Exhibit 1.1
5,750,000 Shares
XXXXXXXXXX.XXX, INC.
Common Stock
Underwriting Agreement
dated June _, 1999
TABLE OF CONTENTS
Section 1. Representations and Warranties of the Company and the Selling Stockholder............................2
1.1. Representations and Warranties of the Company..................................................2
1.1.1. Compliance with Registration Requirements.....................................2
1.1.2. Offering Materials Furnished to Underwriters..................................3
1.1.3. Distribution of Offering Material By the Company..............................3
1.1.4. The Underwriting Agreement....................................................3
1.1.5. Authorization of the Common Shares............................................3
1.1.6. No Applicable Registration or Other Similar Rights............................3
1.1.7. No Material Adverse Change....................................................3
1.1.8. Independent Accountants.......................................................4
1.1.9. Preparation of the Financial Statements.......................................4
1.1.10. Incorporation and Good Standing of the Company and
its Subsidiaries.....................................................4
1.1.11. Capitalization and Other Capital Stock Matters...............................5
1.1.12. Stock Exchange Listing.......................................................5
1.1.13. Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required................................................5
1.1.14. No Material Actions or Proceedings...........................................6
1.1.15. Intellectual Property Rights.................................................6
1.1.16. All Necessary Permits, etc...................................................6
1.1.17. Title to Properties..........................................................7
1.1.18. Tax Law Compliance...........................................................7
1.1.19. Company Not an "Investment Company"..........................................7
1.1.20. Insurance....................................................................7
1.1.21. No Price Stabilization or Manipulation.......................................7
1.1.22. Related Party Transactions...................................................8
1.1.23. No Unlawful Contributions or Other Payments..................................8
1.1.24. Company's Accounting System..................................................8
1.1.25. Compliance with Environmental Laws...........................................8
1.1.26. ERISA Compliance.............................................................9
1.1.27. Year 2000....................................................................9
1.1.28. Cuba.........................................................................9
1.2. Representations and Warranties of the Selling Stockholder........................................10
1.2.1. The Underwriting Agreement...................................................10
1.2.2. The Custody Agreement and Power of Attorney..................................10
1.2.3. Title to Common Shares to be Sold;
All Authorizations Obtained.........................................10
1.2.4. Delivery of the Common Shares to be Sold.....................................10
1.2.5. Non-Contravention; No Further Authorizations or
Approvals Required..................................................11
1.2.6. No Registration or Other Similar Rights......................................11
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1.2.7. Disclosure Made by the Selling Stockholder in the Prospectus.................11
1.2.8. No Price Stabilization or Manipulation.......................................11
1.2.9. Confirmation of Company Representations and Warranties.......................11
1.2.10. Compliance with Registration Requirements....................................12
Section 2. Purchase, Sale and Delivery of the Common Shares.....................................................12
2.1. The Firm Common Shares...........................................................................12
2.2. The First Closing Date...........................................................................12
2.3. The Optional Common Shares; the Second Closing Date..............................................13
2.4. Public Offering of the Common Shares.............................................................13
2.5. Payment for the Common Shares....................................................................14
2.6. Delivery of the Common Shares....................................................................14
2.7. Delivery of Prospectus to the Underwriters.......................................................14
Section 3. Additional Covenants................................................................................15
3.1. Additional Covenants of the Company..............................................................15
3.1.1. Representatives' Review of Proposed Amendments
and Supplements.....................................................15
3.1.2. Securities Act Compliance....................................................15
3.1.3. Amendments and Supplements to the Prospectus and
Other Securities Act Matters........................................15
3.1.4. Copies of any Amendments and Supplements to the Prospectus...................16
3.1.5. Blue Sky Compliance..........................................................16
3.1.6. Use of Proceeds..............................................................16
3.1.7. Transfer Agent...............................................................16
3.1.8. Earnings Statement...........................................................16
3.1.9. Periodic Reporting Obligations...............................................16
3.1.10. Company to Provide Copy of the Prospectus in Form
That May be Downloaded from the Internet............................17
3.1.11. Agreement Not To Offer or Sell Additional Securities........................17
3.1.12. Future Reports to the Representatives.......................................17
3.2. Covenants of the Selling Stockholder..............................................................18
Section 4. Payment of Expenses.................................................................................18
Section 5. Conditions of the Obligations of the Underwriters...................................................19
5.1. Accountants' Comfort Letter......................................................................19
5.2. Compliance with Registration Requirements; No Stop Order;
No Objection from NASD...............................................................19
5.3. No Material Adverse Change.......................................................................20
5.4. Opinion of Counsel for the Company...............................................................20
5.5. Opinion of Counsel for the Underwriters..........................................................20
5.6. Officers' Certificate............................................................................20
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5.7. Bring-down Comfort Letter........................................................................21
5.8. Lock-Up Agreement from Certain Securityholders of the Company....................................21
5.9. Opinion of Counsel for the Selling Stockholder...................................................21
5.10. Selling Stockholders Certificate...............................................................21
5.11. Selling Stockholders Documents..................................................................22
5.12. Additional Documents............................................................................22
Section 6. Reimbursement of Underwriters' Expenses.............................................................22
Section 7. Effectiveness of this Agreement.....................................................................22
Section 8. Indemnification.....................................................................................23
8.1. Indemnification of the Underwriters.............................................................23
8.2. Indemnification of the Company, its Directors and Officers.......................................25
8.3. Notifications and Other Indemnification Procedures...............................................26
8.4. Settlements......................................................................................26
8.5. Limitation on Liability of the Selling Stockholder...............................................27
Section 9. Contribution........................................................................................27
Section 10. Default of One or More of the Several Underwriters.................................................28
Section 11. Termination of this Agreement......................................................................29
Section 12. Representations and Indemnities to Survive Delivery................................................30
Section 13. Notices............................................................................................30
Section 14. Successors.........................................................................................31
Section 15. Partial Unenforceability...........................................................................31
Section 16. Governing Law; Jurisdiction; Waiver................................................................31
16.1. Governing Law Provisions........................................................................31
16.2. Consent to Jurisdiction.........................................................................31
16.3. Waiver of Immunity..............................................................................32
Section 17. Failure of the Selling Stockholder to Sell and Deliver Common Shares...............................32
Section 18. General Provisions.................................................................................32
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Underwriting Agreement
June __, 0000
XXXX XX XXXXXXX SECURITIES LLC
PAINEWEBBER INCORPORATED
XXXX XXXXXXXX XXXXXXX
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Xxxxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to the several underwriters named in Schedule A (the
"Underwriters") an aggregate of 5,000,000 shares (the "Firm Common Shares") of
its Common Stock, par value $.01 per share (the "Common Stock"). In addition,
the Company has granted to the Underwriters an option to purchase up to an
additional 650,000 shares (the "Company Optional Common Shares") and Xxxxxxx X.
XxXxxxx (the "Selling Stockholder") has granted to the Underwriters an option to
purchase up to an additional 100,000 shares (the "Selling Stockholder Optional
Common Shares" and together with the Company Optional Common Shares, the
"Optional Common Shares") of Common Stock, as provided in Section 2. The Firm
Common Shares and, if and to the extent such option is exercised, the Optional
Common Shares are collectively called the "Common Shares". Banc of America
Securities LLC ("BAS"), PaineWebber Incorporated and Xxxx Xxxxxxxx Xxxxxxx, a
division of Xxxx Xxxxxxxx Incorporated have agreed to act as representatives of
the several Underwriters (in such capacity, the "Representatives") in connection
with the offering and sale of the Common Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-76383), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares. Such registration statement,
as amended, including the financial statements, exhibits and schedules thereto,
in the form in which it was declared effective by the Commission under the
Securities Act of 1933 and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), including any information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430A or Rule 434
under the Securities Act, is called the "Registration Statement". Any
registration statement
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filed by the Company pursuant to Rule 462(b) under the Securities Act is called
the "Rule 462(b) Registration Statement", and from and after the date and time
of filing of the Rule 462(b) Registration Statement the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. Such
prospectus, in the form first used by the Underwriters to confirm sales of the
Common Shares, is called the "Prospectus"; provided, however, if the Company
has, with the consent of BAS, elected to rely upon Rule 434 under the Securities
Act, the term "Prospectus" shall mean the Company's prospectus subject to
completion (each, a "preliminary prospectus") dated May 19, 1999 (such
preliminary prospectus is called the "Rule 434 preliminary prospectus"),
together with the applicable term sheet (the "Term Sheet") prepared and filed by
the Company with the Commission under Rules 434 and 424(b) under the Securities
Act and all references in this Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. All references in this Agreement to (i) the
Registration Statement, the Rule 462(b) Registration Statement, a preliminary
prospectus, the Prospectus or the Term Sheet, or any amendments or supplements
to any of the foregoing, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX") and (ii) the Prospectus shall be deemed to include the
"electronic Prospectus" provided for use in connection with the offering of the
Common Shares as contemplated by Section 3.1.10 of this Agreement.
