Exhibit 1.1
SHARES
CYBER DIALOGUE INC.
Common Stock
UNDERWRITING AGREEMENT
___________, 2000
XX XXXXX SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
ING BARINGS LLC
As Representatives of the several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
1. INTRODUCTORY. Cyber Dialogue Inc., a Delaware corporation (the "Company"),
proposes to sell, pursuant to the terms of this Agreement, to the several
underwriters named in Schedule A hereto (the "Underwriters," or, each, an
"Underwriter"), an aggregate of ____ shares of Common Stock, $.01 par value (the
"Common Stock") of the Company. The aggregate of ____ shares so proposed to be
sold is hereinafter referred to as the "Firm Stock." The Company also proposes
to sell to the Underwriters, upon the terms and conditions set forth in Section
3 hereof, up to an additional ______ shares of Common Stock (the "Optional
Stock"). The Firm Stock and the Optional Stock are hereinafter collectively
referred to as the "Stock." XX Xxxxx Securities Corporation ("XX Xxxxx") is and
Banc of America Securities LLC and ING Barings LLC are acting as representatives
of the several Underwriters and in such capacity are hereinafter referred to as
the "Representatives."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to, and agrees with, the several
Underwriters that:
a. A registration statement on Form S-1 (File No. 333-30652) (the
"Initial Registration Statement") in respect of the Stock has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto, to you for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of
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the Commission thereunder, which became effective upon filing, no other document
with respect to the Initial Registration Statement has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the Rules and Regulations, is hereinafter
called a "Preliminary Prospectus"); the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if any,
including all exhibits thereto and including the information contained in the
form of final prospectus filed with the Commission pursuant to Rule 424(b) under
the Securities Act and deemed by virtue of Rule 430A under the Securities Act to
be part of the Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statements"; and such final prospectus, in
the form first filed pursuant to Rule 424(b) under the Securities Act, is
hereinafter called the "Prospectus." No document has been or will be prepared or
distributed in reliance on Rule 434 under the Securities Act. No order
preventing or suspending the use of any Preliminary Prospectus has been issued
by the Commission.
b. The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or supplements
to either of the Registration Statements or the Prospectus, when they become
effective or are filed with the Commission, as the case may be, will conform) in
all material respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable effective date (as
to the Registration Statements and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or supplement
thereto) contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing representations
and warranties shall not apply to information contained in or omitted from the
Registration Statements or the Prospectus or any such amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
c. The Company and each of its subsidiaries (as set forth in Section
2(d)) have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of incorporation,
are duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to so qualify or have such power or authority would not
have, singularly or in the aggregate, a material adverse effect on the condition
(financial or otherwise), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole (a "Material Adverse Effect"). The
Company owns or
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controls, directly or indirectly, only the following corporations, associations
or other entities: [___].
d. This Agreement has been duly authorized executed and delivered by
the Company.
e. The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued,
fully paid and nonassessable and free of any preemptive or similar rights and
will conform to the description thereof contained in the Prospectus.
f. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company, have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus.
g. All the outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued, are fully paid and
nonassessable and, except to the extent set forth in the Prospectus, are owned
by the Company directly or indirectly through one or more wholly-owned
subsidiaries, free and clear of any claim, lien, encumbrance, security interest,
restriction upon voting or transfer or any other claim of any third party.
h. The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets.
i. Except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
x. Xxxxx & Xxxxx LLP, who have expressed their opinions on the audited
financial statements and related schedules included in the Registration
Statements and the Prospectus are independent public accountants as required by
the Securities Act and the Rules and Regulations.
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k. The financial statements, together with the related notes and
schedules, included in the Prospectus and in each Registration Statement fairly
present the financial position and the results of operations and changes in
financial position of the Company and its consolidated subsidiaries at the
respective dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis except as
may be set forth in the Prospectus.
l. Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements included in the Prospectus,
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since such date, there has not
been any change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business, general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, otherwise than
as set forth or contemplated in the Prospectus.
m. Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, singularly or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, might have a Material
Adverse Effect or would prevent or adversely affect the ability of the Company
to perform its obligations under this Agreement; and to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
n. Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws, (ii) is in default in any respect, and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject or (iii) is in violation in any
respect of any law, ordinance, governmental rule, regulation or court decree to
which it or its property or assets may be subject, except any violations or
defaults which, singularly or in the aggregate, would not have a Material
Adverse Effect.
