omission to state therein a material fact
required to be stated
-38-
39
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that (i) the indemnity agreement contained in this Section 6(a) shall not extend
to any selling holder of Warrant Shares in respect of any such losses, claims,
damages, liabilities or actions arising out of, or based upon, any such untrue
statement or alleged untrue statement, or any such omission or alleged omission,
if such statement or omission was based upon and made in conformity with
information furnished in writing to the Company by a selling holder of Warrant
Shares specifically for use in connection with the preparation of such
Registration Statement, any final prospectus, any preliminary prospectus or any
such amendment or supplement thereto. The Company agrees to pay any legal and
other expenses for which it is liable under this Section 6(a) from time to time
(but not more frequently than monthly) within 30 days after its receipt of a
xxxx therefor.
(b) Each selling holder of Warrant Shares, severally and not jointly, will
indemnify and hold harmless the Company, its directors, its officers who shall
have signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act to the same
extent as the foregoing indemnity from the Company, but in each case to the
extent, and only to the extent, that any statement in or omission from or
alleged omission from such Registration Statement, any final prospects, any
preliminary prospectus or any amendment or supplement thereto was made in
reliance upon information furnished in writing to the Company by such selling
holder specifically for use in connection with the preparation of the
Registration Statement, any final prospectus or the preliminary prospectus or
any such amendment or supplement thereto; provided, however, that the obligation
of any holder of Warrant Shares to indemnify the Company under the provisions of
this Section 6(b) shall be limited to the Market Price of the Warrant Shares
being sold by the selling holder minus the Aggregate Warrant Price for such
Warrant Shares. Each selling holder of Warrant Shares agrees to pay any legal
and other expenses for which its liable under this Section 6(b) from time to
time (but not more frequently than monthly) within 30 days after receipt of a
xxxx therefor.
(c) If any action is brought against a person entitled to indemnification
pursuant to the foregoing Section 6(a) or Section 6(b) (an "indemnified party")
in respect of which indemnity may by sought against a person granting
indemnification (an "indemnifying party") pursuant to such section, such
indemnified party shall promptly notify such indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
of any such action shall not release the indemnifying party from any liability
it may have to such indemnified party otherwise than on account of the indemnity
agreement contained in Section 6(a) or Section 6(b) hereof to the extent it is
not prejudiced as a proximate result of such failure. In case any such action is
brought against an indemnified party and it notifies an indemnifying party of
the commencement thereof, the indemnifying party against which a claim is to be
made will be entitled to participate therein at its own expense and, to the
extent that it may wish, to assume at its own expense the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the indemnified party shall have reasonably concluded based upon advice
of counsel that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party shall have the right to select
separate counsel to assume such legal defenses and otherwise to
-39-
40
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. An indemnifying
party shall not be liable for any settlement of any action or proceeding
effected without its written consent (which consent shall not be unreasonably
withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 6(a) or
(b) hereof is unavailable in accordance with its terms, the Company and the
selling holder of Warrant Shares shall contribute to the aggregate losses,
claims, damages and liabilities, of the nature contemplated by said indemnity
agreement, incurred by the Company and the selling holder of Warrant Shares, in
such proportions as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the selling holder of Warrant Shares, on the
other hand, from any offering of the Warrant Shares; provided, however, that if
such allocation is not permitted by applicable law or if the indemnified party
failed to give the notice required under Section 6(c), then the relative fault
of the Company and the selling holder of Warrant Shares in connection with the
statements or omissions which result in such losses, claims, damages and
liabilities and other relevant equitable considerations will be considered
together with such relative benefits.
(e) The respective indemnity and contribution agreements by the Company and
the selling holder of Warrant Shares in Sections 6(a), (b), (c) and (d) hereof
shall remain operative and in full force and effect regardless of (i) any
investigation made by any selling holder of Warrant Shares or by or on behalf of
any person who controls such selling holder or by the Company or any controlling
person of the Company or any director or any officer of the Company, (ii) the
exercise of this Warrant or (iii) payment for any of the Warrant Shares, and
shall survive the delivery of the Warrant Shares, and any successor of the
Company, or of any selling holder of Warrant Shares, or of any person who
controls the Company, or of any selling holder of Warrant Shares, as the case
may be, shall be entitled to the benefit of such respective indemnity and
contribution agreements. The respective indemnity and contribution agreements by
the Company and the selling holders of Warrant Shares contained in Sections
6(a), (b), (c) and (d) hereof shall be in addition to any liability which the
Company and the selling holders of Warrant Shares may otherwise have.
