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EXHIBIT 1.1
3,800,000 SHARES
XXXXXXX.XXX, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED , 1999
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TABLE OF CONTENTS
PAGE
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1. Representations and Warranties of the Company............................................................2
1.1. Effective Registration Statement................................................................2
1.2. Contents of Registration Statement..............................................................2
1.3. Due Incorporation...............................................................................3
1.4. No Subsidiaries.................................................................................3
1.5. Underwriting Agreement..........................................................................3
1.6. Description of Capital Stock....................................................................3
1.7. Authorized Stock................................................................................3
1.8. Validly Issued Shares...........................................................................4
1.9. No Conflict.....................................................................................4
1.10. No Material Adverse Change......................................................................4
1.11. Legal Proceedings; Exhibits.....................................................................4
1.12. Compliance with Securities Act..................................................................4
1.13. Not an Investment Company.......................................................................5
1.14. Compliance with Laws............................................................................5
1.15. No Environmental Costs..........................................................................5
1.16. No Registration Rights..........................................................................5
1.17. Cuban Business Statute..........................................................................5
1.18. Absence of Material Charges.....................................................................5
1.19. Good Title to Properties........................................................................6
1.20. Intellectual Property Rights....................................................................6
1.21. No Labor Disputes...............................................................................6
1.22. Insurance.......................................................................................6
1.23. Governmental Permits............................................................................7
1.24. Accounting Controls.............................................................................7
1.25. Year 2000 Compliance............................................................................7
1.26. Directed Share Program..........................................................................7
1.27. Compliance with Laws............................................................................8
2. Representations and Warranties of the Selling Stockholders...............................................8
2.1. Due Authorization...............................................................................8
2.2. Selling Stockholder Documents...................................................................8
2.3. No Conflict.....................................................................................8
2.4. Good Title to Shares............................................................................9
2.5. Delivery of Common Shares.......................................................................9
2.6. No Registration Rights..........................................................................9
2.7. No Price Stabilization or Manipulation..........................................................9
2.8. Disclosure by Selling Stockholder in Registration Statement....................................10
3. Purchase and Sale Agreements............................................................................10
3.1. Firm Shares....................................................................................10
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TABLE OF CONTENTS
(CONTINUED)
3.2. Additional Shares..............................................................................10
3.3. Market Standoff Provision......................................................................11
3.4. Terms of Public Offering.......................................................................11
4. Payment and Delivery....................................................................................12
4.1. Firm Shares....................................................................................12
4.2. Additional Shares..............................................................................12
4.3. Delivery of Certificates.......................................................................12
5. Covenants of the Company................................................................................12
5.1. Furnish Copies of Registration Statement and Prospectus........................................13
5.2. Notification of Amendments or Supplements......................................................13
5.3. Filings of Amendments or Supplements...........................................................13
5.4. Blue Sky Laws..................................................................................13
5.5. Earnings Statement.............................................................................13
5.6. Use of Proceeds................................................................................14
5.7. Transfer Agent.................................................................................14
5.8. Periodic Reporting Obligations.................................................................14
5.9. Directed Share Program.........................................................................14
5.10. Exchange Act Compliance........................................................................14
6. Conditions to the Underwriters' Obligations.............................................................14
6.1. Effective Registration Statement...............................................................15
6.2. Rule 462 Registration Statement................................................................15
6.3. Prospectus Filed with Commission...............................................................15
6.4. No Stop Order..................................................................................15
6.5. No NASD Objection..............................................................................15
6.6. No Material Adverse Change.....................................................................15
6.7. Officer's Certificate..........................................................................16
6.8. Opinion of Company Counsel.....................................................................16
6.9. Opinion of Selling Stockholders Counsel........................................................16
6.10. Opinion of Patent Counsel......................................................................16
6.11. Opinion of Underwriters Counsel................................................................16
6.12. Accountant's Comfort Letter....................................................................16
6.13. Lock-Up Agreements.............................................................................17
6.16. Additional Documents...........................................................................17
7. Expenses................................................................................................18
8. Indemnity and Contribution..............................................................................19
8.1. Indemnification of the Underwriters............................................................19
8.2. Indemnification of Company by the Selling Stockholders.........................................19
8.3. Indemnification of Underwriters by Selling Stockholders........................................19
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TABLE OF CONTENTS
(CONTINUED)
8.4. Indemnification by the Underwriters............................................................20
8.5. Indemnification Procedures.....................................................................20
8.6. Limitation of Selling Stockholder Liability....................................................22
8.7. Indemnification for Directed Share Program.....................................................22
8.8. Contribution Agreement.........................................................................22
8.9. Contribution Amounts...........................................................................23
8.10. Survival of Provisions.........................................................................23
9. Effectiveness...........................................................................................24
10. Termination.............................................................................................24
11. Defaulting Underwriters.................................................................................24
12. Counterparts............................................................................................25
13. Headings; Table of Contents.............................................................................25
14. Notices.................................................................................................26
15. Successors..............................................................................................26
16. Partial Unenforceability................................................................................27
17. Governing Law...........................................................................................27
18. Failure of the Selling Stockholders to Sell and Deliver Shares..........................................27
19. Entire Agreement........................................................................................27
20. Amendments..............................................................................................28
21. Sophisticated Parties...................................................................................28
SCHEDULES
A List of Underwriters
B List of Selling Stockholders
EXHIBITS
A Matters to be Covered in the Opinion of Company Counsel
B Matters to be Covered in the Opinion of Patent Counsel to the Company
C Form of Lock-Up Agreement
5
, 1999
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Xxxxxx Xxxxxx Partners LLC
Xxxx Xxxxxxxx Xxxxxxx
Wit Capital Corporation
As Representatives of the several Underwriters
c/o Thomas Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Introduction. Xxxxxxx.xxx, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several underwriters named in
Schedule A hereto (the "UNDERWRITERS"), and certain stockholders of the Company
(the "SELLING STOCKHOLDERS") named in Schedule B hereto severally propose to
sell to the several Underwriters, an aggregate of 3,800,000 shares of the common
stock, par value $0.01 per share, of the Company (the "FIRM SHARES"), of which
3,530,000 shares are to be issued and sold by the Company and 270,000 shares are
to be sold by the Selling Stockholders, with each Selling Stockholder selling
the number of shares set forth opposite such Selling Stockholder's name in
Schedule B hereto.
