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EXHIBIT 1.1
SHARES OF COMMON STOCK
FIRST VIRTUAL HOLDINGS INCORPORATED
UNDERWRITING AGREEMENT
November , 1996
BEAR, XXXXXXX & CO. INC.
XXXXX & COMPANY
XXXXXX BROTHERS, INC.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Dear Sirs:
First Virtual Holdings Incorporated, a corporation organized and existing
under the laws of Delaware (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of shares (the
"Firm Shares") of its common stock, par value ($.001) per share (the "Common
Stock") and, for the sole purpose of covering over-allotments in connection with
the sale of the Firm Shares, at the option of the Underwriters, up to an
additional shares (the "Additional Shares") of Common Stock. The Firm
Shares and any Additional Shares purchased by the Underwriters are referred to
herein as the "Shares". The Shares are more fully described in the Registration
Statement referred to below.
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, and may have filed an
amendment or amendments thereto, on Form S-1 (No. 333- ), for the
registration of the Shares under the Securities Act of 1933, as amended
(the "Act"). Such registration statement, including the prospectus,
financial statements and schedules, exhibits and all other documents filed
as a part thereof, as amended at the time of effectiveness of the
registration statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule
430A or Rule 434 of the Rules and Regulations of the Commission under the
Act (the "Regulations"), is herein called the "Registration Statement" and
the prospectus, in the form first filed with the Commission pursuant to
Rule 424(b) of the Regulations or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) or Rule 434 filing
is required, is herein called the "Prospectus". The term "preliminary
prospectus" as used herein means a preliminary prospectus as described in
Rule 430 of the Regulations. Neither the Commission nor the Blue Sky or
securities authority of any jurisdiction has issued a stop order suspending
the effectiveness of the Regulation Statement, preventing or suspending the
use of any preliminary prospectus, the Prospectus, the Registration
Statement or any amendment or supplement thereto, refusing to permit the
effectiveness of the Registration Statement or suspending the registration
or qualification of the Shares, nor, to the Company's knowledge, has any of
such authorities instituted or threatened to institute any proceedings with
respect to a stop order.
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(b) At the time of the effectiveness of the Registration Statement or
the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant
to Rule 424(b) or Rule 434 of the Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission and at the Closing
Date and the Additional Closing Date, if any, (as hereinafter respectively
defined), the Registration Statement and the Prospectus and any amendments
thereof and supplements thereto complied or will comply in all material
respects with the applicable provisions of the Act and the Regulations and
does not or will not contain an untrue statement of a material fact and
does not or will not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein (i) in the
case of the Registration Statement, not misleading and (ii) in the case of
the Prospectus, in light of the circumstances under which they were made,
not misleading. When any related preliminary prospectus was first filed
with the Commission (whether filed as part of the registration statement
for the registration of the Shares or any amendment thereto or pursuant to
Rule 424(a) of the Regulations) and when any amendment thereof or
supplement thereto was first filed with the Commission, such preliminary
prospectus and any amendments thereof and supplements thereto complied in
all material respects with the applicable provisions of the Act and the
Regulations and did not contain an untrue statement of a material fact and
did not omit to state any 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 misleading. No representation
and warranty is made in this subsection (b), however, with respect to any
information contained in or omitted from the Registration Statement or the
Prospectus or any related preliminary prospectus or any amendment thereof
or supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through you as herein stated expressly for use in connection with the
preparation thereof. If Rule 434 is used, the Company will comply with the
requirements of Rule 434.
(c) Ernst & Young LLP, who have certified the financial statements and
supporting schedules included in the Registration Statement, are
independent public accountants as required by the Act and the Regulations.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth
in the Registration Statement and the Prospectus, there has been no
material adverse change or any development involving a prospective material
adverse change in the business, prospects, properties, operations,
condition (financial or other) or results of operations of the Company and
its subsidiaries taken as a whole, whether or not arising from transactions
in the ordinary course of business, and since the date of the latest
balance sheet presented in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries has incurred or undertaken
any liabilities or obligations, direct or contingent, which are material to
the Company and its subsidiaries taken as a whole, except for liabilities
or obligations which are reflected in the Registration Statement and the
Prospectus.
(e) This Agreement and the transactions contemplated herein have been
duly and validly authorized by the Company and this Agreement has been duly
and validly executed and delivered by the Company.
(f) The execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will not
(i) conflict with or result in a breach of any of the terms and provisions
of, or constitute a default (or an event which with notice or lapse of
time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any
agreement, instrument, franchise, license or permit to which the Company or
any of its subsidiaries is a party or by which any of such corporations or
their respective properties or assets may be bound or (ii) violate or
conflict with any provision of the certificate of incorporation or by-laws
of the Company or any of its subsidiaries or any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their respective properties or assets. No
consent, approval, authorization, order, registration,
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filing, qualification, license or permit of or with any court or any
public, governmental or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective
properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, including the issuance, sale and delivery of the
Shares to be issued, sold and delivered by the Company hereunder, except
the registration under the Act of the Shares and such consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses
and permits as may be required under state securities or Blue Skylaws in
connection with the purchase and distribution of the Shares by the
Underwriters.
