Exhibit 1.01
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3,400,000 SHARES1
XXXXXXXX.XXX CORPORATION
COMMON STOCK
PURCHASE AGREEMENT
___________ __, 1999
U.S. BANCORP XXXXX XXXXXXX INC.
XXXXXXX XXXXX & COMPANY L.L.C.
DLJdirect Inc.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o U.S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Gentlemen:
xxxxxxxx.xxx Corporation, a Delaware corporation (the "Company"),
proposes to sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 3,400,000 shares (the "Firm Shares") of Common
Stock, $0.01 par value per share (the "Common Stock"), of the Company. The
respective amounts of the Firm Shares to be so purchased by the several
Underwriters are set forth opposite their names in Schedule I hereto. The Firm
Shares consist of 3,400,000 authorized but unissued shares of Common Stock to be
issued and sold by the Company. For the sole purpose of covering over-allotments
in connection with the sale of the Firm Shares, at the option of the
Underwriters, Internet World Media, Inc., a stockholder of the Company (the
"Selling Stockholder"), proposes to sell to the Underwriters up to an additional
510,000 shares of Common Stock on the terms and for the purposes set forth in
Section 3 hereof (the "Option Shares"). The Firm Shares and any Option Shares
purchased pursuant to this Purchase Agreement are herein collectively called the
"Securities."
The Company and the Selling Stockholder hereby confirm their agreement
with respect to the sale of the Securities to, and purchase of the Securities
by, the several Underwriters, for whom you are acting as Representatives (the
"Representatives").
1. REGISTRATION STATEMENT AND PROSPECTUS. A registration statement
on Form S-1 (File No. 333-76331) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
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1 Plus an option to purchase up to 510,000 additional shares from the Selling
Stockholder to cover over-allotments.
1.
Commission; one or more amendments to such registration statement have also been
so prepared and have been, or will be, so filed; and, if the Company has elected
to rely upon Rule 462(b) of the Rules and Regulations to increase the size of
the offering registered under the Act, the Company will prepare and file with
the Commission a registration statement with respect to such increase pursuant
to Rule 462(b). Copies of such registration statement(s) and amendments and each
related preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, and, in
the event of any amendment thereto after the effective date and prior to the
First Closing Date (as hereinafter defined), such registration statement as so
amended (but only from and after the effectiveness of such amendment), including
a registration statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Rules and
Regulations, is hereinafter called the "Registration Statement." The prospectus
included in the Registration Statement at the time it is or was declared
effective by the Commission is hereinafter called the "Prospectus," except that
if any prospectus (including any term sheet meeting the requirements of Rule 434
of the Rules and Regulations provided by the Company for use with a prospectus
subject to completion within the meaning of Rule 434 in order to meet the
requirements of Section 10(a) of the Rules and Regulations) filed by the Company
with the Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the
Rules and Regulations or any other such prospectus provided to the Underwriters
by the Company for use in connection with the offering of the Securities
(whether or not required to be filed by the Company with the Commission pursuant
to Rule 424(b) of the Rules and Regulations) differs from the prospectus on file
at the time the Registration Statement is or was declared effective by the
Commission, the term "Prospectus" shall refer to such differing prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) from and after the time such prospectus is filed with the
Commission or transmitted to the Commission for filing pursuant to such Rule
424(b) (and Rule 434, if applicable) or from and after the time it is first
provided to the Underwriters by the Company for such use. The term "Preliminary
Prospectus" as used herein means any preliminary prospectus included in the
Registration Statement prior to the time it becomes or became effective under
the Act and any prospectus subject to completion as described in Rule 430A or
434 of the Rules and Regulations.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDER.
(A) The Company represents and warrants to, and agrees with, the
several Underwriters as follows:
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(I) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission and each Preliminary
Prospectus, at the time of filing thereof, did not contain an 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, in the light of the
circumstances under which they were made, not misleading; except that the
foregoing shall not apply to statements in or omissions from any Preliminary
Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by you, or by any Underwriter through you, specifically
for use in the preparation thereof.
(II) As of the time the Registration Statement is or was
declared effective by the Commission, upon the filing or first delivery to the
Underwriters of the Prospectus (or any supplement to the Prospectus (including
any term sheet meeting the requirements of Rule 434 of the Rules and
Regulations)) and at the First Closing Date and Second Closing Date (as
hereinafter defined), (A) the Registration Statement and Prospectus (in each
case, as so amended and/or supplemented) conformed or will conform in all
material respects to the requirements of the Act and the Rules and Regulations,
(B) the Registration Statement (as so amended) did not or will not include an
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,
and (C) the Prospectus (as so supplemented) did not or will not include an
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, in light of the
circumstances in which they are or were made, not misleading; except that the
foregoing shall not apply to statements in or omissions from any such document
in reliance upon, and in conformity with, written information furnished to the
Company by you, or by any Underwriter through you, specifically for use in the
preparation thereof. If the Registration Statement has been declared effective
by the Commission, no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that purpose has
been initiated or, to the Company's knowledge, threatened by the Commission.
(III) The financial statements of the Company, together with
the notes thereto, set forth in the Registration Statement and Prospectus comply
in all material respects with the requirements of the Act and fairly present the
financial condition of the Company as of the dates indicated and the results of
operations and changes in cash flows for the periods therein specified in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein); and the
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein. No other financial statements or
schedules are required to be included in the Registration Statement or
Prospectus. Xxxxxx Xxxxxxxx LLP, which has expressed its opinion with respect to
the financial statements and schedules filed as a part of the Registration
Statement and included in the Registration Statement and Prospectus, are
independent public accountants as required by the Act and the Rules and
Regulations.
(IV) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. Each of the Company and its
subsidiaries has full corporate power and authority to own its properties and
conduct its business as currently being carried on and as described in the
Registration Statement and Prospectus, and is duly qualified to do business as a
foreign
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corporation in good standing in each jurisdiction in which it owns or leases
real property or in which the conduct of its business makes such qualification
necessary and in which the failure to so qualify would have a material adverse
effect upon the business, condition (financial or otherwise) or properties of
the Company and its subsidiaries, taken as a whole ("Material Adverse Effect").
(V) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its subsidiaries
has incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock; and there
has not been any change in the capital stock (other than a change in the number
of outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock, of the Company or any
of its subsidiaries, or any material adverse change, or any development
involving a prospective material adverse change, in the general affairs,
condition (financial or otherwise), business, key personnel, property, net worth
or results of operations of the Company and its subsidiaries, taken as a whole.
(VI) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened or contemplated, any
action, suit or proceeding to which the Company or any of its subsidiaries is a
party before or by any court or governmental agency, authority or body, or any
arbitrator, which might result in a Material Adverse Effect.
(VII) There are no contracts or documents of the Company or
any of its subsidiaries that are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations that have not
been so filed.
(VIII) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding obligation
of the Company, enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The execution, delivery and performance
of this Agreement and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any statute, any agreement or instrument to which
the Company is a party or by which it is bound or to which any of its property
is subject, the Company's charter or by-laws, or any order, rule, regulation or
decree of any court or governmental agency or body having jurisdiction over the
Company or any of its properties; no consent, approval, authorization or order
of, or filing with, any court or governmental agency or body is required for the
execution, delivery and performance of this Agreement or for the consummation of
the transactions contemplated hereby, including the issuance or sale of the
Securities by the Company, except such as may be required under the Act or state
securities or blue sky laws; and the Company has full power and authority to
enter into this Agreement and to authorize, issue and sell the Securities as
contemplated by this Agreement.
