EXHIBIT 1.1
8,500,000 Shares
REPLAYTV, INC.
COMMON STOCK, PAR VALUE $0.001 PER SHARE
FORM OF
UNDERWRITING AGREEMENT
__________, 2000
_______________, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Chase Seucrities Inc.
Deutsche Bank Securities Inc.
Xxxxxxxxxxx Xxxxxxx Securities, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
ReplayTV, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") 8,500,000 shares of its common stock, par value $0.001 per share
(the "Firm Shares"). Xxxxxx Xxxxxxx & Co. Incorporated, Bear, Xxxxxxx & Co.
Inc., Deutsche Bank Securities Inc., Xxxxxxxxx & Xxxxx LLC and Xxxxxxxxxxx
Xxxxxxx Securities, Inc. shall act as representatives (the "Representatives") of
the several Underwriters.
The Company also proposes to issue and sell to the several Underwriters
not more than an additional 1,275,000 shares of its common stock, par value
$0.001 (the "Additional Shares") if and to the extent that the Representatives
shall have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of common stock granted to the Underwriters in Section 2
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares." The shares of common stock, par value $0.001, of
the Company to be outstanding after giving effect to the sales contemplated
hereby are hereinafter referred to as the "Common Stock."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (File No. 333-95425), including a
prospectus, relating to the Shares. The registration statement as amended at the
time it becomes effective, including the information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act of 1933, as amended (the "Securities Act"), is
hereinafter
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referred to as the "Registration Statement"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "Prospectus."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement.
The representatives have agreed to reserve a portion of the Shares to be
purchased by them under this Agreement for sale by an affiliate of Deutsche Bank
Securities Inc. to the Company's directors, officers, employees and business
associates and other parties related to the Company (collectively,
"Participants"), as set forth in the Prospectus under the heading "Underwriters"
(the "Directed Share Program"). The Shares to be sold by Deutsche Bank
Securities Inc. and its affiliates pursuant to the Directed Share Program are
hereinafter referred to as the "Directed Shares." Any Directed Shares not orally
confirmed for purchase by any Participants by the end of the business day on
which this Agreement is executed will be offered to the public by the
Underwriters as set forth in the Prospectus.
1. Representations and Warranties. The Company represents and warrants
to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the Company's
knowledge, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, 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, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (iii) the Prospectus
does not contain and, as amended or supplemented, if applicable, 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,
except that the representations and warranties set forth in this paragraph
do not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter furnished
to the
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Company in writing by such Underwriter through you expressly for use
therein.
(c) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of Delaware, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
Company.
(d) The Company does not own a controlling interest in, or
otherwise control, directly or indirectly, any corporation, association or
other business entity.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained
in the Prospectus.
(g) The shares of Common Stock outstanding prior to or concurrently
with the issuance of the Shares (including the shares of Common Stock
issued upon conversion of all of the Company's preferred stock) have been
duly authorized and are validly issued, fully paid and non-assessable.
(h) Each share of the Company's outstanding preferred stock will
automatically convert into one share of Common Stock on the Closing
Date, as described in the Prospectus.
(i) The shares of Common Stock of the Company to be issued upon
conversion of all of the Company's preferred stock have been duly
authorized and, when issued and delivered pursuant to the terms of the
Company's certificate of incorporation, will be validly issued, fully paid
and non-assessable.
(j) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
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issued, fully paid and non-assessable, and the issuance of such Shares will
not be subject to any preemptive or similar rights, other than rights that
have been validly waived with respect to the Shares.
(k) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or, except where such contravention
would not, singly or in the aggregate, have a material adverse effect on
the Company, any agreement or other instrument binding upon the Company or
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
under this Agreement, except such as have been obtained under the federal
securities laws or as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Shares.
(l) There has not occurred any material adverse change in the
condition, financial or otherwise, or in the earnings, business, operations
or prospects of the Company from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement).