(g) All of the outstanding shares of Common Stock are duly and validly
authorized and issued, fully paid and nonassessable and were not issued and
are not now in violation of or subject to any preemptive rights. The
Shares, when issued, delivered and sold in accordance with this Agreement,
will be duly and validly issued and outstanding, fully paid and
nonassessable, and will not have been issued in violation of or be subject
to any preemptive rights. The Company had, at June 30, 1996, an authorized
and outstanding capitalization as set forth in the Registration Statement
and the Prospectus. The Common Stock, the Firm Shares and the Additional
Shares conform to the descriptions thereof contained in the Registration
Statement and the Prospectus.
(h) Each of the Company and its subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation. Each of the Company and its subsidiaries
is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which will not in the aggregate have a material adverse
effect on the Company and its subsidiaries taken as a whole. Each of the
Company and its subsidiaries has all requisite power and authority, and all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public, regulatory or
governmental agencies and bodies, to own, lease and operate its properties
and conduct its business as now being conducted and as described in the
Registration Statement and the Prospectus, and no such consent, approval,
authorization, order, registration, qualifications, license or permit
contains a materially burdensome restriction not adequately disclosed in
the Registration Statement and the Prospectus. All of the outstanding
capital stock of the Company's subsidiaries are duly and validly issued,
fully paid and nonassessable and are owned by the Company free and clear of
any liens, mortgages, pledges, charges, security interests, claims,
encumbrances and other defects in title whatsoever.
(i) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which the Company or any of its subsidiaries is
a party or to which any property of the Company or any of its subsidiaries
is subject or which is pending or, to the knowledge of the Company,
contemplated against the Company or any of its subsidiaries which might
result in any material adverse change or any development involving a
material adverse change or any development involving a material adverse
change in the business, prospects, properties, operations, condition
(financial or other) or, results of operations of the Company and its
subsidiaries taken as a whole or which is required to be disclosed in the
Registration Statement and the Prospectus.
(j) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which constitutes
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the
sale or resale of the Shares.
(k) The financial statements, including the notes thereto, and
supporting schedules included in the Registration Statement and the
Prospectus present fairly the financial position of the Company as of the
dates indicated and the results of its operations for the periods
specified; except as otherwise stated in the Registration Statement, said
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis; and the
supporting schedules included in the Registration Statement present fairly
the information required to be stated therein.
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(l) Except as described in the Prospectus, no holder of securities of
the Company has any rights to the registration of securities of the Company
because of the filing of the Registration Statement or otherwise in
connection with the sale of the Shares contemplated hereby.
(m) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940.
(n) Neither the Company nor any of its subsidiaries is in violation of
its certificate of incorporation or by-laws, as the case may be, or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any material bond, debenture,
note or other evidence of indebtedness or in any material contract,
indenture, mortgage, deed of trust, loan or credit agreement, lease, joint
venture or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of their properties may be bound,
which default would have, singly or in the aggregate, a material adverse
effect on the Company and its subsidiaries taken as a whole, or in
violation of any law, order, rule, regulation, writ, injunction, judgment
or decree of any court or governmental agency or body, the violation of
which would have, singly or in the aggregate, a material adverse effect on
the Company and its subsidiaries taken as a whole.
(o) The Shares have been approved for inclusion on the Nasdaq National
Market, subject to notice of issuance or sale, as the case may be.
(p) The Company and its subsidiaries have good and marketable title to
all the properties and assets reflected as owned in the financial
statements hereinabove described and elsewhere in the Prospectus, subject
to no lien, mortgage, pledge, charge, security interest, claim, encumbrance
or other deficit in title of any kind except those reflected in such
financial statements or elsewhere in the Prospectus or such as are not
material to the Company and its subsidiaries taken as a whole. The Company
and its subsidiaries hold their respective leased properties that are
material to the Company and its subsidiaries taken as a whole under valid
and binding leases, except for such imperfections in title to the leasehold
estates as are not material and do not interfere with the use made and
proposed to be made of such properties by the Company and its subsidiaries.
(q) The Company, together with its subsidiaries, owns and possesses
all right, title and interest in and to, or has duly licensed from third
parties a valid and enforceable right to use, all trademarks, copyrights,
patents, trade secrets and other proprietary rights (collectively, the
"Rights") presently employed by the Company and its subsidiaries in
connection with their business as described in the Prospectus, whether such
Rights are registered or unregistered, except where the failure to own,
possess or license the same would not have a material adverse effect on the
Company and its subsidiaries taken as a whole. None of the Company or its
subsidiaries have received any notice of infringement, misappropriation or
conflict from any third party as to the material Rights which has not yet
been resolved or disposed of and none of the Company or its subsidiaries
have infringed, misappropriated or otherwise conflicted with the Rights of
any third parties, which infringement, misappropriation or conflict would
have a material adverse effect upon the condition (financial or otherwise)
or results of operations of the Company and its subsidiaries taken as a
whole.