The Company also proposes to issue and sell to the several
Underwriters and the Selling Stockholders severally propose to sell to the
several Underwriters not more than an additional 570,000 shares of its common
stock, par value $0.01 per share (the "ADDITIONAL SHARES"), if and to the extent
that you shall have determined to exercise, on behalf of the Underwriters, the
right to purchase such shares of common stock granted to the Underwriters in
Section 3 hereof. If you determine to exercise this right to purchase the
Additional Shares, the Selling Stockholders shall sell the first 80,000 shares
and then the Company shall sell up to the remaining 490,000 shares. The Firm
Shares and the Additional Shares are hereinafter collectively referred to as the
"SHARES". The shares of common stock, par value $0.01 per share, of the Company
to be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the "COMMON STOCK". The Company and the Selling
Stockholders are hereinafter sometimes collectively referred to as the
"SELLERS". Xxxxxx Xxxxxx Partners LLC, Wit Capital Corporation and Xxxx Xxxxxxxx
Xxxxxxx have agreed to act as representatives of the several Underwriters (in
such capacity, the "REPRESENTATIVES") in connection with the offering and sale
of the Shares.
The Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-1 (file no.
333-85315), including a
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prospectus, relating to the Shares. The registration statement as amended at the
time it becomes effective, including the information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), is
hereinafter referred to as the "REGISTRATION STATEMENT"; the prospectus in the
form first used to confirm sales of Shares is hereinafter referred to as the
"PROSPECTUS". If the Company has filed a registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement. All references in this Agreement to the Registration
Statement, the Rule 462 Registration Statement, a preliminary prospectus, the
Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System ("XXXXX").
As part of the offering contemplated by this Agreement, Xxxxxx
Xxxxxx Partners LLC has agreed to reserve out of the Shares set forth opposite
its name on Schedule A to this Agreement, up to 175,000 shares, for sale to the
Company's employees, officers, and directors and other parties associated with
the Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus
under the heading "Underwriting" (the "DIRECTED SHARE PROGRAM"). The Shares to
be sold by Xxxxxx Xxxxxx Partners LLC pursuant to the Directed Share Program
(the "DIRECTED SHARES") will be sold by Xxxxxx Xxxxxx Partners LLC pursuant to
this Agreement at the public offering price. Any Directed Shares not orally
confirmed for purchase by any Participants by the end of the first business day
after the date on which this Agreement is executed will be offered to the
public by Xxxxxx Xxxxxx Partners LLC as set forth in the Prospectus.
1. Representations and Warranties of the Company.
The Company represents and warrants to and agrees with each of
the Underwriters that:
1.1. Effective Registration Statement.
The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
1.2. Contents of Registration Statement.
(i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement and the Prospectus comply and, as
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amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) the Prospectus does not contain and, as amended
or supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through you expressly for use
therein.
1.3. Due Incorporation.
The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company.
1.4. No Subsidiaries.
The Company has no subsidiaries.
1.5. Underwriting Agreement.
This Agreement has been duly authorized, executed and
delivered by the Company, and is a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
1.6. Description of Capital Stock.
The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
1.7. Authorized Stock.
The shares of Common Stock (including the Shares to be sold by
the Selling Stockholders) outstanding prior to the issuance of the Shares to be
sold by the Company have been duly authorized and are validly issued, fully paid
and non-assessable.
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1.8. Validly Issued Shares.
The Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
1.9. No Conflict.
The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will not
contravene any provision of applicable law or the certificate of incorporation
or by-laws of the Company or any agreement or other instrument binding upon the
Company that is material to the Company, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Shares.
1.10. No Material Adverse Change.
There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company, from that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
1.11. Legal Proceedings; Exhibits.
There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company is a party or to
which any of the properties of the Company is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
filed as required.
1.12. Compliance with Securities Act.
Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
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1.13. Not an Investment Company.
The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
1.14. Compliance with Laws.
The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii)
has received all permits, licenses or other approvals required of it under
applicable Environmental Laws to its business and (iii) is in compliance with
all terms and conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, individually or in the
aggregate, have a material adverse effect on the Company.
1.15. No Environmental Costs.
There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
would, individually or in the aggregate, have a material adverse effect on the
Company.
1.16. No Registration Rights.
There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the Company
to file a registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement other than as
described in the Registration Statement and as have been waived in writing in
connection with the offering contemplated hereby.
1.17. Cuban Business Statute.
The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government of Cuba
or with any person or affiliate located in Cuba.
1.18. Absence of Material Charges.
Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) the Company has not
incurred any material
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liability or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (2) the Company has not
purchased any of its outstanding capital stock, nor declared, paid or otherwise
made any dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (3) there has not been any material
change in the capital stock, short-term debt or long-term debt of the Company,
except as described in the Prospectus.
1.19. Good Title to Properties.
The Company has good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by it
which is material to the business of the Company, free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company; and any
real property and buildings held under lease by the Company are held by it under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company.
1.20. Intellectual Property Rights.
The Company owns or possesses, or can acquire on reasonable
terms, all material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names that it currently employs in connection with the
business it now operates, and the Company has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
of the foregoing which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse affect on
the Company.