(m) Each of (i) the OEM Distribution Agreement dated as of July 30,
1999 and amended as of December 20, 1999 between Matsushita-Kotobuki
Electronics Industries, Ltd ("MKE") and the Company, (ii) the Master
Collaboration Agreement dated as of December 20, 1999 between MKE and the
Company, (iii) the Agreement, dated as of February 1, 1999 between Showtime
Networks, Inc. and the Company, (iv) the Replay Network Service Agreement
dated as of July 30, 1999 between Xxxxxx Broadcasting System, Inc. and the
Company, (v) the Letter Agreement dated July 30, 1999 between National
Broadcasting, Inc. and the Company and (vi) the Flextronics International
Manufacturing Contract dated November 3, 1998 between Flextronics
International USA, Inc. and the Company (collectively, the "Contracts") is
in full force and effect, the Company (i) is not in breach of or default
under any Contract in any manner that would allow any party to any such
Contract to terminate such
5
Contract as a result of such breach or default and (ii) has received no
notification of an intention by any party to terminate any Contract.
(n) None of (i) Tribune Media Services, Inc., (ii) Sony, (iii)
Philips, (iv) Quantum Corporation, (v) Universal Electronics, Inc. or
(vi) any other sole supplier of the Company (each a "Sole Supplier") has
notified the Company that such party cannot, or does not intend to,
continue to supply the Company with the goods and/or services it is
currently supplying the Company in quantities sufficient to meet the
Company's reasonably foreseeable requirements for such goods and/or
services.
(o) There are no legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company is a party or to
which any of the properties of the Company is subject that are required to
be described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(p) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(q) The Company is not, and after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus will not be, required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(r) The Company (i) is in compliance with any and all applicable
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws"), (ii) has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
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comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse effect on
the Company.
(s) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company.
(t) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement, except any such right which has been disclosed to
the Representatives and which has been effectively waived in writing by the
holder of such right.
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(u) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company has
not incurred any material liability or obligation, direct or contingent,
nor entered into any material transaction not in the ordinary course of
business; (ii) the Company has not purchased any of its outstanding capital
stock (other than repurchases of Common Stock from terminated employees or
consultants pursuant to pre-existing contractual arrangements), nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock; and (iii) there has not been any change in the
capital stock (other than (x) issuances of Common Stock upon exercise of
existing options, (y) repurchases of Common Stock from terminated employees
or consultants pursuant to pre-existing contractual arrangements and (z)
grants prior to the date hereof of options to purchase Common Stock, the
terms of which, in the case of clause (z), the Representatives have been
advised in writing) or debt of the Company, except in each case as
described in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(v) The Company has good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned
by it which is material to the business of the Company, in each case free
and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be
made of such property by the Company; and any real property and buildings
held under lease by the Company are held by it under valid, subsisting and,
to the Company's knowledge, enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company, in each case except as
described in the Prospectus.
(w) The Company owns or possesses, or can acquire on reasonable
terms, all material patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names currently employed
by it in connection with the business now operated by it, in each case
except as disclosed in the Prospectus. The Company has not received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the Company, in each case except as disclosed in
the Prospectus. To its knowledge, the Company's services and products (and
any underlying technology related
8
thereto) do not infringe any U.S. patent, copyright, trade secret or other
proprietary right of any third party or otherwise conflict with the rights
of any third party.
(x) No material labor dispute with the employees of the Company
exists or, to the knowledge of the Company, is imminent; and the Company is
not aware of any existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors
that could have a material adverse effect on the Company.
(y) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which it is engaged; the Company
has not been refused any insurance coverage sought or applied for; and the
Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse effect on the
Company.
(z) The Company possesses all certificates, authorizations and
permits issued by the appropriate federal or state regulatory authorities
necessary to conduct its business as described in the Prospectus, except
where the failure to possess any such certificate, authorization or permit
would not have a material adverse effect on the Company, and the Company
has not received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company.
(aa) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
9
(bb) Except as described in the Registration Statement or
Prospectus (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement), the Company has not sold, issued or
distributed any shares of Common Stock, or any options, rights or warrants
to purchase shares of Common Stock or any class of preferred stock of the
Company, or any other securities convertible into Common Stock or such
preferred stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A, Regulation D or Regulation S
under the Securities Act, except for any options to purchase Common Stock
or restricted stock granted to employees or consultants of the Company.
