EXHIBIT 1.2
PLACEMENT AGENCY AGREEMENT
_____________ ___, 1998
xxxxxxxx.xxx, inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This placement agency agreement (the "Agreement") outlines the terms upon
which Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx") and Xxxxx Xxxxx Xxxxxx &
Company, LLC (collectively, the "Placement Agents") are engaged by xxxxxxxx.xxx,
inc., a Delaware corporation (the "Company"), to act as its financial advisors
and exclusive placement agents in connection with the offering by the Company
(the "Concurrent Offering") of up to an aggregate of _________ Shares (the
"Concurrent Shares") of Common Stock, par value $.001 per share (the "Common
Stock"), of the Company. The Concurrent Offering of the Concurrent Shares is
registered on Registration Statement No. 333-59751 (as such Registration
Statement may be amended from time to time, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Act"), filed by the Company with
the Securities and Exchange Commission (the "Commission"). The Company will
also enter into an underwriting agreement with the Placement Agents (as such
underwriting agreement may be amended from time to time with the Placement
Agents' consent, the "Underwriting Agreement"), as representatives of the
several Underwriters to be named in Schedule I thereto (collectively, the
"Underwriters"), relating to the offering of Common Stock by the Underwriters
(the "Initial Public Offering" and, together with the Concurrent Offering, the
"Offerings"), in the form filed as Exhibit 1.1 to the Registration Statement and
attached hereto as Annex A. The Initial Public Offering is also registered on
the Registration Statement. To the extent designated herein, portions of the
Underwriting Agreement shall be deemed to be incorporated by reference herein
and form a part hereof. Notwithstanding anything else herein to the contrary,
it is expressly understood and agreed that the closing of the Concurrent
Offering is conditioned on the occurrence of the Closing Date. All capitalized
terms not defined herein shall have the meanings ascribed to them in the
Underwriting Agreement.
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SERVICES
1. The Company hereby appoints the Placement Agents as the Company's
exclusive placement agents in connection with the Concurrent Offering and,
subject to the terms and conditions contained or incorporated by reference
herein, the Placement Agents hereby accept such appointment.
2. The Placement Agents agree to provide advisory services to the
Company as to the structure of the Concurrent Offering. Except as specifically
set forth herein, the Placement Agents do not assume any additional duties or
responsibilities with respect to the Concurrent Offering and no other duties
shall be implied from this Agreement. The Company acknowledges that purchasers
of the Concurrent Offering are not, and will not be treated as, "customers" of
the Placement Agents for purposes of the rules of the National Association of
Securities Dealers, Inc. (the "NASD") and that the Placement Agents shall have
no responsibility for the performance or non-performance of any purchaser in the
Concurrent Offering or for the performance or non-performance of the Company.
3. The Company hereby makes to the Placement Agents the
representations, warranties and covenants set forth in Sections 1 and 4 of the
Underwriting Agreement.
4. The Company agrees with the Placement Agents to provide the
Placement Agents with such copies of the Registration Statement, Prospectus, any
preliminary prospectus and such other documents and instruments as the Placement
Agents may reasonably request; and
5. [CONFORM TO ANY CHANGES TO BE MADE TO THE UNDERWRITING AGREEMENT.]
Whether or not the transactions contemplated in the Underwriting Agreement or in
this Agreement are consummated, or the Underwriting Agreement or this Agreement
is terminated, the Company hereby agrees to pay all costs and expenses incident
to the performance of the obligations of the Company hereunder, including those
in connection with (i) preparing, printing, duplicating, filing and distributing
the Registration Statement, as originally filed and all amendments thereof
(including all exhibits thereto), any preliminary prospectus, the Prospectus and
any amendments or supplements thereto (including, without limitation, fees and
expenses of the Company's accountants and counsel), the underwriting documents
(including the Underwriting Agreement, this Agreement, the Agreement Among
Underwriters [and the Selling Agreement]) and all other documents related to the
public offering of the Concurrent Shares (including those supplied to the
Underwriters and the Placement Agents in quantities as hereinabove stated), (ii)
the issuance, transfer and delivery of the
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Concurrent Shares to the Placement Agents, including any transfer or other taxes
payable thereon, (iii) the qualification of the Concurrent Shares under state or
foreign securities or Blue Sky laws, including the costs of printing and mailing
a preliminary and final "Blue Sky Survey" and the fees of counsel for the
Placement Agents and such counsel's disbursements in relation thereto, (iv)
quotation of the Concurrent Shares on the National Association of Securities
Dealers Automated Quotation system ("Nasdaq"), (v) filing fees of the Commission
and the NASD; (vi) the cost of printing certificates representing the Concurrent
Shares, (vii) the cost and charges of any transfer agent or registrar, and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder and the Subscription Agreements which are not otherwise
provided for in this Section.
