4,000,000 Shares of Common Stock
XXXX.XXX, INC.
UNDERWRITING AGREEMENT
----------------------
March ____,1999
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX & XXXXX LLC
BANCBOSTON XXXXXXXXX XXXXXXXX
WIT CAPITAL CORPORATION
as Representatives of the
several U.S. Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXXXXX & XXXXX LLC
BANCBOSTON XXXXXXXXX XXXXXXXX
INTERNATIONAL LTD
DEUTSCHE BANK AG LONDON
as Representatives of the
several International Underwriters
named in Schedule II hereto
c/o Bear, Xxxxxxx International Limited
Dear Sirs:
Xxxx.xxx, Inc., a corporation organized and existing under the laws of
Delaware (the "Company"), proposes, subject to the terms and conditions stated
herein, to issue and sell to the several Underwriters (as defined below) and
Xxxxx Xxxxx and Xxxxxxx Xxxxx (the "Principal Selling Stockholders") and the
Stockholders of the Company named in Schedule III hereto (the "Other Selling
Stockholders", collectively with the Principal Selling Stockholders, the
"Selling Stockholders") propose to sell to the Underwriters (as defined below)
an aggregate of 4,000,000 shares of the Company's Common Stock par value $0.0001
per share (the "Common Stock") of which 2,000,000 shares are to be issued and
sold by the Company and 2,000,000 shares are to be sold by the Selling
Stockholders, each Selling Stockholder selling the amount set forth opposite
such Selling Stockholder's name in Schedule III hereto. The 4,000,000 shares of
Common Stock sold in the aggregate by the Company and the Selling Stockholders
are collectively called the "Firm Shares". It is understood that, subject to
the conditions hereinafter stated, 3,400,000 Firm Shares (the "U.S. Firm
Shares") will be sold to the several U.S. Underwriters named in Schedule I
hereto (the "U.S. Underwriters") in connection with the offering and sale of
such U.S. Firm Shares in the United States and Canada to United States and
Canadian Persons (as such terms are defined in the Agreement Between U.S.
Underwriters and International Underwriters of even date herewith), and 600,000
Firm Shares (the "International Shares") will be sold to the several
International Underwriters named in Schedule II hereto (the
"International Underwriters") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other
than United States and Canadian Persons. Bear Xxxxxxx & Co. Inc., Xxxxxxxxx &
Xxxxx LLC, BancBoston Xxxxxxxxx Xxxxxxxx and Wit Capital Corporation shall act
as representatives (the "Representatives") of the several U.S. Underwriters,
and Bear, Xxxxxxx International Limited, Xxxxxxxxx & Xxxxx LLC, BancBoston
Xxxxxxxxx Xxxxxxxx International Ltd and Deutsche Bank AG London shall act as
representatives of the several International Underwriters. The U.S.
Underwriters and the International Underwriters are hereinafter collectively
referred to as the "Underwriters". In addition, for the sole purpose of
covering over-allotments in connection with the sale of the Firm Shares, at
the option of the U.S. Underwriters, the Company proposes to sell up to an
additional 600,000 shares (the "Additional Shares") of Common Stock to the
U.S. Underwriters. The Firm Shares and any Additional Shares purchased by the
Underwriters are referred to herein as the "Shares". The Shares are more fully
described in the Registration Statement referred to below.
1. A. Representations and Warranties of the Company and the Principal
---------------------------------------------------------------
Selling Stockholders. The Company and the Principal Selling Stockholders
--------------------
represent and warrant to, and agree with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations of
the Commission thereunder (the "Regulations") a registration statement, and may
have filed an amendment or amendments thereto, on Form S-1 (No. 333-74441) for
the registration of the Shares under the Act. The registration statement
contains two prospectuses to be used in connection with the offering and sale of
the Shares: the U.S. prospectus, to be used in connection with the offering and
sale of Shares in the United States and Canada to United States and Canadian
Persons, and the international prospectus, to be used in connection with the
offering and sale of Shares outside the United States and Canada to persons
other than United States and Canadian Persons. The international prospectus is
identical to the U.S. prospectus except for the outside front and back cover
pages and the section captioned "Material U.S. Tax Considerations to Non-U.S.