o. The Company and each of its subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate state, federal or foreign
regulatory agencies or bodies which are necessary or desirable for the ownership
of their respective properties or the conduct of their respective businesses as
described in the Prospectus except where any failures to possess or make the
same, singularly or in the aggregate, would not have a Material Adverse Effect,
and the Company has not received notification of any revocation or modification
of any such license, authorization or
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permit and has no reason to believe that any such license, certificate,
authorization or permit will not be renewed.
p. Neither the Company nor any of its subsidiaries is or, after giving
effect to the offering of the Stock and the application of the proceeds thereof
as described in the Prospectus will become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
q. Neither the Company nor any of its officers, directors or affiliates
has taken or will take, directly or indirectly, any action designed or intended
to stabilize or manipulate the price of any security of the Company, or which
caused or resulted in, or which might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any security
of the Company.
r. The Company and its subsidiaries own or possess the right to use all
patents, trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets and
rights described in the Prospectus as being owned by them for the conduct of
their respective businesses, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company and
its subsidiaries with respect to the foregoing. The Company's business as now
conducted and as proposed to be conducted does not and will not infringe or
conflict with any patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses or other intellectual property or franchise right of any
person. Except as described in the Prospectus, no claim has been made against
the Company alleging the infringement by the Company of any patent, trademark,
service xxxx, trade name, copyright, trade secret, license in or other
intellectual property right or franchise right of any person.
s. The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use, all
items of real or personal property which are material to the business of the
Company and its subsidiaries taken as a whole, in each case free and clear of
all liens, encumbrances, claims and defects that may result in a Material
Adverse Effect.
t. No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is imminent
which might be expected to have a Material Adverse Effect. The Company is not
aware that any key employee or significant group of employees of the Company or
any subsidiary plans to terminate employment with the Company or any such
subsidiary.
u. No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the
"Code")), or "accumulated funding deficiency" (as defined in Section 302 of
ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred with respect to any employee benefit plan
which could have a
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Material Adverse Effect; each employee benefit plan is in compliance in all
material respects with applicable law, including ERISA and the Code; the Company
has not incurred and does not expect to incur liability under Title IV of ERISA
with respect to the termination of, or withdrawal from, any "pension plan"; and
each "pension plan" (as defined in ERISA) for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which could cause the loss of such qualification.
v. There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of toxic
or other wastes or other hazardous substances by, due to, or caused by the
Company or any of its subsidiaries (or, to the best of the Company's knowledge,
any other entity for whose acts or omissions the Company or any of its
subsidiaries is or may be liable) upon any of the property now or previously
owned or leased by the Company or any of its subsidiaries, or upon any other
property, in violation of any statute or any ordinance, rule, regulation, order,
judgment, decree or permit or which would, under any statute or any ordinance,
rule (including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or liability which
would not have, singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; there has been no disposal, discharge,
emission or other release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other hazardous
substances with respect to which the Company or any of its subsidiaries have
knowledge, except for any such disposal, discharge, emission, or other release
of any kind which would not have, singularly or in the aggregate with all such
discharges and other releases, a Material Adverse Effect.
w. The Company and its subsidiaries each (i) have filed all necessary
federal, state and foreign income and franchise tax returns, (ii) have paid all
federal state, local and foreign taxes due and payable for which it is liable,
and (iii) do not have any tax deficiency or claims outstanding or assessed or,
to the best of the Company's knowledge, proposed against it which could
reasonably be expected to have a Material Adverse Effect.
x. The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar businesses in similar
industries.
y. The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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z. The minute books of the Company and each of its subsidiaries have
been made available to the Underwriters and counsel for the Underwriters, and
such books (i) contain a complete summary of all meetings and actions of the
directors and shareholders of the Company and each of its subsidiaries since the
time of its respective incorporation through the date of the latest meeting and
action, and (ii) accurately in all material respects reflect all transactions
referred to in such minutes.
aa. There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be described
in the Prospectus or to be filed as an exhibit to the Registration Statements
which is not described or filed therein as required; and all descriptions of any
such franchises, leases, contracts, agreements or documents contained in the
Registration Statements are accurate and complete descriptions of such documents
in all material respects.
bb. No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus and which is not so described.
cc. No person or entity has the right to require registration of shares
of Common Stock or other securities of the Company because of the filing or
effectiveness of the Registration Statements or otherwise, except for persons
and entities who have expressly waived such right or who have been given proper
notice and have failed to exercise such right within the time or times required
under the terms and conditions of such right.
dd. Neither the Company nor any of its subsidiaries owns any "margin
securities" as that term is defined in Regulations G and U of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"), and none
of the proceeds of the sale of the Stock will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin security, for the purpose
of reducing or retiring any indebtedness which was originally incurred to
purchase or carry any margin security or for any other purpose which might cause
any of the Securities to be considered a "purpose credit" within the meanings of
Regulation G, T, U or X of the Federal Reserve Board.
ee. Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person that would give rise to a
valid claim against the Company or the Underwriters for a brokerage commission,
finder's fee or like payment in connection with the offering and sale of the
Stock.
ff. No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in the
Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
gg. The Stock has been approved for listing subject to notice of
issuance on the NASDAQ Stock Market's National Market.