6. The obligations of the Placement Agents hereunder and the closing of
the sale of the Concurrent Shares in the Concurrent Offering (the "Concurrent
Time of Delivery") shall be subject to the satisfaction of the conditions set
forth in Section 6 of the Underwriting Agreement. Furthermore, (i) the
Concurrent Time of Delivery shall be conditioned upon the occurrence of the
Closing Date, (ii) the obligations of the Placement Agents hereunder shall be
conditioned upon resolution to the reasonable satisfaction of the Placement
Agents of all legal and regulatory issues related to the Concurrent Offering and
(iii) if the Concurrent Offering is not consummated for all the proposed shares,
the shares of Common Stock not sold to the Concurrent Purchasers will not be
offered to the purchasers of the Initial Public Offering. For purposes of this
Section 6, all references to "Placement Agents" and "Firm Shares" in the
introductory paragraph of Section 6 of the Underwriting Agreement shall be
deemed to refer to the Placement Agents and Concurrent Shares, respectively.
Also for purposes of this Section 6, (a) the opinions of (i) Fried, Frank,
Harris, Xxxxxxx & Xxxxxxxx, (ii) Xxxxxx Godward LLP and (iii) Xxxxxxxx &
Xxxxxxxx LLP, (b) the letter or letters of KPMG Peat Marwick, LLP and (c) the
certificates of officers of the Company (provided for in Section 6(e) of the
Underwriting Agreement), shall each also be addressed and furnished to the
Placement Agents at the Concurrent Time of Delivery and all references in
Section 6 of the Underwriting Agreement to "as you may reasonably require," "as
you may reasonably request," "satisfactory to you," "reasonably satisfactory in
form and substance to you" or similar language shall be deemed to refer to a
determination by the Placement Agents.
PROCEEDS AND FEES
7. All proceeds of the Concurrent Offering will be paid directly to the
Company and will be segregated in a separate non-interest bearing account
established by the Company and pending the consummation of the Concurrent
Offering. As compensation for their services under this Agreement, the Placement
Agents will receive
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at the Concurrent Time of Delivery a fee (the "Placement Fee") from the
Company of ____ of the amount equal to Initial Public Offering Price less the
underwriting discount and commissions to be paid to the Placement Agents in the
Underwritten Offering, multiplied by the number of Shares sold in the Concurrent
Offering, by wire transfer in immediately available funds to a bank account or
accounts designated by the Placement Agents. Payment of such Placement Fee
shall be a condition of the Concurrent Time of Delivery. In the event the
Concurrent Offering is (i) terminated by the Placement Agents because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement or (ii) not consummated by the
closing date of the Initial Public Offering, the Concurrent Offering will be
terminated and all payments made by the Concurrent Purchasers in connection with
the Concurrent Offering will be promptly returned, and the Company agrees to
reimburse the Placement Agents for all out-of-pocket expenses (including the
fees and disbursements of counsel) reasonably incurred by them.
INDEMNIFICATION [CONFORM WITH ANY CHANGES TO BE MADE TO THE UNDERWRITING
AGREEMENT]
8. (a) The Company agrees to indemnify and hold harmless each of the
Placement Agents and each person, if any, who controls any of the Placement
Agents within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), against any
and all losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Concurrent Shares and the Shares, as
originally filed or any amendment thereof, or any related preliminary prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the Company will not be liable
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in any such case to the extent but only to the extent that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on
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behalf of any of the Placement Agents through you expressly for use therein.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have including under this Agreement.
(b) Promptly after receipt by an indemnified party under subsection
(a) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 8). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent; provided, however,
that such consent was not unreasonably withheld.