Holders of the Common Stock" (which appears only in the international
prospectus) and certain cross-references relating thereto. All of the Shares
have been duly registered under the Act pursuant to the initial registration
statement, or if an abbreviated registration statement has been, or is proposed
to be, filed pursuant to Rule 462(b) of the Regulations (the "Rule 462(b)
Registration Statement"), all of the Shares have been or will be, on the date of
this Agreement, duly registered under the Act pursuant to the initial
registration statement and the Rule 462(b) Registration Statement. Such
registration statement, including the U.S. prospectus and the International
prospectus, financial statements and schedules, exhibits and all other documents
filed as a part thereof, as amended at the time of effectiveness of the
registration statement, including any information deemed to be a part thereof as
of the time of effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434
of the Regulations is herein called the "Registration Statement" and the U.S.
prospectus and the International prospectus, in the respective forms first filed
with the Commission pursuant to Rule 424(b) of the Regulations or filed as part
of the Registration Statement at the time of effectiveness if no Rule 434 or
Rule 424(b) filing is required, are hereinafter collectively referred to as the
"Prospectus". If the Company has filed or proposes to file a Rule 462
Registration Statement, then any reference herein to the term "Registration
Statement" shall include such Rule 462 Registration Statement. The term
"preliminary prospectus" as used herein means a
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preliminary prospectus as described in Rule 430 of the Regulations. All
references in this Agreement to (i) the Registration Statement, the Rule
462(b) Registration Statement, a preliminary prospectus, the Prospectus or a
term sheet that complies with Rule 434, or any amendments or supplements to
any of the foregoing, shall include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("XXXXX") and (ii) the Prospectus shall be deemed to include the "electronic
Prospectus" provided for use in connection with the offering of the Shares as
contemplated by Section 4(g) of this Agreement.
(b) Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Act and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by Regulation S-T
under the Act), was identical to the copy thereof delivered to the Underwriters
for use in connection with the offer and sale of the Shares. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and at all
subsequent times, complied or will comply in all material respects with the
applicable provisions of the Act and the Regulations and does not or will not
contain an untrue statement of a material fact and does not or will not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein (i) in the case of the Registration Statement, not
misleading and (ii) in the case of the Prospectus, in light of the circumstances
under which they were made, not misleading. When any related preliminary
prospectus was first filed with the Commission (whether filed as part of the
registration statement for the registration of the Shares or any amendment
thereto or pursuant to Rule 424(a) of the Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and did not contain an untrue statement of a material fact and
did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein in light of the circumstances
under which they were made not misleading. No representation and warranty is
made in this subsection (b), however, with respect to any information contained
in or omitted from the Registration Statement or the Prospectus or any related
preliminary prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through you as herein stated
expressly for use in connection with the preparation thereof. If Rule 434 is
used, the Company will comply with the requirements of Rule 434.
(c) Ernst & Young LLP, who have certified the financial statements
and supporting schedules included in the Registration Statement, are independent
public accountants as required by the Act and the Regulations.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth in
the Registration Statement and the Prospectus, there has been no material
adverse change or any development involving a prospective material adverse
change in the business, prospects, properties, operations, condition (financial
or other) or results of operations of the Company and its subsidiaries taken as
a whole ("Material Adverse Change"), whether or not arising from transactions in
the ordinary course of business, and since the date of the latest balance sheet
presented in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries has incurred or undertaken
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any liabilities or obligations, direct or contingent, which are material to
the Company and its subsidiaries taken as a whole, except for liabilities or
obligations which are reflected in the Registration Statement and the
Prospectus.
(e) This Agreement and the transactions contemplated herein have
been duly and validly authorized by the Company and this Agreement has been duly
and validly executed and delivered by the Company.