(r) There are no agreements, leases or other documents of a character
required to be described or referred to in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement by
the Act or by the Regulations that have not been described or referred to
therein or filed as required.
(s) The Company and its subsidiaries have filed all necessary federal
and state income and franchise tax returns required to be filed through the
date hereof and have paid all taxes when due, except where the failure to
file or pay such taxes, in the aggregate, could not reasonably be expected
to have a material adverse effect on the Company and its subsidiaries taken
as a whole and there is no tax deficiency that has been, or to the
knowledge of the Company might be, asserted against the Company and its
subsidiaries, or their respective properties or assets, that would have a
material adverse effect on
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the Company's ability to perform its obligations under this Agreement, the
Company's condition (financial or other) or the results of operations of
the Company or its subsidiaries taken as a whole.
(t) The Company and each of its subsidiaries maintain a system of
internal accounting controls that, taken as a whole, are sufficient to
provide reasonable assurance that: (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to maintain asset accountability; (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 the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(u) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any of its subsidiaries has been refused
any insurance coverage sought or applied for; and neither the Company nor
any of its subsidiaries has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business.
(v) No labor disputes with the employees of the Company or its
subsidiaries exists or is threatened or imminent that could result in a
material adverse change that would affect the Company's ability to perform
its obligations under this Agreement, the Company's condition (financial or
other) or the results of operations of the Company and its subsidiaries
taken as a whole.
(w) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida), relating to doing
business with the Government of Cuba or any person or affiliate located in
Cuba.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained,but subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriters and the
Underwriters, severally and not jointly, agree to purchase from the
Company, at a purchase price per share of $ , the number of Firm
Shares set forth opposite the respective names of the Underwriters in
Schedule I hereto plus any additional number of Shares which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 9 hereof.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of Skadden, Arps, Slate,
Xxxxxxx & Xxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by you and the Company, at 10:00 A.M.
on the third or fourth business day (as permitted under Rule 15c6-1 under
the Exchange Act) (unless postponed in accordance with the provisions of
Section 9 hereof) following the date of the effectiveness of the
Registration Statement (or, if the Company has elected to rely upon Rule
430A of the Regulations, the third or fourth business day (as permitted
under Rule 15c6-1 under the Exchange Act) after the determination of the
initial public offering price of the Shares), or such other time not later
than ten business days after such date as shall be agreed upon by you and
the Company (such time and date of payment and delivery being herein called
the "Closing Date"). Payment shall be made to the Company by wire transfer
in same day funds, against delivery to you for the respective accounts of
the Underwriters of certificates for the Shares to be purchased by them.
Certificates for the Shares shall be registered in such name or names and
in such authorized denominations as you may request in writing at least two
full business days prior to the Closing Date. The Company will permit you
to examine and package such certificates for delivery at least one full
business day prior to the Closing Date.
(c) In addition, the Company hereby grants to the Underwriters the
option to purchase up to Additional Shares at the same purchase
price per share to be paid by the Underwriters to the Company for the Firm
Shares as set forth in this Section 2, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option
may be exercised at any time, in
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whole or in part, on or before the thirtieth day following the date of the
Prospectus, by written notice by you to the Company. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is
being exercised and the date and time, as reasonably determined by you,
when the Additional Shares are to be delivered (such date and time being
herein sometimes referred to as the "Additional Closing Date"); provided,
however, that the Additional Closing Date shall not be earlier than the
Closing Date or earlier than the second full business day after the date on
which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions
of Section 9 hereof). Certificates for the Additional Shares shall be
registered in such name or names and in such authorized denominations as
you may request in writing at least two full business days prior to the
Additional Closing Date. The Company will permit you to examine and package
such certificates for delivery at least one full business day prior to the
Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall be the
number which bears the same ratio to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to Firm Shares, subject, however, to such
adjustments to eliminate any fractional shares as you in your sole discretion
shall make.
Payment for the Additional Shares shall be made by wire transfer in same
day funds) at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional Shares to you
for the respective accounts of the Underwriters.
3. Offering. Upon your authorization of the release of the Firm Shares,
the Underwriters propose to offer the Shares for sale to the public upon the
terms set forth in the Prospectus.
4. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(a) If the Registration Statement has not yet been declared effective
the Company will use its best efforts to cause the Registration Statement
and any amendments thereto to become effective as promptly as possible, and
if Rule 430A is used for the filing of the Prospectus is otherwise required
under Rule 424(b) or Rule 434, the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) or
Rule 434 within the prescribed time period and will provide evidence
satisfactory to you of such timely filing. If the Company elects to rely on
Rule 434, the Company will prepare and file a term sheet that complies with
the requirements of Rule 434.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement
and any amendments thereto become effective, (ii) of any request by the
Commission for any amendment of or supplement to the Registration Statement
or the Prospectus or for any additional information, (iii) of the mailing
or the delivery to the Commission for filing of any amendment of or
supplement to the Registration Statement or the Prospectus, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto or of
the initiation, or the threatening, of any proceedings therefor, (v) of the
receipt of any comments from the Commission, and (vi) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for that purpose. If the Commission shall
propose or enter a stop order at any time, the Company will make every
reasonable effort to prevent the issuance of any such stop order and, if
issued, to obtain the lifting of such order as soon as possible. The
Company will not file any amendment to the Registration Statement or any
amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b) or Rule 434) that differs from
the prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement
to which you shall reasonably object in writing after being timely
furnished in advance a copy thereof.
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(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would, in
the judgment of the Underwriters or the Company include an untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall be
necessary at any time to amend or supplement the Prospectus or Registration
Statement to comply with the Act or the Regulations, the Company will
notify you promptly and prepare and file with the Commission an appropriate
amendment or supplement (in form and substance satisfactory to you) which
will correct such statement or omission and will use its best efforts to
have any amendment to the Registration Statement declared effective as soon
as possible.
(c) The Company will promptly deliver to you two signed copies of the
Registration Statement, including exhibits and all amendments thereto, and
the Company will promptly deliver to each of the Underwriters such number
of copies of any preliminary prospectus, the Prospectus, the Registration
Statement, and all amendments of and supplements to such documents, if any,
as you may reasonably request.
(d) The Company will endeavor in good faith, in cooperation with you,
at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating
to the offering or sale of the Shares of such jurisdictions as you may
designate and to maintain such qualification in effect for so long as
required for the distribution thereof; except that in no event shall the
Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process.
(e) The company will make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to you as soon as
practicable, but not later than 45 days after the end of its fiscal quarter
in which the first anniversary date of the effective date of the
Registration Statement occurs, an earning statement (in form complying with
the provisions of Rule 158 of the Regulations) covering a period of at
least twelve consecutive months beginning after the effective date of the
Registration Statement.
(f) During the period of 180 days from the date of the Prospectus, the
Company will not, without your prior written consent, issue, sell, offer or
agree to sell, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, any Common Stock (or any securities convertible
into, exercisable for or exchangeable for Common Stock), and the Company
will obtain the undertaking of each of its officers and directors and such
of its shareholders as have been heretofore designated by you and listed on
Schedule II attached hereto not to engage in any of the aforementioned
transactions on their own behalf, other than (i) the Company's sale of
Shares hereunder, (ii) the Company's issuance of Common Stock upon the
exercise of presently outstanding stock options, (iii) grants of options to
purchase Common Stock or awards of restricted stock pursuant to option and
restricted stock plans in existence on the date hereof, provided such
options are not exercisable within such 180-day period, and (iv) the
pledges of shares of Common Stock by any such officers, directors or
stockholders provided that the pledgee agrees in writing to be bound by the
same restrictions in the event of foreclosure on the pledged shares.
(g) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of (i) all
reports to its shareholders; and (ii) all reports, financial statements and
proxy or information statements filed by the Company with the Commission or
any national securities exchange.
(h) The Company will apply the proceeds from the sale of the Shares as
set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will use its best efforts to cause the Shares to be
quoted on the National Association of Securities Dealers Automated
Quotation National Market System.
(j) The Company will file with the Commission such reports on Form SR
as may be required pursuant to Rule 463 of the Regulations.
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5. Payment of Expense. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits thereto), and preliminary prospectus, the Prospectus and any amendments
or supplements thereto (including, without limitation, fees and expenses of the
Company's accountants and counsel), the underwriting documents (including this
Agreement and the Agreement Among Underwriters and the Selling Agreement) and
all other documents related to the public offering of the Shares (including
those supplied to the Underwriters in quantities as hereinabove stated), (ii)
the issuance, transfer and delivery of the Shares to the Underwriters, including
any transfer or other taxes payable thereon, (iii) the qualification of the
Shares under state or foreign securities or Blue Sky laws, including the costs
of printing and mailing a preliminary and final "Blue Sky Survey" and the fees
of counsel for the Underwriters and such counsel's disbursements in relation
thereto, (iv) quotation of the Shares on the National Association of Securities
Dealers Automated Quotation National Market System, (v) filing fees of the
Commission and the National Association of Securities Dealers, Inc., (vi) the
cost of printing certificates representing the Shares and (vii) the cost and
charges of any transfer agent or registrar.