CONTRIBUTION [CONFORM TO CHANGES IN UNDERWRITING AGREEMENT]
9. In order to provide for contribution in circumstances in which the
indemnification provided for in Section 8 hereof is for any reason held to be
unavailable from any indemnifying party or is insufficient to hold harmless a
party indemnified thereunder, the Company and the Placement Agents shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
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asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company any contribution received by
the Company from persons, other than the Placement Agents, who may also be
liable for contribution, including persons who control the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, officers
of the Company who signed the Registration Statement and directors of the
Company) as incurred to which the Company and one or more of the Placement
Agents may be subject, in such proportions as is appropriate to reflect the
relative benefits received by the Company and the Placement Agents from the
offering of the Concurrent Shares or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 8 hereof,
in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the Placement
Agents in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Placement Agents shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and (y) the underwriting
discounts and commissions received by the Placement Agents, respectively, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company and of the Placement Agents shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Placement Agents and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Placement
Agents agree that it would not be just and equitable if contribution pursuant to
this Section 9 were determined by pro rata allocation (even if the Placement
Agents were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this Section 9, (i) in no case shall
any Placement Agent be liable or responsible for any amount in excess of the
underwriting discount applicable to the Concurrent Shares purchased by such
Placement Agent hereunder, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 9 and the
preceding sentence, no Placement Agent shall be required to contribute any
amount in excess of the amount by which the total price at which the Concurrent
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Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Placement Agent has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. For purposes of this Section 9, each person, if
any, who controls a Placement Agent within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Placement Agent, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 9. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties, notify each party or parties from whom contribution may be sought,
but the omission to so notify such party or parties shall not relieve the party
or parties from whom contribution may be sought from any obligation it or they
may have under this Section 9 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
rovided, however, that such consent was not unreasonably withheld.
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OTHER
10. The Company represents and warrants that no person or organization
other than the Placement Agents are, as a result of any action by the Company,
entitled to compensation for services as a finder, broker, placement agent or
investment banker in connection with the Concurrent Offering.
11. This Agreement shall be deemed to be effective as of the date
hereof and the term of this engagement shall be from the date hereof until the
earlier of (i) termination of the Concurrent Offering, and (ii) the completion
of the Offerings. Notwithstanding the foregoing, if at any time the Company
violates any of its covenants and agreements contained herein or if any of the
conditions set forth in Section 6 are not satisfied, the Placement Agents shall
have the right to terminate their obligations hereunder upon prior notice to the
Company. In the event of any termination of this Agreement or if for any reason
the Concurrent Offering is terminated, the Company shall be responsible for (i)
the reimbursement of all fees, disbursements, costs and expenses, as provided in
Section 5, and (ii) its obligations arising under Sections 8 and 9.
12. The Company agrees that the Placement Agents shall have the right
to advertise their participation in the Concurrent Offering in "tombstone" or
other
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appropriate financial advertisements in newspapers, magazines, trade periodicals
or other publications.
13. The invalidity or unenforceability of any provision of this
Agreement shall in no way offset the validity or enforceability of any other
provision. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the state of New York. The terms and provisions of
this Agreement are solely for the benefit of the Company and the Placement
Agents and the other indemnified parties and their respective successors,
assigns, heirs and personal representatives, and no other person shall acquire
or have any right by virtue of this letter.
14. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Placement Agents shall be delivered or sent by mail,
telex or facsimile transmission to: in the case of the Placement Agents to Bear,
Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx Xxx Xxxx 00000; and in
the case of the Company to the address of the Company set forth in the
Registration Statement, Attention: Secretary. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
* * *
Please confirm that the terms described herein are in accordance with
your understanding by signing and returning to us the enclosed duplicate of this
letter.
Very truly yours,
BEAR, XXXXXXX & CO. INC.
By:______________________________
Title:___________________________
XXXXX XXXXX XXXXXX & COMPANY, LLC
By:______________________________
Title:___________________________
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AGREED AND CONFIRMED:
xxxxxxxx.xxx, inc.
By:______________________________
Title:_____________________________
9
ANNEX A
[Attach form of Underwriting Agreement]