Section 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SELLING STOCKHOLDER.
1.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
1.1.1. COMPLIANCE WITH REGISTRATION REQUIREMENTS. The
Registration Statement and any Rule 462(b) Registration Statement have
been declared effective by the Commission under the Securities Act. The
Company has complied to the Commission's satisfaction with all requests
of the Commission for additional or supplemental information. No stop
order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for
such purpose have been instituted or are pending or, to the best
knowledge of the Company, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed
by electronic transmission pursuant to XXXXX (except as may be
permitted by Regulation S-T under the Securities Act), was identical to
the copy thereof delivered to the Underwriters for use in connection
with the offer and sale of the Common Shares. Each of the Registration
Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, as of the applicable effective date,
complied and will comply in all material respects with the Securities
Act and did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The
Prospectus, and any amendment or supplement thereto, as of the
applicable filing date of such document, did not and will not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under
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which they were made, not misleading. The representations and
warranties set forth in the two immediately preceding sentences do not
apply to statements in or omissions from the Registration Statement,
any Rule 462(b) Registration Statement, or any post-effective amendment
thereto, or the Prospectus, or any amendments or supplements thereto,
made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by the
Representatives expressly for use therein. There are no contracts or
other documents required to be described in the Prospectus or to be
filed as exhibits to the Registration Statement which have not been
described or filed as required.
1.1.2. OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The
Company has delivered to the Representatives one copy of a complete
manually signed Registration Statement and of each consent and
certificate of experts filed as a part thereof, and conformed copies of
the Registration Statement (without exhibits) and preliminary
prospectuses and the Prospectus, as amended or supplemented, in such
quantities and at such places as the Representatives have reasonably
requested for each of the Underwriters.
1.1.3. DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY. The
Company has not distributed and will not distribute, prior to the later
of the Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Common Shares, any offering material
in connection with the offering and sale of the Common Shares other
than a preliminary prospectus, the Prospectus or the Registration
Statement.
1.1.4. THE UNDERWRITING AGREEMENT. This Agreement has been
duly authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or
by general equitable principles.
1.1.5. AUTHORIZATION OF THE COMMON SHARES. The Common Shares
to be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement, will be
validly issued, fully paid and nonassessable.
1.1.6. NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS.
There are no persons with registration or other similar rights to have
any equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as have been duly waived.
1.1.7. NO MATERIAL ADVERSE CHANGE. Except as otherwise
disclosed in the Prospectus, subsequent to the respective dates as of
which information is given in the Prospectus: (i) there has been no
material adverse change, or any development that could reasonably be
expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings,
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business or operations, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries,
considered as one entity (any such change is called a "Material Adverse
Change"); (ii) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of business
nor entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of
its subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class of
capital stock.
1.1.8. INDEPENDENT ACCOUNTANTS. Each of PricewaterhouseCoopers
LLP and Xxxxxx Xxxxxxxx LLP, who have expressed their opinion with
respect to certain of the financial statements (which term as used in
this Agreement includes the related notes thereto) and related
financial statement schedules filed with the Commission as a part of
the Registration Statement, are independent public or certified public
accountants as required by the Securities Act.
1.1.9. PREPARATION OF THE FINANCIAL STATEMENTS. The financial
statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as
of and at the dates indicated and the results of their operations and
cash flows for the periods specified. The related financial statement
schedules included in the Registration Statement present fairly the
information required to be stated therein. Such financial statements
and related financial statement schedules have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus
under the captions "Prospectus Summary--Summary Selected Financial
Data", "Selected Financial Data" and "Capitalization" fairly present
the information set forth therein on a basis consistent with that of
the audited financial statements contained in the Registration
Statement.
1.1.10. INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS
SUBSIDIARIES.
Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and, in the case of the Company, to enter into
and perform its obligations under this Agreement. Each of the Company and each
subsidiary is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions (other than The Commonwealth
of Massachusetts) where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a
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Material Adverse Change. All of the issued and outstanding capital stock of each
subsidiary has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 22 to the Registration Statement.
1.1.11. CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The
authorized, issued and outstanding capital stock of the Company is as
set forth in the Prospectus under the caption "Capitalization" (other
than for subsequent issuances, if any, pursuant to the Company's
employee stock option or purchase plans or the director stock option
plan described in the Prospectus or upon exercise of outstanding
options or warrants described in the Prospectus). The Common Stock
(including the Common Shares) conforms in all material respects to the
description thereof contained in the Prospectus. Upon consummation of
the transactions contemplated hereby, all of the issued and outstanding
shares of Common Stock have been duly authorized and validly issued,
shall be fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the
outstanding shares of Common Stock shall have been issued in violation
of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There
are no authorized or outstanding options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any
capital stock of the Company or any of its subsidiaries other than
those accurately described in the Prospectus. The description of the
Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set
forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options
and rights.
1.1.12. STOCK EXCHANGE LISTING. The Common Shares have been
approved for inclusion on the Nasdaq National Market, subject only to
official notice of issuance.
1.1.13. NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER
AUTHORIZATIONS OR APPROVALS REQUIRED. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or is in
default (or, with the giving of notice or lapse of time, would be in
default) ("Default") under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to
which the Company or any of its subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject (each, an
"Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change.
The Company's execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by the
Prospectus (i) have been duly authorized by all necessary corporate
action and will not result in any violation of the provisions of the
charter or by-laws of the Company or any subsidiary, (ii) will not
conflict with or constitute a breach of, or Default under, or result in
the creation or imposition of any lien, charge or
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encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to,
any Existing Instrument, except for such conflicts, breaches, Defaults,
liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and (iii) will not
result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company's
execution, delivery and performance of this Agreement and consummation
of the transactions contemplated hereby and by the Prospectus, except
such as have been obtained or made by the Company and are in full force
and effect under the Securities Act, applicable state securities or
blue sky laws and from the National Association of Securities Dealers,
Inc. (the "NASD").
1.1.14. NO MATERIAL ACTIONS OR PROCEEDINGS. There are no legal
or governmental actions, suits or proceedings pending or, to the best
of the Company's knowledge, threatened (i) against the Company or any
of its subsidiaries, (ii) which has as the subject thereof any officer
or director of, or property owned or leased by, the Company or any of
its subsidiaries or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable possibility
that such action, suit or proceeding might be determined adversely to
the Company or such subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. No
material labor dispute exists with the employees of the Company or any
of its subsidiaries, or, to the Company's knowledge, with the employees
of any principal supplier of the Company, or, to the best of the
Company's knowledge, is threatened or imminent.
1.1.15. INTELLECTUAL PROPERTY RIGHTS. The Company and its
subsidiaries own or possess sufficient trademarks, trade names, patent
rights, copyrights, licenses, approvals, trade secrets and other
similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their businesses as described in the
Prospectus; and the expected expiration of any of such Intellectual
Property Rights would not result in a Material Adverse Change. Neither
the Company nor any of its subsidiaries has received any notice of
infringement or conflict with asserted Intellectual Property Rights of
others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change.
1.1.16. ALL NECESSARY PERMITS, ETC. The Company and each
subsidiary possess such valid and current certificates, authorizations
or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective
businesses (except for any absence of which would not, individually or
in the aggregate, result in a Material Adverse Change), and neither the
Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with,
any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, could result in a Material Adverse Change.
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1.1.17. TITLE TO PROPERTIES. The Company and each of its
subsidiaries has good and marketable title to all the properties and
assets reflected as owned in the financial statements referred to in
Section 1.1.9 above (or elsewhere in the Prospectus), in each case free
and clear of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except such as are described in the
Prospectus or do not materially and adversely affect the value of such
property and do not materially interfere with the use made or proposed
to be made of such property by the Company or such subsidiary. The real
property, improvements, equipment and personal property held under
lease by the Company or any subsidiary are held under valid and
enforceable leases, with such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of such
real property, improvements, equipment or personal property by the
Company or such subsidiary.
1.1.18. TAX LAW COMPLIANCE. The Company and its subsidiaries
have filed all necessary federal, state and foreign income and
franchise tax returns or have properly requested extensions thereof and
have paid all taxes required to be paid by any of them and, if due and
payable, any related or similar assessment, fine or penalty levied
against any of them. The Company has made adequate charges, accruals
and reserves in the applicable financial statements referred to in
Section 1.1.9 above in respect of all federal, state and foreign income
and franchise taxes for all periods as to which the tax liability of
the Company or any of its subsidiaries has not been finally determined.