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(IX) All of the issued and outstanding shares of capital
stock of the Company, including the outstanding shares of Common Stock, are duly
authorized and validly issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities, and the holders thereof are not subject to personal
liability by reason of being such holders; the Securities which may be sold
hereunder by the Company have been duly authorized and, when issued, delivered
and paid for in accordance with the terms hereof, will have been validly issued
and will be fully paid and nonassessable, and the holders thereof will not be
subject to personal liability by reason of being such holders; and the capital
stock of the Company, including the Common Stock, conforms to the description
thereof in the Registration Statement and Prospectus. Except as otherwise stated
in the Registration Statement and Prospectus, there are no preemptive rights or
other rights to subscribe for or to purchase, or any restriction upon the voting
or transfer of, any shares of Common Stock pursuant to the Company's charter,
by-laws or any agreement or other instrument to which the Company is a party or
by which the Company is bound. Neither the filing of the Registration Statement
nor the offering or sale of the Securities as contemplated by this Agreement
gives rise to any rights for or relating to the registration of any shares of
Common Stock or other securities of the Company. All of the issued and
outstanding shares of capital stock of each of the Company's subsidiaries have
been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise described in the Registration Statement
and Prospectus and except for any directors' qualifying shares, the Company owns
of record and beneficially, free and clear of any security interests, claims,
liens, proxies, equities or other encumbrances, all of the issued and
outstanding shares of such stock. Except as described in the Registration
Statement and the Prospectus, there are no options, warrants, agreements,
contracts or other rights in existence to purchase or acquire from the Company
or any subsidiary of the Company any shares of the capital stock of the Company
or any subsidiary of the Company. The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement and the Prospectus.
(X) The Company and each of its subsidiaries holds, and is
operating in compliance in all material respects with, all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates and orders
of any governmental or self-regulatory body required for the conduct of its
business, except where the failure to hold or be in compliance could not
reasonably be expected to have a Material Adverse Effect, and all such
franchises, grants, authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and effect, except where
the failure to hold or be in compliance could not reasonably be expected to have
a Material Adverse Effect; and the Company and each of its subsidiaries is in
compliance in all material respects with all applicable federal, state, local
and foreign laws, regulations, orders and decrees, except where the failure to
hold or be in compliance could not reasonably be expected to have a Material
Adverse Effect.
(XI) The Company and its subsidiaries have good and
marketable title to all property described in the Registration Statement and
Prospectus as being owned by them, in each case free and clear of all liens,
claims, security interests or other encumbrances except such as are described in
the Registration Statement and the Prospectus; the property held under lease by
the Company and its subsidiaries is held by them under valid, subsisting and
enforceable leases with only such exceptions with respect to any particular
lease as do not interfere in any
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material respect with the conduct of the business of the Company or its
subsidiaries; the Company and each of its subsidiaries owns or possesses all
patents, patent applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights, licenses, inventions,
trade secrets and rights necessary for the conduct of the business of the
Company and its subsidiaries as currently carried on and as described in the
Registration Statement and Prospectus; except as stated in the Registration
Statement and Prospectus, no name which the Company or any of its subsidiaries
uses and no other aspect of the business of the Company or any of its
subsidiaries will involve or give rise to any infringement of, or license or
similar fees for, any patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service xxxx registrations, copyrights,
licenses, inventions, trade secrets or other similar rights of others material
to the business of the Company, except where the failure to hold or be in
compliance could not reasonably be expected to have a Material Adverse Effect,
and neither the Company nor any of its subsidiaries has received any notice
alleging any such infringement or fee.
(XII) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in breach of or otherwise in
default in the performance of any material obligation, agreement or condition
contained in any bond, debenture, note, indenture, loan agreement or any other
material contract, lease or other instrument to which it is subject or by which
any of them may be bound, or to which any of the material property or assets of
the Company or any of its subsidiaries is subject, except for breaches or
defaults that could not reasonably be expected to have a Material Adverse
Effect.
(XIII) The Company has filed all federal, state, local and
foreign income and franchise tax returns required to be filed, and the Company's
subsidiaries have filed all federal, state and local income and franchise tax
returns required to be filed (except for the failure to file tax returns as
could not reasonably be expected to have a Material Adverse Effect) and neither
the Company nor any of its subsidiaries is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto, other than any which the Company or any of its subsidiaries is
contesting in good faith.
(XIV) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the offering and
sale of the Securities other than any Preliminary Prospectus or the Prospectus
or other materials permitted by the Act to be distributed by the Company.
(XV) The Securities have been conditionally approved for
quotation on the Nasdaq National Market and, on the date the Registration
Statement became or becomes effective, the Company's Registration Statement on
Form 8-A or other applicable form under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), became or will become effective.
(XVI) Other than the subsidiaries of the Company listed in
Exhibit 21.01 to the Registration Statement, the Company owns no capital stock
or other equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.
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(XVII) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(XVIII) Other than as contemplated by this Agreement, the
Company has not incurred any liability for any finder's or broker's fee or
agent's commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(XIX) Neither the Company nor any of its affiliates is
presently doing business with the government of Cuba or with any person or
affiliate located in Cuba.
(XX) The Company is not an "investment company" as defined
in the Investment Company Act of 1940, and is not required to register as an
investment adviser as defined in the Investment Advisers Act of 1940.
(XXI) The merger between the Company and xxxxxxxx.xxx LLC
(the "Predecessor") was effective as of _________, 1999 upon the filing of a
merger agreement with the Delaware Secretary of State in accordance with
Section 264 of the Delaware General Corporation Law. Pursuant to such merger,
the separate existence of the Predecessor ceased as of the time of such
filing, the membership interest of each member of the Predecessor outstanding
immediately prior to such merger, and each outstanding option and warrant to
acquire any such membership interests, which constituted all of the
outstanding equity interests, options and warrants with respect to the
Predecessor as of such time, was converted into shares of the Company's
Common Stock and options and warrants to purchase shares of the Company's
Common Stock, respectively, and the Company succeeded to and assumed all of
the rights and obligations of the Predecessor in effect immediately prior to
such merger. All corporate action on the part of the Company, the Predecessor
and their respective directors, stockholders, managers and members, as
applicable, necessary for the consummation of such merger had been obtained
as of the time of such filing. The consummation of such merger did not
violate or contravene any provision of (i) the Certificate of Incorporation,
Bylaws or Operating Agreement of the Company or the Predecessor, as
applicable, (ii) any laws, rules or regulations applicable to, or any order,
writ, judgment, injunction, decree, determination or award entered against,
the Company or the Predecessor or (iii) any agreement or instrument to which
the Company or the Predecessor is or was a party or by which the Company or
the Predecessor is or was bound. All necessary consents, approvals,
authorizations or orders of, and filings, registrations and qualifications
with any regulatory authority or governmental body required for the
consummation of such merger were timely made or obtained. To the best of the
Company's knowledge, there is no action, proceeding or investigation pending
or threatened that questions the validity of such merger, nor is there any
basis therefor.