1.21. No Labor Disputes.
No material labor dispute with the employees of the Company
exists, or, to the knowledge of the Company, is imminent; and the Company is not
aware of any existing, threatened or imminent labor disturbance by the employees
of any of its principal suppliers, manufacturers or contractors that could have
a material adverse effect on the Company.
1.22. Insurance.
The Company is insured by the insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; and the Company has
no reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a material adverse effect on the Company.
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1.23. Governmental Permits.
The Company possesses all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct its business, and the Company has not received
any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, individually or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the Company.
1.24. Accounting Controls.
The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (1) transactions are executed in
accordance with management's general or specific authorizations; (2)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (3) access to assets is permitted only in
accordance with management's general or specific authorization; and (4) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
1.25. Year 2000 Compliance.
The Company has reviewed its operations and those of any third
parties with which the Company has a material relationship to evaluate the
extent to which the business or operations of the Company will be affected by
the Year 2000 Problem. As a result of such review, the Company has no reason to
believe, and does not believe, that the Year 2000 Problem will have a material
adverse effect on the Company, or result in any material loss or interference
with the Company's business or operations. The "Year 2000 Problem" as used
herein means any significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of mechanical or
electrical systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1, 2000.
1.26. Directed Share Program.
The Company represents and warrants to Xxxxxx Xxxxxx Partners
LLC that (i) the Registration Statement, the Prospectus and any preliminary
prospectus comply, and any further amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program,
and that (ii) no authorization, approval, consent, license, order, registration
or qualification of or with any government, governmental instrumentality or
court, other than such as have been obtained, is
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necessary under the securities laws and regulations of foreign jurisdictions in
which the Directed Shares are offered outside the United States.
1.27. Compliance with Laws.
To the Company's knowledge, the Company is conducting its
business in compliance with the Fair Labor Standards Act, and all applicable
federal, state and local laws, rules and regulations of the jurisdictions in
which it is conducting business, including, without limitation, all applicable
local, state and federal laws and regulations governing environmental matters,
zoning and land use, except where the failure to be so in compliance would not
have a material adverse effect on the Company.
2. Representations and Warranties of the Selling Stockholders.
Each of the Selling Stockholders, severally and not jointly,
represents and warrants to and agrees with each of the Underwriters that:
2.1. Due Authorization.
This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder (including through the Power of Attorney,
as defined below), enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
2.2. Selling Stockholder Documents.
The Custody Agreement and the Power of Attorney have been duly
authorized, executed and delivered by such Selling Stockholder and are valid and
binding agreements of such Selling Stockholder enforceable in accordance with
their respective terms, except as rights to indemnification thereunder may be
limited by applicable law and except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
2.3. No Conflict.
The execution and delivery by such Selling Stockholder of, and
the performance by such Selling Stockholder of its obligations under, this
Agreement, the Custody Agreement signed by such Selling Stockholder and
____________, as Custodian, relating to the deposit of the Shares to be sold by
such Selling Stockholder (the "CUSTODY AGREEMENT") and the Power of Attorney
appointing certain individuals as such Selling Stockholder's attorneys-in-fact
to the
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extent set forth therein, relating to the transactions contemplated hereby and
by the Registration Statement (the "POWER OF ATTORNEY") will not contravene any
provision of the certificate of incorporation or by-laws of such Selling
Stockholder (if such Selling Stockholder is a corporation), or any agreement or
other instrument binding upon such Selling Stockholder or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over such
Selling Stockholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by such Selling Stockholder of its obligations under this Agreement
or the Custody Agreement or Power of Attorney of such Selling Stockholder,
except such as may be required by the Securities Act and the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
Shares, and to such Selling Stockholder's knowledge it will not contravene any
provisions of applicable law.
2.4. Good Title to Shares.
Such Selling Stockholder has, and on each Closing Date will
have, valid title to the Shares to be sold by such Selling Stockholder and the
legal right and power, and all authorization and approval required by law, to
enter into this Agreement, the Custody Agreement and the Power of Attorney and
to sell, transfer and deliver the Shares to be sold by such Selling Stockholder,
except such as may be required by the Securities Act and the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
Shares.
2.5. Delivery of Common Shares.
Delivery of the Shares to be sold by such Selling Stockholder
pursuant to this Agreement will pass title to such Shares free and clear of any
security interests, claims, liens, equities and other encumbrances.
2.6. No Registration Rights.
Such Selling Stockholder does not have any registration or
other similar rights to have any equity or debt securities registered for sale
by the Company under the Registration Statement or included in the offering
contemplated by this Agreement, other than as described in the Registration
Statement or as contemplated under this Agreement and as have been waived in
writing in connection with the offering contemplated hereby.
2.7. No Price Stabilization or Manipulation.
Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
9.
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2.8. Disclosure by Selling Stockholder in Registration Statement.
(i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading
with respect to, and only with respect to, information under the caption
"Principal and Selling Stockholders" which specifically relate to such Selling
Stockholder, (ii) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder with respect to, and only with respect to, information
under the caption "Principal and Selling Stockholders" which specifically relate
to such Selling Stockholder and (iii) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading with respect to, and only with respect to, information
under the caption "Principal and Selling Stockholders" which specifically relate
to such Selling Stockholder, except that the representations and warranties set
forth in this paragraph 2.9 do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
3. Purchase and Sale Agreements.
3.1. Firm Shares.
Each Seller, severally and not jointly, hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from such
Seller at $______ a share (the "PURCHASE PRICE") the number of Firm Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the number of Firm Shares to be
sold by such Seller as the number of Firm Shares set forth in Schedule A hereto
opposite the name of such Underwriter bears to the total number of Firm Shares.