6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6 "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Skadden, Arps, Slate,
Xxxxxxx & Xxxx ("Underwriters' Counsel") pursuant to this Section 6 of any
misstatement or omission, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M., New York time, on the date of this Agreement, or at such
later time and date as shall have been consented to in writing by you; if
the Company shall have elected to rely upon Rule 430A or Rule 434 of the
Regulations, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 4(a) hereof; and, at or prior to
the Closing Date no stop order suspending the effectiveness of the
Registration Statement or any post-effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued
and no proceedings therefor shall have been initiated or threatened by the
Commission.
(b) At the Closing Date you shall have received the opinion of Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, counsel for the Company, dated the Closing Date
addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. Each of the Company
and its subsidiaries is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of
its properties (owned, leased or licensed) or the nature or conduct of
its business makes such qualification necessary, except for those
failures to be so qualified or in good standing which will not in the
aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole. Each of the Company and its subsidiaries
has all requisite corporate authority to own, lease and license its
respective properties and conduct its business as now being conducted as
described in the Registration Statement and the Prospectus. All of the
issued and outstanding capital stock of each subsidiary of the Company
has been duly and validly issued and is fully paid and nonassessable and
were not issued in violation of preemptive rights and, is owned directly
or indirectly by the Company, free and clear of any lien, encumbrance,
claim, security interest, restriction on transfer, shareholders'
agreement, voting trust or other defect of title whatsoever.
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(ii) The Company has an authorized capital stock as set forth in
the Registration Statement and the Prospectus. All of the outstanding
shares of Common Stock are duly and validly authorized and issued, are
fully paid and nonassessable and were not issued in violation of or
subject to any preemptive rights. The Shares to be delivered on the
Closing Date have been duly and validly authorized and, when delivered
by the Company in accordance with this Agreement, will be duly and
validly issued, fully paid and nonassessable and will not have been
issued in violation of or subject to any preemptive rights. The Common
Stock, the Firm Shares and the Additional Shares conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(iii) The form of certificates for the Shares complies in all
material respects with the requirements of the Delaware General
Corporation Law and the Company's bylaws. The Shares to be sold under
this Agreement to the Underwriters are duly authorized for quotation, on
the National Association of Securities Dealers Automated Quotation
National Market System.
(iv) This Agreement has been duly and validly authorized, executed
and delivered by the Company.
(v) There is no litigation or governmental or other action, suit,
proceeding or investigation before any court or before or by any public,
regulatory or governmental agency or body pending or to the best of such
counsel's knowledge, threatened against, or involving the properties or
business of, the Company or any of its subsidiaries, which is of a
character required to be disclosed in the Registration Statement and the
Prospectus which has not been properly disclosed therein.
(vi) The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby by the Company
do not and will not (A) conflict with or result in a breach of any of
the terms and provisions of, or constitute a default (or an event which
with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any agreement, instrument, franchise, license
or permit known to such counsel to which the Company or any of its
subsidiaries is a party or by which any of such corporations or their
respective properties or assets may be bound or (B) violate or conflict
with any provision of the certificate of incorporation or by-laws of the
Company or any of its subsidiaries, or, to the best knowledge of such
counsel, any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or with
any court or any public, governmental, or regulatory agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of their respective properties or assets is required for the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, except for (1) such as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters (as to which such
counsel need express no opinion) and (2) such as have been made or
obtained under the Act.
(vii) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial data included or
incorporated by reference therein, as to which no opinion need be
rendered) comply as to form in all material respects with the
requirements of the Act and the Regulations.
(viii) The Registration Statement is effective under the Act, and,
to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereof has been issued and no proceedings therefor have been
initiated or threatened by the Commission and all filings required by
Rule 424(b) of the Regulations have been made.
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(ix) The descriptions in the Registration Statement and the
Prospectus of the provisions of the certificate of incorporation and
bylaws of the Company accurately reflect, in all material respects, such
provisions.
(x) The descriptions in the Registration Statement and the
Prospectus, as regards any part of the Registration Statement or the
Prospectus not purporting to be made on authority of an expert, of the
provisions of statutes, regulations, government proceedings, agreements
and contracts, if any, accurately reflect, in all material respects,
such provisions, and such counsel does not know of any statutes,
regulations or government proceedings required to be described or
referred to in the Registration Statement or Prospectus that are not
described or referred to therein.
(xi) To the knowledge of such counsel, neither the Company nor any
of its subsidiaries is in violation of its certificate of incorporation
or bylaws and neither the Company nor any of its subsidiaries is in
default under (and no event has occurred which with notice, lapse of
time or both would constitute a breach of or a default under) any
agreement, license, mortgage, deed of trust, loan or credit agreement,
indenture or instrument filed as an exhibit to the Registration
Statement, which violation or default would have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(xii) To the knowledge of such counsel after due inquiry, there are
no agreements, contracts, leases or documents of a character required to
be described or referred to in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement by
the Act or by the Regulations that are not described or referred to
therein or filed as required.