(f) The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, the terms of (A) any agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which any of such corporations or their respective properties or assets may be
bound that is material to the Company and its subsidiaries, taken as a whole, or
(B) any governmental franchise, license, or permit heretofore issued to the
Company or any of its subsidiaries, or (ii) violate or conflict with any
provision of the certificate of incorporation or by-laws of the Company or any
of its subsidiaries or any judgment, decree, order, statute, rule or regulation
of any court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court or
any public, governmental or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective properties or
assets is required for the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby, including the
issuance, sale and delivery of the Shares to be issued, sold and delivered by
the Company hereunder, except the registration under the Act of the Shares and
such consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters.
(g) All of the outstanding shares of Common Stock are duly and
validly authorized and issued, fully paid and nonassessable and were not issued
and are not now in violation of or subject to any preemptive rights. The Shares,
when issued, delivered and sold in accordance with this Agreement, will be duly
and validly issued and outstanding, fully paid and nonassessable, and will not
have been issued in violation of or be subject to any preemptive rights. The
Company had, at December 31, 1998, an authorized and outstanding capitalization
as set forth in the Registration Statement and the Prospectus. The Common Stock,
the Firm Shares and the Additional Shares conform to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(h) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. Each of the Company and its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification
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necessary, except for those failures to be so qualified or in good standing
which will not in the aggregate have a material adverse effect on the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect"). Each of
the Company and its subsidiaries has all requisite power and authority, and
all material consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public, regulatory or
governmental agencies and bodies, which are necessary to own, lease and
operate its properties and conduct the business of the Company and its
subsidiaries, taken as a whole, as now being conducted and as described in the
Registration Statement and the Prospectus, and no such consent, approval,
authorization, order, registration, qualification, license or permit contains
a materially burdensome restriction not adequately disclosed in the
Registration Statement and the Prospectus. The Company is in compliance with
all applicable laws, orders, rules, regulations, ordinances and directives,
except where the failure to be in compliance would not have a Material Adverse
Effect.
(i) Neither the Company nor any of its subsidiaries is in
violation of any provision of its certificate of incorporation or of its by-laws
or in breach of, or in default under (nor has any event occurred that with
notice, lapse of time, or both, would constitute a breach of, or default under),
except where such breach or default would not have a Material Adverse Effect,
any provision of any agreement, instrument, franchise, license or permit to
which the Company or such subsidiary is a party or by which any of its
properties or assets may be bound or affected or any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or such
subsidiary or any of its properties or assets.
(j) Except as described in the Registration Statement and the
Prospectus, there is no litigation, arbitration, proceeding, investigation or
claim to which the Company or any of its subsidiaries is a party or to which any
property or assets of the Company or any of its subsidiaries is subject or which
is pending or, to the knowledge of the Company, threatened or contemplated
against the Company or any of its subsidiaries which might result in any
Material Adverse Effect.
(k) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which constitutes or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Shares or a violation of Regulation M under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(l) The financial statements, including the notes thereto, and
supporting schedules included in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Company and its
subsidiaries as of the dates indicated and the results of their operations and
cash flows for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto; and the supporting schedules included in
the Registration Statement present fairly the information required to be stated
therein.
(m) Except as described in the Registration Statement and the
Prospectus and except for rights that have been effectively waived in writing
(complete and accurate copies of
5
which have been provided to the Underwriters prior to the date of this
Agreement), which waivers are in full force and effect, no holder of
securities of the Company has any rights to cause the Company to issue to it,
or register pursuant to the Act, any securities of the Company because of the
filing of the Registration Statement, in connection with the sale of the
Shares contemplated hereby or otherwise, nor does any holder of securities of
the Company have preemptive rights or other rights to purchase any of the
Shares.
(n) The Company is not, and upon consummation of the transactions
contemplated hereby and the application of the proceeds therefrom as described
in the Prospectus will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940.
