DRAFT OF
04/16/98
EXHIBIT 1.1
10,125,000 Shares of Common Stock
GENESIS DIRECT, INC.
UNDERWRITING AGREEMENT
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, 1998
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Bear, Xxxxxxx & Co. Inc.
Xxxxxxx, Sachs & Co.
Xxxxx Xxxxxx Inc.
Invemed Associates, Inc.
Xxxxxx Xxxxxx & Company, Inc.
as Representatives of the
several Underwriters named
in Schedule I annexed hereto
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c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Ladies and Gentlemen:
Genesis Direct, a Delaware corporation (the "Company"), and each of
the selling stockholders listed on Schedule II hereto (the "Selling
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Stockholders"), hereby confirm their respective agreements with you as follows:
1. Underwriters. The term "Underwriters", as used herein, refers
collectively to you and the other underwriters named in Schedule I hereto, for
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whom you are acting as representatives. Except as may be expressly set forth
below, any reference to you in this Underwriting Agreement shall be solely in
your capacity as representatives of the Underwriters, and the Company and the
Selling Stockholders shall be entitled to act and rely upon any statement,
request, notice, consent, waiver or agreement purportedly on behalf of any
Underwriter made or given by Bear, Xxxxxxx & Co. Inc. ("Bear, Xxxxxxx").
2. Description of Stock. The Company and the Selling Stockholders
severally propose to sell to the Underwriters an aggregate of 10,125,000 shares
(the "Firm Shares") of Common Stock, par value $.01 per share (the "Common
Stock"), of the Company, upon the terms and subject to the conditions set forth
herein. Of the Firm Shares, 8,577,406 are to be issued and sold by the Company
and 1,547,594 in the aggregate are to be sold severally by the Selling
Stockholders. The Company also proposes to grant to the Underwriters the option
to purchase from the
Company, for the sole purpose of covering over-allotments, if any, in connection
with the sale of the Firm Shares, an aggregate of up to 1,518,750 additional
shares (the "Additional Shares") of Common Stock upon the terms and subject to
the conditions set forth herein and for the purposes set forth in Section 5(b)
hereof. The Firm Shares and the Additional Shares are hereinafter referred to
collectively as the "Shares."
3. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Underwriter that:
(a) The Company meets the requirements for the use of a Registration
Statement on Form S-1 under the Securities Act of 1933 (the "Act"), and has
prepared and filed with the Securities and Exchange Commission (the
"Commission"), pursuant to the Act and the rules and regulations
promulgated by the Commission thereunder (the "Regulations"), a
registration statement on Form S-1 (File No. 333-47455) relating to the
Shares and may have filed one or more amendments thereto, including a
preliminary prospectus relating to the offering of the Shares. The Company
next proposes to file with the Commission a further amendment to the
registration statement, including therein a final prospectus, necessary to
permit the registration statement to become effective or, if no amendment
is required for that purpose, then promptly following the effectiveness of
the registration statement, the Company proposes to file with the
Commission, in accordance with Rules 430A and 424(b)(1) or Rule 424(b)(4)
of the Regulations, a final prospectus with respect to the offering of the
Shares, the final prospectus so filed in either case to include all Rule
430A Information (as hereinafter defined) and to conform, in content and
form, to the last printer's proof thereof furnished to and approved by you
immediately prior to such filing. As used in this Underwriting Agreement,
(i) "Effective Date" means the date that the registration statement
hereinabove referred to, or the most recent post-effective amendment
thereto, if any, is declared effective by the Commission, (ii)
"Registration Statement" means such registration statement as last amended
prior to the time the same was declared effective by the Commission,
including all exhibits and schedules thereto and all Rule 430A Information
deemed to be included therein at the Effective Date pursuant to Rule 430A
of the Regulations, (iii) "Rule 430A Information" means information with
respect to the Shares and the public offering thereof permitted, pursuant
to the provisions of paragraph (a) of Rule 430A of
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the Regulations, to be omitted from the form of prospectus included in the
Registration Statement at the time it is declared effective by the
Commission, (iv) "Prospectus" means the form of final prospectus relating
to the Shares first filed with the Commission pursuant to Rule 424(b) of
the Regulations or, if no filing pursuant to Rule 424(b) is required, the
form of final prospectus included in the Registration Statement at the
Effective Date and (v) "Preliminary Prospectus" means any preliminary
prospectus (as described in Rule 430 of the Regulations) with respect to
the Shares that omits Rule 430A Information.
(b) The Registration Statement conforms and on the Effective Date
will conform, and the Prospectus on the date thereof and on the date first
filed with the Commission pursuant to Rule 424(b) of the Regulations (if
required) will conform, in all material respects with the applicable
requirements of the Act and the Regulations. On the Effective Date, the
date the Prospectus is first filed with the Commission pursuant to Rule
424(b) of the Regulations (if required), at all times subsequent thereto to
and including the Closing Date (as defined in Section 5(a)(ii) hereof) and,
if later, the Additional Closing Date (as defined in Section 5(b)(ii)
hereof), when any post-effective amendment to the Registration Statement
becomes effective or any supplement to the Prospectus is filed with the
Commission, and during such longer period as the Prospectus may be
required to be delivered under the Act in connection with sales of Shares
by the Underwriters or a dealer, the Registration Statement and the
Prospectus (as amended or supplemented if the Company shall have filed with
the Commission an amendment or supplement thereto) did not and will not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading. No order
preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission, and when any Preliminary Prospectus was first
filed with the Commission (whether filed as part of the Registration
Statement or an amendment thereof 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 conformed in all material
respects with the applicable requirements of the Act and the Regulations
thereunder and did not contain an untrue statement of a
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material fact or omit to state any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. No
representation and warranty, however, is made in this subsection 3(b) by
the Company with respect to written information contained in or omitted
from the Registration Statement, the Prospectus, any Preliminary
Prospectus, or any amendment or supplement in reliance upon and in
conformity with written information with respect to the Underwriters and
the plan of distribution of the Shares furnished to the Company on behalf
of any Underwriter by Bear, Xxxxxxx expressly for use in connection with
the preparation thereof.
(c) Each contract, agreement, instrument, lease, license or other item
required to be described in the Registration Statement or the Prospectus or
filed as an exhibit to the Registration Statement has been so described or
filed, as the case may be.
(d) Ernst & Young LLP, whose separate report appears in the
Prospectus, are independent public accountants with respect to the Company,
as required by and within the meaning of the Act and the Regulations. The
consolidated financial statements and schedules (including the related
notes) of the Company, its subsidiaries and their predecessors (the
"Company Financials") included in the Registration Statement or any
Preliminary Prospectus, or to be included in the Prospectus fairly present
the consolidated financial position, results of operations and cash flows
of the Company, its subsidiaries and their predecessors and the other
information purported to be shown therein at the respective dates and for
the respective periods to which they apply. The Company Financials have
been prepared in accordance with generally accepted accounting principles
as in effect in the United States ("US GAAP") consistently applied
throughout the periods involved, and are, in all material respects, in
accordance with the books and records of the Company, its subsidiaries and
their predecessors, as the case may be. The financial statements
(including the related notes) of the other entities listed in the "Index to
Financial Statements" in the Preliminary Prospectus (the "Acquired Company
Financials") included in the Registration Statement or any Preliminary
Prospectus, or to be included in the Prospectus fairly present the
financial position, results of operations and cash flows of such entities
and the other information purported to be shown therein at the respective
dates and for the respective
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periods to which they apply. The Acquired Company Financials have been
prepared in accordance with US GAAP consistently applied throughout the
periods involved, and are, in all material respects, in accordance with the
books and records of such entities. The "pro forma" financial information
included in the Registration Statement or any Preliminary Prospectus, or to
be included in the Prospectus, fairly present the information purported to
be shown therein at the respective dates thereof and for the respective
periods covered thereby and all adjustments have been properly applied.
The assumptions in such pro forma financial information are reasonable. No
other financial statements are required by Form S-1 or otherwise to be
included in the Registration Statement or the Prospectus other than those
included therein.
(e) Subsequent to the respective dates as of which information is
given in the Registration Statement, except as set forth in the
Registration Statement or as may be set forth in the Prospectus, there has
not been any material adverse change in the business, properties,
operations, condition (financial or other) or results of operations of the
Company and the subsidiaries (as defined below) 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 of the Company included in the
Registration Statement, and except as described in the Registration
Statement or as may be described in the Prospectus, (i) neither the Company
nor any of its subsidiaries (A) has incurred or undertaken any liabilities
or obligations, direct or contingent, that are, individually or in the
aggregate, material to the Company and its subsidiaries taken as a whole,
or (B) entered into any transaction not in the ordinary course of business
that is material to the Company and its subsidiaries taken as a whole; and
(ii) the Company has not declared or paid any dividend on or made any
distribution of or with respect to any shares of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
otherwise acquire any shares of its or its subsidiaries' capital stock. As
used in this Underwriting Agreement, the term "subsidiary" means any
corporation, partnership, joint venture, association, company, business
trust or other entity in which the Company directly or indirectly (i)
beneficially owns or controls a majority of the outstanding voting
securities having by the terms thereof ordinary voting power to elect a
majority of the board of directors (or other body fulfilling a
substantially similar function)
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of such entity (irrespective of whether or not at the time any class or
classes of such voting securities shall have or might have voting power by
reason of the happening of any contingency) or (ii) has the authority or
ability to control the policies of such entity (including, but without
limitation thereto, any partnership of which the Company or a subsidiary is
a general partner or owns or has the right to obtain a majority of limited
partnership interests and any joint venture in which the Company or a
subsidiary has liability similar to the liability of a general partner of a
partnership or owns or has the right to obtain a majority of the joint
venture interests).