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hh. The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or any of its
subsidiaries has a material relationship to evaluate the extent to which the
business or operations of the Company or any of its subsidiaries will be
affected by the Year 2000 Problem. As a result of such review, the Company has
no reason to believe, and does not believe that the Year 2000 Problem will have
a Material Adverse Effect. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval, retransmission or
other utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company that number of shares of Firm Stock (rounded up or down, as
determined by XX Xxxxx in its discretion, in order to avoid fractions) obtained
by multiplying shares of Firm Stock by a fraction, the numerator of which is the
number of shares of Firm Stock set forth opposite the name of such Underwriter
in Schedule A hereto and the denominator of which is the total number of shares
of Firm Stock.
The purchase price per share to be paid by the Underwriters to the
Company for the Stock will be $_____ per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York time, on the second full business day preceding the
First Closing Date (as defined below)) against payment of the aggregate Purchase
Price therefor by wire transfer to an account at a bank acceptable to XX Xxxxx,
payable to the order of the Company, all at the offices of Xxxxxxx, Phleger &
Xxxxxxxx LLP, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. Time shall be
of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligations of each Underwriter
hereunder. The time and date of the delivery and closing shall be at 10:00 A.M.,
New York time, on , 2000, in accordance with Rule 15c6-1 of the Exchange Act.
The time and date of such payment and delivery are herein referred to as the
"First Closing Date." The First Closing Date and the location of delivery of,
and the form of payment for, the Firm Stock may be varied by agreement between
the Company and XX Xxxxx.
The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters in New York, New
York at least twenty-four hours prior to the First Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or
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less than all of the Optional Stock. The price per share to be paid for the
Optional Stock shall be the Purchase Price. The Company agrees to sell to the
Underwriters the number of shares of Optional Stock specified in the written
notice by XX Xxxxx described below and the Underwriters agree, severally and not
jointly, to purchase such shares of Optional Stock.
Such shares of Optional Stock shall be purchased from the Company for
the account of each Underwriter in the same proportion as the number of shares
of Firm Stock set forth opposite such Underwriter's name bears to the total
number of shares of Firm Stock (subject to adjustment by XX Xxxxx to eliminate
fractions). The option granted hereby may be exercised as to all or any part of
the Optional Stock at any time, and from time to time, not more than thirty (30)
days subsequent to the date of this Agreement. No Optional Stock shall be sold
and delivered unless the Firm Stock previously has been, or simultaneously is,
sold and delivered. The right to purchase the Optional Stock or any portion
thereof may be surrendered and terminated at any time upon notice by XX Xxxxx to
the Company.
The option granted hereby may be exercised by written notice given to
the Company by XX Xxxxx setting forth the number of shares of the Optional Stock
to be purchased by the Underwriters and the date and time for delivery of and
payment for the Optional Stock. Each date and time for delivery of and payment
for the Optional Stock (which may be the First Closing Date, but not earlier) is
herein called the "Option Closing Date" and shall in no event be earlier than
two (2) business days nor later than five (5) business days after written notice
is given. (The Option Closing Date and the First Closing Date are herein called
the "Closing Dates.")
The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Company given at
or prior to 12:00 Noon, New York time, on the second full business day preceding
the Option Closing Date) against payment of the aggregate Purchase Price
therefor in federal (same day) funds by certified or official bank check or
checks or wire transfer to an account at a bank acceptable to XX Xxxxx payable
to the order of the Company. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligations of each Underwriter hereunder. The Company shall make the
certificates for the Optional Stock available to the Representatives for
examination on behalf of the Underwriters in New York, New York not later than
10:00 A.M., New York Time, on the business day preceding the Option Closing
Date. The Option Closing Date and the location of delivery of, and the form of
payment for, the Optional Stock may be varied by agreement between the Company
and XX Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the
terms and conditions set forth in the Prospectus.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters that:
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a. The Company will prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and file such Rule 462(b)
Registration Statement with the Commission on the date hereof; prepare the
Prospectus in a form approved by the Representatives and file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the second
business day following the execution and delivery of this Agreement; make no
further amendment or any supplement to the Registration Statements or to the
Prospectus to which the Representatives shall reasonably object by notice to the
Company after a reasonable period to review; advise the Representatives,
promptly after it receives notice thereof, of the time when any amendment to
either Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish the Representatives with copies thereof; advise the Representatives,
promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the qualification
of the Stock for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statements or
the Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such qualification,
use promptly its best efforts to obtain its withdrawal.