Except as described in the Prospectus and except for any options to
purchase Common Stock or restricted stock granted or committed for issuance
to employees or consultants of the Company after the date of the Prospectus
(which shall be in accordance with the Company's ordinary business practice
and generally in accordance with written guidelines provided to the
Representatives by the Company prior to the date hereof), there are no
options, rights or warrants to purchase shares of Common Stock or any class
of preferred stock of the Company, or any other securities convertible into
Common Stock or such preferred stock, outstanding, or any existing
commitments by the Company to sell or issue shares of Common Stock or any
such preferred stock.
(cc) The Registration Statement, the Prospectus and any preliminary
prospectus comply in all material respects, and any amendments or
supplements thereto will comply in all material respects, with any
applicable laws or regulations of any jurisdiction in which the Prospectus
or any preliminary prospectus, as amended or supplemented, if applicable,
is distributed in connection with the Directed Share Program; no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any jurisdiction
where the Directed Shares are being offered.
(dd) The Company has not offered, or caused Xxxxxx Xxxxxxx or its
affiliates to offer, Shares to any person pursuant to the Directed Share
Program with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or type
of business with the Company, or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its products.
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2. Agreements to Sell and Purchase. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the Company the respective numbers of Firm Shares set forth
in Schedule I hereto opposite its name at $______ a share (the "Purchase
Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to 1,275,000
Additional Shares at the Purchase Price. If the Representatives, on behalf of
the Underwriters, elect to exercise such option, the Representatives shall so
notify the Company in writing not later than 30 days after the date of this
Agreement, which notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten business days after the
date of such notice. Additional Shares may be purchased as provided in Section 4
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as the Representatives may determine) that bears the same proportion to
the total number of Additional Shares to be purchased as the number of Firm
Shares set forth in Schedule I hereto opposite the name of such Underwriter
bears to the total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Shares to be sold hereunder, (B) the issuance by the Company of shares of
Common Stock
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upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof of which the Underwriters have been advised in
writing , (C) the grant of options to purchase Common Stock or the issuance of
restricted stock to employees or consultants of the Company or (D) the issuance
of any shares of Common Stock or right to acquire shares of capital stock of the
Company; provided that, in the case of clauses (C) and (D), (x) any such option
or right to acquire shares of capital stock shall not be exercisable prior to
the expiration of the 180 day period (and the Company agrees not to accelerate
the exercisability thereof) or the recipient thereof shall have executed a
"lock-up" agreement substantially in the form of Exhibit A hereto, (y) any such
shares of restricted stock shall have restrictions attached thereto
substantially to the effect of the "lock-up" agreement attached as Exhibit A
hereto or the recipient thereof shall have executed a "lock-up" agreement
substantially in the form of Exhibit A hereto and (z) the recipient of any
shares of Common Stock shall have executed a "lock-up" agreement substantially
in the form of Exhibit A hereto.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
$_____________ a share (the "Public Offering Price") and to certain dealers
selected by you at a price that represents a concession not in excess of $______
a share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made to
the Company in Federal funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on ____________, 2000, or at
such other time on the same or such other date, not later than _________, 2000,
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the Company in Federal
funds immediately available in New York City against delivery of such Additional
Shares for the respective accounts of the several Underwriters at 10:00 a.m.,
New York City time, on the date specified in the notice described in Section 2
or at such other time on the same or on such other date, in any event not later
than _______, 2000, as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "Option Closing Date."