(f) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Underwriting
Agreement and to issue, sell and deliver the Shares in accordance with the
terms and conditions hereof. This Underwriting Agreement has been duly and
validly authorized, executed and delivered by the Company and is a legal
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity), and
except insofar as rights to indemnification and contribution contained
herein may be limited by federal or state securities laws or related public
policy.
(g) The Company's execution and delivery of, and its performance of
its obligations under, this Underwriting Agreement and the consummation of
the transactions con templated hereby, will not (i) conflict with or result
in a breach of any of the terms and provisions of, or constitute a default
under (or an event that with notice or lapse of time, or both, would
constitute a default under) or require approval or consent 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
the terms of (A) any agreement, contract, indenture, mortgage, lease,
license, arrangement or understanding to which the Company or any of its
subsidiaries is a party, or to which any of its properties is subject, that
is material to the Company and the subsidiaries taken as a whole
(hereafter, collectively, "Material
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Contracts") (except for those conflicts, breaches or defaults for which
consent or approval has been obtained by the Company prior to the date
hereof, and copies evidencing such consent or approval have been provided
to Bear, Xxxxxxx) or (B) any governmental franchise, license or permit
heretofore issued to the Company or any of its subsidiaries that is
material to the Company and its subsidiaries taken as a whole (hereafter,
collectively, "Material Permits"), (ii) violate or conflict with any
provision of the certificate of incorporation, by-laws or similar governing
instruments of the Company or any of its subsidiaries listed on Schedule
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III hereto (the "Material Subsidiaries") or (iii) violate or conflict with
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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 Material Subsidiary or any of its respective
properties or assets, except for those violations or conflicts, that,
individually or in the aggregate, would not have a material adverse effect
on the Company and its subsidiaries taken as a whole (hereafter, a
"Material Adverse Effect").
(h) 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 its respective properties or
assets is required for the Company's execution and delivery of, and its
performance of its obligations under, this Underwriting Agreement, and the
consummation of the transactions contemplated hereby, except the
registration of the Shares under the Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the authorization of the Shares for
trading on the Nasdaq Stock Market and such filings and registrations as
may be required under state securities or "Blue Sky" laws and the
securities laws of foreign jurisdictions in connection with the purchase
and distribution of the Shares by the Underwriters.
(i) All of the currently outstanding shares of capital stock of the
Company, and all of the outstanding shares of capital stock (or similar
interests) of each of its subsidiaries, have been 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 of Common
Stock of the Company to be outstanding on the Closing Date, including the
Shares, have been duly authorized and, when issued (and, in the case of the
Shares,
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delivered and sold in accordance with the terms of this Underwriting
Agreement) will be validly issued, fully paid and nonassessable, and will
not have been issued in violation of or be subject to any preemptive
rights. Upon delivery of and payment for the Shares in accordance with
this Underwriting Agreement, the Underwriters will receive valid title to
those of the Shares to be purchased by them from the Company, free and
clear of all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts. The Company has, as of the
date hereof, and will have, as of the Closing Date and the Additional
Closing Date, if any, an authorized and outstanding capitalization as set
forth in the Registration Statement and as shall be set forth in the
Prospectus, both on an historical basis and as adjusted to give effect to
the offering of the Shares. The Company's capital stock conforms to the
description thereof set forth in the Registration Statement and as shall be
set forth in the Prospectus. The Company owns directly or indirectly such
percentage of the outstanding capital stock (or similar interests) of each
of its subsidiaries as is set forth opposite the name of such subsidiary in
Schedule IV hereto, free and clear of all claims, liens, security
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interests, pledges, charges, encumbrances, stockholders agreements and
voting trusts, except as otherwise described in said Schedule IV.
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(j) There is no commitment, plan or arrangement to issue, and no
outstanding option, warrant or other right calling for the issuance of, any
shares of capital stock (or similar interests) of the Company or of any of
its subsidiaries or any security or other instrument that by its terms is
convertible into, exchangeable for or evidencing the right to purchase
capital stock (or similar interests) of the Company or such subsidiary,
except as described in the Registration Statement and as shall be described
in the Prospectus.
(k) The Company has no subsidiaries other than those listed in
Schedule IV hereto. Each of the Company and its subsidiaries has been duly
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organized and is validly existing as a corporation or limited liability
company in good standing under the laws of its jurisdictions of
incorporation. Each of the Company and the Material 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,
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except for those failures to be so qualified or in good standing that will
not in the aggregate have a Material Adverse Effect. Each of the Company
and the Material Subsidiaries has all requisite corporate power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, filings, 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 as shall be described in
the Prospectus (except for those the absence of which, individually or in
the aggregate, would not have a Material Adverse Effect), and no such
consent, approval, authorization, order, registration, qualification,
license or permit contains a materially burdensome restriction that is not
adequately disclosed in the Registration Statement and the Prospectus.
Neither the Company nor any Material Subsidiary has received any notice of
proceedings relating to revocation or modification of any such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses or permits (except for those the revocation or modification of
which would not have a Material Adverse Effect).
(l) Neither the Company nor any of its subsidiaries, nor to the
knowledge of the Company, any other party, is in violation or breach of, or
in default under (nor has an event occurred that with notice, lapse of time
or both, would constitute a default under), any Material Contract, and each
Material Contract is in full force and effect, and is the legal, valid and
binding obligation of the Company or such subsidiary, as the case may be,
and (subject to applicable bankruptcy, insolvency, and other laws affecting
the enforceability of creditors' rights generally) is enforceable as to the
Company or such subsidiary, as the case may be, in accordance with its
terms. Neither the Company nor any Material Subsidiary is in violation of
its certificate of incorporation, by-laws or similar governing instrument.
(m) There is no litigation, arbitration, claim, governmental or other
proceeding or investigation pending or, to the best knowledge of the
Company, threatened with respect to the Company or any of its subsidiaries,
or any of its respective operations, businesses, properties or assets,
except as described in the Registration Statement and as shall be described
in the Prospectus, that, individually or in the aggregate, would have a
Material Adverse Effect.
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Neither the Company nor any Material Subsidiary is, or, to the best
knowledge of the Company, with the giving of notice or lapse of time or
both would be, in violation of or in non-compliance with the requirements
of any Material Permit or the provisions of any law, rule, regulation,
order, judgment or decree, including, without limitation, all applicable
federal, state and local laws and regulations relating to (i) zoning, land
use, protection of the environment, human health and safety or hazardous or
toxic substances, wastes, pollutants or contaminants and (ii) employee or
occupational safety, discrimination in hiring, promotion or pay of
employees, employee hours and wages or employee benefits, except for such
violations or failures of compliance that, individually or in the
aggregate, would not have a Material Adverse Effect.
(n) Except as described in the Registration Statement and as shall be
described in the Prospectus, the Company and each of its subsidiaries have
(i) good and marketable title to all real and personal properties owned by
them, free and clear of all liens, security interests, pledges, charges,
encumbrances and mortgages, and (ii) valid, subsisting and enforceable
leases for all real and personal properties leased by them, in each case,
subject to such exceptions as, individually or in the aggregate, do not
have and are not reasonably likely to have a Material Adverse Effect. No
real property owned, leased, licensed or used by the Company or by a
Material Subsidiary lies in an area that is, or to the best knowledge of
the Company will be, subject to zoning, use or building code restrictions
that would prohibit, and no state of facts relating to the actions or
inaction of another person or entity or his, her or its ownership, leasing,
licensing or use of any real or personal property exists that would
prevent, the continued effective ownership, leasing, licensing or use of
such real property in the business of the Company or such Material
Subsidiary as presently conducted or as the Prospectus indicates are
contemplated to be conducted, subject to such exceptions as, individually
or in the aggregate, do not have and are not reasonably likely to have a
Material Adverse Effect.
(o) The Company, directly or through one or more of its subsidiaries,
owns or has the right under license to use all patents, patent rights,
licenses, inventions, copyrights, trademarks, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), service marks and trade
names (collectively, "Intellectual
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Property") necessary to conduct its business as now conducted and proposed
to be conducted as disclosed in the Registration Statement and as shall be
disclosed in the Prospectus. Neither the Company nor any of its
subsidiaries has received notice of infringement of or conflict with the
asserted rights of others with respect to any Intellectual Property. To
the best knowledge of the Company, there is no infringement by others of
any Intellectual Property of the Company or any of its subsidiaries that
has had or may in the future have a Material Adverse Effect.
(p) To the Company's best knowledge, neither the Company or any of its
subsidiaries, nor any director, officer or employee of the Company or any
such subsidiary has, directly or indirectly, used any corporate funds for
unlawful contributions, gifts, entertainment, or other unlawful expenses
relating to political activity; made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; violated any provision
of the Foreign Corrupt Practices Act of 1977, as amended; or made any
bribe, rebate, payoff, influence payment, kickback, or other unlawful
payment.
(q) Except as set forth in the Registration Statement, no person or
entity has the right, by contract or otherwise, to require registration
under the Act of shares of capital stock or other securities of the Company
or any of its subsidiaries solely because of the filing or effectiveness of
the Registration Statement and the consummation of the transactions
contemplated by this Underwriting Agreement.
(r) Neither the Company nor any of its officers, directors or
affiliates (as defined in the Regulations) has taken or will take, directly
or indirectly, prior to the termination of the offering of the Shares
contemplated by this Underwriting Agreement, any action designed to
stabilize or manipulate the price of the Common Stock, or that might
reasonably be expected to cause or result in stabilization or manipulation
of the price of the Common Stock.