3.2. Additional Shares.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to sell to the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 570,000
Additional Shares at the Purchase Price. A total of the first 80,000 Additional
Shares shall first be sold by the Selling Stockholders, on a pro rata basis,
based upon the number of Firm Shares to be sold by such Selling Stockholders set
forth on Schedule A hereto (subject to adjustments to eliminate fractional
shares); if the Underwriters purchase more
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than 80,000 Additional Shares, the Company shall sell the remaining Additional
Shares to the Underwriters. If you, on behalf of the Underwriters, elect to
exercise such option, you shall so notify the Company and in writing not later
than thirty (30) days after the date of this Agreement, which notice shall
specify the number of Additional Shares to be purchased by the Underwriters and
the date on which such shares are to be purchased. Such date may be the same as
the Closing Date (as defined below) but not earlier than the Closing Date nor
later than ten (10) business days after the date of such notice. Additional
Shares may be purchased as provided in Section 4 hereof solely for the purpose
of covering over-allotments made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Shares (subject
to such adjustments to eliminate fractional shares as you may determine) that
bears the same proportion to the total number of Additional Shares to be sold by
such Seller as the number of Firm Shares set forth in Schedule A hereto opposite
the name of such Underwriter bears to the total number of Firm Shares.
3.3. Market Standoff Provision.
Each Seller hereby agrees that, without the prior written
consent of Xxxxxx Xxxxxx Partners LLC, it will not, during the period ending 180
days after the date of the Prospectus, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder, or (B) the issuance by the Company of shares of Common Stock upon the
exercise of options or warrants or the conversion of a security outstanding on
the date hereof of which the Underwriters have been advised in writing and which
is described in the Prospectus. In addition, each Selling Stockholder, agrees
that, without the prior written consent of Xxxxxx Xxxxxx Partners LLC, it will
not, during the period ending 180 days after the date of the Prospectus, make
any demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
3.4. Terms of Public Offering.
The Sellers are advised by you that the Underwriters propose
to make a public offering of the Shares as soon after the Registration Statement
and this Agreement have become effective as in your judgment is advisable. The
Sellers are further advised by you that the Shares are to be offered to the
public initially at $_____________ a share (the "PUBLIC OFFERING PRICE") and to
certain dealers selected by you at a price that represents a concession not in
excess of $______ a share under the Public Offering Price, and that any
Underwriter may allow, and such
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dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
4. Payment and Delivery.
4.1. Firm Shares.
Payment for the Firm Shares to be sold by each Seller shall be
made to such Seller in immediately available funds against delivery of such Firm
Shares for the respective accounts of the several Underwriters at 10:00 a.m.,
New York City time, on ____________, 1999, or at such other time on the same or
such other date, not later than _________, 1999, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "CLOSING DATE".
4.2. Additional Shares.
Payment for any Additional Shares to be sold by the Sellers
shall be made to such Seller in immediately available funds in New York City
against delivery of such Additional Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on the date specified in
the notice described in Section 3.2 or at such other time on the same or on such
other date, in any event not later than _______, 1999, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "OPTION CLOSING DATE."
4.3. Delivery of Certificates.
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one (1) full business day prior to
the Closing Date or the Option Closing Date, as the case may be. The
certificates evidencing the Firm Shares and Additional Shares shall be delivered
to you on the Closing Date or the Option Closing Date, as the case may be, for
the respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the Purchase Price therefor.
5. Covenants of the Company.
In further consideration of the agreements of the Underwriters
herein contained, the Company covenants with each Underwriter as follows:
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5.1. Furnish Copies of Registration Statement and Prospectus.
To furnish to you, without charge, four (4) signed copies of
the Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge, prior
to 10:00 a.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 5.3 below, as many
copies of the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
5.2. Notification of Amendments or Supplements.
Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such rule.
5.3. Filings of Amendments or Supplements.
If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer (the "PROSPECTUS DELIVERY PERIOD"), any event shall occur
or condition exist as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish to
the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with law.
5.4. Blue Sky Laws.
To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
5.5. Earnings Statement.
To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen (18) months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Securities Act), an earnings statement of the Company (which need not be
audited) complying with Section 11(a) of the Securities Act and
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the rules and regulations thereunder (including, at the option of the Company,
Rule 158).
5.6. Use of Proceeds.
The Company shall apply the net proceeds from the sale of the
Shares sold by it in the manner described under the caption "Use of Proceeds" in
the Prospectus.
5.7. Transfer Agent.
The Company shall engage and maintain, at its expense, a
registrar and transfer agent for the Common Stock.
5.8. Periodic Reporting Obligations.
During the Prospectus Delivery Period, the Company shall file,
on a timely basis, with the Commission and the Nasdaq National Market all
reports and documents required to be filed under the Exchange Act. Additionally,
the Company shall file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Securities Act.
5.9. Directed Share Program.
That in connection with the Directed Share Program, the
Company will ensure that the Directed Shares will be restricted to the extent
required by the National Association of Securities Dealers, Inc. (the "NASD") or
the NASD rules from sale, transfer, assignment, pledge or hypothecation for a
period of three (3) months following the date of the effectiveness of the
Registration Statement. Xxxxxx Xxxxxx Partners LLC will notify the Company as to
which Participants will need to be so restricted. The Company will direct the
transfer agent to place stop transfer restrictions upon such securities for such
period of time. Furthermore, the Company covenants with Xxxxxx Xxxxxx Partners
LLC that the Company will comply with all applicable securities and other
applicable laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.
5.10. Exchange Act Compliance.
During the Prospectus Delivery Period, the Company will file
all documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the Exchange Act in the manner and within the time periods required
by the Exchange Act.