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Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 4:30 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change in the
condition, financial or otherwise, or in the earnings, business,
operations or prospects of the Company from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the Chairman and Chief
Executive Officer of the Company, to the effect set forth in Section
5(a)(i)
13
above and to the effect that the representations and warranties of
the Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Venture Law Group, A Professional Corporation, outside counsel
for the Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of Delaware,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company;
(ii) the authorized capital stock of the Company conforms in
all material respects as to legal matters to the description thereof
contained in the Prospectus;
(iii) the shares of Common Stock outstanding prior to or
concurrently with the issuance of the Shares (including the shares of
Common Stock issued upon conversion of all of the Company's preferred
stock) have been duly authorized and are validly issued, fully paid
and non-assessable;
(iv) the Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive rights set forth in
the Company's certificate of incorporation or bylaws or, to the
knowledge of such counsel,
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similar rights, other than rights that have been validly waived with
respect to the Shares;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or bylaws of the Company or, to such counsel's
knowledge, any agreement or other instrument binding upon the Company
that is material to the Company, or, to such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its
obligations under this Agreement, except such as have been obtained
under the federal securities laws or as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares;
(vii) the statements (A) in the Prospectus under the
captions "Risk Factors -- Risks Related to this Offering and Our
Common Stock -- An aggregate of 40,952,916 shares, or approximately
83%, of our outstanding stock will become eligible for resale in the
public market between 180 days and one year after this offering, and
future sales of this stock may cause our stock price to decline," the
second sentence under "Dividend Policy," the second paragraph under
"Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Overview," the second paragraph under
"Business -- Media Relationships," "Management -- Board Composition,"
Management -- Board Committees," "Management -- Option Grants"
"Management -- Change of Control Agreements," "Management -- Stock
Plans," "Management -- Limitation of Liability and Indemnification
Matters," "Related Party Transactions," "Description of Capital Stock"
and "Shares Eligible for Future Sale" and
15
(B) in the Registration Statement in Items 14 and
15, in each case insofar as such statements constitute summaries of
the legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the matters
referred to therein;
(viii) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company is
a party or to which any of the properties of the Company is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as
required;
(ix) the Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus will not be, required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended; and
(x) such counsel has no reason to believe that (A) the
Registration Statement and Prospectus (except for the financial
statements and financial schedules and other financial and statistical
data included therein, as to which such counsel need not express any
belief) do not comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder or (B) (x) the Registration
Statement and the prospectus included therein (except for the
financial statements and financial schedules and other financial and
statistical data included therein, as to which such counsel need not
express any belief) at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (y) the Prospectus
(except as stated) as of its date and as of the date hereof contained
or contains an untrue statement of a material fact or omitted or omits
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.
16
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 5(c)(iv), 5(c)(v),
5(c)(vii) (but only as to the statements in the Prospectus under "Description of
Capital Stock" and "Underwriters") and 5(c)(x) above.
(e) The Underwriters shall have received on the Closing Date an
opinion of Blakely, Sokoloff, Xxxxxx & Zafman, patent counsel for the Company,
dated the Closing Date, to the effect that:
(i) the statements in the Registration Statement and
Prospectus in the third and fourth paragraphs under the caption "Risk
Factors -- Risks Related to Our Business -- Intellectual property
claims against us could be costly and could result in the loss of
significant rights," under the caption "Risk Factors -- Risks Related
to our Service and Technology -- Our success depends on our ability to
secure and protect patents, trademarks and other proprietary rights,"
under the caption "Business -- Patents and Intellectual Property" and
in the last sentence under the caption "Business -- Legal Matters"
(the "Patent Paragraphs"), in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(ii) to the knowledge of such counsel, there are no legal or
governmental proceedings other than patent applications pending,
relating to patent rights of the Company to which the Company is a
party, and to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or others;
(iii) to the knowledge of such counsel, the Company has not
received any communications in which it is alleged that the Company is
infringing or violating the patent of third parties, except as
disclosed in the Prospectus or to the Representatives in writing;
(iv) to the knowledge of such counsel, except as disclosed in
the Prospectus, the Company possesses all right, title and
17
interest to all patent applications described or referred to in the
Prospectus as owned by it; and
(v) such counsel has no reason to believe that (A) the
descriptions and statements in the Patent Paragraphs in the
Registration Statement and the prospectus included therein at the time
the Registration Statement became effective contained any untrue
statement of a material fact with respect to patent rights of the
Company or omitted to state a material fact with respect to patent
rights of the Company required to be stated therein or necessary in
order to make the statements therein not misleading or (B) the