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(B) The Selling Stockholder represents and warrants to, and agrees
with, the several Underwriters as follows:
(I) Such Selling Stockholder is the record and beneficial
owner of, and has, and on the Second Closing Date, will have, valid and
marketable title to the Option Shares to be sold by such Selling Stockholder,
free and clear of all security interests, claims, liens, restrictions on
transferability, legends, proxies, equities or other encumbrances; and upon
delivery of and payment for such Option Shares hereunder, the several
Underwriters will acquire valid and marketable title thereto, free and clear of
any security interests, claims, liens, restrictions on transferability, legends,
proxies, equities or other encumbrances. Such Selling Stockholder is selling the
Option Shares to be sold by such Selling Stockholder for such Selling
Stockholder's own account and is not selling such Option Shares, directly or
indirectly, for the benefit of the Company, and no part of the proceeds of such
sale received by such Selling Stockholder will inure, either directly or
indirectly, to the benefit of the Company other than as described in the
Registration Statement and Prospectus.
(II) Such Selling Stockholder has duly authorized, executed
and delivered a Letter of Transmittal and Custody Agreement ("Custody
Agreement"), which Custody Agreement is a valid and binding obligation of such
Selling Stockholder, to [FULL NAME OF CUSTODIAN], as Custodian (the
"Custodian"); pursuant to the Custody Agreement the Selling Stockholder has
placed in custody with the Custodian, for delivery under this Agreement, the
certificates representing the Option Shares to be sold by such Selling
Stockholder; such certificates represent validly issued, outstanding, fully paid
and nonassessable shares of Common Stock; and such certificates were duly and
properly endorsed in blank for transfer, or were accompanied by all documents
duly and properly executed that are necessary to validate the transfer of title
thereto, to the Underwriters, free of any legend, restriction on
transferability, proxy, lien or claim, whatsoever.
(III) Such Selling Stockholder has the power and authority to
enter into this Agreement and to sell, transfer and deliver the Option Shares to
be sold by such Selling Stockholder; and such Selling Stockholder has duly
authorized, executed and delivered to ____________________ and _______________,
as attorneys-in-fact (the "Attorneys-in-Fact"), an irrevocable power of attorney
(a "Power of Attorney") authorizing and directing the Attorneys-in-Fact, or
either of them, to effect the sale and delivery of the Option Shares being sold
by such Selling Stockholder, to enter into this Agreement and to take all such
other action as may be necessary hereunder.
(IV) This Agreement, the Custody Agreement and the Power of
Attorney have each been duly authorized, executed and delivered by or on behalf
of such Selling Stockholder and each constitutes a valid and binding agreement
of such Selling Stockholder, enforceable in accordance with its terms, except as
rights to indemnity hereunder or thereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or laws affecting the rights of creditors generally
and subject to general principles of equity. The execution and delivery of this
Agreement, the Custody Agreement and the Power of Attorney and the performance
of the terms hereof and thereof and the consummation of the transactions herein
and therein contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a
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default under, any agreement or instrument to which such Selling Stockholder is
a party or by which such Selling Stockholder is bound, or any law, regulation,
order or decree applicable to such Selling Stockholder; no consent, approval,
authorization or order of, or filing with, any court or governmental agency or
body is required for the execution, delivery and performance of this Agreement,
the Custody Agreement and the Power of Attorney or for the consummation of the
transactions contemplated hereby and thereby, including the sale of the Option
Shares being sold by such Selling Stockholder, except such as may be required
under the Act or state securities laws or blue sky laws.
(V) Such Selling Stockholder has not distributed and will
not distribute any prospectus or other offering material in connection with the
offering and sale of the Option Shares other than any Preliminary Prospectus or
the Prospectus or other materials permitted by the Act to be distributed by such
Selling Stockholder.
(VI) Such Selling Stockholder has reviewed the Registration
Statement and the Prospectus and to the best knowledge of such Selling
Stockholder neither the Registration Statement nor the Prospectus contains any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
regarding such Selling Stockholder, the Company or otherwise.
(VII) To the best knowledge of such Selling Stockholder, the
representations and warranties of the Company contained in paragraph (a) of this
Section 2 are true and correct.
(C) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby; any certificate signed by or on behalf of the Selling
Stockholder as such and delivered to you or to counsel for the Underwriters
shall be deemed a representation and warranty by the Selling Stockholder to each
Underwriter as to the matters covered thereby.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
(A) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell 3,400,000 Firm Shares to the several
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto. The purchase price for each Firm Share
shall be $_____ per share. The obligation of each Underwriter to the Company
shall be to purchase from the Company that number of Firm Shares (to be adjusted
by the Representatives to avoid fractional shares) which represents the same
proportion of the number of Firm Shares to be sold by the Company pursuant to
this Agreement as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto represents to the total number of Firm Shares
to be purchased by all Underwriters pursuant to this Agreement. In making this
Agreement, each Underwriter is contracting severally and not jointly; except as
provided in paragraph (c) of this Section 3 and in Section 8 hereof, the
agreement of each Underwriter is to purchase only the respective number of Firm
Shares specified in Schedule I.
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The Firm Shares will be delivered by the Company to you for the
accounts of the several Underwriters against payment of the purchase price
therefor by certified or official bank check or other next day funds payable to
the order of the Company at the offices of U.S. Bancorp Xxxxx Xxxxxxx Inc.,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable, at 9:00 a.m. Central time on the
third (or if the Securities are priced, as contemplated by Rule 15c6-1(c) under
the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day
following the date hereof, or at such other time and date as you and the Company
determine pursuant to Rule 15c6-1(a) under the Exchange Act, such time and date
of delivery being herein referred to as the "First Closing Date." If the
Representatives so elect, delivery of the Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives. Certificates representing the Firm Shares, in
definitive form and in such denominations and registered in such names as you
may request upon at least two business days' prior notice to the Company, will
be made available for checking and packaging not later than 10:30 a.m., Central
time, on the business day next preceding the First Closing Date at the offices
of U.S. Bancorp Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable.
(B) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Selling Stockholder hereby grants to the several Underwriters an option to
purchase all or any portion of the Option Shares at the same purchase price as
the Firm Shares, for use solely in covering any over-allotments made by the
Underwriters in the sale and distribution of the Firm Shares. The option granted
hereunder may be exercised at any time (but not more than once) within 30 days
after the effective date of this Agreement upon notice (confirmed in writing) by
the Representatives to the Attorneys-in-Fact setting forth the aggregate number
of Option Shares as to which the several Underwriters are exercising the option,
the names and denominations in which the certificates for the Option Shares are
to be registered and the date and time, as determined by you, when the Option
Shares are to be delivered, such time and date being herein referred to as the
"Second Closing" and "Second Closing Date", respectively; PROVIDED, HOWEVER,
that the Second Closing Date shall not be earlier than the First Closing Date
nor earlier than the second business day after the date on which the option
shall have been exercised. The number of Option Shares to be purchased by each
Underwriter shall be the same percentage of the total number of Option Shares to
be purchased by the several Underwriters as the number of Firm Shares to be
purchased by such Underwriter is of the total number of Firm Shares to be
purchased by the several Underwriters, as adjusted by the Representatives in
such manner as the Representatives deem advisable to avoid fractional shares. No
Option Shares shall be sold and delivered unless the Firm Shares previously have
been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Custodian to you for the
accounts of the several Underwriters against payment of the purchase price
therefor by certified or official bank check or other next day funds payable to
the order of the Custodian at the offices of U.S. Bancorp Xxxxx Xxxxxxx Inc.,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable at 9:00 a.m., Central time, on the
Second Closing Date. If the Representatives so elect, delivery of the Option
Shares may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives. Certificates
representing the Option Shares in definitive form
10.