6. Conditions to the Underwriters' Obligations.
The obligations of the Seller to sell the Shares to the
several Underwriters and the several obligations of the Underwriters to purchase
and pay for the Shares on the Closing Date are subject to the following
conditions:
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6.1. Effective Registration Statement.
The Registration Statement shall have become effective not
later than [__________] (New York City time) on the date hereof.
6.2. Rule 462 Registration Statement.
If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462 Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462 Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Securities Act.
6.3. Prospectus Filed with Commission.
The Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under the Securities
Act) in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment to
the Registration Statement containing the information required by such Rule
430A, and such post-effective amendment shall have become effective.
6.4. No Stop Order.
No stop order suspending the effectiveness of the Registration
Statement, any Rule 462 Registration Statement, or any post-effective amendment
to the Registration Statement, shall be in effect and no proceedings for such
purpose shall have been instituted or threatened by the Commission.
6.5. No NASD Objection.
The NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
6.6. No Material Adverse Change.
There shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in
the earnings, business or operations of the Company, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
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6.7. Officer's Certificate.
The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the Chief Executive Officer or
President of the Company, to the effect set forth in Sections 6.4 and 6.6 above
and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before the
Closing Date.
6.8. Opinion of Company Counsel.
The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx Godward LLP, counsel for the Company, dated the Closing Date,
the form of which is attached hereto as Exhibit A. The opinion shall be rendered
to the Underwriters at the request of the Company and shall so state therein.
6.9. Opinion of Selling Stockholders Counsel.
The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxx Xxxxxx, counsel to the Selling Stockholders, dated the
Closing Date, the firm of which is attached hereto as Exhibit B. The opinion
shall be rendered to the Underwriters at the request of the Selling
Stockholders.
6.10. Opinion of Patent Counsel.
The Underwriters shall have received on the Closing Date an
opinion of Finnegan, Henderson, Farabow, Garrett & Dunner LLP, patent counsel to
the Company, dated the Closing Date, the form of which is attached hereto as
Exhibit C. The opinion shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
6.11. Opinion of Underwriters Counsel.
The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in Exhibit A, paragraphs
(vi), (vii), (ix) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters") and (x). With respect to
paragraph (x) of Exhibit A, such counsel may state that their opinion and belief
are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and review
and discussion of the contents thereof, but are without independent check or
verification, except as specified.
6.12. Accountant's Comfort Letter.
The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters, from
KPMG LLP, independent public accountants,
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containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus; provided that the letter delivered on the Closing
Date shall use a "cut-off date" not earlier than the date hereof.
6.13. Lock-Up Agreements.
The "lock-up" agreements, each substantially in the forms of
Exhibit D hereto, between you and certain stockholders, officers and directors
of the Company, delivered to you on or before the date hereof, shall be in full
force and effect on the Closing Date.
6.14. Selling Stockholders Certificate.
The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the Attorney-in-Fact of each
Selling Stockholder, to the effect that the representations and warranties of
the Selling Stockholders contained in this Agreement are true and correct as of
the Closing Date and that the Selling Stockholders have complied with all of the
agreements and satisfied all of the conditions on their part to be performed or
satisfied hereunder on or before the Closing Date.
6.15. Selling Stockholder Documents.
On the date hereof, the Company and the Selling Stockholders
shall have furnished for review by the Representatives copies of the Powers of
Attorney and Custody Agreements executed by each of the Selling Stockholders and
such further information, certificates and documents as the Representatives may
reasonably request.
6.16. Additional Documents.
On the Closing Date, the Representatives and counsel for the
Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Shares as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction of each of the above
conditions on or prior to the Option Closing Date and to the delivery to you on
the Option Closing Date of such documents as you may reasonably request with
respect to the good standing of the Company, the due authorization and issuance
of the Additional Shares and other matters related to the issuance of the
Additional Shares.
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7. Expenses.
Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, the Sellers agree to pay or
cause to be paid all expenses incident to the performance of their obligations
under this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel, the Company's accountants and counsel for the Selling
Stockholders in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or legal investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
contemplated by Section 5.4 hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the NASD, (v) all fees and
expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Stock and all costs and expenses
incident to listing the Shares on the Nasdaq National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) the costs and expenses of
the Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, (ix) all expenses in connection with any offer and sale of the Shares
outside of the United States, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with offers and
sales outside of the United States, (x) all reasonable fees and disbursements of
counsel incurred by the Underwriters in connection with the Directed Share
Program and stamp duties, similar taxes or duties or other taxes, if any,
incurred by the Underwriters in connection with the Directed Share Program and
(xi) all other costs and expenses incident to the performance of the obligations
of the Company hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this Section,
Section 8 entitled "Indemnity and Contribution", and the last paragraph of
Section 11 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel and any advertising expenses
connected with any offers they may make.
Each Selling Stockholder will pay (directly or by
reimbursement) all fees and
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expenses incident to the performance of such Selling Stockholder's obligations
under this Agreement which are not otherwise specifically provided for herein,
including but not limited to such Selling Stockholder's pro rata share of fees
and expenses of the attorneys-in-fact and all expenses and taxes incident to the
sale and delivery of the Shares to be sold by such Selling Stockholder to the
Underwriters hereunder.
The provisions of this Section shall not supersede or
otherwise affect any agreement that the Sellers may otherwise have for the
allocation of such expenses among themselves.
8. Indemnity and Contribution.
8.1. Indemnification of the Underwriters.
The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except (i)
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
8.2. Indemnification of Company by the Selling Stockholders.
Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder expressly for
use in the Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto.
8.3. Indemnification of Underwriters by Selling Stockholders.
Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained under the caption
"Principal and Selling Stockholders" in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference
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to information relating to such Selling Stockholder furnished in writing by or
on behalf of such Selling Stockholder expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto.