(s) Neither the Company nor any of its subsidiaries is, or intends to
conduct its business in such a manner that it would become, and after
giving effect to the offering and sale of the Shares and the application of
the proceeds thereof as described in the Prospectus, neither the Company
nor any subsidiary will be, an "investment company" or a
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company "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(t) Except as may be set forth in the Prospectus, the Company has not
incurred any liability for a fee, commission or other compensation on
account of the employment of a broker or finder in connection with the
transactions contemplated by this Underwriting Agreement.
(u) The Company and each of its subsidiaries maintain systems 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 US GAAP and
to maintain accountability for assets; (iii) the access to the respective
assets of the Company and each such subsidiary, as the case may be, 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.
(v) Other than as disclosed in the Registration Statement and as shall
be disclosed in the Prospectus, no labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the best knowledge of the
Company, is imminent that, individually or in the aggregate, is or is
reasonably likely to have a Material Adverse Effect, and the Company is not
aware of any existing or imminent labor disturbance by the employees of any
of its principal suppliers or contractors that reasonably can be expected
to have a Material Adverse Effect.
(w) (i) All United States Federal income tax returns of the Company
and each of its subsidiaries required by law to be filed have been filed
and all taxes shown by such returns or otherwise assessed that are due and
payable have been paid, except assessments against which appeals have been
or will be promptly taken and (ii) the Company and its subsidiaries have
filed all other tax returns that are required to have been filed by them
pursuant to the applicable laws of all other jurisdictions, except, as to
each of the foregoing clauses (i) and (ii), insofar as the failure to file
such returns, individually or in the aggregate, would not have a Material
Adverse Effect, and the
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Company and its subsidiaries have paid all taxes due pursuant to said
returns or pursuant to any assessment received by the Company or any such
subsidiary, except for such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided in accordance
with US GAAP. The charges, accruals and reserves on the consolidated books
of the Company in respect of any tax liability for any years not finally
determined are adequate to meet any assessments or re-assessments for
additional tax for any years not finally determined, except to the extent
of any inadequacy that would not have a Material Adverse Effect.
(x) Each of the Company and its subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which the
Company and its subsidiaries are engaged. 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 from similar insurers as may be
necessary to continue its business.
(y) Except as disclosed in the Registration Statement and as shall be
disclosed in the Prospectus, there are no business relationships or related
party transactions of the nature described in Item 404 of Regulation S-K of
the Commission involving the Company or any other persons referred to in
such Item 404, except for such transactions that would be considered
immaterial under such Item 404.
4. Representations and Warranties of the Selling Stockholders. Each
of the Selling Stockholders, with respect to itself and severally and not
jointly, represents and warrants to, and agrees with, each Underwriter that:
(a) Such Selling Stockholder has been duly organized and is validly
existing as a corporation or partnership, as the case may be, in good
standing (if such concept is applicable) under the laws of its jurisdiction
of organization.
(b) Such Selling Stockholder is the sole owner of the number of
Shares set forth opposite its name on Schedule II hereto, and, upon
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delivery of and payment for the Shares to be sold by the Selling
Stockholder to each Underwriter in accordance with this Underwriting
Agreement, each Underwriter will receive valid title to such Shares, free
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and clear of all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts.
(c) There is no commitment, plan or arrangement to transfer, and no
outstanding option, warrant or other right calling for the transfer of, any
of the Shares to be sold by such Selling Stockholder to the Underwriters
pursuant to this Underwriting Agreement.
(d) This Underwriting Agreement has been duly and validly executed and
delivered by such Selling Stockholder and is a legal and binding obligation
of such Selling Stockholder, enforceable against such Selling Stockholder
in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity), and
except insofar as right to indemnification and contribution contained
herein may be limited by federal or state securities laws or related public
policy.
(e) The execution, delivery and performance by such Selling
Stockholder of this Underwriting Agreement and the consummation of the
transactions contemplated thereby, including the purchase, delivery and
sale of the Shares to be delivered and sold by such Selling Stockholder
thereunder, will not (i) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default under (or an event that
with notice or lapse of time, or both, would constitute a default under) or
require approval or consent under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of such
Selling Stockholder pursuant to the terms of any material agreement,
contract, indenture, mortgage, lease, license, arrangement or understanding
to which such Selling Stockholder is a party, or to which any of its
properties is subject or (ii) violate or conflict with any provision of the
certificate of incorporation, by-laws or similar governing instruments of
such Selling Stockholder or any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over such Selling Stockholder or any of its
properties or assets.
14
(f) 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 such
Selling Stockholder or any of its properties or assets is required for such
Selling Stockholder's execution and delivery of, and performance of its
obligation under, this Underwriting Agreement and the consummation of the
transactions contemplated thereby, except for the registration of the
Shares under the Act and the Exchange Act, the authorization of the Shares
for trading on the Nasdaq Stock Market and such filings and registration as
may be required under state securities or "Blue Sky" Laws and the
securities laws of foreign jurisdictions in connection with the purchase
and distribution of the Shares by the Underwriters.
(g) To the extent that any statements or omissions are made in the
Registration Statement, the Prospectus or any amendment or supplement
thereto in reliance upon and in conformity with written information
furnished to the Company by such Selling Stockholder specifically for use
therein, on the Effective Date, the date the Prospectus is first filed with
the Commission pursuant to Rule 424(b) of the Regulations (if required), at
all times subsequent thereto to and including the Closing Date, when any
post-effective amendment to the Registration Statement becomes effective or
any supplement to the Prospectus is filed with the Commission, and during
such longer period as the Prospectus may require to be delivered in
connection with sales of Shares by the Underwriters or a dealer, the
Registration Statement and the Prospectus (as amended or supplemented if
the Company shall have filed with the Commission an amendment or supplement
thereto) did not and will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading. Such Selling Stockholder has reviewed the most recent
Preliminary Prospectus, the Prospectus (if the same shall be in existence)
and the Registration Statement, and the information regarding such Selling
Stockholder set forth therein is complete and accurate. From the Effective
Date through the Closing Date, such Selling Stockholder will advise Bear,
Xxxxxxx in writing if and to the extent that such information does not
conform with the requirements of the Act and the Regulations or contains
any untrue statement of a material fact or omits to state any material fact
15
required to be stated therein or necessary in order to make the statements
made therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading.
(h) The sale by such Selling Stockholder of Shares pursuant to this
Underwriting Agreement is not prompted by any adverse information
concerning the Company known to such Selling Stockholder as a result of
communications with, or information provided by, the Company or any of its
affiliates that is not set forth in the Registration Statement or the
Prospectus.
(i) Such Selling Stockholder has not taken or will not take, directly
or indirectly, prior to the termination of the offering of the Shares
contemplated by this Underwriting Agreement, any action designed to
stabilize or manipulate the price of the Common Stock, or that might
reasonably be expected to cause or result in stabilization or manipulation
of the price of the Common Stock.
5. Purchase, Sale and Delivery of the Shares.
(a)(i) 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 issue and sell
to each of the Underwriters an aggregate of 8,577,406 shares of Common
Stock and the Selling Stockholders, severally and not jointly, agree
to sell to the Underwriters an aggregate of 1,547,594 shares of Common
Stock (each such Selling Stockholder to sell the number of Shares set
forth opposite its name in Schedule II hereto under the caption
-----------
"Number of Firm Shares to be Sold"), and each Underwriter agrees,
severally and not jointly, to purchase from the Company and the
Selling Stockholders, the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto, all at a purchase price
----------
per share of $______ (the "Purchase Price"). Subject to Section 14,
the number of Firm Shares to be purchased from the Company and the
Selling Stockholders by each Underwriter (as adjusted by Bear, Xxxxxxx
to eliminate fractions) shall be determined by multiplying the
aggregate number of Firm Shares to be sold by the Company or the
Selling Stockholders, as the case may be, as set forth above by a
fraction (A) the numerator of which is the total number of Firm Shares
set forth opposite the name of such Underwriter in
16
Schedule I hereto and (B) the denominator of which is the total number
----------
of Firm Shares.
(ii) Delivery of the Firm Shares and payment of the
Purchase Price therefor shall be made at the offices of Bear, Xxxxxxx
& Co. Inc. at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other
location in the New York City metropolitan area as Bear, Xxxxxxx shall
determine and advise the Company and the Selling Stockholders upon at
least two full business days' (as defined in Section 20 hereof) notice
in writing. Such delivery and payment shall be made at 10:00 A.M.,
New York City time, on the third full business day following the
determination of the Purchase Price, or at such other time as may be
agreed upon by Bear, Xxxxxxx, the Company and the Selling
Stockholders. The time and date of such delivery and payment are
herein called the "Closing Date." Delivery of the Firm Shares shall
be made to or upon the order of Bear, Xxxxxxx, for the respective
accounts of the Underwriters, against payment to the Company or the
Selling Stockholders as the case may be, of the aggregate Purchase
Price therefor by wire transfer of same day funds to the respective
accounts of the Company and each Selling Stockholder, as the case may
be, designated in writing to Bear, Xxxxxxx at least two business days
prior to the Closing Date.
(iii) Certificates for the Firm Shares shall be
registered in such name or names and in such authorized denominations
as Bear, Xxxxxxx may request in writing at least two full business
days prior to the Closing Date, provided that, if so specified by
Bear, Xxxxxxx, the Firm Shares may be represented by a global
certificate registered in the name of Cede & Co., as nominee of the
Depositary Trust Company ("Cede"). Bear, Xxxxxxx shall be permitted
to examine and package such certificates for delivery at least one
full business day prior to the Closing Date, unless the Firm Shares
are to be represented by a global certificate.