(xiii) Neither the Company nor any of its subsidiaries is an
"investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940 and,
upon its receipts of any proceeds from the sale of the Shares, will no
become or be deemed to be an "investment company" thereunder.
(xiv) In addition, such opinion shall also contain a statement that
such counsel has participated in conferences with officers and
representatives of the Company, representatives of the independent
public accountants for the Company and the Underwriters at which the
contents and the Prospectus and related matters were discussed and, no
facts have come to the attention of such counsel which would lead such
counsel to believe that either the Registration Statement at the time it
became effective (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule
430A(b) or Rule 434, if applicable), or any amendment thereof made prior
to the Closing Date as of the date of such amendment, contained an
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus as of its date (or any
amendment thereof or supplement thereto made prior to the Closing Date
as of the date of such amendment or supplement) and as of the Closing
Date contained or contains an untrue statement of a material fact or
omitted or omits to state any 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 (it being
understood that such counsel need express no belief or opinion with
respect to the financial statements and schedules and other financial
data included or incorporated by reference therein).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon
an opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to
Underwriters' Counsel, familiar with the applicable laws; (B) as to matters
of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and certificates or other written statements of
officers of departments of various jurisdictions having custody of
documents respecting the corporate existence or good standing of the
Company and its subsidiaries, provided that copies of any such statements
or certificates shall be delivered to Underwriters' Counsel. The opinion of
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such counsel for the Company shall state that the opinion of any such other
counsel is in form satisfactory to such counsel and, in their opinion, you
and they are justified in relying thereon.
(c) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and
the Underwriters shall have received from said Underwriters' Counsel a
favorable opinion, dated as of the Closing Date with respect to the
issuance and sale of the Shares, the Registration Statement and the
Prospectus and such other related matters as you may reasonably require,
and the Company shall have furnished to Underwriters' Counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(d) At the Closing Date you shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date to the effect that (i) the condition set forth in
subsection (a) of this Section 6 has been satisfied, (ii) as of the date
hereof and as of the Closing Date the representations and warranties of the
Company set forth in Section 1 hereof are accurate, (iii) as of the Closing
Date the obligations of the Company to be performed hereunder on or prior
thereto have been duly performed and (iv) subsequent to the respective
dates as of which information is given in the Registration Statement and
the Prospectus, the Company and its subsidiaries have not sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any material adverse
change, or any development involving a material adverse change, in the
business prospects, properties, operations, condition (financial or
otherwise), or results of operations of the Company and its subsidiaries
taken as a whole, except in each case as described in or contemplated by
the Prospectus.
(e) At the time this Agreement is executed and at the Closing Date,
you shall have received a letter, from Ernst & Young LLP, independent
public accountants for the Company, dated, respectively, as of the date of
this Agreement and as of the Closing Date addressed to the Underwriters and
in form and substance satisfactory to you, to the effect that: (i) they are
independent certified public accountants with respect to the Company within
the meaning of the Act and the Regulations and stating that the answer to
Item 10 of the Registration Statement is correct insofar as it relates to
them; (ii) stating that, in their opinion, the financial statements and
schedules of the Company included in the Registration Statement and the
Prospectus and covered by their opinion therein comply as to form in all
material respects with the applicable accounting requirements of the Act
and the applicable published rules and regulations of the Commission
thereunder; (iii) on the basis of procedures consisting of a reading of the
latest available unaudited interim consolidated financial statements of the
Company, and its subsidiaries, a reading of the minutes of meetings and
consents of the shareholders and boards of directors of the Company and its
subsidiaries and the committees of such boards subsequent to March 31,
1996, inquiries of officers and other employees of the Company and its
subsidiaries who have responsibility for financial and accounting matters
of the Company and its subsidiaries with respect to transactions and events
subsequent to March 31, 1996 and other specified procedures and inquiries
to a date not more than five days prior to the date of such letter, nothing
has come to their attention that would cause them to believe that: (A) the
unaudited consolidated financial statements and schedules of the Company
presented in the Registration Statement and the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and, if applicable, the Exchange Act and the
applicable published rules and regulations of the Commission thereunder or
that such unaudited consolidated financial statements are not fairly
presented in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
consolidated financial statements included in the Registration Statement
and the Prospectus; (B) with respect to the period subsequent to June 30,
1996 there were, as of the date of the most recent available monthly
consolidated financial statements of the Company and its subsidiaries, if
any, and as of a specified date not more than five days prior to the date
of such letter, any changes in the capital stock or long-term indebtedness
of the Company or any decrease in the net current assets or stockholders'
equity of the Company, in each case as compared with the amounts shown in
the most recent balance sheet presented in the Registration
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Statement and the Prospectus, except for changes or decreases which the
Registration Statement and the Prospectus disclose have occurred or may
occur or which are set forth in such letter or (C) that during the period
from June 30, 1996 to the date of the most recent available monthly
consolidated financial statements of the Company and its subsidiaries, if
any, and to a specified date not more than five days prior to the date of
such letter, there was any decrease, as compared with the corresponding
period in the prior fiscal year, in total revenues, or total or per share
net income, except for decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur or which are set forth in
such letter; and (iv) stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and earnings, and other
financial information pertaining to the Company and its subsidiaries set
forth in the Registration Statement and the Prospectus, which have been
specified by you prior to the date of this Agreement, to the extent that
such amounts, numbers, percentages, and information may be derived from the
general accounting and financial records of the Company and its
subsidiaries or from schedules furnished by the Company, and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries, and other
appropriate procedures specified by you set forth in such letter, and found
them to be in agreement.