-40-
41
7. Limited Transferability.
This Warrant may not be sold, transferred, assigned or hypothecated by the
Holder (a) except in compliance with the provisions of the Securities Act and
any applicable state securities laws and (b) until the first anniversary of the
date hereof except (i) to Xxxx Capital Partners, Incorporated or any successor
firm or corporation of Xxxx Capital Partners, Incorporated, (ii) to any of the
officers of Xxxx Capital Partners, Incorporated, or of any such successor firm
or corporation or (iii) in the case of an individual, pursuant to such
individual's last will and testament or the laws of descent and distribution,
and is so transferable only upon the books of the Company which it shall cause
to be maintained for the purpose. The Company may treat the registered Holder of
this Warrant as he or it appears on the Company's books at any time as the
Holder for all purposes. The Company shall permit any Holder of a Warrant or his
or its duly authorized attorney, upon written request during ordinary business
hours, to inspect and copy or make extracts from its books showing the
registered holders of Warrants. All Warrants issued upon the transfer or
assignment of this Warrant will be dated the same date as this Warrant, and all
rights of the Holder thereof shall be identical to those of the Holder of this
Warrant.
8. Loss or Destruction of Warrant.
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to the Company, if lost, stolen or destroyed, and upon surrender
and cancellation of this Warrant, if mutilated, the Company shall execute and
deliver to the Holder a new Warrant of like date, tenor and denomination.
9. Warrant Holder Not Stockholder.
Except as otherwise provided herein, this Warrant does not confer upon the
Holder any right to vote or to consent to or receive notice as a stockholder of
the Company, as such, in respect of any matters whatsoever, or any other rights
or liabilities as a stockholder, prior to the exercise hereof.
10. Communication.
No notice or other communication under this Warrant shall be effective
unless, but any notice or other communication shall be effective and shall be
deemed to have been given if, the same is in writing and is mailed by
first-class mail, postage prepaid, addressed to:
(a) the Company at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxx 00000, or such
other address as the Company has designated in writing to the Holder, or
(b) the Holder at Xxxx Capital Partners, Incorporated, 00 Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention: Corporate Finance
Department, or such other address as the Holder has designated in writing to the
Company.
-41-
42
11. Headings.
The headings of this Warrant have been inserted as a matter of convenience
and shall not affect the construction hereof.
12. Applicable Law.
This Warrant shall be governed by and construed in accordance with the law
of the State of Minnesota without giving effect to the principles of conflicts
of law thereof.
IN WITNESS WHEREOF, Stockpoint, Inc. has caused this Warrant to be signed
by its [ ] and attested by its Secretary this ____ day of ____________, 2000.
STOCKPOINT, INC.
By:_____________________________________
Its:_________________________________
ATTEST:
Name:
Title:
-42-
43
ASSIGNMENT
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto _______________________________ the foregoing Warrant and all
rights evidenced thereby, and does irrevocably constitute and appoint
_____________________________, attorney, to transfer said Warrant on the books
of Stockpoint, Inc.
Dated: ________________ Signature: ____________________________________
Address: ___________________________
___________________________
___________________________
-43-
44
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto __________________________ the right to purchase _____________
shares of the Common Stock of Stockpoint, Inc. covered by the foregoing Warrant,
and a proportionate part of said Warrant and the rights evidenced thereby, and
does irrevocably constitute and appoint __________________________, attorney, to
transfer that part of said Warrant on the books of Stockpoint, Inc.
Dated: ________________ Signature: ____________________________________
Address: ___________________________
___________________________
___________________________
-44-
45
SUBSCRIPTION FORM
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the attached Warrant for, and to purchase thereunder,
_____________ shares of the Common Stock of Stockpoint, Inc., as provided for in
Section 1 thereof.
The undersigned herewith makes payment for such shares in full at the price per
share provided by such Warrant in the following manner (please check the type or
types of payment and indicate the portion of the aggregate payment to be paid by
each type of payment):
____ exercise for cash as provided in Section 1(a) of such
Warrant.
____ exercise by surrender of such Warrant (or a portion
thereof) in accordance with Section 1(b) of such
Warrant.
Please issue a certificate or certificates for such shares in the name of, and
pay any cash for any fractional share to:
Name ___________________________________________________
(Please Print Name, Address and
Social Security No. or Taxpayer Identification No.)
Address ________________________________________________
________________________________________________
________________________________________________
Social Security No. or
Taxpayer Identification
No.___________________________
Signature__________________________________________
NOTE: The above signature should correspond exactly
with the name on the first page of such
Warrant or with the name of the assignee
appearing in the assignment form attached to
the Warrant.