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and in such denominations and registered in such names as you have set forth in
your notice of option exercise, will be made available for checking and
packaging not later than 10:30 a.m., Central time, on the business day next
preceding the Second Closing Date at the office of U.S. Bancorp Xxxxx Xxxxxxx
Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or
such other location as may be mutually acceptable.
(C) It is understood that you, individually and not as
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment to the Company or the Selling Stockholder, as the case may be, on
behalf of any Underwriter for the Securities to be purchased by such
Underwriter. Any such payment by you shall not relieve any such Underwriter of
any of its obligations hereunder. Nothing herein contained shall constitute any
of the Underwriters an unincorporated association or partner with the Company or
the Selling Stockholder.
4. COVENANTS.
(A) The Company covenants and agrees with the several Underwriters as
follows:
(I) If the Registration Statement has not already been
declared effective by the Commission, the Company will use its best efforts to
cause the Registration Statement and any post-effective amendments thereto to
become effective as promptly as possible; the Company will notify you promptly
of the time when the Registration Statement or any post-effective amendment to
the Registration Statement has become effective or any supplement to the
Prospectus (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations) has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or
additional information; if the Company has elected to rely on Rule 430A of the
Rules and Regulations, the Company will prepare and file a Prospectus (or term
sheet within the meaning of Rule 434 of the Rules and Regulations) containing
the information omitted therefrom pursuant to Rule 430A of the Rules and
Regulations with the Commission within the time period required by, and
otherwise in accordance with the provisions of, Rules 424(b), 430A and 434, if
applicable, of the Rules and Regulations; if the Company has elected to rely
upon Rule 462(b) of the Rules and Regulations to increase the size of the
offering registered under the Act, the Company will prepare and file a
registration statement with respect to such increase with the Commission within
the time period required by, and otherwise in accordance with the provisions of,
Rule 462(b); the Company will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration Statement
or Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) that, in your opinion, may be necessary or advisable in
connection with the distribution of the Securities by the Underwriters; and the
Company will not file any amendment or supplement to the Registration Statement
or Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) to which you shall reasonably object by notice to the
Company after having been furnished a copy a reasonable time prior to the
filing.
(II) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order
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suspending the effectiveness of the Registration Statement, of the suspension of
the qualification of the Securities for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such purpose; and the
Company will promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such a stop order should be issued.
(III) Within the time during which a prospectus (including
any term sheet within the meaning of Rule 434 of the Rules and Regulations)
relating to the Securities is required to be delivered under the Act, the
Company will comply as far as it is able with all requirements imposed upon it
by the Act, as now and hereafter amended, and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Securities as contemplated by the provisions hereof
and the Prospectus. If during such period any event occurs as a result of which
the Prospectus would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend the Registration Statement or supplement the Prospectus to
comply with the Act, the Company will promptly notify you and will amend the
Registration Statement or supplement the Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.
(IV) The Company will use its best efforts to qualify the
Securities for sale under the securities laws of such jurisdictions as you
reasonably designate and to continue such qualifications in effect so long as
required for the distribution of the Securities, except that the Company shall
not be required in connection therewith to qualify as a foreign corporation or
to execute a general consent to service of process in any state.
(V) The Company will furnish to the Underwriters copies of
the Registration Statement (three of which will be signed and will include all
exhibits), each Preliminary Prospectus, the Prospectus, and all amendments and
supplements (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) to such documents, in each case as soon as available and
in such quantities as you may from time to time reasonably request.
(VI) During a period of five years commencing with the date
hereof, the Company will furnish to the Representatives, and to each Underwriter
who may so request in writing, copies of all periodic and special reports
furnished to the stockholders of the Company and all information, documents and
reports filed with the Commission, the National Association of Securities
Dealers, Inc., Nasdaq or any securities exchange.
(VII) The Company will make generally available to its
security holders as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period beginning after
the effective date of the Registration Statement that shall satisfy the
provisions of Section 11 (a) of the Act and Rule 158 of the Rules and
Regulations.
(VIII) The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented from
becoming effective under the provisions of Section 9(a) hereof or is terminated,
will pay or cause to be paid (A) all expenses
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(including transfer taxes allocated to the respective transferees) incurred in
connection with the delivery to the Underwriters of the Securities, (B) all
expenses and fees (including, without limitation, fees and expenses of the
Company's accountants and counsel but, except as otherwise provided below, not
including fees of the Underwriters' counsel) in connection with the preparation,
printing, filing, delivery, and shipping of the Registration Statement
(including the financial statements therein and all amendments, schedules, and
exhibits thereto), the Securities, each Preliminary Prospectus, the Prospectus,
and any amendment thereof or supplement thereto, and the printing, delivery, and
shipping of this Agreement and other underwriting documents, including Blue Sky
Memoranda, (C) all filing fees and fees and disbursements of the Underwriters'
counsel incurred in connection with the qualification of the Securities for
offering and sale by the Underwriters or by dealers under the securities or blue
sky laws of the states and other jurisdictions which you shall designate in
accordance with Section 4(d) hereof, (D) the fees and expenses of any transfer
agent or registrar, (E) the filing fees and fees and disbursements of counsel
incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities, (F) Nasdaq listing
fees, if any, and (G) all other costs and expenses incident to the performance
of its obligations hereunder that are not otherwise specifically provided for
herein. If the sale of the Securities provided for herein is not consummated by
reason of action by the Company pursuant to Section 9(a) hereof which prevents
this Agreement from becoming effective, or by reason of any failure, refusal or
inability on the part of the Company to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company is not fulfilled unless
such failure to perform or fulfill is due solely to the default or omission
of any Underwriter, the Company will reimburse the several Underwriters for
all out-of-pocket disbursements (including reasonable fees and disbursements
of counsel) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The Company shall
not in any event be liable to any of the Underwriters for loss of anticipated
profits from the transactions covered by this Agreement.
(IX) The Company will apply the net proceeds from the sale
of the Securities to be sold by it hereunder for the purposes set forth in the
Prospectus and will file such reports with the Commission with respect to the
sale of the Securities and the application of the proceeds therefrom as may be
required in accordance with Rule 463 of the Rules and Regulations.
(X) The Company will not, without your prior written
consent, offer for sale, sell, contract to sell, grant any option for the sale
of or otherwise issue or dispose of any Common Stock or any securities
convertible into or exchangeable for, or any options or rights to purchase or
acquire, Common Stock, except to the Underwriters pursuant to this Agreement for
a period of 180 days following the date of the Prospectus; PROVIDED, HOWEVER,
that the Company may (i) issue shares upon the exercise of options and warrants
granted prior to the date of the Prospectus, provided such options and warrants
are disclosed in the Prospectus, (ii) grant options under the Company's 1999
Stock Incentive Plan, provided such options are not exercisable during the
180-day period following the date of the Prospectus, (iii) issue 13,500 shares
upon exercise of options previously issued in connection with acquisitions by
the Company, [AND (IV) ISSUE SHARES OF COMMON STOCK IN CONNECTION WITH
ACQUISITION [TO BE DISCUSSED]].