1.1.19. COMPANY NOT AN "INVESTMENT COMPANY". The Company has
been advised of the rules and requirements under the Investment Company
Act of 1940, as amended (the "Investment Company Act"). The Company is
not, and after receipt of payment for the Common Shares will not be, an
"investment company" within the meaning of Investment Company Act and
will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
1.1.20. INSURANCE. Each of the Company and its subsidiaries is
insured by recognized and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for their businesses including,
but not limited to, policies covering real and personal property owned
or leased by the Company and its subsidiaries against theft, damage,
destruction and acts of vandalism. The Company has no reason to believe
that it or any subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change. Neither of the Company
nor any subsidiary has been denied any insurance coverage which it has
sought or for which it has applied.
1.1.21. NO PRICE STABILIZATION OR MANIPULATION. The Company
has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to
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cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Common
Shares.
1.1.22. RELATED PARTY TRANSACTIONS. There are no business
relationships or related-party transactions involving the Company or
any subsidiary or any other person required to be described in the
Prospectus which have not been described as required.
1.1.23. NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Neither
the Company nor any of its subsidiaries nor, to the best of the
Company's knowledge, any employee or agent of the Company or any
subsidiary, has made any contribution or other payment to any official
of, or candidate for, any federal, state or foreign office in violation
of any law or of the character required to be disclosed in the
Prospectus.
1.1.24. COMPANY'S ACCOUNTING SYSTEM. The Company maintains a
system of accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
1.1.25. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as would
not, individually or in the aggregate, result in a Material Adverse
Change (i) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign law or regulation
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including
without limitation, laws and regulations relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
and petroleum products (collectively, "Materials of Environmental
Concern"), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of Materials of Environment Concern (collectively, "Environmental
Laws"), which violation includes, but is not limited to, noncompliance
with any permits or other governmental authorizations required for the
operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or any of its subsidiaries
received any written communication, whether from a governmental
authority, citizens group, employee or otherwise, that alleges that the
Company or any of its subsidiaries is in violation of any Environmental
Law; (ii) there is no claim, action or cause of action filed with a
court or governmental authority or investigation with respect to which
the Company has received written notice, and no written notice to the
Company by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries,
attorneys' fees or penalties arising out of, based
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on or resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location owned, leased or
operated by the Company or any of its subsidiaries, now or in the past
(collectively, "Environmental Claims"), pending or, to the best of the
Company's knowledge, threatened against the Company or any of its
subsidiaries or any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained
or assumed either contractually or by operation of law; and (iii) to
the best of the Company's knowledge, there are no past or present
actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that
reasonably could result in a violation of any Environmental Law or form
the basis of a potential Environmental Claim against the Company or any
of its subsidiaries or against any person or entity whose liability for
any Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of law.
1.1.26. ERISA COMPLIANCE. The Company and its subsidiaries and
any "employee benefit plan" (as defined under the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, "ERISA"))
established or maintained by the Company, its subsidiaries or their
"ERISA Affiliates" (as defined below) are in compliance in all material
respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or a subsidiary, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue
Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such
subsidiary is a member. No "reportable event" (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. No "employee benefit
plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates, if such "employee benefit plan" were
terminated, would have any "amount of unfunded benefit liabilities" (as
defined under ERISA). Neither the Company, its subsidiaries nor any of
their ERISA Affiliates has incurred or reasonably expects to incur any
liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "employee benefit plan" or (ii) Sections 412,
4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of
their ERISA Affiliates that is intended to be qualified under Section
401(a) of the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would cause the loss of such
qualification.
1.1.27. YEAR 2000. The Company will not incur significant
operating expenses or costs to ensure that its information systems will
be year 2000 complaint, other than as disclosed in the Prospectus.
1.1.28. CUBA. Neither the Company nor any of its affiliates
does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes.
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Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
1.2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER. The
Selling Stockholder represents, warrants and covenants to each Underwriter as
follows:
1.2.1. THE UNDERWRITING AGREEMENT. This Agreement has been
duly executed and delivered by the Selling Stockholder and is a valid
and binding agreement of the Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
1.2.2. THE CUSTODY AGREEMENT AND POWER OF ATTORNEY. Each of
(i) the Custody Agreement signed by the Selling Stockholder and the
Company, as custodian (the "Custodian"), relating to the deposit of the
Common Shares to be sold by the Selling Stockholder (the "Custody
Agreement"), and (ii) Power of Attorney appointing certain individuals
named therein as the Selling Stockholder's attorneys-in-fact (each, an
"Attorney-in-Fact") to the extent set forth therein relating to the
transactions contemplated hereby and by the Prospectus (the "Power of
Attorney"), has been duly executed and delivered by the Selling
Stockholder and is a valid and binding agreement of the Selling
Stockholder, enforceable in accordance with its terms, except as rights
to indemnification thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general
equitable principles.
1.2.3. TITLE TO COMMON SHARES TO BE SOLD; ALL AUTHORIZATIONS
OBTAINED. The Selling Stockholder has, and on the First Closing Date
and the Second Closing Date (as defined below), as applicable, will
have, good and valid title to all of the Common Shares which may be
sold by the Selling Stockholder pursuant to this Agreement on such date
and the legal right and power, and all authorizations and approvals
required by law (and under any trust agreement or other documents) to
enter into this Agreement, the Custody Agreement and the Power of
Attorney, to sell, transfer and deliver all of the Common Shares which
may be sold by the Selling Stockholder pursuant to this Agreement and
to comply with his other obligations hereunder and thereunder.
1.2.4. DELIVERY OF THE COMMON SHARES TO BE SOLD. Delivery of
the Common Shares which are sold by the Selling Stockholder pursuant to
this Agreement will pass good and valid title to such Common Shares,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance or other claim.
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1.2.5. NON-CONTRAVENTION; NO FURTHER AUTHORIZATIONS OR
APPROVALS REQUIRED. The execution and delivery by the Selling
Stockholder of, and the performance by the Selling Stockholder of his
obligations under, this Agreement, the Custody Agreement and the Power
of Attorney will not contravene or conflict with, result in a breach
of, or constitute a Default under, or require the consent of any other
party to, any agreement to which the Selling Stockholder is a party or
by which he is bound or under which he is entitled to any right or
benefit, any provision of applicable law or any judgment, order, decree
or regulation applicable to the Selling Stockholder of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over the Selling Stockholder. No consent, approval,
authorization or other order of, or registration or filing with, any
court or other governmental authority or agency, is required for the
consummation by the Selling Stockholder of the transactions
contemplated in this Agreement, except such as have been obtained or
made and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the NASD.
1.2.6. NO REGISTRATION OR OTHER SIMILAR RIGHTS. The Selling
Stockholder does not have any registration or other similar rights to
have any equity or debt securities registered for sale by the Company
under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as are described
in the Prospectus under "Shares Eligible for Future Sale."
1.2.7. DISCLOSURE MADE BY THE SELLING STOCKHOLDER IN THE
PROSPECTUS. All information furnished by or on behalf of the Selling
Stockholder in writing expressly for use in the Registration Statement
and Prospectus is, and on the First Closing Date and the Second Closing
Date will be, true, correct, and complete in all material respects, and
does not, and on the First Closing Date and the Second Closing Date
will not, contain any untrue statement of a material fact or omit to
state any material fact necessary to make such information not
misleading. The Selling Stockholder confirms as accurate the number of
shares of Common Stock set forth opposite the Selling Stockholder's
name in the prospectus under the caption "Principal Stockholders"
(prior to giving effect to the sale of the Common Shares).
1.2.8. NO PRICE STABILIZATION OR MANIPULATION. The Selling
Stockholder has not taken and will not take, directly or indirectly,
any action designed to or that might be reasonably expected to cause or
result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Common Shares.
1.2.9. CONFIRMATION OF COMPANY REPRESENTATIONS AND WARRANTIES.
The Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1.1
hereof are not true and correct, is familiar with the Registration
Statement and the Prospectus and has no knowledge of any material fact,
condition or information not disclosed in the Registration Statement or
the Prospectus which has had or may have a Material Adverse Effect and
is not prompted to sell shares of Common Stock by
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any information concerning the Company which is not set forth in the
Registration Statement and the Prospectus.
1.2.10. COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, as of the applicable effective date,
did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The
Prospectus, and any amendment or supplement thereto, as of the
applicable filing date of such document, did not and will not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments
or supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in
writing by the Representatives expressly for use therein. There are no
contracts or other documents required to be described in the Prospectus
or to be filed as exhibits to the Registration Statement which have not
been described or filed as required.
Any certificate signed by or on behalf of the Selling Stockholder and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Selling Stockholder to each
Underwriter as to the matters covered thereby.