(o) The Common Stock of the Company, including the Shares, are
registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the
"Exchange Act") and are listed on the Nasdaq National Market and the Company has
taken no action designed to, or likely to have the effect of terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the Commission or the National Association of Securities
Dealers, LLC (the "NASD") is contemplating terminating such registration or
listing.
(p) Except as described in the Registration Statement and the
Prospectus, the Company and its subsidiaries own or possess valid and
enforceable licenses or other rights to use all inventions, patents, patent
applications, trademarks, service marks, trade names, copyrights, technology,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) proprietary
techniques (including processes and substances) and other intellectual property
rights necessary to conduct, the business now conducted or presently
contemplated to be conducted by the Company and its subsidiaries, taken as a
whole, as described in the Registration Statement and the Prospectus
("Intellectual Property"), subject to such exceptions as would not have a
Material Adverse Effect; other than as described in the Registration Statement
and the Prospectus: (i) there are no third parties who have any rights in the
Intellectual Property that could preclude the Company or its subsidiaries from
conducting its business as currently conducted or as presently contemplated to
be conducted as described in the Registration Statement and the Prospectus; (ii)
there are no pending or, to the Company's knowledge, threatened actions, suits,
proceedings, investigations or claims by others challenging the rights of the
Company, its subsidiaries or (if the Intellectual Property is licensed) the
licensor thereof in any Intellectual Property owned or licensed to the Company
or its subsidiaries; (iii) the Company, its subsidiaries and (if the
Intellectual Property is licensed) to the Company's knowledge the licensor
thereof has not infringed, or received any notice of infringement of or conflict
with, any rights of others with respect to the Intellectual Property; and (iv)
there is, to the knowledge of the Company, no dispute between it or any licensor
with respect to any Intellectual Property, subject, with respect to any of (i),
(ii), (iii) or (iv), to such exceptions, individually or in the aggregate, as
would not have a Material Adverse Effect. True and correct copies of all
material licenses and other material agreements between the Company, its
subsidiaries and any third party relating to the Intellectual Property, and all
amendments and supplements thereto, have been provided to the Underwriters.
6
(q) The Company and its consolidated subsidiaries have timely
filed all material federal, state and foreign income and franchise tax returns
required to be filed as of the date hereof, and have paid all taxes shown as due
thereon, except to the extent such taxes are (A) currently payable without
penalty or interest or (B) being contested in good faith. All tax liabilities
are adequately provided for on the books of the Company and its consolidated
subsidiaries. There is no tax deficiency that has been asserted against the
Company or any of its consolidated subsidiaries that might have a Material
Adverse Effect.
(r) Each of the Company and its subsidiaries maintains insurance
with insurers of recognized financial responsibility of the types and in the
amounts (i) generally deemed adequate for its business and consistent with
insurance coverage maintained by similar companies in similar businesses and
(ii) required under any of the Company's or its subsidiaries' agreements,
licenses or other contracts, all of which insurance is in full force and effect;
the Company has no reason to believe that it will not be able to renew its
existing insurance as and when such coverage expires or to obtain similar
insurance adequate and customary for its business and sufficient to satisfy any
requirements of its contracts at a cost that would not have a Material Adverse
Effect.
(s) Except as disclosed in the Registration Statement and the
Prospectus, (i) the Company and each of its subsidiaries has good and marketable
title to all properties (real and personal) owned by the Company or such
subsidiary, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind, and (ii) all properties held
under lease or license by the Company and each of its subsidiaries are held
under valid, subsisting and enforceable leases or licenses; subject, with
respect to either (i) or (ii), to such exceptions as would not have a Material
Adverse Effect.
(t) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required to be
described in the Registration Statement and the Prospectus that is not so
described.