b. If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus relating
to the Stock is required to be delivered any event occurs as a result of which
the Prospectus as then amended or supplemented would include any untrue
statement of a material fact, or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Securities Act, the Company will promptly notify the
Representatives thereof and upon their request will prepare an amended or
supplemented Prospectus which will correct such statement or omission or effect
such compliance. The Company will furnish without charge to each Underwriter and
to any dealer in securities as many copies as the Representatives may from time
to time reasonably request of such amended or supplemented Prospectus; and in
case any Underwriter is required to deliver a prospectus relating to the Stock
nine months or more after the effective date of the Initial Registration
Statement, the Company upon the request of the Representatives and at the
expense of such Underwriter will prepare promptly an amended or supplemented
Prospectus as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Securities Act.
c. The Company will furnish promptly to each of the Representatives and
to counsel for the Underwriters a signed copy of each of the Registration
Statements as originally filed with the Commission, and each amendment thereto
filed with the Commission, including all consents and exhibits filed therewith.
d. The Company will deliver promptly to the Representatives in New York
City such number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statements as
originally filed with the Commission and
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each amendment thereto (in each case including exhibits), (ii) each Preliminary
Prospectus, and (iii) the Prospectus (not later than 10:00 A.M., New York time,
of the business day following the execution and delivery of this Agreement) and
any amended or supplemented Prospectus (not later than 10:00 A.M., New York City
time, on the business day following the date of such amendment or supplement).
e. The Company will make generally available to its stockholders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Securities Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations (including, at the option of the Company, Rule
158).
f. The Company will promptly take from time to time such actions as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may designate and to continue such qualifications in effect for
so long as required for the distribution of the Stock; provided that the Company
and its subsidiaries shall not be obligated to qualify as foreign corporations
in any jurisdiction in which they are not so qualified or to file a general
consent to service of process in any jurisdiction;
g. During the period of five years from the date hereof, the Company
will deliver to the Representatives and, upon request, to each of the other
Underwriters, (i) as soon as they are available, copies of all reports or other
communications furnished to shareholders and (ii) as soon as they are available,
copies of any reports and financial statements furnished or filed with the
Commission pursuant to the Exchange Act or any national securities exchange or
automatic quotation system on which the Stock is listed or quoted.
h. The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock for a period of 180 days from the date of the Prospectus without the prior
written consent of XX Xxxxx other than the Company's sale of the Stock hereunder
and the issuance of shares pursuant to employee benefit plans, qualified stock
option plans or other employee compensation plans existing on the date hereof or
pursuant to currently outstanding options, warrants or rights. The Company will
cause each officer, director and shareholder listed in Schedule B to furnish to
the Representatives, prior to the First Closing Date, a letter, substantially in
the form of Exhibit I hereto, pursuant to which each such person shall agree not
to directly or indirectly offer, sell, assign, transfer, pledge, contract to
sell, or otherwise dispose of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock for a period of
180 days from the date of the Prospectus, without the prior written consent of
XX Xxxxx.
i. The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Stock under the Securities Act.
11
j. Prior to each of the Closing Dates the Company will furnish to the
Representatives, as soon as they have been prepared, copies of any unaudited
interim consolidated financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing in the
Registration Statement and the Prospectus.
k. Prior to each of the Closing Dates, the Company will not issue any
press release or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or otherwise,
or earnings, business affairs or business prospects (except for routine oral
marketing communications in the ordinary course of business and consistent with
the past practices of the Company and of which the Representatives are
notified), without the prior written consent of the Representatives, unless in
the judgment of the Company and its counsel, and after notification to the
Representatives, such press release or communication is required by law.
l. In connection with the offering of the Stock, until XX Xxxxx shall
have notified the Company of the completion of the resale of the Stock, the
Company will not, and will cause its affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to, either alone or with one or more
other persons, bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial interest, any Stock, or attempt to induce
any person to purchase any Stock; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating actual, or
apparent, active trading in or of raising the price of the Stock.
m. The Company will not take any action prior to the Option Closing
Date which would require the Prospectus to be amended or supplemented pursuant
to Section 4(b);
n. The Company will apply the net proceeds from the sale of the Stock
as set forth in the Prospectus under the heading "Use of Proceeds."