13.
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(XI) The Company either has caused to be delivered to you
or will cause to be delivered to you prior to the effective date of the
Registration Statement a letter (the "Lock-Up Agreement") from each of the
Company's directors, officers and stockholders stating that such person
agrees that he or she will not, without your prior written consent, offer for
sale, sell, contract to sell or otherwise dispose of any shares of Common
Stock beneficially owned (within the meaning of Rule 13d-3 of the Exchange
Act) by him or her prior to the date of the Prospectus through the end of
such 180-day period, or rights to purchase Common Stock, except to the
Underwriters pursuant to this Agreement, for a period of 180 days after the
date of the Prospectus, other than (i) as a bona fide gift or gifts, provided
the donee or donees thereof agree to be bound by the Lock-Up Agreement, (ii)
as a distribution to limited partners or stockholders of such person,
provided that the distributees thereof agree in writing to be bound by the
terms of the Lock-Up Agreement, (iii) in connection with a bona fide third
party tender or exchange offer open to all holders of Common Stock, or (iv)
with the prior written consent of U.S. Bancorp Xxxxx Xxxxxxx Inc.
(XII) The Company has not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities, and has not effected any sales of Common Stock which are
required to be disclosed in response to Item 701 of Regulation S-K under the Act
which have not been so disclosed in the Registration Statement.
(XIII) The Company will not incur any liability for any
finder's or brokers fee or agent's commission in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(XIV) The Company will inform the Florida Department of
Banking and Finance at any time prior to the consummation of the distribution of
the Securities by the Underwriters if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba. Such
information will be provided within 90 days after the commencement thereof or
after a change occurs with respect to previously reported information.
(B) The Selling Stockholder covenants and agrees with the several
Underwriters as follows:
(I) Except as otherwise agreed to by the Company and the
Selling Stockholder, such Selling Stockholder will pay all taxes, if any, on the
transfer and sale, respectively, of the Option Shares being sold by such Selling
Stockholder and the fees of such Selling Stockholder's counsel; PROVIDED,
HOWEVER, that the Selling Stockholder severally agrees to reimburse the Company
for any reimbursement made by the Company to the Underwriters pursuant to
Section 4(a)(viii) hereof to the extent such reimbursement resulted from the
failure or refusal on the part of such Selling Stockholder to comply under the
terms or fulfill any of the conditions of this Agreement.
(II) If this Agreement shall be terminated by the
Underwriters because of any failure, refusal or inability on the part of such
Selling Stockholder to perform any
14.
DRAFT
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agreement on such Selling Stockholder's part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled by such Selling Stockholder is not fulfilled, such Selling Stockholder
agrees to reimburse the several Underwriters for all out-of-pocket disbursements
(including reasonable fees and disbursements of counsel for the Underwriters)
incurred by the Underwriters in connection with their investigation, preparing
to market and marketing the Option Shares or in contemplation of performing
their obligations hereunder. The Selling Stockholder shall not in any event be
liable to any of the Underwriters for loss of anticipated profits from the
transactions covered by this Agreement.
(III) The Option Shares to be sold by such Selling
Stockholder, represented by the certificates on deposit with the Custodian
pursuant to the Custody Agreement of such Selling Stockholder, are subject to
the interest of the several Underwriters; the arrangements made for such custody
are, except as specifically provided in the Custody Agreement, irrevocable; and
the obligations of such Selling Stockholder hereunder shall not be terminated,
except as provided in this Agreement or in the Custody Agreement, by any act of
such Selling Stockholder, by operation of law, whether by the liquidation,
dissolution or merger of such Selling Stockholder, by the death of such Selling
Stockholder, or by the occurrence of any other event. If such Selling
Stockholder should liquidate, dissolve or be a party to a merger or if any other
such event should occur before the delivery of the Option Shares hereunder,
[CERTIFICATES] for the Option Shares deposited with the Custodian shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such liquidation, dissolution, merger or other event had not
occurred, whether or not the Custodian shall have received notice thereof.
(IV) Such Selling Stockholder will not, without your prior
written consent, offer for sale, sell, contract to sell, grant any option for
the sale of or otherwise dispose of any Common Stock or any securities
convertible into or exchangeable for, or any options or rights to purchase or
acquire, Common Stock, except to the Underwriters pursuant to this Agreement,
for a period of 180 days after the commencement of the public offering of the
Securities by the Underwriters.
(V) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Securities,
and has not effected any sales of Common Stock which, if effected by the
Company, would be required to be disclosed in response to Item 701 of Regulation
S-K.
(VI) Such Selling Stockholder shall immediately notify you
if any event occurs, or of any change in information relating to such Selling
Stockholder or the Company or any new information relating to the Company or
relating to any matter stated in the Prospectus or any supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), which results in the Prospectus (as supplemented) including an
untrue statement of a material fact or omitting to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters hereunder are subject to the accuracy, as of the date
hereof and at each of the First
15.
DRAFT
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Closing Date and the Second Closing Date (as if made at such Closing Date), of
and compliance with all representations, warranties and agreements of the
Company and the Selling Stockholder contained herein, to the performance by the
Company and the Selling Stockholder of their respective obligations hereunder
and to the following additional conditions:
(A) The Registration Statement shall have become effective not later
than 5:00 p.m., Central time, on the date of this Agreement, or such later time
and date as you, as Representatives of the several Underwriters, shall approve
and all filings required by Rules 424, 430A and 434 of the Rules and Regulations
shall have been timely made; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereof shall have been issued; no
proceedings for the issuance of such an order shall have been initiated or
threatened; and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
(B) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or supplement
thereto (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations), contains an untrue statement of fact which, in your opinion,
is material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(C) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, neither the Company nor any of its subsidiaries shall have
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock; and there
shall not have been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of shares upon
the exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt of the Company, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock
of the Company or any of its subsidiaries, or any material adverse change or any
development involving a prospective material adverse change (whether or not
arising in the ordinary course of business), in the condition (financial or
otherwise), business, key personnel, property, prospects, net worth or results
of operations of the Company and its subsidiaries, taken as a whole, that, in
your judgment, makes it impractical or inadvisable to offer or deliver the
Securities on the terms and in the manner contemplated in the Prospectus.
(D) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of Xxxxxxx Xxxx &
Xxxxxxxxx, counsel for the Company, dated such Closing Date and addressed to
you, to the effect that:
(I) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation. The Company has all requisite corporate power and authority to
own, lease and operate its properties and conduct its business as currently
being conducted and as described in the Registration Statement and Prospectus,
and is duly qualified to do business as a foreign corporation and is in good
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standing in each jurisdiction in which the conduct of its business makes such
qualification necessary except where the failure to so qualify would not have a
Material Adverse Effect.
(II) The capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus under the caption
"Description of Capital Stock." All of the issued and outstanding shares of the
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable, and the holders thereof are not subject to
personal liability by reason of being such holders. The Securities to be issued
and sold by the Company hereunder have been duly authorized and, when issued,
delivered and paid for in accordance with the terms of this Agreement, will have
been validly issued and will be fully paid and nonassessable, and the holders
thereof will not be subject to personal liability by reason of being such
holders. Except as otherwise stated in the Registration Statement and
Prospectus, to such counsel's knowledge, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon the voting or
transfer of, any shares of Common Stock pursuant to the Company's charter or
by-laws or any agreement or other instrument to which the Company is a party or
by which the Company is bound. To such counsel's knowledge, neither the filing
of the Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities of the Company
other than rights that have been effectively waived.