8.4. Indemnification by the Underwriters.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholders, the directors
of the Company, the officers of the Company who sign the Registration Statement
and each person, if any, who controls the Company or any Selling Stockholder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
8.5. Indemnification Procedures.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this
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Section 8, such person (the "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (i) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Underwriters and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section and (iii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Selling Stockholders and all
persons, if any, who control any Selling Stockholder within the meaning of
either such Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Underwriters
and such control persons of any Underwriters, such firm shall be designated in
writing by Xxxxxx Xxxxxx Partners LLC. In the case of any such separate firm for
the Company, and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of any such
separate firm for the Selling Stockholders and such control persons of any
Selling Stockholders, such firm shall be designated in writing by the persons
named as attorneys-in-fact for the Selling Stockholders under the Powers of
Attorney. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to Section 8.4 hereof in respect of such action
or proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the
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reasonable fees and expenses of not more than one separate firm (in addition to
any local counsel) for Xxxxxx Xxxxxx Partners LLC for the defense of any losses,
claims, damages and liabilities arising out of the Directed Share Program, and
all persons, if any, who control Xxxxxx Xxxxxx Partners LLC within the meaning
of either Section 15 of the Act or Section 20 of the Exchange Act.
8.6. Limitation of Selling Stockholder Liability.
The liability of each Selling Stockholder under the indemnity
and contribution provisions of this Section 8 shall be limited to an amount
equal to the initial public offering price of the Shares sold by such Selling
Stockholder, less the underwriting discount, as set forth on the front cover
page of the Prospectus. The Company and the Selling Stockholders may agree, as
among themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
8.7. Indemnification for Directed Share Program.
The Company agrees to indemnify and hold harmless Xxxxxx
Xxxxxx Partners LLC and each person, if any, who controls Xxxxxx Xxxxxx Partners
LLC within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act ("XXXXXX XXXXXX PARTNERS ENTITIES"), from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in the prospectus wrapper
material prepared by or with the consent of the Company for distribution in
foreign jurisdictions in connection with the Directed Share Program attached to
the Prospectus or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein, when considered in conjunction with
the Prospectus or any applicable preliminary prospectus, not misleading; (ii)
caused by the failure of any Participant to pay for and accept delivery of the
shares which, immediately following the effectiveness of the Registration
Statement, were subject to a properly confirmed agreement to purchase; or (iii)
related to, arising out of, or in connection with the Directed Share Program,
provided that, the Company shall not be responsible under this subparagraph
(iii) for any losses, claim, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of Xxxxxx Xxxxxx Partners Entities.
8.8. Contribution Agreement.
To the extent the indemnification provided for in this Section
8 is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion
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as is appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party or parties on the
other hand from the offering of the Shares 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 indemnifying party or parties on the
one hand and of the indemnified party or parties on the other hand 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 Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses but after deducting the underwriting
discounts and commissions) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters. The relative fault of
the Company, the Selling Stockholders and the Underwriters 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 such party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
8.9. Contribution Amounts.
The Sellers and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 8.8. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
8.10. Survival of Provisions.
The indemnity and contribution provisions contained in this
Section 8 and the
23.
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representations, warranties and other statements of the Company and the Selling
Stockholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, any Selling Stockholder or any person controlling any Selling
Stockholder, or the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
9. Effectiveness.
This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
10. Termination.
This Agreement shall be subject to termination by notice given
by you to the Company, if (a) after the execution and delivery of this Agreement
and prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
or California shall have been declared by either federal or New York or
California state authorities or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis that, in your judgment, is material and adverse, or (v) in the judgment
of the Representatives, there shall have occurred any material adverse change,
or any development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings,
business, operations or prospects, whether or not arising from transactions in
the ordinary course of business, of the Company, and (b) in the case of any of
the events specified in clauses 10(a)(i) through 10(a)(v), such event,
individually or together with any other such event, makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
11. Defaulting Underwriters.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it has or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule A bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may
24.
29
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you, the Company and the Selling Stockholders, for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders. In any such
case either you or the relevant Sellers shall have the right to postpone the
Closing Date, but in no event for longer than seven (7) days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. If, on the Option
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Additional
Shares or (ii) purchase not less than the number of Additional Shares that such
non-defaulting Underwriters would have been obligated to purchase in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of any Seller to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason any Seller shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
12. Counterparts.
This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
13. Headings; Table of Contents.
The headings of the sections of this Agreement and the table
of contents have been inserted for convenience of reference only and shall not
be deemed a part of this Agreement.
25.
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14. Notices.
All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Representatives:
Xxxxxx Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxxxx Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Company:
Xxxxxxx.xxx, Inc.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: E. Xxxxxx Xxxxxx
If to the Selling Stockholders:
Xxxx Xxxx
00000 Xxxxxxx Xxx
Xxxxxx, XX 00000
With a copy to each Selling Stockholder at the address listed
in their respective Powers of Attorney.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
15. Successors.
This Agreement will inure to the benefit of and be binding
upon the parties
26.
31
hereto, including any substitute Underwriters pursuant to Section 11 hereof, and
to the benefit of the officers and directors and controlling persons referred to
in Section 8, and in each case their respective successors, and no other person
will have any right or obligation hereunder. The term "successors" shall not
include any purchaser of the Shares as such from any of the Underwriters merely
by reason of such purchase.