(b)(i) The Company hereby grants to the Underwriters an
option (the "Option") to purchase from the Company the Additional
Shares at the Purchase Price, for the sole purpose of covering over-
allotments, if any, in the offering of the Firm Shares by the
Underwriters. The Option shall be exercisable by the Underwriters on
one occasion only, at any time before the expiration of
17
30 days from the date of the Prospectus, for the purchase of all or
part of the Additional Shares, such exercise to be made by notice,
given by Bear, Xxxxxxx to the Company in the manner specified in
Section 16 hereof, which notice shall set forth the aggregate number
of Additional Shares with respect to which the Option is being
exercised, the denominations and the name or names in which
certificates evidencing the Additional Shares so purchased are to be
registered, and the date and time of delivery of such Additional
Shares, which date may be at or subsequent to the Closing Date and
shall not be less than two nor more than ten days after such notice.
Subject to Section 14, the aggregate number of Additional Shares so
purchased from the Company by each Underwriter (as adjusted by Bear,
Xxxxxxx to eliminate fractions) shall be determined by multiplying the
total number of such Additional Shares to be sold by the Company by a
fraction (A) the numerator of which is the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto and
----------
(B) the denominator of which is the total number of Firm Shares.
(ii) Delivery of the Additional Shares so purchased and
payment of the Purchase Price therefor shall be made at the offices of
Bear, Xxxxxxx & Co. Inc. at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or such other location in the New York City metropolitan area as Bear,
Xxxxxxx shall determine and advise the Company upon at least two full
business days' notice in writing. Such delivery and payment shall be
made at 10:00 A.M., New York City time, on the date designated in such
notice or at such other time and date as may be agreed upon by Bear,
Xxxxxxx and the Company. The time and date of such delivery and
payment are herein called the "Additional Closing Date." Delivery of
the Additional Shares shall be made to or upon the order of Bear,
Xxxxxxx, for the respective accounts of the Underwriters, against
payment to the Company of the aggregate Purchase Price therefor by
wire transfer of same day funds to the account of the Company
designated in writing to Bear, Xxxxxxx at least two business days
prior to the Additional Closing Date.
(iii) Certificates for the Additional Shares purchased by
the Underwriters, when so delivered, shall be registered in such name
or names and in such
18
authorized denominations as Bear, Xxxxxxx shall have requested in the
notice of exercise of the Option, provided that, if so specified
therein, such Additional Shares may be represented by a global
certificate registered in the name of Cede. Bear, Xxxxxxx shall be
permitted to examine and package such certificates for delivery at
least one full business day prior to the Additional Closing Date,
unless the Additional Shares are to be represented by a global
certificate.
(c) The Underwriters shall not be obligated to purchase any Firm
Shares from the Company or the Selling Stockholders except upon tender to
the Underwriters by the Company or the Selling Stockholders, as the case
may be, of all of the Firm Shares and the Underwriters shall not be
obligated to purchase any Additional Shares from the Company except upon
tender to the Underwriters by the Company of all of the Additional Shares
specified in the notice of exercise of the Option. The Company or the
Selling Stockholders shall not be obligated to sell or deliver any Firm
Shares or Additional Shares, as the case may be, except upon tender of
payment by the Underwriters for all the Firm Shares or the Additional
Shares, as the case may be, agreed to be purchased by the Underwriters
hereunder.
6. Offering.
(a) The Company and the Selling Stockholders have been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Underwriting Agreement have become effective as in your judgment is
advisable. The Company and the Selling Stockholders have been further
advised by you that the Shares are to be offered to the public initially at
a price of $_____ per share and to certain dealers selected by you at a
price that represents a concession not in excess of $0.___ per share, and
that any Underwriter may allow, and such dealers may reallow, a further
concession, not in excess of $0.__ a share, to any Underwriter or to
certain other dealers, and that after the initial offering of the Shares,
the public offering price and such concessions may be changed by you.
(b) It is understood by all parties that approximately 500,000 Firm
Shares ("Directed Shares") will initially be reserved by the Underwriters
for offer and sale at the price to the public set forth above and upon the
terms set forth
19
in the Prospectus to directors, officers, employees and other persons
associated with the Company (the "Directed Share Purchasers") who have
heretofore delivered to Bear, Xxxxxxx indications of interest to purchase
Directed Shares in form satisfactory to Bear, Xxxxxxx, and that any
allocation of such Directed Shares among the Directed Share Purchasers
shall be made in accordance with timely directions received by Bear,
Xxxxxxx from the Company; provided, however, that under no circumstances
-------- -------
will Bear, Xxxxxxx or any other Underwriter be liable to the Company or to
any of the Directed Share Purchasers for any action taken or omitted in
good faith in connection with transactions effected with the Directed Share
Purchasers. It is further understood that any such Directed Shares that
are not purchased by Directed Share Purchasers will be offered by the
Underwriters for sale to the public upon the terms set forth in Section
6(a) hereof.
7. Covenants of the Company. The Company covenants and agrees with
each Underwriter that:
(a) The Company shall use its best efforts to cause the Registration
Statement to become effective as promptly as possible and to maintain it in
effect. If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Regulations, or filing of the Prospectus with
the Commission is otherwise required under Rule 424(b) of the Regulations,
the Company shall file the Prospectus, properly completed, with the
Commission pursuant to Rule 424(b) of the Regulations within the time
period therein prescribed and shall provide evidence satisfactory to you of
such timely filing. The Company shall promptly advise you (and, if
requested, confirm such advice in writing), (i) when the Registration
Statement or any post-effective amendment thereto has become effective,
(ii) of the initiation or threatening of any proceedings for, or receipt by
the Company of any notice with respect to, the suspension of the
qualification of the Shares for sale in any jurisdiction or the issuance by
the Commission of any order suspending the effectiveness of the
Registration Statement and (iii) of receipt by the Company or any
representative of or attorney for the Company of any other communications
from the Commission relating to the Company, the Registration Statement,
any Preliminary Prospectus, the Prospectus or the transactions contemplated
by this Underwriting Agreement. The Company shall make every reasonable
effort to prevent the issuance of an order suspending the effectiveness of
the Registration Statement
20
or any post-effective amendment thereto and, if any such order is issued,
to obtain its lifting as soon as possible. The Company shall not file any
amendment to the Registration Statement or any amendment of or supplement
to the Prospectus before or after the Effective Date to which you shall
reasonably object after being timely furnished in advance a copy thereof
unless the Company shall conclude, upon the advice of counsel, that any
such amendment must be filed at a time prior to obtaining such consent.
(b) Within the time during which the Prospectus is required to be
delivered under the Act, the Company shall comply with all requirements
imposed upon it by the Act, as now or hereafter amended, and by the
Regulations, as from time to time in force, so far as necessary to permit
the continuance of sales of or dealings in the Shares as contemplated by
the provisions hereof and by the Prospectus. If, during such period, any
event shall occur as a result of which the Prospectus as then amended or
supplemented include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they
were made, not misleading, or if it shall be necessary at any time to amend
the Registration Statement or supplement the Prospectus to comply with the
Act and the Regulations, the Company shall notify you promptly and prepare
and file with the Commission an appropriate post-effective amendment to the
Registration Statement or supplement to each Prospectus (in form and
substance reasonably satisfactory to you) that will correct such statement
or omission and shall use its best efforts to have any such post-effective
amendment to the Registration Statement declared effective as soon as
possible.
(c) The Company shall promptly deliver to you two manually-signed
copies of the Registration Statement, including exhibits and all amendments
thereto, and to those persons (including your counsel) whom you identify to
the Company, such number of conformed copies of the Registration Statement,
with exhibits, each Preliminary Prospectus, the Prospectus and all
amendments of and supplements to such documents, if any, as you may
reasonably request.
(d) The Company shall cooperate with the Underwriters and Weil,
Gotshal & Xxxxxx LLP ("Underwriters' Counsel") in connection with their
efforts to qualify or register the Shares for sale under the state
securities (or "Blue Sky") or foreign laws of such jurisdictions as you
shall request,
21
shall execute such applications and documents and furnish such information
as reasonably may be required for such purpose and shall comply with such
laws so as to continue such registrations and qualifications in effect for
so long as may be required to complete the distribution of the Shares;
provided, however, that in connection therewith the Company shall not be
-------- -------
required to (i) qualify as a foreign corporation in any jurisdiction in
which it is not so qualified as of the date hereof, (ii) file a consent to
service of process in any jurisdiction in any action other than one arising
out of the offering or sale of the Shares in such jurisdiction or (iii)
become subject to taxation in any jurisdiction in which it is not now so
subject.
(e) The Company shall make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to you, in such
numbers as you reasonably may request for distribution to the Underwriters,
as soon as practicable but in no event later than 45 days after the end of
its fiscal quarter in which the first anniversary date of the Effective
Date occurs, an earnings statement, covering a period of at least twelve
consecutive full calendar months commencing after the effective date of the
Registration Statement, that satisfies the provisions of Section 11(a) of
the Act and Rule 158 of the Regulations.