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of their obligations hereunder, and to each of the following additional
terms and conditions:
a. No stop order suspending the effectiveness of either of the
Registration Statements shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the Commission, and any
request for additional information on the part of the Commission (to be included
in the Registration Statements or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representatives. The Rule
462(b) Registration Statement, if any, and the Prospectus shall have been timely
filed with the Commission in accordance with Section 4(a).
b. None of the Underwriters shall have discovered on or prior to the
Closing Date that the Registration Statement or the Prospectus or any amendment
or supplement thereto contains
12
an untrue statement of a fact which, in the opinion of counsel for the
Underwriters, is material or omits to state any fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
c. All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Stock, the
Registration Statement and the Prospectus and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
d. Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP shall have furnished to the
Representatives such counsel's written opinion, as counsel to the Company,
addressed to the Underwriters and dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have all
power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not have, singularly or in the
aggregate, a Material Adverse Effect.
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company,
including the Stock being delivered on the Closing Date, have been duly and
validly authorized and issued, are fully paid and non-assessable and conform to
the description thereof contained in the Prospectus.
(iii) All the outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and, except to the extent set forth in the
Prospectus, are owned by the Company directly or indirectly through one or more
wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other claim of any
third party.
(iv) There are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of, any shares
of the Stock pursuant to the Company's charter or by-laws or any agreement or
other instrument known to such counsel.
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under any indenture,
13
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel after reasonable investigation to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the properties or assets of the Company or any of
its subsidiaries is subject, nor will such actions result in any violation of
the Charter or by-laws of the Company or of any of its subsidiaries or any
statute or any order, rule or regulation of any court or governmental agency or
body or court having jurisdiction over the Company or any of its subsidiaries or
any of their properties or assets.
(vii) Except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(viii) The statements in the Prospectus under the heading
"Risk Factors - We have anti-takeover provisions which may make it difficult for
a third party to acquire us," "Business - Legal Proceedings," "Description of
Capital Stock," "Shares Eligible for Future Sale" and "Underwriting" in the
Prospectus and Items 14 and 15 of Part II of the Registration Statement, to the
extent that they constitute summaries of matters of law or regulation or legal
conclusions, have been reviewed by such counsel and fairly summarize the matters
described therein in all material respects.
(ix) The description in the Registration Statement and
Prospectus of statutes, legal or governmental proceedings and contracts and
other documents are accurate in all material respects; and to the best of such
counsel's knowledge, there are no statutes, legal or governmental proceedings,
contracts or other documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as required.
(x) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries (i) is in violation of its charter or
by-laws, (ii) is in default, and no event has occurred, which, with notice or
lapse of time or both, would constitute a default, in the due performance or
observance of any term, covenant or condition contained in any agreement or
instrument to which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any license, permit, certificate,
franchise or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business except, in the case
of clauses (ii) and (iii), for those defaults, violations or failures which,
either individually or in the aggregate, would not have a Material Adverse
Effect.
(xi) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or
14
any of its subsidiaries is a party or of which any property or asset of the
Company or any of its subsidiaries is the subject which, singularly or in the
aggregate, if determined adversely to the Company or any of its subsidiaries,
might have a Material Adverse Effect or would prevent or adversely affect the
ability of the Company to perform its obligations under this Agreement; and, to
the best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(xii) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such opinion, the Rule
462(b) Registration Statement, if any, was filed with the Commission on the date
specified therein, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and Regulations specified in such
opinion on the date specified therein and no stop order suspending the
effectiveness of the Registration Statement has been issued and, to the
knowledge of such counsel, no proceeding for that purpose is pending or
threatened by the Commission.
(xiii) The Registration Statements, as of the respective
effective dates and the Prospectus, as of its date, and any further amendments
or supplements thereto, as of their respective dates, made by the Company prior
to the Closing Date (other than the financial statements and other financial
data contained therein, as to which such counsel need express no opinion)
complied as to form in all material respects with the requirements of the
Securities Act and the Rules and Regulations (other than the financial
statements and related schedules therein, as to which such counsel need express
no opinion), when they were filed with the Commission.