16. Partial Unenforceability.
The invalidity or unenforceability of any Section, paragraph
or provision of this Agreement shall not affect the validity or enforceability
of any other Section, paragraph or provision hereof. If any Section, paragraph
or provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
17. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
18. Failure of the Selling Stockholders to Sell and Deliver Shares.
If one or more of the Selling Stockholders shall fail to sell
and deliver to the Underwriters the Shares to be sold and delivered by such
Selling Stockholders at the Closing Date pursuant to this Agreement, then the
Underwriters may at their option, by written notice from the Representatives to
the Company and the Selling Stockholders, either (i) terminate this Agreement
without any liability on the part of any Underwriter or, except as provided in
Sections 7 and 8 hereof, the Company or the Selling Stockholders, or (ii)
purchase the shares which the Company and other Selling Stockholders have agreed
to sell and deliver in accordance with the terms hereof. If one or more of the
Selling Stockholders shall fail to sell and deliver to the Underwriters the
Shares to be sold and delivered by such Selling Stockholders pursuant to this
Agreement at the Closing Date or the Option Closing Date, then the Underwriters
shall have the right, by written notice from the Representatives to the Company
and the Selling Stockholders, to postpone the Closing Date or the Option Closing
Date, as the case may be, but in no event for longer than seven (7) days in
order that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
19. Entire Agreement.
This Agreement constitutes the entire agreement of the parties
to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
27.
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20. Amendments.
This Agreement may only be amended or modified in writing,
signed by all of the parties hereto, and no condition herein (express or
implied) may be waived unless waived in writing by each party whom the condition
is meant to benefit.
21. Sophisticated Parties.
Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification and contribution provisions of Section 8, and is fully informed
regarding said provisions. Each of the parties hereto further acknowledges that
the provisions of Section 8 hereto fairly allocate the risks in light of the
ability of the parties to investigate the Company, its affairs and its business
in order to assure that adequate disclosure has been made in the Registration
Statement, any preliminary prospectus and the Prospectus (and any amendments and
supplements thereto), as required by the Securities Act and the Exchange Act.
[Remainder of page intentionally left blank]
28.
33
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
XXXXXXX.XXX, INC.
By:
---------------------------------
Name: E. Xxxxxx Xxxxxx, Xx.
Title: President and Chief
Executive Officer
THE SELLING STOCKHOLDERS
By:
---------------------------------
Name:
Title: Attorney-in-Fact acting
on behalf of each of the
Selling Stockholders
named in Schedule B to
this Agreement
Accepted as of the date hereof
Xxxxxx Xxxxxx Partners LLC
Xxxx Xxxxxxxx Xxxxxxx
Wit Capital Corporation
Acting severally on behalf of themselves and the several Underwriters named in
Schedule A hereto.
By: Xxxxxx Xxxxxx Partners LLC
By:
------------------------------------------
Title:
Name:
29.
34
SCHEDULE A
NUMBER OF FIRM
UNDERWRITER SHARES TO BE PURCHASED
----------- ----------------------
Xxxxxx Xxxxxx Partners LLC
Xxxx Xxxxxxxx Xxxxxxx
Wit Capital Corporation
[NAMES OF OTHER UNDERWRITERS]
----------------------
Total 3,800,000
======================
35
SCHEDULE B
TOTAL NUMBER
TOTAL NUMBER OF ADDITIONAL
OF FIRM SHARES TO BE SOLD IF
THE SELLING STOCKHOLDERS SHARES TO BE SOLD MAXIMUM OPTION IS EXERCISED
------------------------ ----------------- ---------------------------
Xxxx Xxxx 178,184 52,795
Xxxxxxx X. Xxxxxxxxxx 8,4401 2,501
Xxx Xxxxx 34,155 10,120
Xxxxxxx Xxxx 14,580 4,320
Xxxxxxx Xxxx 13,500 4,000
Xxxxx Xxxx 5,400 1,600
Xxxxxxx Stake 7,560 2,240
Xxxxx Xxxx Xxxxxxxxxx III 2,700 800
Xxxxx Xxxxxxxxx 2,700 800
Xxxxxx Xxxxx 1,350 400
Xxxx Xxxxxx Xxxx Educational Trust 1,431 424
----------------- ---------------------------
Total 270,000 80,000
================= ===========================
36
EXHIBIT A
MATTERS TO BE COVERED IN THE
OPINION OF COMPANY COUNSEL
(i) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and, to the best of such counsel's knowledge, is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company.
(ii) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus under the caption
"Description of Securities."
(iii) The shares of Common Stock (including the Shares to be sold by
the Selling Stockholders) outstanding prior to the issuance of the Shares to be
sold by the Company have been duly authorized and are validly issued, fully paid
and non-assessable.
(iv) The Shares to be sold by the Company have been duly authorized
and, when issued, delivered and paid for in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and non-assessable,
and the issuance of such Shares will not be subject to any preemptive or, to
such counsel's knowledge, similar rights.
(v) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Underwriting Agreement will not
contravene any provision of applicable law (except with respect to state
securities and Blue Sky laws, as to which such counsel need not express any
opinion) or the certificate of incorporation or by-laws of the Company or, to
the best of such counsel's knowledge, any agreement or other instrument binding
upon the Company that is material to the Company, or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under
this Agreement (except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the Shares
as to which such counsel need not express any opinion).
(vii) The statements (A) in the Prospectus under the captions "Shares
Eligible" and "Description of Securities" and (B) in the Registration Statement
in Items 14 and 15, in each case insofar as such statements constitute summaries
of the legal matters, documents or proceedings referred to
37
therein, fairly present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the legal matters,
documents and proceedings referred to therein to the extent required by the Act
and the Regulations.