(f) During a period of 180 days from the date of this Underwriting
Agreement, the Company shall not, without the prior written consent of
Bear, Xxxxxxx, (i) issue, sell, offer or agree to sell, or otherwise
dispose of, directly or indirectly, any shares of its capital stock (or any
securities convertible into, exercisable for or exchangeable for shares of
its capital stock) other than (a) the Company's issuance of shares of
Common Stock in connection with the 275-for-one stock split, (b) the
Company's issuance and sale of Shares in accordance with this Underwriting
Agreement and (c) the issuance of up to such number of shares of Common
Stock (or options exercisable for up to such number of shares) reserved for
issuance pursuant to the Company's Stock Option Plan as specified in the
Registration Statement, or (ii) acquire, or agree or commit to acquire or
publicly announce its intention to acquire, directly or through a
subsidiary, assets or securities of any other person, firm or corporation
in a transaction or series of related transactions that would be material
to the Company and its subsidiaries, taken as a whole. In addition, the
Company has obtained and delivered to you a written undertaking from each
of its directors, executive
22
officers and principal stockholders (other than __________) that, during
the period of 180 days from the date of this Underwriting Agreement,
without the prior written consent of Bear, Xxxxxxx, such person or entity
will not sell, offer or agree to sell, or otherwise dispose of, directly or
indirectly, any shares of capital stock (or any securities convertible
into, exercisable for or exchangeable for shares of capital stock) of the
Company or any of its subsidiaries.
(g) During the three years following the Effective Date, the Company
shall furnish to Bear, Xxxxxxx, in such quantity as Bear, Xxxxxxx may
reasonably request for distribution to the Underwriters, copies of (i) all
reports of the Company to its stockholders, (ii) all reports, financial
statements, and proxy or information statements filed by the Company with
the Commission, any national securities exchange or the Nasdaq Stock Market
and (iii) such other information concerning the Company and its affairs as
Bear, Xxxxxxx may reasonably request from time to time.
(h) The Company shall apply the proceeds from the sale of the Shares
to be sold by it under this Underwriting Agreement in the manner set forth
under "Use of Proceeds" in the Prospectus. The Company shall take such
steps as shall be necessary to ensure that neither the Company nor any
subsidiary shall become an "investment company" or a company "controlled"
by an "investment company" within the meaning of such terms under the
Investment Company Act.
(i) The Company shall use its best efforts promptly to cause the
Shares to be traded on the Nasdaq Stock Market and shall take all actions
necessary to comply with the rules and regulations of the Nasdaq Stock
Market in order to maintain the trading of the Shares on the Nasdaq Stock
Market.
(j) The Company shall comply with all registration, filing and
reporting requirements of the Exchange Act and the rules and regulations
thereunder, which may from time to time be applicable to the Company.
(k) The Company shall comply with all provisions of all undertakings
contained in Part II of the Registration Statement.
23
(l) Prior to the Closing Date and, if the Option is exercised, until
the Additional Closing Date, the Company shall issue no press release or
other communication or hold any press conference with respect to the
offering of the Shares, or the financial condition, results of operations,
operations, business properties, assets, liabilities, or prospects of the
Company, without your prior consent.
8. Covenants of the Selling Stockholders. Each Selling Stockholder,
severally and not jointly, covenants and agrees with each Underwriter that:
(a) If, within the time during which the Prospectus is required to be
delivered under the Act, such Selling Stockholder shall believe or have any
reasonable grounds to believe that the Prospectus as then amended or
supplemented includes 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 made therein, in light of the circumstances under which they
were made, not misleading, or that any of the representations of such
Selling Stockholder contained in this Underwriting Agreement are untrue,
such Selling Stockholder shall notify you and the Company promptly to such
effect.
(b) Such Selling Stockholder will not take, directly or indirectly,
prior to the termination of the offering of the Shares contemplated by this
Underwriting Agreement, any action designed to stabilize or manipulate the
price of the Common Stock, or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Common Stock.
(c) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of 1986,
as amended, such Selling Stockholder shall deliver to you on or prior to
the Closing Date, a properly completed and executed United States Treasury
Department Form W-8 or W-9, as applicable (or other applicable form or
statement specified by Treasury Department Regulations in lieu thereof).
9. Payment of Expenses. Whether or not the transactions contemplated
by this Underwriting Agreement are consummated or this Underwriting Agreement is
terminated, and subject to Section 15(d) hereof, the Company agrees to pay all
costs and expenses incident to the performance of its obligations and the
Selling Stockholders' obligations under this Underwriting
24
Agreement, including those in connection with (i) preparing, printing,
duplicating, filing and distributing the Registration Statement (including all
amendments thereof and exhibits thereto), any Preliminary Prospectus, the
Prospectus and any supplements thereto, this Underwriting Agreement and all
related agreements, and all other documents relating to the public offering of
the Shares, (ii) the issuance, transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
registration and qualification if any, of the Shares under the securities laws
of foreign jurisdictions and the preparation of a memorandum with respect
thereto, or where applicable the obtaining of exemptions therefrom, including
the reasonable fees and disbursements of Underwriters' Counsel and local counsel
in connection therewith, (iv) the trading of the Shares on the Nasdaq Stock
Market, (v) the review of the terms of the public offering of the Shares by the
National Association of Securities Dealers, Inc. (the "NASD") and the reasonable
fees and disbursements of Underwriters' Counsel in connection therewith, (vi)
the printing of certificates representing the Shares and (vii) the cost and
charges of any transfer agent and registrar for the Shares.
10. Conditions of the Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Shares, as provided herein,
shall be subject to (i) the accuracy of the representations and warranties of
the Company, with respect to the Shares to be purchased from the Company, and
each of the Selling Stockholders, with respect to the Shares to be purchased
from the Selling Stockholders, herein contained, as of the date hereof, as of
the Closing Date and, with respect to the Additional Shares, the accuracy of the
representations and warranties of the Company as of the Additional Closing Date,
(ii) the absence from any certificates, opinions, written statements or letters
furnished pursuant to this Section 10 to you or to Underwriters' Counsel of any
qualification or limitation not previously approved in writing by you, (iii) the
performance by the Company and each of the Selling Stockholders of their
respective obligations hereunder and (iv) the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M., New York City time, on the date of this Underwriting
Agreement or at such later time and date as shall have been consented to in
writing by Bear, Xxxxxxx. All post-effective amendments to the
Registration Statement shall have become effective. If the Company shall
have relied upon Rule 430A of the Regulations, the Prospectus shall have
been filed with the Commission in
25
a timely fashion in accordance with Section 7(a) hereof. All filings
required by Rule 424 of the Regulations shall have been made and no such
filings shall have been made without your consent. No stop order
suspending the effectiveness of the Registration Statement or any post-
effective amendment thereof shall have been issued by the Commission or any
state securities commission and no proceedings therefor shall have been
initiated or threatened by the Commission or any state securities
commission.
(b) At the Closing Date (and, with respect to the Additional Shares,
the Additional Closing Date), you shall have received the written opinion
of Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company, dated the date of its
delivery, addressed to the Underwriters, and in form and scope satisfactory
to Underwriters' Counsel, to the effect that:
(i) Each of the Company and the domestic subsidiaries listed in
Schedule III hereto (the "Material Domestic Subsidiaries") (x) has
------------
been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and (y)
has all requisite corporate power and authority, and all necessary
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies, to own, lease and
license its respective properties and conduct its business as now
being conducted and as described in the Registration Statement and the
Prospectus, except for those the absence of which, individually or in
the aggregate, would not have a Material Adverse Effect.
(ii) The authorized capital stock of the Company is as set forth
in the Prospectus under the caption "Capitalization". All of the
outstanding shares of such capital stock have been 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
of Common Stock to be outstanding on the Closing Date, including the
Shares, have been duly authorized and when issued (and, in the case of
the Shares, delivered and sold in accordance with the terms of this
Underwriting Agreement) will be validly issued, fully paid and
nonassessable. Upon delivery of and payment for the Shares to be sold
by
26
the Company to each Underwriter in accordance with this Underwriting
Agreement, each Underwriter (assuming that it acquires such Shares
without notice of any adverse claim, as such term is used in Section
8-302 of the Uniform Commercial Code in effect in the State of New
York) will acquire good and marketable title to the Shares so sold and
delivered to it, free and clear of all liens, pledges, charges,
claims, security interests, restrictions on transfer, agreements or
other defects of title whatsoever (other than those resulting from any
action taken by such Underwriter). The capital stock of the Company
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus.
(iii) The Company has all requisite corporate right, power and
authority to execute, deliver and perform its obligations under this
Underwriting Agreement and to issue, sell and deliver the Shares in
accordance with the terms and conditions hereof. This Underwriting
Agreement has been duly and validly authorized, executed and delivered
by the Company.
(iv) To the best of such counsel's knowledge, 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
Material Domestic Subsidiary or any of its respective properties or
assets is required for the Company's execution and delivery of, and
its performance of its obligations under, this Underwriting Agreement,
and the consummation of the transactions contemplated hereby,
including, without limitation, of the issuance, sale and delivery of
the Shares, except for (A) such as may be required under state
securities or "Blue Sky" laws and the securities laws of foreign
jurisdictions in connection with the purchase and distribution of the
Shares by the Underwriters (as to which such counsel need express no
opinion) and (B) such as have been made or obtained under the Act, the
Exchange Act or the rules of the Nasdaq Stock Market.
(v) The Registration Statement and the Prospectus (except for
the financial statements and the notes thereto, the financial
statement schedules and the other financial and accounting data
included therein, as to which no opinion need be expressed) comply as
to
27
form in all material respects with the requirements of the Act and the
Regulations.
(vi) The Registration Statement has become effective under the
Act, and such counsel is not aware of any stop order suspending the
effectiveness of the Registration Statement and to such counsel's
knowledge no proceedings therefor have been initiated or threatened by
the Commission, and there are no other filings on the part of the
Company required by the Act or the Regulations, including those
required by Rule 424(b) of the Regulations, that to such counsel's
knowledge have not been made.