(III) The Registration Statement has become effective under
the Act and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of such
counsel, threatened by the Commission.
(IV) The descriptions (a) in the Prospectus under the
captions "Risk Factors - Government regulation and legal uncertainties could
add additional costs and risks to doing business on the Internet"; "-Our
charter documents and Delaware General Corporate Law may inhibit a takeover";
"-Shares eligible for public sale after this offering could hurt our stock
price"; "Management's Discussion and Analysis and Results of Operations -
Liquidity and Capital Resources"; "Business - Intellectual Property; Domain
Names"; "Management - Employment Contracts and Change of Control
Arrangements"; "-1999 Stock Incentive Plan"; "-Indemnification of Directors
and Executive Officers and Limitation of Liability"; "Certain Transactions";
"Description of Capital Stock"; "Shares Eligible for Future Sale"; and (b) in
the Registration Statement in Items 14 and 15, in each case insofar as such
statements constitute summaries of legal matters or documents (or provisions
thereof) referenced therein, fairly present the information required to be
disclosed with respect to such legal matters and documents (or provisions
thereof) and fairly summarize in all material respects such legal matters and
documents (or provisions thereof) required to be disclosed.
(V) The Company has all requisite corporate power and
authority to enter into this Agreement, and this Agreement has been duly
authorized, executed and delivered by the Company; the execution, delivery and
performance of this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (a) any statute, rule or
regulation (other than state securities or blue sky laws as to which such
counsel need not express any
17.
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opinion) applicable to the Company, (b) any agreement or instrument to which the
Company is a party or by which it is bound or to which any of its property is
subject which is filed as an exhibit to the Registration Statement or of which
such counsel is aware, (c) the Company's certificate of incorporation or
by-laws, or (d) or any order or decree known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any of its
respective properties; and no consent, approval, authorization or order of, or
filing with, any court or governmental agency or body is required for the
execution, delivery and performance by the Company of this Agreement or for the
consummation of the transactions contemplated hereby, including the issuance or
sale of the Securities by the Company, except such as has been obtained under
the Act or as may be required under blue sky laws or state securities laws (as
to which such counsel need not express any opinion).
(VI) To such counsel's knowledge, the Company is not in
violation of its charter or by-laws. To such counsel's knowledge, the Company is
not in breach of or otherwise in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note, indenture, loan
agreement or any other material contract, lease or other instrument to which it
is subject or by which it may be bound, or to which any of the property or
assets of the Company is subject, except for such breach or default which could
not reasonably be expected to have a Material Adverse Effect.
(VII) The Registration Statement and the Prospectus (except
for the financial statements and the notes thereto and the other financial,
statistical and accounting data included in the Registration Statement or the
Prospectus, as to which such counsel need not express an opinion) comply as to
form in all material respects with the requirements of the Act and the Rules and
Regulations.
(VIII) The merger between the Company and xxxxxxxx.xxx LLC
was effective as of _________, 1999 upon the filing of a merger agreement
with the Delaware Secretary of State in accordance with Section 264 of the
Delaware General Corporation Law. Pursuant to such merger, the separate
existence of the Predecessor ceased as of the time of such filing, the
membership interest of each member of the Predecessor outstanding immediately
prior to such merger, and each outstanding option and warrant to acquire any
such membership interests, which constituted all of the outstanding equity
interests, options and warrants with respect to the Predecessor as of such
time, was converted into shares of the Company's Common Stock and options and
warrants to purchase shares of the Company's Common Stock, respectively, and
the Company succeeded to and assumed all of the rights and obligations of the
Predecessor in effect immediately prior to such merger. All corporate action
on the part of the Company, the Predecessor and their respective directors,
stockholders, managers and members, as applicable, necessary for the
consummation of such merger had been obtained as of the time of such filing.
The consummation of such merger did not violate or contravene any provision
of (i) the Certificate of Incorporation, Bylaws or Operating Agreement of the
Company or the Predecessor, as applicable, (ii) any laws, rules or
regulations applicable to, or any order, writ, judgment, injunction, decree,
determination or award entered against, the Company or the Predecessor or
(iii) any agreement or instrument to which the Company or the Predecessor is
or was a party or by which the Company or the Predecessor is or was bound.
All necessary consents, approvals, authorizations or orders of, and filings,
registrations and qualifications with any regulatory authority or
governmental body required for the
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consummation of such merger were timely made or obtained. To the best of such
counsel's knowledge, there is no action, proceeding or investigation pending or
threatened that questions the validity of such merger, nor is there any basis
therefor.
In addition, such counsel shall state that such counsel has
participated in conferences with officers of the Company, other representatives
of the Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company, examined documents referred to in
the Registration Statement and Prospectus and performed such other procedures as
such counsel deemed appropriate, and, although such counsel has not
independently verified and is not passing upon and assumes no responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to the attention of
such counsel that causes such counsel to believe that the Registration Statement
or any amendment thereof, at the time the Registration Statement became
effective and as of such Closing Date (including any Registration Statement
filed under Rule 462(b) of the Rules and Regulations), contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus (as of its date and as of such Closing Date), as amended or
supplemented, includes any untrue statement of material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that such counsel need express no opinion as to the financial statements and the
notes thereto or other financial, statistical and accounting data included in
any of the documents mentioned in this clause.
In rendering such opinion such counsel may rely (i) as to matters of
law other than New York, Delaware corporate and federal law, upon the opinion or
opinions of local counsel PROVIDED THAT the extent of such reliance is specified
in such opinion and that such counsel shall state that such opinion or opinions
of local counsel are satisfactory to them and that they believe they and you are
justified in relying thereon and (ii) as to matters of fact, to the extent such
counsel deems reasonable upon certificates of officers of the Company and its
subsidiaries PROVIDED THAT the extent of such reliance is specified in such
opinion.
(E) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of Xxxxx, Day, Xxxxxx &
Xxxxx, counsel for the Selling Stockholder, dated such Closing Date and
addressed to you, to the effect that:
(I) The Selling Stockholder is the sole record and
beneficial owner of the Option Shares to be sold by such Selling Stockholder and
delivery of the [CERTIFICATES] for the Option Shares to be sold by such Selling
Stockholder pursuant to this Agreement, upon payment therefor by the
Underwriters, will pass marketable title to such Option Shares to the
Underwriters and the Underwriters will acquire all the rights of such Selling
Stockholder in the Option Shares (assuming the Underwriters have no knowledge of
an adverse claim), free and clear of any security interests, claims, liens or
other encumbrances.
(II) The Selling Stockholder has the power and authority to
enter into the Custody Agreement, the Power of Attorney and this Agreement and
to perform and discharge such Selling Stockholder obligations thereunder and
hereunder; and this Agreement, the Custody Agreements and the Powers of Attorney
have been duly and validly authorized, executed and
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delivered by (or by the Attorneys-in-Fact, or either of them, on behalf of) the
Selling Stockholder and are valid and binding agreements of the Selling
Stockholder, enforceable in accordance with their respective terms (except as
rights to indemnity hereunder or thereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
and subject to general principles of equity).