(f) Prior to the Closing Date the Company shall have furnished to you
such further information, certificates and documents as you may reasonably
request.
(g) You shall have received from each person who is a director or
officer of the Company or such shareholder as have been heretofore
designated by you and listed on Schedule II hereto an agreement to the
effect that such person will not, directly or indirectly, without your
prior written consent, offer, sell, offer or agree to sell, grant any
option to purchase or otherwise dispose (or announce any offer, sale, grant
of an option to purchase or other disposition) of any shares of Common
Stock (or any securities convertible into, exercisable for or exchangeable
or exercisable for shares of Common Stock) for a period of 180 days after
the date of the Prospectus other than the pledge of shares of Common Stock
by any such director, officer or shareholder listed on Schedule II,
provided that the pledgee agrees in writing to be bound by such
restrictions in the event of foreclosure on the pledged shares.
(h) At the effective date of the Registration Statement, the Shares
shall have been approved for quotation on the National Association of
Securities Dealers Automated Quotation National Market System.
If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to you or to Underwriters'
Counsel pursuant to this Section 6 shall not be in all material respects
reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, all obligations of the Underwriters hereunder may be cancelled by you
at, or at any time prior to, the Closing Date and the obligations of the
Underwriters to purchase the Additional Shares may be cancelled by you at, or at
any time prior to, the Additional Closing Date. Notice of such cancellation
shall be given to the Company in writing, or by telephone, telex or telegraph,
confirmed in writing.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including
but not limited to attorneys' fees and any and all expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts
paid in settlement of any claim or litigation), joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Shares, as originally
filed or any amendment thereof, or any related preliminary prospectus or
the
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Prospectus, or in any supplement thereto or amendment thereof, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company will
not be liable in any such case to the extent but only to the extent that
any such loss, liability, claim, damage or expense arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to indemnify
and hold harmless the Company, each of the directors of the Company, each
of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation),
jointly or several, to which they or any of them may become subject under
the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for
the registration of the Shares, as originally filed or any amendment
thereof, or any related preliminary prospectus or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter through you expressly for use therein; provided, however, that
in no case shall any Underwriter be liable or responsible for any amount in
excess of the underwriting discount applicable to the Shares purchased by
such Underwriter hereunder. This indemnity will be in addition to any
liability which any Underwriter may otherwise have including under this
Agreement. The Company acknowledges that the statements set forth in the
last paragraph of the cover page and in the paragraphs under the
caption "Underwriting" in the Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter expressly for use
in the registration statement relating to the Shares as originally filed or
in any amendment thereof, any related preliminary prospectus or the
Prospectus or in any amendment thereof or supplement thereto, as the case
may be.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not
relieve it from any liability which it may have under this Section 7). In
case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the
extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof with counsel satisfactory to such indemnified
party. Notwithstanding the foregoing, the indemnified party or parties
shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by one of the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
or (iii) such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different
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from or additional to those available to one or all of the indemnifying
parties (in which case the indemnifying parties shall not have the right to
direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by
the indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent;
provided, however, that such consent was not unreasonably withheld.
8. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company any contribution received by
the Company from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company within the meaning
of Section 15 of the Act of Section 20(a) of the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company and one or more of the Underwriters may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company and the Underwriters from the offering of the Shares or,
if such allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 7 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and the Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Underwriters shall be deemed to be in the same proportion
as (x) the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and (y) the
underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and of the Underwriters 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 or the
Underwriters and the parties' relative intent, 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
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this Section
8, (i) in no case shall any Underwriter be liable or responsible for any amount
in excess of the underwriting discount applicable to the Shares purchased by
such Underwriter hereunder, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 8 and the
preceding sentence, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. For purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 (a) of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 (a) of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to clauses (i) and (ii) of this Section 8. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not
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relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 8 or otherwise. No party shall
be liable for contribution with respect to any action or claim settled without
its consent; provided, however, that such consent was not unreasonably withheld.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default
relates do not (after giving effect to arrangements, if any, made by you
pursuant to subsection (b) below) exceed in the aggregate 10% of the number
of Firm Shares or Additional Shares, to which the default relates shall be
purchased by the non-defaulting Underwriters in proportion to the
respective proportions which the numbers of Firm Shares set forth opposite
their respective names in Schedule I hereto bear to the aggregate number of
Firm Shares set forth opposite the names of the non-defaulting
Underwriters.