(vii) The Company is not an "investment company" or a company
"controlled" by an "investment company" as defined in the Investment
Company Act.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent certified public accountants of the
Company, representatives of the Underwriters and Underwriters' Counsel at
which the contents of the Registration Statement, the Prospectus and any
amendments thereof or supplements thereto and related matters were
discussed and, although such counsel has not undertaken to investigate or
verify independently and are not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus or any
amendments thereof or supplements thereto (except as to matters referred to
in the last sentence of clause (ii) above), no facts have come to such
counsel's attention which lead such counsel to believe that the
Registration Statement, on the effective date thereof (or any post-
effective amendment thereof 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, on the date thereof or the date of
such opinion, 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 made therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel need
express no view with respect to the financial statements and related notes,
the
28
financial statement schedules and the other financial and accounting data
included therein).
In rendering such opinion, such counsel (i) may limit its opinions to
the corporate laws of the State of Delaware, the laws of the State of New
York and the federal laws of the United States of America, and (ii) may
rely (A) as to matters involving the application of laws other than the
laws of the State of New York and the corporate laws of the State of
Delaware and the federal laws of the United States of America, to the
extent such counsel deems proper and to the extent specified in such
opinion letter, if at all, upon a written opinion or opinions (in form and
scope reasonably satisfactory to Underwriters' Counsel) of other counsel
reasonably acceptable to Underwriters' Counsel, familiar with the
applicable laws; and (B) as to matters of fact, to the extent such counsel
may 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. The
opinion of such counsel shall specifically state that the opinion of any
such other counsel is in form and scope satisfactory to such counsel and,
in such counsel's opinion, such counsel and you are justified in relying
thereon. A copy of the opinion of any such other counsel shall be
delivered to Underwriters' Counsel.
(c) At the Closing Date (and, with respect to the Additional Shares,
the Additional Closing Date), you shall have received the written opinion
of the General Counsel of the Company, dated the date of its delivery,
addressed to the Underwriters, and in form and scope satisfactory to
Underwriters' Counsel, to the effect that:
(i) Each of the Company and the Material Domestic 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 that will not in the aggregate have a
Material Adverse Effect. All of the issued and outstanding capital
stock (or similar interests) of each Material Domestic Subsidiary has
been duly and validly authorized and issued, is fully paid and
nonassessable and was not
29
issued in violation of or subject to any preemptive rights and is
owned by the Company or one of its subsidiaries, free and clear of all
claims, liens, security interests, pledges, charges, encumbrances,
stockholders agreements and voting trusts, except as otherwise
described in Schedule III to this Underwriting Agreement.
------------
(ii) The shares of Common Stock to be outstanding on the
Closing Date, including the Shares, will not have been issued in
violation of or be subject to any preemptive rights. To such counsel's
knowledge, there is no outstanding option, warrant or other right
calling for the issuance of any share of capital stock (or similar
interests) of the Company or of any of its subsidiaries or any
security or other instrument that by its terms is convertible into,
exercisable for or exchangeable for capital stock (or similar
interests) of the Company or any subsidiary, except as described in
the Registration Statement and the Prospectus.
(iii) The Company's execution and delivery of, and its
performance of its obligations under, this Underwriting Agreement and
the consummation of the transactions contemplated thereby, do not and,
when such performance is required pursuant to the terms thereof, will
not (A) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default under (or an event that with
notice or lapse of time, or both, would constitute a default under) or
require approval or consent 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 the terms
of any Material Contract or any Material Permit, except for those
conflicts, breaches or defaults for which consent or approval has been
obtained by the Company prior to the date hereof, (B) violate or
conflict with any provision of the certificate of incorporation, by-
laws or similar governing instruments of the Company or any Material
Domestic Subsidiary, or (C) to such counsel's knowledge, violate or
conflict with 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 Material Domestic
Subsidiary or any of its respective properties or assets, except, with
respect to clauses (A) and (C) of this subparagraph
30
(iii), for those violations or conflicts that, individually or in the
aggregate, would not have a Material Adverse Effect.
(iv) Insofar as statements in the Prospectus purport to
summarize the nature and status of litigation or the provisions of
laws, rules, regulations, orders, judgments or decrees, or the terms
of any Material Contracts or Material Permits, such statements are
correct in all material respects and are fair summaries of the matters
referred to therein.
(v) To the best of such counsel's knowledge, except as set
forth in the Registration Statement and the Prospectus, no person or
entity has the right, by contract or otherwise, to require
registration under the Act of shares of capital stock or other
securities of the Company or any of its subsidiaries solely because of
the filing or effectiveness of the Registration Statement and the
consummation of the transactions contemplated by this Underwriting
Agreement.
(vi) The Shares have been duly authorized for trading on
the Nasdaq Stock Market, subject only to official notice of issuance.
(vii) To the best of such counsel's knowledge, there is
no litigation, arbitration 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
threatened against, or involving the properties or business of, the
Company or any of its subsidiaries, that, if resolved against the
Company or such subsidiary, individually or, to the extent involving
related claims or issues, in the aggregate, is of a character required
to be disclosed in the Registration Statement and the Prospectus that
has not been properly disclosed therein; and to the best of such
counsel's knowledge, there is no contract or document concerning the
Company or any of its subsidiaries of a character required to be
described in the Registration Statement and the Prospectus or to be
filed as an exhibit to the Registration Statement, that is not so
described or filed.
31
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Company,
representatives of the independent certified public accountants of the
Company, representatives of the Underwriters and Underwriters' Counsel at
which the contents of the Registration Statement, the Prospectus and any
amendments thereof or supplements thereto and related matters were
discussed and, although such counsel has not undertaken to investigate or
verify independently and are not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus or any
amendments thereof or supplements thereto (except as to matters referred to
in clause (iv) above), no facts have come to such counsel's attention which
lead such counsel to believe that the Registration Statement, on the
effective date thereof (or any post-effective amendment thereof 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, on the date thereof or the date of such opinion, 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 made
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no view with
respect to the financial statements and related notes, the financial
statement schedules and the other financial and accounting data included
therein).
In rendering such opinion, such counsel (i) may limit its opinions to
the corporate laws of the State of Delaware, the laws of the State of New
York and the federal laws of the United States of America, and (ii) may
rely (A) as to matters involving the application of laws other than the
laws of the State of New York and the corporate laws of the State of
Delaware and the federal laws of the United States of America, to the
extent such counsel deems proper and to the extent specified in such
opinion letter, if at all, upon a written opinion or opinions (in form and
scope reasonably satisfactory to Underwriters' Counsel) of other counsel
reasonably acceptable to Underwriters' Counsel, familiar with the
applicable laws; and (B) as to matters of fact, to the extent such counsel
may deem proper, on certificates of responsible officers of the Company and
certificates or other written statements of officers of departments of
32
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and the subsidiaries. The
opinion of such counsel shall specifically state that the opinion of any
such other counsel is in form and scope satisfactory to such counsel and,
in such counsel's opinion, such counsel and you are justified in relying
thereon. A copy of the opinion of any such other counsel shall be
delivered to Underwriters' counsel.
(d) At the Closing Date, you shall have received the written opinion
of counsel for each of the Selling Stockholders, dated the date of its
delivery, addressed to the Underwriters, and in form and scope reasonably
satisfactory to Underwriters' Counsel, to the effect that:
(i) The Selling Stockholder is the sole owner of the
number of Shares to be sold by the Selling Stockholder, and, upon
delivery of and payment for the Shares to be sold by the Selling
Stockholder to each Underwriter in accordance with this Underwriting
Agreement, each Underwriter (assuming that it acquires such Shares
without notice of any adverse claim, as such term is used in Section
8-302 of the Uniform Commercial Code in effect in the State of New
York) will acquire valid title to such Shares, free and clear of all
liens, pledges, charges, security interests, restrictions on transfer,
agreements or other defects of title whatsoever (other than those
resulting from any action by such Underwriter).
(ii) This Underwriting Agreement has been duly executed
and delivered by such Selling Stockholder and is a legal and binding
obligation of such Selling Stockholder.
In rendering such opinion, such counsel (i) may limit its opinion to
the laws of the jurisdiction in which it is licensed to practice and (ii)
may rely as to matters of fact, to the extent such counsel may deem proper,
on certificates of responsible officers of the Selling Stockholder and
certificates or other written statements of officers of departments of
jurisdictions having custody of documents respecting the corporate
existence or good standing of the Selling Stockholder. The opinion of
counsel shall specifically state that the same may be relied upon by you
and Underwriters' Counsel.
33
(e) At the Closing Date (and, with respect to the Additional Shares,
the Additional Closing Date), you shall have received a certificate of the
Company executed by each of the Chief Executive Officer and the Chief
Financial Officer of the Company, dated the date of its delivery, to the
effect that the conditions set forth in subsection (a) of this Section 10
have been satisfied, that the representations and warranties of the Company
set forth in Section 3 hereof are true and correct as of such Closing Date
and the obligations of the Company to be performed hereunder on or prior
thereto have been duly performed.
(f) At the Closing Date, you shall have received a certificate of each
Selling Stockholder, dated the date of its delivery, to the effect that, as
of the date of such certificate, the representations and warranties of such
Selling Stockholder set forth in Section 4 hereof are true and correct as
of the Closing Date and the obligations of the Selling Stockholder to be
performed hereunder on or prior thereto have been duly performed.