(viii) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened to which the Company is a party or to which
any of the properties of the Company is subject that are required under the Act
and the Regulations to be described in the Registration Statement or the
Prospectus and are not so described such counsel does not know of any contracts
or other agreements that are required under the Act and the Regulations to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
(ix) The Company is not and, after giving effect to the issuance and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
Such counsel shall also state that:
In connection with the preparation of the Registration Statement and
the Prospectus, such counsel has participated in conferences with officers and
representatives of the Company and with its certified public accountants (as you
and your counsel have done). At such conferences such counsel has made inquiries
of such officers, representatives and accountants and discussed the contents of
the Registration Statement and Prospectus. Such counsel has not independently
verified and, accordingly does not render any opinion upon, the accuracy,
completeness or fairness of the Registration Statement or the Prospectus.
Subject to the foregoing, no facts have come to such counsel's attention that
have caused such counsel to believe that, as of its effective date, the
Registration Statement contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that, as of its date or the date
hereof, the Prospectus contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided that such counsel expresses no
view as to the financial statements and schedules and other financial and
statistical date included therein.
38
EXHIBIT B
FORM OF LEGAL OPINION OF SELLING STOCKHOLDERS COUNSEL
(a) The Underwriting Agreement has been duly authorized,
executed and delivered by or on behalf of each of the Selling Stockholders.
(b) The execution and delivery by each Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations under, the
Underwriting Agreement and the Custody Agreement and Powers of Attorney of such
Selling Stockholder will not contravene any provision of applicable law, or the
[articles/certificate] of incorporation or by-laws of such Selling Stockholder
(if such Selling Stockholder is a corporation), or, to such counsel's knowledge,
any agreement or other instrument binding upon such Selling Stockholder or, to
such counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over such Selling Stockholder, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by such Selling
Stockholder of its obligations under the Underwriting Agreement or the Custody
Agreement or Power of Attorney of such Selling Stockholder, except such as may
be required by the securities or Blue Sky laws of the various states in
connection with offer and sale of the Shares.
(c) Each of the Selling Stockholders has valid title to the
Shares to be sold by such Selling Stockholder and the legal right and power, and
all authorization and approval required by law, to enter into the Underwriting
Agreement and the Custody Agreement and Power of Attorney of such Selling
Stockholder and to sell, transfer and deliver the Shares to be sold by such
Selling Stockholder.
(d) The Custody Agreement and the Power of Attorney of each
Selling Stockholder have been duly authorized, executed and delivered by such
Selling Stockholder and are valid and binding agreements of such Selling
Stockholder.
(e) Delivery of the Shares to be sold by each Selling
Stockholder pursuant to this Agreement will pass title to such Shares free and
clear of any security interests, claims, liens, equities and other encumbrances.
(f) Such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and schedules and
other financial and statistical data included therein as to which such counsel
need not express any opinion) comply as to form in all material respects with
the Securities Act and the applicable rules and regulations of the Commission
thereunder, (B) has no reason to believe that (except for financial statements
and schedules and other financial and statistical data as to which such counsel
need not express any belief).
39
EXHIBIT C
MATTERS TO BE COVERED IN THE
OPINION OF PATENT COUNSEL TO THE COMPANY
Such counsel shall state that they are familiar with the technology
used by the Company in its business and the manner of its use thereof and have
read the Registration Statement and the Prospectus, including particularly the
portions of the Registration Statement and the Prospectus referring to patents,
trade secrets, trademarks, service marks or other proprietary information or
materials and:
(i) The Company is listed in the records of the United States Patent
and Trademark Office as the holder of record of the patents listed on a schedule
to such opinion (the "Patents") and each of the applications listed on a
schedule to such opinion (the "Applications"). To the knowledge of such counsel,
there are no claims of third parties to any ownership interest or lien with
respect to any of the Patents or Applications. Such counsel is not aware of any
material defect in form in the preparation or filing of the Applications on
behalf of the Company. To the knowledge of such counsel, the Applications are
being pursued by the Company. To the knowledge of such counsel, the Company owns
as its sole property the Patents and pending Applications;
(ii) The Company is listed in the records of the appropriate foreign
offices as the sole holder of record of the foreign patents listed on a schedule
to such opinion (the "Foreign Patents") and each of the applications listed on a
schedule to such opinion (the "Foreign Applications"). Such counsel knows of no
claims of third parties to any ownership interest or lien with respect to the
Foreign Patents or Foreign Applications. Such counsel is not aware of any
material defect of form in the preparation or filing of the Foreign Applications
on behalf of the Company. To the knowledge of such counsel, the Foreign
Applications are being pursued by the Company. To the knowledge of such counsel,
the Company owns as its sole property the Foreign Patents and pending Foreign
Applications;
(iii) Such counsel knows of no reason why the Patents or Foreign
Patents are not valid as issued. Such counsel has no knowledge of any reason why
any patent to be issued as a result of any Application or Foreign Application
would not be valid or would not afford the Company useful patent protection with
respect thereto;
(iv) As to the statements under the captions "Risk Factors -- Our
limited ability to protect our intellectual property may adversely affect our
competitive position. We are subject to claims alleging intellectual property
infringement and we may need to license third party technologies and we face
risks in doing so." and "Business --Intellectual Property," nothing has come to
the attention of such counsel which caused them to believe that the
above-mentioned sections of the Registration Statement and any amendment or
supplement thereto made available and reviewed
40
by such counsel, at the time the Registration Statement became effective and at
all times subsequent thereto up to and on the Closing Date and on any later date
on which Option Stock are to be purchased, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and
(v) Such counsel knows of no material action, suit, claim or proceeding
relating to patents, patent rights or licenses, trademarks or trademark rights,
copyrights, collaborative research, licenses or royalty arrangements or
agreements or trade secrets, know-how or proprietary techniques, including
processes and substances, owned by or affecting the business or operations of
the Company which are pending or threatened against the Company or any of its
officers or directors.
41
EXHIBIT D
FORM OF LOCK-UP AGREEMENT