(III) The execution and delivery of this Agreement, the
Custody Agreement and the Power of Attorney and the performance of the terms
hereof and thereof and the consummation of the transactions herein and therein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule or regulation,
or any agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or to which
any of its property is subject, any such Selling Stockholder's charter or
by-laws, or any order or decree known to such counsel of any court or government
agency or body having jurisdiction over such Selling Stockholder or any of its
respective properties; and no consent, approval, authorization or order of, or
filing with, any court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, the Custody Agreement and
the Power of Attorney or for the consummation of the transactions contemplated
hereby and thereby, including the sale of the Option Shares being sold by such
Selling Stockholder, except such as may be required under the Act or state
securities laws or blue sky laws.
(IV) Such other matters as you may reasonably request.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Delaware law and federal law, upon the opinion or opinions of
local counsel PROVIDED THAT the extent of such reliance is specified in such
opinion and that such counsel shall state that such opinion or opinions of local
counsel are satisfactory to them and that they believe they and you are
justified in relying thereon and (ii) as to matters of fact, to the extent such
counsel deems reasonable upon certificates of officers of the Selling
Stockholder PROVIDED THAT the extent of such reliance is specified in such
opinion.
(F) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, such opinion or opinions from
Xxxxxx Godward LLP, counsel for the several Underwriters, dated such Closing
Date and addressed to you, with respect to the formation of the Company, the
validity of the Securities, the Registration Statement, the Prospectus and other
related matters as you reasonably may request, and such counsel shall have
received such papers and information as they request to enable them to pass upon
such matters.
(G) On each Closing Date you, as Representatives of the several
Underwriters, shall have received a letter of Xxxxxx Xxxxxxxx LLP, dated such
Closing Date and addressed to you, confirming that they are independent public
accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under Rule
2-01 of Regulation S-X of the Commission, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five
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days prior to the date of such letter), the conclusions and findings of said
firm with respect to the financial information and other matters covered by its
letter delivered to you concurrently with the execution of this Agreement, and
the effect of the letter so to be delivered on such Closing Date shall be to
confirm the conclusions and findings set forth in such prior letter.
(H) On each Closing Date, there shall have been furnished to you, as
Representatives of the Underwriters, a certificate, dated such Closing Date and
addressed to you, signed by the chief executive officer and by the chief
financial officer of the Company, to the effect that:
(I) The representations and warranties of the Company in
this Agreement are true and correct, in all material respects, as if made at and
as of such Closing Date, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date;
(II) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment thereof or the
qualification of the Securities for offering or sale has been issued, and no
proceeding for that purpose has been instituted or, to the best of their
knowledge, is contemplated by the Commission or any state or regulatory body;
and
(III) The signers of said certificate have carefully examined
the Registration Statement and the Prospectus, and any amendments thereof or
supplements thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), and (A) such documents contain all statements and
information required to be included therein, the Registration Statement, or any
amendment thereof, does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus, as amended or
supplemented, does not include any untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) since the
effective date of the Registration Statement, there has occurred no event
required to be set forth in an amended or supplemented prospectus which has not
been so set forth, (C) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, and
except for the reverse stock split and merger of the Predecessor with and into
the Company, neither the Company nor any of its subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered into any
material transactions, not in the ordinary course of business, or declared or
paid any dividends or made any distribution of any kind with respect to its
capital stock, and except as disclosed in the Prospectus, there has not been any
change in the capital stock (other than a change in the number of outstanding
shares of Common Stock due to the issuance of shares upon the exercise of
outstanding options or warrants), or any material change in the short-term or
long-term debt, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock, of the Company, or any of its
subsidiaries, or any material adverse change or any development involving a
prospective material adverse change (whether or not arising in the ordinary
course of business), in the condition (financial or otherwise), business, key
personnel, property, prospects, net worth or results of operations of the
Company, and (D) except as stated in the Registration Statement and the
Prospectus, there is not pending, or, to the knowledge of the Company,
threatened or contemplated, any action, suit or proceeding to which the Company
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is a party before or by any court or governmental agency, authority or body, or
any arbitrator, which might result in any material adverse change in the
condition (financial or otherwise), business, prospects or results of operations
of the Company.
(I) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, a certificate or certificates,
dated such Closing Date and addressed to you, signed by the Selling Stockholder
or either of such Selling Stockholder's Attorneys-in-Fact to the effect that the
representations and warranties of such Selling Stockholder contained in this
Agreement are true and correct as if made at and as of such Closing Date, and
that such Selling Stockholder has complied with all the agreements and satisfied
all the conditions on such Selling Stockholder part to be performed or satisfied
at or prior to such Closing Date.
(J) The Company shall have furnished to you and counsel for the
Underwriters such additional documents, certificates and evidence as you or they
may have reasonably requested.
(K) The Securities have been conditionally approved for quotation on
the Nasdaq National Market.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and counsel for the Underwriters. The Company will furnish
you with such conformed copies of such opinions, certificates, letters and other
documents as you shall reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(A) The Company and the Selling Stockholder, jointly and severally,
agree to indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of the
Company and/or the Selling Stockholder, as the case may be), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including the information
deemed to be a part of the Registration Statement at the time of effectiveness
pursuant to Rules 430A and 434(d) of the Rules and Regulations, if applicable,
any Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that neither the Company nor the Selling
Stockholder shall be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
such amendment or supplement, in reliance upon and in conformity with written
information furnished to the
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Company by you, or by any Underwriter through you, specifically for use in the
preparation thereof; and FURTHER PROVIDED, HOWEVER, that in no event shall the
Selling Stockholder be liable under the provisions of this Section 6 for any
amount in excess of the aggregate amount of proceeds such Selling Stockholder
received from the sale of the Securities pursuant to this Agreement; PROVIDED,
FURTHER, THAT, to the extent any such losses, claims, damages or liabilities to
which such Underwriter may become subject arise under Section 12 of the Act, the
foregoing indemnity agreement with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting such
losses, claims, damages or liabilities purchased Securities, 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 Securities 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 arising
under Section 12 of the Act.
In addition to their other obligations under this Section 6(a), the
Company and the Selling Stockholder agree that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in this Section 6(a), they will reimburse each
Underwriter on a monthly basis for all reasonable legal fees or other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
and/or the Selling Stockholder's obligation to reimburse the Underwriters for
such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Underwriter
that received such payment shall promptly return it to the party or parties that
made such payment, together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by U.S. Bancorp (the "Prime
Rate"). Any such interim reimbursement payments which are not made to an
Underwriter within 30 days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request. This indemnity agreement shall be
in addition to any liabilities which the Company or the Selling Stockholder may
otherwise have.
(B) Each Underwriter will indemnify and hold harmless the Company and
the Selling Stockholder against any losses, claims, damages or liabilities to
which the Company and the Selling Stockholder may become subject, under the Act
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that 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 such amendment or supplement,
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in reliance upon and in conformity with written information furnished to the
Company by you, or by such Underwriter through you, specifically for use in the
preparation thereof, and will reimburse the Company and the Selling Stockholder
for any legal or other expenses reasonably incurred by the Company or the
Selling Stockholder in connection with investigating or defending against any
such loss, claim, damage, liability or action.