Section 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
2.1. THE FIRM COMMON SHARES. The Company agrees to issue and sell to
the several Underwriters the Firm Common Shares upon the terms herein set forth.
On the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company the
respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company shall be $[___] per share.
2.2. THE FIRST CLOSING DATE. Delivery of certificates for the Firm
Common Shares to be purchased by the Underwriters and payment therefor shall be
made at the offices of BAS, Two International Place, Boston, Massachusetts (or
such other place as may be agreed to by the Company and the Representatives) at
6:00 a.m. San Francisco time, on [___], 1999 or such other time and date not
later than 10:30 a.m. San Francisco time, on [___], 1999 as the Representatives
shall designate by notice to the Company (the time and date of such closing are
called the "First Closing Date"). The Company hereby acknowledges that
circumstances under which the Representatives may provide notice to postpone the
First Closing Date as originally scheduled include, but are in no way limited
to,
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any determination by the Company or the Representatives to recirculate to the
public copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 10.
2.3. THE OPTIONAL COMMON SHARES; THE SECOND CLOSING DATE. In addition,
on the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of 650,000 Optional Common Shares from the
Company and the Selling Stockholder hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
100,000 Optional Common Shares from the Selling Stockholder, each such option to
be at the purchase price per share to be paid by the Underwriters for the Firm
Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the
Representatives to the Company and the Selling Stockholder, which notice may be
given at any time within 30 days from the date of this Agreement. Such notice
shall set forth (i) the aggregate number of Optional Common Shares as to which
the Underwriters are exercising the option, (ii) the names and denominations in
which the certificates for the Optional Common Shares are to be registered and
(iii) the time, date and place at which such certificates will be delivered
(which time and date may be simultaneous with, but not earlier than, the First
Closing Date; and in such case the term "First Closing Date" shall refer to the
time and date of delivery of certificates for the Firm Common Shares and the
Optional Common Shares). Such time and date of delivery, if subsequent to the
First Closing Date, is called the "Second Closing Date" and shall be determined
by the Representatives and shall not be earlier than three nor later than five
full business days after delivery of such notice of exercise. If any Optional
Common Shares are to be purchased, each Underwriter agrees, severally and not
jointly, to purchase the number of Optional Common Shares (subject to such
adjustments to eliminate fractional shares as the Representatives may determine)
that bears the same proportion to the total number of Optional Common Shares to
be purchased as the number of Firm Common Shares set forth on Schedule A
opposite the name of such Underwriter bears to the total number of Firm Common
Shares. The Representatives may cancel the option at any time prior to its
expiration by giving written notice of such cancellation to the Company and the
Selling Stockholder. To the extent the Underwriters exercise the option for less
than the maximum number of Optional Common Shares, the Underwriters shall
purchase Optional Common Shares from the Company and the Selling Stockholder in
the same proportion that the Company Optional Common Shares and the Selling
Stockholder Common Shares bear to the maximum number of Optional Common Shares,
respectively.
2.4. PUBLIC OFFERING OF THE COMMON SHARES. The Representatives hereby
advise the Company and the Selling Stockholder that the Underwriters intend to
offer for sale to the public, as described in the Prospectus, their respective
portions of the Common Shares as soon after this Agreement has been executed and
the Registration Statement has been declared effective as the Representatives,
in their sole judgment, have determined is advisable and practicable.
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2.5. PAYMENT FOR THE COMMON SHARES. Payment for the Common Shares to be
sold by the Company shall be made at the First Closing Date (and, if applicable,
at the Second Closing Date) by wire transfer of immediately available funds to
the order of the Company. Payment for the Common Shares, if any, to be sold by
the Selling Stockholder shall be made at the First Closing Date and, if
applicable, at the Second Closing Date, as the case may be, by wire transfer of
immediately available funds to the order of the Custodian.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Common Shares and any Optional Common Shares the Underwriters have agreed
to purchase. BAS, individually and not as the Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.
The Selling Stockholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Common Shares to be sold by the Selling Stockholder to
the several Underwriters, or otherwise in connection with the performance of the
Selling Stockholder's obligations hereunder and (ii) the Custodian is authorized
to deduct for such payment any such amounts from the proceeds to the Selling
Stockholder hereunder and to hold such amounts for the account of the Selling
Stockholder under the Custody Agreement.
2.6. DELIVERY OF THE COMMON SHARES. The Company shall deliver, or cause
to be delivered, to the Representatives for the accounts of the several
Underwriters certificates for the Firm Common Shares at the First Closing Date,
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. The Company and the Selling
Stockholder shall also deliver, or cause to be delivered, to the Representatives
for the accounts of the several Underwriters, certificates for the Optional
Common Shares the Underwriters have agreed to purchase at the First Closing Date
or the Second Closing Date, as the case may be, against the irrevocable release
of a wire transfer of immediately available funds for the amount of the purchase
price therefor. The certificates for the Common Shares shall be in definitive
form and registered in such names and denominations as the Representatives shall
have requested at least two full business days prior to the First Closing Date
(or the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location in New York City as the
Representatives may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
2.7. DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later than 12:00
p.m. on the second business day following the date the Common Shares are first
released by the Underwriters for sale to the public, the Company shall deliver
or cause to be delivered, copies of the Prospectus in such quantities and at
such places as the Representatives shall request.
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Section 3. ADDITIONAL COVENANTS.
3.1 ADDITIONAL COVENANTS OF THE COMPANY. The Company further covenants
and agrees with each Underwriter as follows:
3.1.1 REPRESENTATIVES' REVIEW OF PROPOSED AMENDMENTS AND
SUPPLEMENTS. During such period beginning on the date hereof and ending
on the later of the First Closing Date or such date, as in the opinion
of counsel for the Underwriters, the Prospectus is no longer required
by law to be delivered in connection with sales by an Underwriter or
dealer (the "Prospectus Delivery Period"), prior to amending or
supplementing the Registration Statement (including any registration
statement filed under Rule 462(b) under the Securities Act) or the
Prospectus, the Company shall furnish to the Representatives for review
a copy of each such proposed amendment or supplement, and the Company
shall not file any such proposed amendment or supplement to which the
Representatives reasonably object.
3.1.2. SECURITIES ACT COMPLIANCE. After the date of this
Agreement, the Company shall promptly advise the Representatives in
writing (i) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (ii) of
the time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date
that any post-effective amendment to the Registration Statement becomes
effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or
of any proceedings to remove, suspend or terminate from listing or
quotation the Common Stock from any securities exchange upon which it
is listed for trading or included or designated for quotation, or of
the threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any
time, the Company will use its best efforts to obtain the lifting of
such order at the earliest possible moment. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b), 430A
and 434, as applicable, under the Securities Act and will use its
reasonable efforts to confirm that any filings made by the Company
under such Rule 424(b) were received in a timely manner by the
Commission.
3.1.3. AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER
SECURITIES ACT MATTERS. If, during the Prospectus Delivery Period, any
event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if in the
opinion of the Representatives or counsel for the Underwriters it is
otherwise necessary to amend or supplement the Prospectus to comply
with law, the Company agrees to promptly prepare (subject to Section
3.1.1 hereof), file with the Commission and furnish at its own expense
to the Underwriters and to dealers, amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
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supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
3.1.4. COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE
PROSPECTUS. The Company agrees to furnish the Representatives, without
charge, during the Prospectus Delivery Period, as many copies of the
Prospectus and any amendments and supplements thereto as the
Representatives may reasonably request.
3.1.5. BLUE SKY COMPLIANCE. The Company shall cooperate with
the Representatives and counsel for the Underwriters to qualify or
register the Common Shares for sale under (or obtain exemptions from
the application of) the state securities or blue sky laws or Canadian
provincial Securities laws of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as
required for the distribution of the Common Shares. The Company shall
not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise
the Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares
for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the
issuance of any order suspending such qualification, registration or
exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.
3.1.6. USE OF PROCEEDS. The Company shall apply the net
proceeds from the sale of the Common Shares sold by it in the manner
described under the caption "Use of Proceeds" in the Prospectus.
3.1.7. TRANSFER AGENT. The Company shall engage and maintain,
at its expense, a registrar and transfer agent for the Common Stock.
3.1.8. EARNINGS STATEMENT. As soon as practicable, the Company
will make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited)
covering the twelve-month period ending June 30, 2000 that satisfies
the provisions of Section 11(a) of the Securities Act.
3.1.9. PERIODIC REPORTING OBLIGATIONS. During the Prospectus
Delivery Period the Company shall file, on a timely basis, with the
Commission and the Nasdaq National Market all reports and documents
required to be filed under the Exchange Act. Additionally, the Company
shall report the use of proceeds from the issuance of the Common Shares
as may be required under Rule 463 under the Securities Act.