(g) At the time this Underwriting Agreement is executed and at the
Closing Date (and, with respect to the Additional Shares, the Additional
Closing Date), you shall have received a letter, from Ernst & Young, dated
the date of its delivery, addressed to the Underwriters and in form and
substance reasonably satisfactory to you, to the effect that: (i) they are
independent accountants with respect to the Company within the meaning of
the Act and the Regulations; (ii) in their opinion, the Company Financials
audited by such firm and included in the Registration Statement and the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act and the applicable published rules and
regulations thereunder; (iii) on the basis of procedures (but not an audit
made in accordance with generally accepted auditing standards) 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 stockholders and boards of
directors of the Company and the subsidiaries and the committees of such
boards subsequent to December 31, 1997, inquiries of certain officials of
the Company and its subsidiaries who have responsibility for financial and
accounting matters of such companies with respect to transactions and
events subsequent to December 31, 1997, and other specified procedures and
inquiries to a date not more than five days prior to the date of such
letter, nothing has
34
come to their attention that would cause them to believe that: (A) the
unaudited historical consolidated financial statements of the Company, its
subsidiaries and their predecessors included 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 the published rules
and regulations thereunder or that any material modification should be made
to such unaudited consolidated financial statements for them to be in
conformity with US GAAP; (B) with respect to the period subsequent to
December 31, 1997 there were, as of the date of the most recent available
monthly consolidated financial data of the Company and the 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 increases in long-term
indebtedness of the Company or any decrease in stockholders' equity of the
Company, in each case as compared with the amounts shown in the most recent
balance sheet included in the Registration Statement and the Prospectus,
except for changes or decreases that the Registration Statement and the
Prospectus disclose have occurred or may occur; (C) the unaudited pro forma
consolidated financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable accounting
requirements of the Act and the applicable published rules and regulations
thereunder or the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of such financial statements; or
(D) that during the period from December 31, 1997 to the date of the most
recent available monthly consolidated financial data 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 that the Prospectus discloses
have occurred or may occur; 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 Prospectus, which have been specified by you
prior to the date of this Underwriting Agreement, to the extent that such
dollar amounts, numbers, percentages and information may be derived from
the general accounting and financial records that are subject to the
internal control structure policies and procedures of the Company's and its
subsidiaries' accounting systems or that have been derived directly from
such accounting records by
35
analysis or computation, 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 (which procedures do not constitute an
examination in accordance with generally accepted auditing standards) set
forth in such letter, and found them to be in agreement.
(h) All proceedings taken in connection with the sale of the Shares as
contemplated by this Underwriting Agreement shall be reasonably
satisfactory in form and substance to you and to Underwriters' Counsel, and
you shall have received from Underwriters' Counsel a written opinion, dated
as of the Closing Date and addressed to the Underwriters, with respect to
the sale of the Firm Shares, and dated as of the Additional Closing Date
with respect to the sale of the Additional Shares, and with respect to such
other matters as you reasonably may require, and the Company shall have
furnished to Underwriters' Counsel such documents as Underwriters' Counsel
may request for the purpose of enabling Underwriters' Counsel to pass upon
such matters.
(i) The NASD, upon review of the terms of the underwriting
arrangements for the public offering of the Shares, shall have raised no
objections thereto.
(j) The Shares shall have been approved for trading on the Nasdaq
Stock Market, subject to official notice of issuance.
(k) At the time this Underwriting Agreement is executed, the Company
shall have furnished to you the written undertakings referred to in the
last sentence of Section 7(f) hereof, in form and substance satisfactory to
Underwriters' Counsel.
(l) At the time this Underwriting Agreement is executed, each Selling
Stockholder shall have executed and delivered to you a United States
Treasury Department Form W-8 or W-9, as applicable (or other applicable
form or statement specified by Treasury Department Regulations in lieu
thereof).
(m) Prior to the Closing Date, and with respect to the Additional
Shares, the Additional Closing Date, the Company shall have furnished to
you such further information, certificates and documents as you may
reasonably request.
36
If any of the conditions specified in this Section 10 shall not have
been fulfilled when and as required by this Underwriting Agreement, or if any of
the certificates, opinions, written statements, or letters furnished to you or
to Underwriters' Counsel pursuant to this Section 10 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 not
theretofore discharged may be canceled by you at, or at any time prior to, the
Closing Date and with respect to the Additional Shares, the Additional Closing
Date. Notice of such cancellation shall be given to the Company in writing, or
by telephone or telephonic facsimile, confirmed in writing.
11. Indemnification.
(a) The Company, and each of the Selling Stockholders, severally and
not jointly, agree 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 Exchange Act, against any and
all losses, liabilities, claims, damages and expenses whatsoever (including
but not limited to attorneys' fees and any and all expenses reasonably
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, provided that such
settlement was effected with the Company's or the Selling Stockholders'
written consent, as applicable, in accordance with subsection 11(c)
hereof), 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 made by the Company or the Selling
Stockholders contained in the Registration Statement or the Prospectus or
any Preliminary 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 (in the case of the Prospectus, in light of
the circumstances under which they were made) not misleading; provided,
--------
however, that neither the Company nor the Selling Stockholders shall be
-------
liable under this subsection 11(a) to any Underwriter 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
37
such untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with written information
furnished to the Company by or on your behalf with respect to the
Underwriters; provided further, that, notwithstanding anything to the
-------- -------
contrary in this Section 11, the obligations of each Selling Stockholder
under this subsection 11(a) shall arise and the Company shall have no
obligation under this subsection 11(a), to the extent, but only to the
extent, that any 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 in reliance upon and in conformity with
written information furnished to the Company by such Selling Stockholder
expressly for use in the Registration Statement or the Prospectus; provided
--------
further, that in no case shall any such Selling Stockholder be liable or
-------
responsible for any amount in excess of the net proceeds received by such
Selling Stockholder from its sale of Shares pursuant to this Underwriting
Agreement; and provided further, that with respect to any Preliminary
-------- -------
Prospectus, such indemnity shall not inure to the benefit of any
Underwriter (or the benefit of any person controlling such Underwriter) if
the person asserting any such losses, liabilities, claims, damages or
expenses purchased the Shares that are the subject thereof from such
Underwriter and if such person was not sent or given a copy of the
Prospectus at or prior to confirmation of the sale of such Shares to such
person in any case where such sending or giving is required by the Act and
the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus. These indemnity
agreements will be in addition to any liability that the Company and the
Selling Stockholders may otherwise have to any Underwriter or to any
controlling person of such Underwriter, including under this Underwriting
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,
and each of the Selling Stockholders, against any losses, liabilities,
claims, damages and expenses whatsoever (including but not limited to
attorneys' fees and any and all expenses reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim
38
whatsoever, and any and all amounts paid in settlement of any claim or
litigation, provided that such settlement was effected with such
Underwriter's written consent in accordance with subsection 11(c) hereof),
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 or the Prospectus or
any Preliminary 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 (in the case of the Prospectus, in light of
the circumstances under which they were made) 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
in reliance upon and in conformity with written information furnished to
the Company by you or on your behalf with respect to such Underwriter
expressly for use in the Registration Statement or Prospectus; provided,
--------
however, that in no case shall such 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 that the Underwriter may otherwise have to the
Company or any such director, officer or controlling person, or the Selling
Stockholders, including under this Underwriting Agreement. The Company
acknowledges that the statements set forth in the last paragraph of the
cover page, the legend concerning stabilization on page two of the
Prospectus, the statements set forth 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, any related Preliminary Prospectus and Prospectus.
(c) Promptly after receipt by an indemnified party under subsection
11(a) or 11(b) above of notice of the assertion of any claim, 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
39
that it may have under this Section 11 except to the extent that it has
been prejudiced in any material respect by such failure or from any
liability that it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party shall 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 take 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 that are different 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 with respect to such
different defenses), in any of which events such fees and expenses shall be
borne by the indemnifying parties. The indemnifying party under subsection
11(a) or 11(b) above shall only be liable for the legal expenses of one
counsel for all indemnified parties in each jurisdiction in which any claim
or action is brought; provided, however, that the indemnifying party shall
-------- -------
be liable for separate counsel for any indemnified party in a jurisdiction,
if counsel to the indemnified parties shall have reasonably concluded that
there may be defenses available to such indemnified party that are
different from or additional to those available to one or more of the other
indemnified parties and that separate counsel for such indemnified party is
prudent under the circumstances. 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 written consent was not unreasonably withheld.
-------- -------
40
12. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in subsection 11(a)
hereof is for any reason held to be unavailable from the Company 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
provisions (including any investigation, legal and other expenses reasonably
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 one or more of the
Underwriters, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) to which the Company, the Selling
Stockholders and one or more of the Underwriters may be subject, in such
proportions as are appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders, on the one hand, and the Underwriters, on
the other hand, 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 11
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
Selling Stockholders, on the one hand, and the Underwriters, on the other hand,
in connection with the statements or omissions that 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
Selling Stockholders, on the one hand, and the Underwriters, on the other hand,
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 the Selling Stockholders, respectively,
and (y) the underwriting discounts 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 the Selling Stockholders, on the one hand, and
of the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Selling Stockholders, on the one
hand, or the Underwriters, on the other hand, and the parties' relative
41
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, each of the Selling Stockholders and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 11 were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to above. The Selling Stockholders' and the
Underwriters' obligations in this Section 11 to contribute are several and not
joint. Notwithstanding the provisions of this Section 11, (i) in no case shall
any Underwriter be required to contribute any amount in excess of the amount by
which the aggregate public offering price of the Shares underwritten by it and
distributed 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 such omission or alleged omission, (ii) in no case
shall any Selling Stockholder be required to contribute any amount in excess of
the amount by which the net proceeds received by such Selling Stockholder from
its sale of Shares pursuant to this Underwriting Agreement exceeds the amount of
any damages that such Selling Stockholder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or such omission or alleged
omission and (iii) 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. For purposes of
this Section 12, (A) each person, if any, who controls any 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 (B) 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 12. Any party entitled to contribution shall,
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 under this Section 12, notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 12 or otherwise. No party shall be liable for contribution with respect
to any action or claim settled without its written consent; provided, however,
-------- -------
that such written consent was not unreasonably withheld.