(xiv) To the best of such counsel's no person or entity has
the right to require registration of shares of Common Stock or other securities
of the Company because of the filing or effectiveness of the Registration
Statements or otherwise, except for persons and entities who have expressly
waived such right or who have been given proper notice and have failed to
exercise such right within the time or times required under the terms and
conditions of such right.
(xv) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act and the
rules and regulations of the Commission thereunder.
Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and dated the
Closing Date, in form and substance satisfactory to the Representatives, to the
effect that (x) such counsel has acted as counsel to the Company in connection
with the preparation of the Registration Statements (y) based on such counsel's
examination of the Registration Statements and such counsel's investigations
made in connection with the preparation of the Registration Statements and
"conferences with certain officers and employees of and with auditors for and
counsel to the Company", such counsel has no reason to believe that the
Registration Statements, as of the respective effective dates, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus contains any untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
15
circumstances under which they were made, not misleading when they were filed
with the Commission any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; it being
understood that such counsel need express no opinion as to the financial
statements or other financial data contained in the Registration Statement or
the Prospectus.
The foregoing opinion and statement may be qualified by a statement to
the effect that such counsel has not independently verified the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and takes no responsibility therefor except to the
extent set forth in the opinion described in clauses (viii) and (ix) above.
e. The Representatives shall have received from Xxxxxxx, Phleger &
Xxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to such matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for enabling them to pass upon such matters.
f. At the time of the execution of this Agreement, the Representatives
shall have received from Ernst & Young a letter, addressed to the Underwriters
and dated such date, in form and substance satisfactory to the Representatives
(i) confirming that they are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Securities
Act and the Rules and Regulations and (ii) stating the conclusions and findings
of such firm with respect to the financial statements and certain financial
information contained or incorporated by reference in the Prospectus.
g. On the Closing Date, the Representatives shall have received a
letter (the "bring-down letter") from Ernst & Young LLP addressed to the
Underwriters and dated the Closing Date confirming, as of the date of the
bring-down letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Prospectus as of a date not more than three business days prior to the
date of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by its letter
delivered to the Representatives concurrently with the execution of this
Agreement pursuant to Section 6(f).
h. The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its President and Chief Executive
Officer and its Chief Financial Officer stating that (i) such officers have
carefully examined the Registration Statements and the Prospectus and, in their
opinion, the Registration Statements as of their respective effective dates and
the Prospectus, as of each such effective date, did not include any untrue
statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(ii) since the effective date of the Initial Registration Statement no event has
occurred which should have been set forth in a supplement or amendment to the
Registration Statements or the Prospectus, (iii) to the best of their knowledge
after reasonable investigation, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct and the Company
has complied with all
16
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, and (iv) subsequent to the date of
the most recent financial statements included in the Prospectus, there has been
no material adverse change in the financial position or results of operation of
the Company and its subsidiaries, or any change, or any development including a
prospective change, in or affecting the condition (financial or otherwise),
results of operations, business or prospects of the Company and its subsidiaries
taken as a whole, except as set forth in the Prospectus.
i. Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included in the
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the business, general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is, in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the sale or delivery of the
Stock on the terms and in the manner contemplated in the Prospectus.
j. No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency or
body which would, as of the Closing Date, prevent the issuance or sale of the
Stock; and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued as of
the Closing Date which would prevent the issuance or sale of the Stock.
k. Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review (other than an announcement
with positive implications of a possible upgrading), its rating of any of the
Company's debt securities.
l. Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv) there
shall have occurred such a material adverse change in general economic,
political or financial
17
conditions (or the effect of international conditions on the financial markets
in the United States shall be such) as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the sale or
delivery of the Stock on the terms and in the manner contemplated in the
Prospectus.
m. The Nasdaq National Market system shall have approved the Stock for
inclusion, subject only to official notice of issuance and evidence of
satisfactory distribution.
n. XX Xxxxx shall have received the written agreements, substantially
in the form of Exhibit I hereto, of the officers, directors and shareholders of
the Company listed in Schedule C to this Agreement.