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3.1.10. COMPANY TO PROVIDE COPY OF THE PROSPECTUS IN FORM THAT
MAY BE DOWNLOADED FROM THE INTERNET. The Company shall cause to be
prepared and delivered, at its expense, within one business day from
the effective date of this Agreement, to E*Trade Securities, Inc.
("E*Trade") an "electronic Prospectus" to be used by E*Trade in
connection with the offering and sale of the Common Shares. As used
herein, the term "electronic Prospectus" means a form of Prospectus,
and any amendment or supplement thereto, that shall disclose the same
information as the paper Prospectus and Prospectus filed pursuant to
XXXXX, except to the extent that graphic and image material cannot be
disseminated electronically, in which case such graphic and image
material shall be replaced in the electronic Prospectus with a fair and
accurate narrative description or tabular representation of such
material, as appropriate. The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to XXXXX or
otherwise with the Commission and in the Registration Statement at the
time it was declared effective an undertaking that, upon receipt of a
request by an investor or his or her representative within the
Prospectus Delivery Period, the Company shall transmit or cause to be
transmitted promptly, without charge, a paper copy of the Prospectus.
3.1.11. AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES.
During the period of 180 days following the date of the Prospectus, the
Company will not, without the prior written consent of BAS (which
consent may be withheld at the sole discretion of BAS), directly or
indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of or transfer, or announce the offering of, or file any registration
statement under the Securities Act in respect of, any shares of Common
Stock, options or warrants to acquire shares of the Common Stock or
securities exchangeable or exercisable for or convertible into shares
of Common Stock (other than as contemplated by this Agreement with
respect to the Common Shares); provided, however, that the Company may
(i) issue shares of its Common Stock or options to purchase its Common
Stock, or Common Stock upon exercise of options, pursuant to any stock
option, stock bonus or other stock plan or arrangement described in the
Prospectus, but only if the holders of such shares, options, or shares
issued upon exercise of such options, agree in writing not to sell,
offer, dispose of or otherwise transfer any such shares or options
during such 180 day period without the prior written consent of BAS
(which consent may be withheld at the sole discretion of the BAS); (ii)
file a registration statement with respect to any stock option, stock
bonus or other stock plan or arrangement described in the Prospectus,
and (iii) issue shares in connection with a merger or acquisition by
the Company of the assets or capital stock of another person or entity,
and file a registration statement with respect to such shares, so long
as the shares so issued by the Company may not be resold for a period
of 180 days after the date of the Prospectus.
3.1.12. FUTURE REPORTS TO THE REPRESENTATIVES. During the
period of five years hereafter the Company will furnish to the
Representatives at Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000
(Attention: Xxxxxxx X. Xxxxxx) (i) as soon as practicable after the end
of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the
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Company as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public or certified public
accountants; (ii) as soon as practicable after the filing thereof,
copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed
by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital
stock.
BAS, on behalf of the several Underwriters, may, in its sole
discretion, waive in writing the performance by the Company of any one
or more of the foregoing covenants or extend the time for their
performance.
3.2. COVENANTS OF THE SELLING STOCKHOLDER. The Selling Stockholder
further covenants and agrees with each Underwriter to deliver to the
Representatives prior to the First Closing Date a properly completed and
executed United States Treasury Department Form W-9.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs,
fees and expenses incurred by it in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance
and delivery of the Common Shares (including all printing and engraving costs),
(ii) all fees and expenses of the registrar and transfer agent of the Common
Stock, (iii) all necessary issue, transfer and other stamp taxes in connection
with the issuance and sale of the Common Shares to the Underwriters, (iv) all
fees and expenses of the Company's counsel, independent public or certified
public accountants and other advisors, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), each preliminary prospectus and the
Prospectus, and all amendments and supplements thereto, and this Agreement, (vi)
all filing fees, attorneys' fees and expenses incurred by the Company or the
Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Common Shares for offer and sale under the state securities or blue sky laws or
the provincial securities laws of Canada, and, if requested by the
Representatives, preparing and printing a "Blue Sky Survey" or memorandum, and
any supplements thereto, advising the Underwriters of such qualifications,
registrations and exemptions, (vii) the filing fees incident to, and the
reasonable fees and expenses of counsel for the Underwriters in connection with,
the NASD's review and approval of the Underwriters' participation in the
offering and distribution of the Common Shares, (viii) the fees and expenses
associated with including the Common Shares Stock on the Nasdaq National Market,
and (ix) all other fees, costs and expenses referred to in Item 13 of Part II of
the Registration Statement. Except as provided in this Section 4, Section 6,
Section 8 and Section 9 hereof, the Underwriters shall pay their own expenses,
including the fees and disbursements of their counsel. The Company's obligation
for the fees and expenses of counsel to the Underwriters' under this Section 4
shall be limited to a maximum of $15,000.
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The Selling Stockholder further agrees with each Underwriter to pay
(directly or by reimbursement to the Company) all fees and expenses incident to
the performance of his obligations under this Agreement which are not otherwise
specifically provided for herein, including but not limited to (i) fees and
expenses of his counsel and other advisors, (ii) fees and expenses of the
Custodian and (iii) expenses and taxes incident to the sale and delivery of the
Common Shares to be sold by him to the Underwriters hereunder (which taxes, if
any, may be deducted by the Custodian under the provisions of Section 2 of this
Agreement).
This Section 4 shall not affect or modify any separate, valid agreement
relating to the allocation of payment of expenses between the Company, on the
one hand, and the Selling Stockholder, on the other hand.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the First Closing Date or the Second Closing Date, as
applicable, shall be subject (a) to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholder set forth in
Section 1 hereof as of the date hereof and as of the First Closing Date as
though then made and, with respect to the Optional Common Shares, as of the
First Closing Date or the Second Closing Date, as applicable, as though then
made, (b) to the timely performance by the Company and the Selling Stockholder
of their covenants and other obligations hereunder, and (c) to each of the
following additional conditions:
5.1. ACCOUNTANTS' COMFORT LETTER. On the date hereof, the
Representatives shall have received from each of PricewaterhouseCoopers LLP and
Xxxxxx Xxxxxxxx LLP, the current and former independent public or certified
public accountants for the Company, respectively, a letter dated the date hereof
addressed to the Underwriters, in form and substance satisfactory to the
Representatives, containing statements and information of the type ordinarily
included in accountant's "comfort letters" to underwriters, delivered according
to Statement of Auditing Standards No. 72 (or any successor bulletin), with
respect to the audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus (and the
Representatives shall have received additional conformed copies of such
accountants' letter for each of the several Underwriters).
5.2. COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER; NO
OBJECTION FROM NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the Optional
Common Shares, the First Closing Date or the Second Closing Date, as applicable:
(i) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under the
Securities Act) in the manner and within the time period required by
Rule 424(b) under the Securities Act; or the Company shall have filed a
post-effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective
amendment shall have become effective; or, if the
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Company elected to rely upon Rule 434 under the Securities Act and
obtained the Representatives' consent thereto, the Company shall have
filed a Term Sheet with the Commission in the manner and within the
time period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in
effect and no proceedings for such purpose shall have been instituted
or threatened by the Commission; and
(iii) the NASD shall have raised no objection to the fairness
and reasonableness of the underwriting terms and arrangements.
5.3. NO MATERIAL ADVERSE CHANGE. For the period from and after the date
of this Agreement and prior to the First Closing Date and, with respect to the
Optional Common Shares, the First Closing Date or Second Closing Date, as
applicable, in the judgment of the Representatives there shall not have occurred
any Material Adverse Change.
5.4. OPINION OF COUNSEL FOR THE COMPANY. On each of the First Closing
Date and the Second Closing Date, if any, the Representatives shall have
received the favorable opinion of Xxxxxxx Xxxx LLP, counsel for the Company,
dated as of such Closing Date, the form of which is attached as Exhibit A (and
the Representatives shall have received an additional four conformed copies of
such counsel's legal opinion for the several Underwriters).
5.5. OPINION OF COUNSEL FOR THE UNDERWRITERS. On each of the First
Closing Date and the Second Closing Date, if any, the Representatives shall have
received the favorable opinion of Ropes & Xxxx, counsel for the Underwriters,
dated as of such Closing Date, with respect to the matters set forth in
paragraphs (1), (7) (with respect to subparagraph (a) only), (8), (9), (10),
(11) and (12) (provided that, such opinion shall address only the captions
"Description of Capital Stock" and "Underwriting"), and the next-to-last
paragraph of Exhibit A (and the Representatives shall have received additional
conformed copies of such counsel's legal opinion for each of the several
Underwriters).