Prospectus as of its date and as of the date hereof contained or
contains an untrue statement of a material fact with respect to patent
rights of the Company or omitted or omits to state a material fact
with respect to patent rights of the Company necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(f) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx, Xxxxxxx & Xxxxxxxx, copyright counsel for the Company, dated
the Closing Date, to the effect that:
(i) the statements in the Registration Statement and
Prospectus in the last paragraph under the caption "Risk Factors --
Risks Related to Our Service and Technology -- Intellectual property
claims against us could be costly and could result in the loss of
significant rights" and in the first three sentences under the caption
"Business -- Legal Matters" (the "Copyright Paragraphs"), insofar as
such statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(ii) to the knowledge of such counsel, except as disclosed in
the Prospectus, the Company has not received any communications in
which it is alleged that the Company is infringing or violating the
copyrights of third parties;
(iii) to the knowledge of such counsel, except as disclosed
in the Prospectus, the Company possesses all right, title and
18
interest to all copyrighted materials described or referred to in the
Prospectus as owned by it; and
(iv) such counsel has no reason to believe that (A) the
descriptions and statements in the Copyright Paragraph in the
Registration Statement and the prospectus included therein at the time
the Registration Statement became effective contained any untrue
statement of a material fact with respect to copyrights of the Company
or omitted to state a material fact with respect to copyrights of the
Company required to be stated therein or necessary in order to make
the statements therein not misleading or (B) the Prospectus as of its
date and as of the date hereof contained or contains an untrue
statement of a material fact with respect to copyrights of the Company
or omitted or omits to state a material fact with respect to
copyrights of the Company necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
With respect to Sections 5(c)(x), 5(e)(v) and 5(f)(vi) above, as
applicable, Venture Law Group, Xxxxx Xxxx & Wardwell, Blakely, Sokoloff,
Taylor & Zafman and Xxxxxx, Xxxxxxx & Xxxxxxxx may state that their opinion and
belief are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and review
and discussion of the contents thereof, but are without independent check or
verification, except as specified.
The opinions of Venture Law Group, Blakely, Sokoloff, Xxxxxx & Zafman and
Xxxxxx, Xxxxxxx & Xxxxxxxx described in Sections 5(c), 5(e) and 5(f) above shall
be rendered to the Underwriters at the request of the Company and shall so state
therein.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance reasonably satisfactory to
the Underwriters, from PricewaterhouseCoopers LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(h) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between Xxxxxx Xxxxxxx & Co. Incorporated and certain
stockholders, officers and directors of the Company relating to sales and
19
certain other dispositions of shares of Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in full
force and effect on the Closing Date.
(i) The Nasdaq National Market shall have approved the Common Stock
for listing, subject only to official notice of issuance.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the issuance of the Additional Shares.
6. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the reasonable opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, 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,
20
during such period, in the reasonable opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the Underwriters and to the dealers
(whose names and addresses you will furnish to the Company) to which Shares
may have been sold by you on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or 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.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the twelve-
month period ending __________, 2001 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) To place stop transfer orders on any Directed Shares that have
been sold to Participants subject to the three month restriction on sale,
transfer, assignment, pledge or hypothecation imposed by NASD Regulation,
Inc. under its Interpretative Material 2110-1 on free-riding and
withholding to the extent necessary to ensure compliance with the three
month restrictions.
(g) To comply with all applicable securities and other applicable
laws, rules and regulations in each jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
(h) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees and expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing,
21
including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to
the transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky memorandum in connection with the offer and sale of
the Shares under state securities laws and all expenses in connection with
the qualification of the Shares for offer and sale under state securities
laws as provided in Section 6(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky
memorandum not to exceed $10,000, (iv) all filing fees and the reasonable
fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Shares
by the National Association of Securities Dealers, Inc. not to exceed
$20,000, (v) all fees and expenses in connection with the preparation and
filing of the registration statement on Form 8-A relating to the Common
Stock and all costs and expenses incident to listing the Shares on the
Nasdaq National Market, (vi) the cost of printing certificates representing
the Shares, (vii) the costs and charges of any transfer agent, registrar or
depositary, (viii) all fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program and stamp
duties, similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program, (ix) the costs
and expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
the cost of any aircraft chartered in connection with the road show, and
(x) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise
made in this Section. It is understood, however, that except as provided in
this Section, Section 7 entitled "Indemnity and Contribution," and the last
paragraph of Section 9 below, the Underwriters will pay all of their costs
and expenses, including fees and disbursements of their counsel, stock
transfer taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make.
7. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
22
Act"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if 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 Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is a result of
noncompliance by the Company with Section 6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 7(a) or 7(b), such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party
23
may designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Xxxxxx Xxxxxxx &
Co. Incorporated, in the case of parties indemnified pursuant to Section 7(a),
and by the Company, in the case of parties indemnified pursuant to Section 7(b).
The indemnifying party 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 indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 7(d)(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
7(d)(i) above but also the relative fault of the Company on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities,
24
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Company on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 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 that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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 remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section
7 and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by
25
or on behalf of any Underwriter or any person controlling any Underwriter or by
or on behalf of the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
26
8. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New
27
York Stock Exchange, the American Stock Exchange or the National Association
of Securities Dealers, Inc., (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a general moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses
8(a)(i) through 8(a)(iv), such event, singly or together with any other such
event, makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased, and arrangements satisfactory to you and the Company for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to
28
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
REPLAYTV, INC.
By:
--------------------------
Name:
Title:
29
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Chase Securities Inc.
Deutsche Bank Securities Inc.
Xxxxxxxxxxx Xxxxxxx Securities, Inc.
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
--------------------------------------------------------
Name:
Title:
30
SCHEDULE I
Underwriter Number of Firm Shares
To Be Purchased
Xxxxxx Xxxxxxx & Co. Incorporated.................
Bear, Xxxxxxx & Co. Inc...........................
Chase Securities Inc..............................
Deutsche Bank Securities Inc......................
Xxxxxxxxxxx Xxxxxxx Securities, Inc...............
--------------------
Total:....................................... 8,500,000
====================
31
EXHIBIT A
Replay Networks, Inc.
----------, ---------
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("Xxxxxx Xxxxxxx") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Replay Networks, Inc., a California
corporation (the "Company"), providing for the public offering (the "Public
Offering") by certain underwriters, including Xxxxxx Xxxxxxx (the
"Underwriters"), of an as yet undetermined number of shares (the "Shares")
of the common stock, par value $0.001 per share, of the Company (the
"Common Stock").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date of the final prospectus relating to the Public
Offering (the "Prospectus") and continuing to and including the date 180
days after the date of such final Prospectus, (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (other than the Shares) or (2) enter into any
swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Common Stock (other
than the Shares), whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
transactions relating to any Shares purchased by the undersigned in the
Public Offering or to shares of
Common Stock or other securities acquired in open market transactions after
the completion of the Public Offering, and are not intended to prevent the
undersigned from exercising or converting securities convertible into or
exercisable or exchangeable for Common Stock (it being understood that any
such shares of Common Stock shall be subject to the restrictions set forth
herein). Further, the lock-up restriction described in this paragraph shall
not apply to (a) bona fide gifts, (b) distributions of the capital stock of
the Company to limited partners or shareholders of the undersigned, (c)
dispositions to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, or (d) if the
undersigned is a corporation, transfers of the capital stock of the Company
to any wholly owned subsidiary of such corporation; provided, however, that
-------- -------
in any such case, it shall be a condition to the transfer that the
transferee agrees in writing to be bound by the restrictions set forth
herein. In addition, the undersigned agrees that, without the prior written
consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date of the final Prospectus and
continuing to and including 180 days after the date of the Prospectus, make
any demand for or exercise any right with respect to, the registration of
any shares of Common Stock or any security convertible into or exercisable
or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be
made pursuant to an Underwriting Agreement, the terms of which are subject
to negotiation between the Company and the Underwriters.
Very truly yours,
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Name
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Authorized Signature
Address:
2