(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including
any non-defaulting Underwriter or Underwriters who so agree) to purchase
such Firm Shares or Additional Shares, as the case may be, to which such
default relates on the terms contained herein. In the event that within 5
calendar days after such a default you do not arrange for the purchase of
the Firm Shares or Additional Shares, as the case may be, to which such
default relates as provided in this Section 9, this Agreement or, in the
case of a default with respect to the Additional Shares, the obligations of
the Underwriters to purchase and of the Company to sell the Additional
Shares shall thereupon terminate, without liability on the part of the
Company with respect thereto (except in each case as provided in Section 5,
7(a) and 8 hereof) or the Underwriters, but nothing in this Agreement shall
relieve a defaulting Underwriter or Underwriters of its or their liability,
if any, to the other Underwriters and the Company for damages occasioned by
its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to which
the default relates are to be purchased by the non-defaulting Underwriters,
or are to be purchased by another party or parties as aforesaid, you or the
Company shall have the right to postpone the Closing Date or Additional
Closing Date, as the case may be for a period, not exceeding five business
days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the
opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include
any party substituted under this Section 9 with like effect as if it had
originally been a party to this Agreement with respect to such Firm Shares
and Additional Shares.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement, including the agreements contained in Section 5,
the indemnity agreements contained in Section 7 and the contribution agreements
contained in Section 8, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement: Termination.
(a) This Agreement shall become effective, upon the later of when (i)
you and the Company shall have received notification of the effectiveness
of the Registration Statement or (ii) the execution of this Agreement. If
either the initial public offering price or the purchase price per Share
has not been agreed upon prior to 5:00 P.M., New York time, on the fifth
full business day after the Registration Statement shall have become
effective, this Agreement shall thereupon terminate without liability to
the Company
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or the Underwriters except as herein expressly provided. Until this
Agreement becomes effective as aforesaid, it may be terminated by the
Company by notifying you or by you notifying the Company. Notwithstanding
the foregoing, the provisions of this Section 11 and of Sections 1, 5, 7
and 8 hereof shall at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement at any time
prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing
Date, as the case may be, if (A) any domestic or international event or act
or occurrence has materially disrupted, or in your opinion will in the
immediate future materially disrupt, the market for the Company's
securities or securities in general; or (B) if trading on the New York or
American Stock Exchanges shall have been suspended, or minimum or maximum
prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required, on the New York or American Stock
Exchanges by the New York or American Stock Exchanges or by order of the
Commission or any other governmental authority having jurisdiction; or (C)
if a banking moratorium has been declared by a state or federal authority
or if any new restriction materially adversely affecting the distribution
of the Firm Shares or the Additional Shares, as the case may be, shall have
become effective; or E (i) if the United States becomes engaged in
hostilities or there is an escalation of hostilities involving the United
States or there is a declaration of a national emergency or war by the
United States or (ii) if there shall have been such change in political,
financial or economic conditions if the effect of any such event in (i) or
(ii) as in your judgment makes it impracticable or inadvisable to proceed
with the offering, sale and delivery of the Firm Shares or the Additional
Shares, as the case may be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be by
telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or
if the sale of the Shares provided for herein is not consummated because
any condition to the obligations of the Underwriters set forth herein is
not satisfied or because of any refusal, inability or failure on the part
of the Company to perform any agreement herein or comply with any provision
hereof, the Company will, subject to demand by you, reimburse the
Underwriters for all out-of-pocket expenses (including the fees and
expenses of their counsel), incurred by the Underwriters in connection
herewith.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and confirmed
in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, X.X. 00000, Attention: Xxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxxx; if sent
to the Company, shall be mailed, delivered, or telegraphed and confirmed in
writing to the Company, 00000 Xx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000,
Attention: Xxx X. Xxxxx.
13. Parties. This Agreement shall insure solely to the benefit of, and
shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 7 and
8, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Shares from any of the Underwriters.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
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If the foregoing correctly sets forth the understanding between you and the
Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
FIRST VIRTUAL HOLDINGS INCORPORATED
By
Accepted as of the date first above
written
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
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SCHEDULE I
NUMBER OF FIRM SHARES
NAME OF UNDERWRITER TO BE PURCHASED
------------------------------------------------------------------------- ---------------------
Bear, Xxxxxxx & Co., Inc.................................................
Xxxxx & Company..........................................................
Xxxxxx Brothers..........................................................
Total..........................................................
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SCHEDULE II
[NAMES OF SHAREHOLDERS SUBJECT TO THE LOCK-UP PROVISION]
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