5.6. OFFICERS' CERTIFICATE. On each of the First Closing Date and the
Second Closing Date, if any, the Representatives shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsections 5.2(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this Agreement
and prior to such Closing Date, there has not occurred any Material
Adverse Change;
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(ii) the representations, warranties and covenants of the
Company set forth in Section 1.1 of this Agreement are true and correct
with the same force and effect as though expressly made on and as of
such Closing Date; and
(iii) the Company has complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed
or satisfied hereunder at or prior to such Closing Date.
5.7. BRING-DOWN COMFORT LETTER. On each of the First Closing Date and
the Second Closing Date the Representatives shall have received from each of
Pricewaterhouse Coopers LLP and Xxxxxx Xxxxxxxx LLP, the current and former
independent public or certified public accountants for the Company,
respectively, a letter dated such date, in form and substance satisfactory to
the Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to Section 5.1, except that the specified date
referred to therein for the carrying out of procedures shall be no more than
three business days prior to the First Closing Date or Second Closing Date, as
the case may be (and the Representatives shall have received additional
conformed copies of such accountants' letter for each of the several
Underwriters).
5.8. LOCK-UP AGREEMENT FROM CERTAIN SECURITYHOLDERS OF THE COMPANY. On
the date hereof, the Company shall have furnished to the Representatives an
agreement substantially in the form of Exhibit B hereto from each director and
officer of the Company and from beneficial owners of at least 97% of Common
Stock on a fully-diluted, as converted basis as of the date hereof (as defined
and determined according to Rule 13d-3 under the Exchange Act, except that a one
hundred eighty day period shall be used rather than the sixty day period set
forth therein), and such agreement shall be in full force and effect on each of
the First Closing Date and the Second Closing Date, if any.
5.9. OPINION OF COUNSEL FOR THE SELLING STOCKHOLDER. On each Closing
Date on which Optional Common Shares are sold by the Selling Stockholder, the
Representatives shall have received the favorable opinion of Xxxxxxx, Xxxx LLP
counsel for the Selling Stockholder, dated as of such Closing Date, the form of
which is attached as Exhibit A (and the Representatives shall have received an
additional four conformed copies of such counsel's legal opinion for each of the
several Underwriters).
5.10. SELLING STOCKHOLDERS CERTIFICATE. On each Closing Date on which
Optional Common Shares are sold by the Selling Stockholder the Representatives
shall received a written certificate executed by the Selling Stockholder, dated
as of such Closing Date, to the effect that:
(i) the representations, warranties and covenants of the
Selling Stockholder set forth in Section 1.2 of this Agreement are true and
correct with the same force and effect as though expressly made by the Selling
Stockholder on and as of such Closing Date; and
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(ii) the Selling Stockholder has complied with all the
agreements and satisfied all the conditions on his part to be performed or
satisfied at or prior to such Closing Date.
5.11. SELLING STOCKHOLDERS DOCUMENTS. On the date hereof, the Company
and the Selling Stockholder shall have furnished for review by the
Representatives a copy of the Custody Agreement executed by the Selling
Stockholder and such further information, certificates and documents as the
Representatives may reasonably request.
5.12. ADDITIONAL DOCUMENTS. On or before each of the First Closing Date
and the Second Closing Date, if any, the Representatives and counsel for the
Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Common Shares as contemplated herein, or in order to
evidence the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and
as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Stockholder at any time
on or prior to the First Closing Date and, with respect to the Optional Common
Shares, at any time prior to the Second Closing Date, which termination shall be
without liability on the part of any party to any other party, except that
Section 4, Section 6, Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement
is terminated by the Representatives pursuant to Section 5, Section 7, Section
10 or Section 11 other than because of the breach or default of one or more of
the Underwriters, or if the sale to the Underwriters of the Common Shares on the
First Closing Date or the Second Closing Date is not consummated because of any
refusal, inability or failure on the part of the Company or the Selling
Stockholder to perform any agreement herein or to comply with any provision
hereof, the Company agrees to reimburse the Representatives and the other
Underwriters (or such Underwriters as have terminated this Agreement with
respect to themselves), severally, upon demand for all out-of-pocket expenses
that shall have been reasonably incurred by the Representatives and the
Underwriters in connection with the proposed purchase and the offering and sale
of the Common Shares, including but not limited to fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile and telephone
charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall not
become effective until the later of (i) the execution of this Agreement by the
parties hereto and (ii) notification by the Commission to the Company and the
Representatives of the effectiveness of the Registration Statement under the
Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any
party by notice to each of the other parties hereto, and any such termination
shall be without liability on the part of (a) the Company or the Selling
Stockholder to any Underwriter, except that the Company shall be
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obligated to reimburse the expenses of the Representatives and the Underwriters
pursuant to Sections 4 and 6 hereof, (b) any Underwriter to the Company or the
Selling Stockholder, or (c) any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
SECTION 8. INDEMNIFICATION.
8.1. INDEMNIFICATION OF THE UNDERWRITERS. (a) The Company agrees to
indemnify and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act and the Exchange Act against any loss, claim, damage, liability
or expense, as incurred, to which such Underwriter or such controlling person
may become subject, under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company contained herein; or (iv) in whole
or in part upon any failure of the Company to perform its obligations hereunder
or under law; or (v) any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner to, the
Common Stock or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising out of
or based upon any matter covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (v) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its bad faith or willful misconduct; and to reimburse each Underwriter and each
such controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by BAS) as such expenses are reasonably incurred
by such Underwriter or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any 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 the Representatives expressly for use in the Registration Statement,
any preliminary prospectus or the Prospectus (or any amendment or supplement
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thereto); and provided, further, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit of
any Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Common Shares, or any person controlling such
Underwriter, if the Company identified the untrue statement or omission in
writing to the Underwriters and copies of the Prospectus were timely delivered
to the Underwriter pursuant to Section 2 and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Common Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth in this Section 8.1(a) shall be in addition to any liabilities that
the Company may otherwise have.
(b) Subject to Section 8.5, the Selling Stockholder agrees to indemnify
and hold harmless each Underwriter, its officers and employees, and each person,
if any, who controls any Underwriter within the meaning of the Securities Act
and the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability or
expense (or actions in resect thereof as contemplated below) arises out of or is
based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of the Selling Stockholder contained herein; or
(iv) in whole or in part upon any failure of such Selling Stockholder to perform
his obligations hereunder or under law; or (v) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or relating
in any manner to, the Common Stock or the offering contemplated hereby, and
which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon any matter covered by clause
(i) or (ii) above, provided that the Selling Stockholder shall not be liable
under this clause (v) to the extent that a court of competent jurisdiction shall
have determined by a final judgment that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its bad faith or willful
misconduct; and to reimburse each Underwriter and each such controlling person
for any and all expenses (including the fees and disbursements of counsel BAS)
as such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling,
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compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon and in conformity with written
information furnished to the Company by the Representatives expressly for use in
the Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and provided, further, that with respect to
any preliminary prospectus, the foregoing indemnity agreement shall not inure to
the benefit of any Underwriter from whom the person asserting any loss, claim,
damage, liability or expense purchased Common Shares, or any person controlling
such Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Common Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth in this Section 8.1(b) shall be in addition to any liabilities that
the Selling Stockholder may otherwise have.
8.2. INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement, the Selling Stockholder and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act, against any loss, claim, damage, liability or expense, as incurred, to
which the Company, or any such director, officer, Selling Stockholder or
controlling person may become subject, under the Securities Act, the Exchange
Act, or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, any preliminary
prospectus, the Prospectus (or any amendment or supplement thereto), in reliance
upon and in conformity with written information furnished to the Company by the
Representatives expressly for use therein; and to reimburse the Company, or any
such director, officer, Selling Stockholder or controlling person for any legal
and other expense reasonably incurred by the Company, or any such director,
officer, Selling Stockholder or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. Each of the Company and the Selling
Stockholder hereby acknowledges that the only information that the Underwriters
have furnished to the Company expressly for use in the Registration Statement,
any preliminary prospectus or the
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Prospectus (or any amendment or supplement thereto) are the statements set forth
in the table after the first paragraph and in the second, sixth, seventh, eighth
and ninth paragraphs under the caption "Underwriting" in the Prospectus; and the
Underwriters confirm that such statements are correct. The indemnity agreement
set forth in this Section 8.2 shall be in addition to any liabilities that each
Underwriter may otherwise have.