o. All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
6. INDEMNIFICATION AND CONTRIBUTION.
a. The Company shall indemnify and hold harmless each Underwriter, its
officers, employees, representatives and agents and each person, if any, who
controls any Underwriter within the meaning of the Securities Act (collectively
the "Underwriter Indemnified Parties" and each an "Underwriter Indemnified
Party") against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which that Underwriter Indemnified Party may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus, either of the Registration Statements or the Prospectus
or in any amendment or supplement thereto, (ii) the omission or alleged omission
to state in any Preliminary Prospectus, either of the Registration Statements or
the Prospectus or in any amendment or supplement thereto a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (iii) 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
Stock or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above, (provided that the
Company shall not be liable in the case of any matter covered by this clause
(iii) to the extent that it is determined in a final judgement by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such act or failure to act undertaken or omitted to
be taken by such Underwriter through its gross negligence or wilful misconduct)
and shall reimburse each Underwriter Indemnified Party promptly upon demand for
any legal or other expenses reasonably incurred by that Underwriter Indemnified
Party in connection with investigating or preparing to defend or defending
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is based
upon (i) an untrue statement or alleged untrue statement in or omission or
alleged omission from the Preliminary Prospectus, either of the Registration
18
Statements or the Prospectus or any such amendment or supplement in reliance
upon and in conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for use
therein, which information the parties hereto agree is limited to the
Underwriter's Information (as defined in Section 15). This indemnity agreement
is not exclusive and will be in addition to any liability which the Company
might otherwise have and shall not limit any rights or remedies which may
otherwise be available at law or in equity to each Underwriter Indemnified
Party.
b. Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company its officers, employees, representatives and agents,
each of its directors and each person, if any, who controls the Company within
the meaning of the Securities Act (collectively the "Company Indemnified
Parties" and each a "Company Indemnified Party") against any loss, claim, damage
or liability, joint or several, or any action in respect thereof, to which the
Company Indemnified Parties may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Prospectus, either of the
Registration Statements or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for use
therein, and shall reimburse the Company Indemnified Parties for any legal or
other expenses reasonably incurred by such parties in connection with
investigating or preparing to defend or defending against or appearing as third
party witness in connection with any such loss, claim, damage, liability or
action as such expenses are incurred; provided that the parties hereto hereby
agree that such written information provided by the Underwriters consists solely
of the Underwriter's Information. This indemnity agreement is not exclusive and
will be in addition to any liability which the Underwriters might otherwise have
and shall not limit any rights or remedies which may otherwise be available at
law or in equity to the Company Indemnified Parties.
c. Promptly after receipt by an indemnified party under this Section 6
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent it has been materially
prejudiced by such failure; and, provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 6. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
19
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties, which firm shall be designated in writing by XX Xxxxx, if the
indemnified parties under this Section 6 consist of any Underwriter Indemnified
Party, or by the Company if the indemnified parties under this Section 6 consist
of any Company Indemnified Parties. Each indemnified party, as a condition of
the indemnity agreements contained in Sections 6(a) and 6(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. Subject to the provisions of Section 6(d) below, no
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
d. If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by this Section 6 effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the request for reimbursement, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
e. If the indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under Section 6(a) or
6(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by
20
the Company on the one hand and the Underwriters on the other from the offering
of the Stock or if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Stock purchased under this Agreement (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Underwriters with respect to the Stock purchased under this Agreement, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission; provided that the parties hereto
agree that the written information furnished to the Company through the
Representatives by or on behalf of the Underwriters for use in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus consists
solely of the Underwriter's Information. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 6(e) 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 considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 6(e) shall be deemed to include, for purposes
of this Section 6(e), 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(e), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Stock underwritten by it and distributed to the public
were offered to the public less the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
f. The Underwriters' obligations to contribute as provided in
Section 6(e) are several in proportion to their respective underwriting
obligations and not joint.
7. TERMINATION. The obligations of the Underwriters hereunder may be terminated
by XX Xxxxx, in its absolute discretion by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 5(i), 5(k) or 5(l) have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
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8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) this Agreement shall have
been terminated pursuant to Section 7 or 9, (b) the Company shall fail to tender
the Stock for delivery to the Underwriters for any reason permitted under this
Agreement, or (c) the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement the Company shall reimburse the
Underwriters for the fees and expenses of their counsel and for such other
out-of-pocket expenses as shall have been reasonably incurred by them in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to XX Xxxxx. If this
Agreement is terminated pursuant to Section 10 by reason of the default of one
or more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
9. SUBSTITUTION OF UNDERWRITERS
a. If any Underwriter or Underwriters shall default in its or their
obligations to purchase shares of Stock hereunder and the aggregate number of
shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed ten percent (10%) of the total number of shares
underwritten, the other Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the shares which such
defaulting Underwriter or Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters shall so default and the aggregate number of shares
with respect to which such default or defaults occur is more than ten percent
(10%) of the total number of shares underwritten and arrangements satisfactory
to the Representatives and the Company for the purchase of such shares by other
persons are not made within forty-eight (48) hours after such default, this
Agreement shall terminate.