(C) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party. In case any such action shall be
brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; PROVIDED, HOWEVER,
that if, in the sole judgment of the Representatives, it is advisable for the
Underwriters to be represented as a group by separate counsel, the
Representatives shall have the right to employ a single counsel to represent the
Representatives and all Underwriters who may be subject to liability arising
from any claim in respect of which indemnity may be sought by the Underwriters
under subsection (a) of this Section 6, in which event the reasonable fees and
expenses of such separate counsel shall be borne by the indemnifying party or
parties and reimbursed to the Underwriters as incurred (in accordance with the
provisions of the second paragraph in subsection (a) above). An indemnifying
party shall not be obligated under any settlement agreement relating to any
action under this Section 6 to which it has not agreed in writing.
(D) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (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 from the offering of the Securities 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 and the
Selling Stockholder on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, 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 shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholder bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or
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alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Underwriters, and the parties' relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company, the Selling Stockholder and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the first sentence
of this subsection (d). The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending against any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(E) The obligations of the Company and the Selling Stockholder under
this Section 6 shall be in addition to any liability which the Company and the
Selling Stockholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 6
shall be in addition to any liability that the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his consent, is named in
the Registration Statement as about to become a director of the Company), to
each officer of the Company who has signed the Registration Statement and to
each person, if any, who controls the Company within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters, the Company and the Selling Stockholder contained in Section 6
hereof, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person
thereof, or the Company or any of its officers, directors, or controlling
persons, or the Selling Stockholder or any controlling person thereof, and shall
survive delivery of, and payment for, the Securities to and by the Underwriters
hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(A) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Firm Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Firm Shares in accordance with the
terms hereof, and the amount of Firm Shares not purchased does not aggregate
more than 10% of the total amount of Firm Shares set
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forth in Schedule I hereto, the remaining Underwriters shall be obligated to
take up and pay for (in proportion to their respective underwriting obligations
hereunder as set forth in Schedule I hereto except as may otherwise be
determined by you) the Firm Shares that the withdrawing or defaulting
Underwriters agreed but failed to purchase.
(B) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Firm Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Firm Shares in accordance with the
terms hereof, and the amount of Firm Shares not purchased aggregates more than
10% of the total amount of Firm Shares set forth in Schedule I hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other
persons are not made within 36 hours thereafter, this Agreement shall terminate.
In the event of any such termination the Company and the Selling Stockholder
shall not be under any liability to any Underwriter (except to the extent
provided in Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof) nor shall
any Underwriter (other than an Underwriter who shall have failed, otherwise than
for some reason permitted under this Agreement, to purchase the amount of Firm
Shares agreed by such Underwriter to be purchased hereunder) be under any
liability to the Company or the Selling Stockholder (except to the extent
provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the
non-defaulting Underwriters or by any other party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8.
9. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION; DEFAULT.
(A) This Agreement shall become effective at 10:00 a.m., Central
time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of the
Registration Statement as you in your discretion shall first release the
Securities for sale to the public; PROVIDED, THAT if the Registration Statement
is effective at the time this Agreement is executed, this Agreement shall become
effective at such time as you in your discretion shall first release the
Securities for sale to the public. For the purpose of this Section, the
Securities shall be deemed to have been released for sale to the public upon
release by you of the publication of a newspaper advertisement relating thereto
or upon release by you of telexes offering the Securities for sale to securities
dealers, whichever shall first occur. By giving notice as hereinafter specified
before the time this Agreement becomes effective, you, as Representatives of the
several Underwriters, or the Company may prevent this Agreement from becoming
effective without liability of any party to any other party, except that the
provisions of Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof shall at
all times be effective.
(B) You, as Representatives of the several Underwriters, shall have
the right to terminate this Agreement by giving notice as hereinafter specified
at any time at or prior to the First Closing Date, and the option referred to in
Section 3(b), if exercised, may be cancelled at any time prior to the Second
Closing Date, if (i) the Company shall have failed, refused or been unable, at
or prior to such Closing Date, to perform any agreement on its part to be
performed
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hereunder, (ii) any other condition of the Underwriters' obligations hereunder
is not fulfilled, (iii) trading on the New York Stock Exchange or the American
Stock Exchange shall have been wholly suspended, (iv) minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, on the New York Stock Exchange or the American Stock
Exchange, by such Exchange or by order of the Commission or any other
governmental authority having jurisdiction, (v) a banking moratorium shall have
been declared by Federal or New York authorities, or (vi) there has occurred any
material adverse change in the financial markets in the United States or an
outbreak of major hostilities (or an escalation thereof) in which the United
States is involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Agreement that, in
your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof shall at
all times be effective.
(C) If you elect to prevent this Agreement from becoming effective or
to terminate this Agreement as provided in this Section, the Company and an
Attorney-in-Fact, on behalf of the Selling Stockholder, shall be notified
promptly by you by telephone or telegram, confirmed by letter. If the Company
elects to prevent this Agreement from becoming effective, you and an
Attorney-in-Fact, on behalf of the Selling Stockholder, shall be notified by the
Company by telephone or telegram, confirmed by letter.
(D) If the Company shall fail at the First Closing Date to sell and
deliver the number of Securities which it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
non-defaulting party.
10. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth in the
last paragraph of the cover page and under the caption "Underwriting" in any
Preliminary Prospectus and in the Prospectus constitute the written information
furnished by or on behalf of the Underwriters referred to in Section 2 and
Section 6 hereof.
11. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to the Representatives c/o U.S. Bancorp
Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, except that notices given to an Underwriter pursuant to Section
6 hereof shall be sent to such Underwriter at the address stated in the
Underwriters' Questionnaire furnished by such Underwriter in connection with
this offering; if to the Company, shall be mailed, telegraphed or delivered to
it at xxxxxxxx.xxx Corporation, 00 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
Attention: Xxxx X. Xxxxxxx. All notices given by telegram shall be promptly
confirmed by letter. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice of a new
address for such purpose.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this
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Agreement is intended or shall be construed to give to any other person, firm or
corporation any legal or equitable remedy or claim under or in respect of this
Agreement or any provision herein contained. The term "successors and assigns"
as herein used shall not include any purchaser, as such purchaser, of any of the
Securities from any of the several Underwriters.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
14. COUNTERPARTS. This Agreement may be signed in counterparts, each of
which shall be enforceable against the party signing such counterpart, and all
of which shall be deemed one instrument.
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Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the Company
and the several Underwriters in accordance with its terms.
Very truly yours,
XXXXXXXX.XXX CORPORATION
By
---------------------------------
[Title]
INTERNET WORLD MEDIA, INC.
By
---------------------------------
[Title]
Confirmed as of the date first above
mentioned, on behalf of themselves
and the other several Underwriters
named in Schedule I hereto.
U.S. BANCORP XXXXX XXXXXXX INC.
By
---------------------------------
Managing Director
XXXXXXX XXXXX & COMPANY L.L.C.
By
---------------------------------
Managing Director
DLJdirect INC.
By
---------------------------------
Managing Director
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SCHEDULE I
NUMBER OF FIRM NUMBER OF OPTION
UNDERWRITER SHARES (1) SHARES
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxxxxx Xxxxx & Company L.L.C.
DLJdirect Inc.
-------------- ----------------
Total............................
============== ================
----------
(1) The Underwriters may purchase up to an additional 510,000 Option Shares,
to the extent the option described in Section 3(b) of the Agreement is
exercised, in the proportions and in the manner described in the
Agreement.