42
13. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements of the Underwriters, the Company and
the Selling Stockholders contained in this Underwriting Agreement, including
without limitation the agreements contained in Sections 7, 8 and 9 hereof, the
indemnity agreements contained in Section 11 hereof and the contribution
agreements contained in Section 12 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Underwriters or any controlling person of any Underwriter or by or on behalf of
the Company, any of its officers and directors, or the Selling Stockholders and
shall survive delivery of the Shares to and payment for the Shares by the
Underwriters. The representations contained in Section 3 hereof and the
agreements contained in this Section 11 and Sections 7, 8, 9, 11, 12 and 15(d)
hereof shall survive the termination of this Underwriting Agreement including
pursuant to Section 14 or 15 hereof; provided, however, that if this
-------- -------
Underwriting Agreement is terminated pursuant to Section 14 or 15 hereof or if
for any reason the purchase of the Shares by the Underwriters as contemplated
hereunder is not consummated, the agreements contained in Sections 7 and 8
hereof shall not survive.
14. 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 pursuant
to subsection 14(b) below) exceed in the aggregate 10% of the number of
shares of Firm Shares or Additional Shares, as the case may be, that all
Underwriters have agreed to purchase hereunder, then such Firm Shares or
Additional Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions
that 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) If 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 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. If within five (5)
43
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 14, this Underwriting 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 or the Selling Stockholders with respect thereto (except in
the case of the Company, as provided in Section 9 hereof, and in each case
as provided in Sections 9, 11(a) and 12 hereof) or the several non-
defaulting Underwriters (except as provided in Sections 11(b) and 12
hereof), but nothing in this Underwriting Agreement shall relieve a
defaulting Underwriter or Underwriters of its or their liability, if any,
to the other several Underwriters, the Company and the Selling Stockholders
for damages occasioned by its or their default hereunder.
(c) If 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 (5) 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 that, in the
opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Underwriting Agreement
shall include any party substituted under this Section 12 with like effect
as if it had originally been a party to this Underwriting Agreement with
respect to such Firm Shares and Additional Shares.
15. Effective Date of Underwriting Agreement; Termination.
(a) This Underwriting Agreement shall become effective upon the later
of (i) when you and the Company and the Selling Stockholders shall have
received notification of the effectiveness of the Registration Statement
and (ii) the execution and delivery of this Underwriting Agreement by the
parties hereto. Until this Underwriting Agreement becomes effective as
aforesaid, this Underwriting Agreement may be terminated by the Company by
notifying you and the Selling
44
Stockholders or by you by notifying the Company and the Selling
Stockholders without any liability of any party to any party hereunder.
Notwithstanding the foregoing, the provisions of this Section 15 and of
Sections 9, 11, 12 and 13 hereof shall at all times be in full force and
effect.
(b) This Underwriting Agreement and the obligations of the
Underwriters hereunder may be terminated by you by written notice to the
Company and the Selling Stockholders at any time at or prior to the Closing
Date (and, with respect to the Additional Shares, the Additional Closing
Date), without liability (other than with respect to Sections 11 and 12) on
the part of any Underwriter to the Company and the Selling Stockholders if,
on or prior to such date, (i) the Company or the Selling Stockholders shall
have failed, refused or been unable to perform in any material respect any
agreement on its part to be performed hereunder, (ii) any other condition
to the obligations of the Underwriters set forth in Section 10 hereof is
not fulfilled when and as required in any material respect, (iii) trading
in securities generally on the New York Stock Exchange, the American Stock
Exchange or in the over-the-counter market shall have been suspended or
materially limited, or minimum prices shall have been established on either
exchange or such market by the Commission, or by either exchange or other
regulatory body or governmental authority having jurisdiction, (iv) a
general banking moratorium shall have been declared by Federal or New York
State authorities, (v) there shall have occurred any outbreak or escalation
of armed hostilities involving the United States on or after the date
hereof, or if there has been a declaration by the United States of a
national emergency or war, the effect of which shall be, in your judgment,
to make it inadvisable or impracticable to proceed with the sale and
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus, (vi) in your reasonable opinion any material adverse change
shall have occurred since the respective dates as of which information is
given in the Registration Statement or the Prospectus affecting the
business, prospects, condition (financial or other) or results of
operations of the Company and its subsidiaries taken as a whole, whether or
not arising in the ordinary course of business, other than as set forth in
the Prospectus or contemplated thereby, (vii) there shall have occurred
such a material adverse change in the financial markets in the United
States such as, in your judgment, makes it inadvisable or impracticable to
proceed with the sale and delivery of the Shares on the terms and in the
manner
45
contemplated in the Prospectus, or (viii) there shall have been any
enactment, proposal, publication, decree or other promulgation of any
foreign or United States federal or state statute, regulation, rule or
order of any court or other governmental authority that would, in your
reasonable judgment, make it inadvisable or impracticable to proceed with
the sale and delivery of the Shares on the terms and in the manner
contemplated in the Prospectus. Your right to terminate this Underwriting
Agreement will not be waived or otherwise relinquished by failure to give
notice of termination prior to the time that the event giving rise to the
right to terminate shall have ceased to exist, provided that notice is
given prior to the Closing Date (and, with respect to the Additional
Shares, the Additional Closing Date).
(c) Any notice of termination pursuant to this Section 15 shall be by
telephone or telephonic facsimile, confirmed in writing by letter.
(d) If this Underwriting Agreement shall be terminated pursuant to
any of the provisions hereof (otherwise than pursuant to notification by
you as provided in subsection 15(a) or 15(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 or
the Selling Stockholders to perform any agreement herein or to comply with
any provision hereof (other than by reason of a default of the
Underwriters), the Company agrees, subject to demand by you, to reimburse
the Underwriters for all reasonable out-of-pocket expenses (including the
reasonable fees and expenses of Underwriters' Counsel), incurred by the
Underwriters in connection herewith.
16. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to any
one or more of the Underwriters, shall be hand delivered or faxed to each such
Underwriter in care of Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Corporate Finance Department (Fax No. 000-000-0000); and
if sent to the Company, shall be hand delivered or faxed to the Company, 000
Xxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Corporate Secretary (Fax
No. 201-___-_____); and if sent to any one or more of the Selling Stockholders,
shall be hand delivered or faxed to such Selling Stockholder in care of
46
_______________, _______________, Attention: __________, Esq.
(Fax No. ___-___-____).
17. Counterparts. This Underwriting Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument.
18. Parties. This Underwriting Agreement shall inure solely to the
benefit of, and shall be binding upon, each of the Underwriters, the Company and
the Selling Stockholders, and the controlling persons, directors, officers,
employees and agents referred to in Sections 11 and 12 hereof, 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 Underwriting Agreement or any provision herein
contained. The term "successors and assigns" shall not include a purchaser, in
its capacity as such, of Shares from the Underwriters.
19. Construction. This Underwriting Agreement shall be construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of laws.
20. Definition of Business Day. For the purposes of this
Underwriting Agreement, "business day" means any day on which the New York Stock
Exchange is open for trading.
47
If the foregoing correctly sets forth the complete agreement among the
Underwriters, the Company and the Selling Stockholders, please so indicate in
the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement among us.
Very truly yours,
GENESIS DIRECT, INC.
By:
-------------------------------------
Name:
Title:
SELLING STOCKHOLDERS:
[ ]
By:
-------------------------------------
Name:
Title:
[ ]
By:
-------------------------------------
Name:
Title:
[ ]
By:
-------------------------------------
Name:
Title:
48
[ ]
By:
-------------------------------------
Name:
Title:
[ ]
By:
-------------------------------------
Name:
Title:
Accepted as of the date first
above written.
BEAR, XXXXXXX & CO. INC.
XXXXXXX, SACHS & CO.
XXXXX XXXXXX INC.
INVEMED ASSOCIATES, INC.
XXXXXX XXXXXX & COMPANY, INC.
as Representatives of the several
Underwriters named in Schedule I
----------
annexed hereto.
By: BEAR, XXXXXXX & CO. INC.
By:
----------------------------
Name:
Title:
49
SCHEDULE I
Number of
Firm Shares
Name of Underwriter to be Purchased
------------------- ---------------
Bear, Xxxxxxx & Co. Inc. ........................................
Xxxxxxx, Xxxxx & Co. ............................................
Xxxxx Xxxxxx Inc. ...............................................
Invemed Associates, Inc. ........................................
Xxxxxx Xxxxxx & Company, Inc. ...................................
----------
TOTAL................. 10,125,000
==========
SCHEDULE II
SELLING STOCKHOLDERS
Number of
Firm Shares
Name of Selling Stockholder to be Sold
--------------------------- -----------
---------
TOTAL.............. 1,547,594
=========
SCHEDULE III
MATERIAL SUBSIDIARIES
JURISDICTION OF
NAME INCORPORATION
---- ---------------
SCHEDULE IV
SUBSIDIARIES OF THE COMPANY
(100% owned unless otherwise indicated)
Name Jurisdiction
---- ------------