b. If the remaining Underwriters or substituted Underwriters are
required hereby or agree to take up all or part of the shares of Stock of a
defaulting Underwriter or Underwriters as provided in this Section 9, (i) the
Company shall have the right to postpone the Closing Dates for a period of not
more than five (5) full business days in order that the Company may effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees promptly to file any amendments to the Registration Statement or
supplements to the Prospectus which may thereby be made necessary, and (ii) the
respective numbers of shares to be purchased by the remaining Underwriters or
substituted Underwriters shall be taken as the basis of their underwriting
obligation for all purposes of this Agreement. Nothing herein contained shall
relieve any defaulting Underwriter of its liability to the Company or the other
Underwriters for damages occasioned by its default hereunder. Any termination of
this Agreement pursuant to this Section 10 shall be without liability on the
part of any non-defaulting Underwriter or the Company, except expenses to be
paid or reimbursed pursuant to Sections 5 and 9 and except the provisions of
Section 7 shall not terminate and shall remain in effect.
10. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the several Underwriters, the
Company and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or
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equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained in
this Agreement shall also be for the benefit of the Underwriter Indemnified
Parties, and the indemnities of the several Underwriters shall also be for the
benefit of the Company Indemnified Parties.
11. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Underwriters, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter, the Company or any person controlling any of them and shall
survive delivery of and payment for the Stock.
12. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
a. if to the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission to SG Securities Corporation Attention: [ ] (Fax:
212-[ ]).
13. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) "business
day" means any day on which the New York Stock Exchange, Inc. is open for
trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the Underwriters' Information consists
solely of the following information in the Prospectus: (i) the last paragraph on
the front cover page concerning the terms of the offering by the Underwriters;
and (ii) the statements concerning the Underwriters contained in the first
paragraph, second paragraph and ninth paragraph under the heading
"Underwriting."
16. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by the Representatives, will be binding on all the
Underwriters.
17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
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18. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representatives.
19. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
If the foregoing is in accordance with your understanding of the
agreement between the Company and the several Underwriters, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
CYBER DIALOGUE, INC.
By: ______________________________
Name:
Title:
Accepted as of
the date first above written:
XX XXXXX SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
ING BARINGS LLC
Acting on their own behalf and as
Representatives of several Underwriters
referred to in the foregoing Agreement.
By: XX XXXXX SECURITIES CORPORATION
By:______________________________
Name:
Title:
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SCHEDULE A
Number of Number of
Firm Shares Optional
to be Shares to be
Name Purchased Purchased
----
XX Xxxxx Securities Corporation
----------- ------------
Banc Of America Securities LLC
ING Barings LLC
Total
=========== ============
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EXHIBIT I
LOCK-UP AGREEMENT
___________, 2000
XX Xxxxx Securities Corporation
Banc of America Securities LLC
ING Barings LLC
As representatives of the
several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Cyber Dialogue Inc. Shares of Common Stock
Dear Sirs:
In order to induce XX Xxxxx Securities Corporation
("XX Xxxxx"), Banc of America Securities LLC and ING Barings LLC (together with
XX Xxxxx, the "Representatives"), to enter in to a certain underwriting
agreement with Cyber Dialogue Inc., a Delaware corporation (the "Company"), with
respect to the public offering of shares of the Company's Common Stock, par
value $.01 per share ("Common Stock"), the undersigned hereby agrees that for a
period of 180 days following the date of the final prospectus filed by the
Company with the Securities and Exchange Commission in connection with such
public offering, the undersigned will not, without the prior written consent of
XX Xxxxx, directly or indirectly, offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock
(including, without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares, the "Beneficially Owned
Shares")) or securities convertible into or exercisable or exchangeable in
Common Stock.
Anything contained herein to the contrary notwithstanding, any person
to whom shares of Common Stock or Beneficially Owned Shares are transferred from
the undersigned shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of 180-day period following the date of the Company's final
Prospectus, any and all rights, if any, to request or demand registration
pursuant to the Securities Act of any shares of Common Stock that are registered
in the name of the undersigned or that are Beneficially Owned Shares. In
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order to enable the aforesaid covenants to be enforced, the undersigned hereby
27
consents to the placing of legends and/or stop-transfer orders with the transfer
agent of the Common Stock with respect to any shares of Common Stock or
Beneficially Owned Shares.
By:___________________________________
Name:
Title:
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