8.3. NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, 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
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (BAS in the case of Section 8.2 and Section 9), representing
the indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
8.4. SETTLEMENTS. The indemnifying party under this Section 8 shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the
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indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
8.5. LIMITATION ON LIABILITY OF THE SELLING STOCKHOLDER. The liability
of the Selling Stockholder under the representations, warranties and agreements
contained herein and under the indemnity and contribution agreements contained
in the provisions of this Section 8 and Section 9 shall be limited to an amount
equal to the aggregate initial public offering price of all Shares sold by the
Selling Stockholder to the Underwriters minus the amount of the underwriting
discount paid thereon to the Underwriters by the Selling Stockholder. The
Company and the Selling Stockholder may agree, as among themselves and without
limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason held
to be unavailable to or otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholder, on the one hand,
and the Underwriters, on the other hand, from the offering of the Common Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholder, on the one hand, and the Underwriters, on the other hand,
in connection with the offering of the Common Shares pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Common Shares pursuant to this Agreement
(before deducting expenses) received by the Company and the Selling Stockholder,
and the total underwriting discount received by the Underwriters, in each case
as set forth on the front cover page of the Prospectus (or, if Rule 434 under
the Securities Act is used, the corresponding location on the Term Sheet) bear
to the aggregate initial public offering price of the Common Shares as set forth
on such cover. The relative fault of the Company and the Selling Stockholder, on
the one hand,
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and the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company and the Selling Stockholder, on the one
hand, or the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8.3, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8.3 with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8.3 for purposes of indemnification.
The Company, the Selling Stockholder and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall
be required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and the Selling
Stockholder and each person, if any, who controls the Company with the meaning
of the Securities Act and the Exchange Act shall have the same rights to
contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed
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10% of the aggregate number of the Common Shares to be purchased on such date,
the other Underwriters shall be obligated, severally, in the proportions that
the number of Firm Common Shares set forth opposite their respective names on
Schedule A bears to the aggregate number of Firm Common Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as may be specified by the Representatives with the consent of the
non-defaulting Underwriters, to purchase the Common Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Common
Shares and the aggregate number of Common Shares with respect to which such
default occurs exceeds 10% of the aggregate number of Common Shares to be
purchased on such date, and arrangements satisfactory to the Representatives and
the Company for the purchase of such Common Shares are not made within 48 hours
after such default, this Agreement shall terminate without liability of any
party to any other party except that the provisions of Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination. In any such case either the Representatives or the Company shall
have the right to postpone the First Closing Date or the Second Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date this Agreement may be terminated by the Representatives by notice given to
the Company and the Selling Stockholder if at any time (i) trading or quotation
in any of the Company's securities shall have been suspended or limited by the
Commission or by the Nasdaq National Market, or trading in securities generally
on either the Nasdaq Stock Market or the New York Stock Exchange shall have been
suspended or limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or the NASD; (ii) a
general banking moratorium shall have been declared by any of federal, New York,
Delaware or California authorities; (iii) there shall have occurred any outbreak
or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial
change in United States' or international political, financial or economic
conditions, as in the judgment of the Representatives is material and adverse
and makes it impracticable to market the Common Shares in the manner and on the
terms described in the Prospectus or to enforce contracts for the sale of
securities; (iv) in the judgment of the Representatives there shall have
occurred any Material Adverse Change; or (v) the Company shall have sustained a
loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Representatives may interfere materially
with the conduct of the business and operations of
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the Company regardless of whether or not such loss shall have been insured. Any
termination pursuant to this Section 11 shall be without liability on the part
of (a) the Company and the Selling Stockholder to any Underwriter, except that
the Company shall be obligated to reimburse the expenses of the Representatives
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to
the Company and the Selling Stockholder, or (c) of any party hereto to any other
party except that the provisions of Section 8 and Section 9 shall at all times
be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholder and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholder as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxx, Esq.
If to the Company or the Selling Stockholder:
Xxxxxxxxxx.xxx, Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. XxXxxxx
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with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Common Shares as such from any of the Underwriters merely by reason of
such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
Section 16. GOVERNING LAW; JURISDICTION; WAIVER.
16.1. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
16.2. CONSENT TO JURISDICTION. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City and County of San Francisco or the
courts of the State of California in each case located in the City and County of
San Francisco (collectively, the "Specified Courts"), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or
-31-
other proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such suit,
action or other proceeding brought in any such court has been brought in an
inconvenient forum.
16.3. WAIVER OF IMMUNITY. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
Section 17. FAILURE OF THE SELLING STOCKHOLDER TO SELL AND DELIVER
COMMON SHARES. If the Selling Stockholder shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by the Selling
Stockholder at the First Closing Date or the Second Closing Date, as applicable,
pursuant to this Agreement, then the Underwriters may at their option, by
written notice from the Representatives to the Company and the Selling
Stockholder, either (i) terminate this Agreement without any liability on the
part of any Underwriter and, except as provided in Sections 4, 6, 8 and 9
hereof, the Company or the Selling Stockholder, or (ii) purchase the shares
which the Company agreed to sell and deliver in accordance with the terms
hereof. If the Selling Stockholder shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by the Selling
Stockholder pursuant to this Agreement at the First Closing Date or the Second
Closing Date, as applicable, then the Underwriters shall have the right, by
written notice from the Representatives to the Company and the Selling
Stockholder, to postpone such Closing Date, but in no event for longer than
seven days in order that the required changes, if any, to the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected.
SECTION 18. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including,
-32-
without limitation, the indemnification provisions of Section 8 and the
contribution provisions of Section 9, and is fully informed regarding said
provisions. Each of the parties hereto further acknowledges that the provisions
of Sections 8 and 9 hereto fairly allocate the risks in light of the ability of
the parties to investigate the Company, its affairs and its business in order to
assure that adequate disclosure has been made in the Registration Statement, any
preliminary prospectus and the Prospectus (and any amendments and supplements
thereto), as required by the Securities Act and the Exchange Act.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
XXXXXXXXXX.XXX, INC.
By:
----------------------------
Name:
Title:
XXXXXXX X. XXXXXXX
-----------------------------
The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Representatives in San Francisco, California as of the date first above
written.
BANC OF AMERICA SECURITIES LLC
PAINEWEBBER INCORPORATED
XXXX XXXXXXXX XXXXXXX
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By BANC OF AMERICA SECURITIES LLC
By:
------------------------------
-33-
-34-
SCHEDULE A
NUMBER OF
FIRM COMMON SHARES
UNDERWRITERS TO BE PURCHASED
Banc of America Securities LLC [ ]
------------
PaineWebber Incorporated [ ]
------------
Xxxx Xxxxxxxx Xxxxxxx [ ]
------------
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EXHIBIT A
Opinion of counsel for the Company and the Selling Stockholder to be
delivered pursuant to Sections 5.4 and 5.9 of the Underwriting Agreement.
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement.
3. The Company has been duly qualified as a foreign corporation to
transact business and is in good corporate standing under the laws of each other
jurisdiction in which it owns or leases real properties so as to require such
qualification or is subject to no material liability or disability by reason of
failure to be so qualified in any such jurisdiction.
4. The Subsidiary has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in corporate good standing under
the laws of each other jurisdiction in which it owns or leases real properties
so as to require such qualification or is subject to no material liability or
disability by reason of failure to be so qualified in any such jurisdiction.
5. All of the issued and outstanding capital stock of the Subsidiary
has been duly authorized and validly issued, is fully paid and non-assessable,
and is owned of record, and to the best of our knowledge, beneficially, directly
by the Company, free and clear, to the best of our knowledge, of any security
interest, mortgage, pledge, lien, encumbrance or pending or threatened claim.
6. The authorized, issued and outstanding capital stock of the Company
(including the Common Shares) conform in all material respects to the
descriptions thereof set forth in the Prospectus under the heading "Description
of Capital Stock." All of the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable. The form of
certificate used to evidence the Common Stock complies with any applicable
requirements of the Certificate of Incorporation and the By-Laws and the DGCL.
The statements set forth in the Prospectus under the caption "Management - Stock
Option Plans" describing the plans filed as Exhibits 10.1, 10.2 and 10.36 to the
Registration Statement (other than with respect to the number of awards granted
or made thereunder) are accurate and complete in all material respects.
-36-
7. No stockholder of the Company or any other person has any preemptive
right, right of first refusal or other similar right to subscribe for or
purchase any securities of the Company arising (a) by operation of the
Certificate of Incorporation or the By-Laws or the DGCL or (b) to the best of
our knowledge, any other agreement or instrument to which the Company is a
party.
8. The Underwriting Agreement has been duly authorized, executed, and
delivered by the Company.
9. The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and non-assessable.
10. The Registration Statement has been declared effective by the
Commission under the Act. To the best of our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under the Act
and no proceedings for such purpose have been instituted or are pending or are
contemplated or threatened by the Commission. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under the Act has
been made in the manner and within the time period required by such Rule 424(b).