And if such number of shares shall not be all the shares purchasable under the
attached Warrant, a new Warrant is to be issued in the name of said undersigned
for the balance remaining of the shares purchasable thereunder and delivered to
the address set forth above.
-45-
46
SCHEDULE III
FORM OF LOCK-UP AGREEMENTS
Xxxx Capital Partners Incorporated Individual Lock-Up
00 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
In connection with a proposed initial public offering (the "Offering")
by Stockpoint, Inc. (the "Company") of shares of the Company's common stock (the
"Common Stock"), the Company has filed a registration statement on Form S-1 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). To induce you to enter into an underwriting agreement for the
Offering (the "Underwriting Agreement"), I agree that for the 180 day period
following the day on which the Registration Statement becomes effective under
the Securities Act (the "Lock Up Period"), I will not, without the prior written
consent of Xxxx Capital Partners Incorporated, directly or indirectly:
o issue,
o offer,
o sell (including any short sale),
o grant any option for the sale of,
o acquire any option to dispose of,
o assign,
o transfer,
o pledge or
o otherwise encumber or dispose of
any shares of Common Stock, or securities convertible into, exercisable or
exchangeable for or evidencing any right to purchase or subscribe for any shares
of Common Stock or any beneficial interest therein (collectively, "Convertible
Securities"), that, as of the date the Registration Statement was filed with the
U.S. Securities and Exchange Commission or becomes effective, I own of record or
beneficially.
I also agree that if I offer or sell any shares of Common Stock or
Convertible Securities (including securities I acquire after the Offering
commences) during the Lock Up Period (with the prior written consent of Xxxx
Capital Partners Incorporated) or during the 180 days following the end of Lock
Up Period, I will offer and sell these securities through Xxxx Capital Partners
Incorporated.
-46-
47
I understand that, notwithstanding the above, I may transfer my Common
Stock or Convertible Securities to:
o my spouse,
o my parents,
o my siblings,
o my children or other lineal descendants,
o any trust for the benefit of the above persons,
o any of my distributees, legatees or devisees who acquire my Common
Stock or Convertible Securities by will or operation of law upon my
death, or
o any other recipient of a bona fide gift or a charitable contribution
of Common Stock or Convertible Securities by me,
but only if my transferees agree in writing to be bound by the terms of this
letter to the same extent as me.
Notwithstanding the above, if the Underwriting Agreement is not executed on
or before July 1, 2000, this agreement shall terminate and be of no effect.
Very truly yours,
________________________________________________
Dated: __________________, 2000
Accepted as of the date set forth immediately above:
XXXX CAPITAL PARTNERS INCORPORATED
By______________________________
Name:___________________________
Title:__________________________
-47-
48
Xxxx Capital Partners Incorporated Entity Lock-Up
00 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
In connection with a proposed initial public offering (the "Offering") by
Stockpoint, Inc. (the "Company") of shares of the Company's common stock (the
"Common Stock"), the Company has filed a registration statement on Form S-1 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). To induce you to enter into an underwriting agreement for the
Offering (the "Underwriting Agreement"), the undersigned agrees that for the 180
day period following the day on which the Registration Statement becomes
effective under the Securities Act (the "Lock Up Period"), the undersigned will
not, without the prior written consent of Xxxx Capital Partners Incorporated,
directly or indirectly:
o issue,
o offer,
o sell (including any short sale),
o grant any option for the sale of,
o acquire any option to dispose of,
o assign,
o transfer,
o pledge or
o otherwise encumber or dispose of
any shares of Common Stock, or securities convertible into, exercisable or
exchangeable for or evidencing any right to purchase or subscribe for any shares
of Common Stock or any beneficial interest therein (collectively, "Convertible
Securities"), that, as of the date the Registration Statement was filed with the
U.S. Securities and Exchange Commission or becomes effective, the undersigned
owns of record or beneficially.
[continued on next page]
-48-
49
The undersigned also agrees that if the undersigned offers or sells any
shares of Common Stock or Convertible Securities (including securities the
undersigned acquires after the Offering commences) during the Lock Up Period
(with the prior written consent of Xxxx Capital Partners Incorporated) or during
the 180 days following the end of Lock Up Period, the undersigned will offer and
sell these securities through Xxxx Capital Partners Incorporated.
Very truly yours,
By______________________________________________
Name:___________________________________________
Title:__________________________________________
Dated: _______________, 2000
Accepted as of the date set forth above:
XXXX CAPITAL PARTNERS INCORPORATED
By_____________________________________
Name:__________________________________
Title:_________________________________
-49-