11. The Registration Statement, the Prospectus, and each amendment or
supplement to the Registration Statement and the Prospectus, as of their
respective effective or issue dates (other than the financial statements,
including the notes thereto, and supporting schedules and other financial and
accounting data included therein or in exhibits to or excluded from the
Registration Statement, as to which we express no opinion) comply as to form in
all material respects with the applicable requirements of the Act.
12. The statements (a) in the Prospectus under the captions (i)
"Description of Capital Stock" describing the authorized capital stock of the
Company, certain provisions of the DGCL, the Certificate of Incorporation, the
By-Laws, and the agreements filed as Exhibits 10.3, 10.5, 10.14, 10.17, and
10.18 to the Registration Statement, respectively, (ii) "Certain Transactions"
describing the agreements filed as Exhibits 10.3 to 10.18, 10.21 to 10.23, 10.34
and 10.35 to the Registration Statement, (iii) "Shares Eligible for Future Sale
B Sales of Restricted Shares" but only with respect to the statements made in
the second and third paragraphs thereunder, and (iv) "Risk Factors B Provisions
of our governing documents and Delaware law . . ." but only with respect to the
statements therein that are introduced by bullets, and (b) in Item 14 of the
Registration Statement; in each case to the extent that such statements purport
to summarize the terms of the capital stock of the Company or to describe the
Certificate of Incorporation or the By-Laws, statutes, rules, or regulations or
the provisions of the agreements referenced therein, are correct in all material
respects and fairly present and summarize the matters referred to therein.
-37-
13. To the best of our knowledge (without having made a search of the
docket of any court or governmental authority), there are no legal or
governmental actions, suits or proceedings pending to which the Company or the
Subsidiary is a party or threatened against the Company or the Subsidiary which
are required to be disclosed in the Registration Statement, other than those
disclosed therein.
14. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance of the
Underwriting Agreement or consummation of the transactions contemplated thereby
and by the Prospectus, except as have been obtained and are in full force and
effect or as are required under applicable state securities or blue sky laws and
from the National Association of Securities Dealers, Inc. (the "NASD").
15. The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder (other
than performance by the Company of its obligations under the indemnification
section of the Underwriting Agreement, as to which we express no opinion) (a)
have been duly authorized by all necessary corporate action on the part of the
Company; (b) will not result in any violation of the provisions of the charter
or by-laws of the Company or the Subsidiary; (c) will not constitute a breach
of, or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or the
Subsidiary pursuant to any document filed as an exhibit to the Registration
Statement; or (d) will not result in any violation of any law, administrative
regulation or administrative or court decree known to us which is applicable to
the Company or the Subsidiary.
16. The Company is not, and will not become, as a result of and at the
consummation of the sale of the Common Shares as contemplated by the
Underwriting Agreement, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
17. Except as disclosed in the Prospectus under the caption "Shares
Eligible For Future Sale," to the best of our knowledge, no person has any right
pursuant to any document to require the Company to register any securities for
offering and sale under the Registration Statement, except for such rights as
have been waived by such person in writing.
18. To the best of our knowledge, neither the Company nor the
Subsidiary is in violation of its charter or by-laws or is in default (or, with
the giving of notice or lapse of time, would be in default) in the performance
or observance of any obligation, agreement, covenant or condition contained in
any document filed as an exhibit to the Registration Statement, except in each
such case for such violations or defaults as would not have a material adverse
effect on the business, properties, condition (financial or other), or results
of operations of the Company and the Subsidiaries taken as a whole.
-38-
19. The Underwriting Agreement has been duly executed and delivered by,
and is a valid and binding agreement of, the Selling Stockholder.
20. Each of the Custody Agreement and the Power of Attorney has been
duly executed and delivered by the Selling Stockholder and is a valid and
binding agreement of the Selling Stockholder, enforceable against the Selling
Stockholder in accordance with its terms.
21. The execution and delivery by the Selling Stockholder, and the
performance by the Selling Stockholder of his obligations under, the
Underwriting Agreement, the Custody Agreement and the Power of Attorney do not
and will not violate, result in a breach of or constitute a default under the
terms of any of the Subject Contracts, nor will such action result in any
violation of the provisions of any statute, or any order, rule, or regulation
known to us of any court or governmental agency or body having jurisdiction over
the Selling Stockholder.
22. Immediately prior to the date hereof, the Selling Stockholder is
the sole registered owner of all of the Common Shares which may be sold by the
Selling Stockholder under the Underwriting Agreement and has the legal right and
power, and to the best of our knowledge, all authorizations and approvals
required to enter into the Underwriting Agreement, the Custody Agreement and the
Power of Attorney, to sell, transfer and deliver all of the Common Shares which
may sold by the Selling Stockholder under the Underwriting Agreement and to
comply with his other obligations under the Underwriting Agreement, the Custody
Agreement and the Power of Attorney.
23. Assuming that the Underwriters purchase the Common Shares which are
sold by the Selling Stockholder pursuant to the Underwriting Agreement as
"protected purchasers" (within the meaning of Section 8-303 of the Massachusetts
Uniform Commercial Code), the Underwriters will acquire all of the rights in
such Common Shares that the Selling Stockholder has or has the power to
transfer, free of any adverse claim.
24. To the best of our knowledge, no consent, approval,
authorization or other order of, or registration or filing with, any court or
governmental authority or agency, is required for the Selling Stockholder's
execution, delivery and performance of the Underwriting Agreement and
consummation by the Selling Stockholder of the transactions contemplated
thereby and by the Prospectus, except as required under the Act, applicable
state securities or blue sky laws, and from the NASD.
----------------------
In addition, we have participated in certain conferences with officers
and other representatives of the Company, representatives of the Underwriters,
and representatives of the independent certified public accountants of the
Company, at which conferences the contents of the Registration Statement and the
Prospectus, and any supplements or amendments thereto, and related matters were
discussed, and although we are not passing upon and do not assume any
responsibility for the accuracy, completeness, or fairness of the statements
contained in the Registration Statement or the Prospectus
-39-
(except as specified in paragraphs 6, 10, 11, and 12 above), on the basis of the
foregoing, no facts have come to our attention that have caused us to believe
that (i) the Registration Statement or any further amendment thereto made by the
Company prior to the First Closing Date (other than the financial statements,
including the notes thereto, and related schedules and other financial and
accounting data included therein, as to which we express no view), at the time
such Registration Statement or amendment became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
as of its date, the Prospectus or any further amendment or supplement thereto
made by the Company prior to the First Closing Date (other than the financial
statements, including the notes thereto, and related schedules and other
financial and accounting data included therein, as to which we express no view)
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or (iii) that, at the First Closing Date, either the Registration Statement or
the Prospectus or any further amendment or supplement thereto made by the
Company prior to the First Closing Date (other than the financial statements,
including the notes thereto, and related schedules and other financial,
statistical and accounting data included therein, as to which we express no
view) contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading; and we do not know of any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the Prospectus, that
are not filed or described as required.
This opinion letter and all of the opinions and other statements herein
are as of the date hereof. We assume no obligation to update this opinion letter
or any such opinion or statement, or otherwise to inform you in the future, with
respect to any facts or circumstances or changes in the law that hereafter may
occur or come to our attention.
This opinion letter and the opinions and other statements herein have
been delivered solely for the benefit of you and your counsel in connection with
the transactions contemplated by the Underwriting Agreement, and may not be
referred to or used for any other purpose or relied upon by any other person,
except with our express prior written consent.
Very truly yours,
XXXXXXX XXXX XXX
-00-
XXXXXXX X
[Date]
Banc of America Securities LLC
PaineWebber Incorporated
Xxxx Xxxxxxxx Xxxxxxx
As Representatives of the several Underwriters
c/o BANC OF AMERICA Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: Xxxxxxxxxx.xxx, Inc. (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
representatives of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company (by,
among other things, raising additional capital for its operations. The
undersigned acknowledges that you and the other underwriters are relying on the
representations and agreements of the undersigned contained in this letter in
carrying out the Offering and in entering into underwriting arrangements with
the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of BAS (which consent
may be withheld in its sole discretion), directly or indirectly, sell, offer,
contract or grant any option to sell (including without limitation any short
sale), pledge, transfer, establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, or otherwise
dispose of any shares of Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable for or convertible into
shares of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended) by the undersigned, or publicly announce the undersigned's
intention to do any of the foregoing, for a period commencing on the date hereof
and continuing through the close of trading on the date 180 days after the date
of the Prospectus. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions. With respect to the Offering only,
the undersigned waives any registration rights relating to registration under
the Securities Act of any Common Stock owned either of record or beneficially by
the undersigned, including any rights to receive notice of the Offering.
-41-
This agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives, and assigns of
the undersigned.
Printed Name of Holder
By:
Signature
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
-42-