(u) Except as disclosed in the Registration Statement or the
Prospectus, there are no issues related to the Company's or any of its
subsidiaries', preparedness for the Year 2000 that might reasonably be expected
to result in any Material Adverse Change. All internal computer systems and each
Constituent Component (as defined below) of those systems and all computer-
related products and each Constituent Component (as defined below) of those
products of the Company and each of its subsidiaries comply in all material
respects with Year 2000 Qualification Requirements. "Year 2000 Qualification
Requirements" means that the internal computer systems and each Constituent
Component (as defined below) of those systems and all computer-related products
and each Constituent Component (as defined below) of those products of the
Company and each of its Subsidiaries (i) have been reviewed to confirm that they
store, process (including sorting and performing mathematical operations,
calculations and computations), input and output data containing date and
information correctly regardless of whether the date contains dates and times
before, on or after January 1, 2000, (ii) have been designated to ensure date
and time entry recognition and calculations, and date data interface values that
reflect the century, (iii) accurately manage and manipulate data involving dates
and times, including single century formulas and multi-century formulas, and
will not cause an
7
abnormal ending scenario within the application or generate incorrect values
or invalid results involving such dates, (iv) accurately process any date
rollover, and (v) accept and respond to two-digit year date input in a manner
that resolves any ambiguities as to the century. "Constituent Component" means
all software (including operating systems, programs, packages and utilities),
firmware, hardware, networking components, and peripherals provided as part of
the configuration. The Company has inquired of material vendors as to their
preparedness for the Year 2000 and to its knowledge, except as disclosed in
the Registration Statement or the Prospectus, there are no issues relating to
such vendors' Year 2000 preparedness that might reasonably be expected to
result in any Material Adverse Change.
B. Representations and Warranties of the Selling Stockholders. Each
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Selling Stockholder represents, warrants and covenants to each Underwriter as
follows:
(a) 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, 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.
(b) Each of the (i) Custody Agreement signed by such Selling
Stockholder and BancBoston, NA, as custodian (the "Custodian"), relating to the
deposit of the Shares to be sold by such Selling Stockholder (the "Custody
Agreement") and (ii) Power of Attorney appointing certain individuals named
therein as such Selling Stockholder's attorneys-in-fact (each, an "Attorney-in-
Fact") to the extent set forth therein relating to the transactions contemplated
hereby and by the Prospectus (the "Power of Attorney"), of such Selling
Stockholder has been duly authorized, executed and delivered by such Selling
Stockholder and is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms, except as rights to indemnification
thereunder may be limited by applicable law and except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles. Each Selling Stockholder agrees that the
Shares to be sold by such Selling Stockholder on deposit with the Custodian is
subject to the interests of the Underwriters, that the arrangements made for
such custody are to that extent irrevocable, and that the obligations of such
Selling Stockholder hereunder shall not be terminated, except as provided in
this Agreement or in the Custody Agreement, by any act of the Selling
Stockholder, by operation of law, by death or incapacity of such Selling
Stockholder or by the occurrence of any other event. If such Selling Stockholder
should die or become incapacitated, or if any other event should occur, before
the delivery of the Shares to be sold by such Selling Stockholder hereunder, the
documents evidencing the Shares to be sold by such Selling Stockholder then on
deposit with the Custodian shall be delivered by the Custodian in accordance
with the terms and conditions of this Agreement as if such death, incapacity or
other event had not occurred, regardless of whether or not the Custodian shall
have received notice thereof.
(c) Such Selling Stockholder is the lawful owner of the Shares to
be sold by such Selling Stockholder hereunder and upon sale and delivery of, and
payment for, such Shares, as provided herein, such Selling Stockholder will
convey good and marketable title to such Shares, free and clear of all liens,
encumbrances, equities and claims whatsoever.
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(d) Such Selling Stockholder has, and on the First Closing Date
and the Additional Closing Date (as defined below) will have, good and valid
title to all of the Shares which may be sold by such Selling Stockholder
pursuant to this Agreement on such date and the legal right and power, and all
authorizations and approvals required by law and under its charter or by-laws,
partnership agreement, trust agreement or other organizational documents to
enter into this Agreement and its Custody Agreement and Power of Attorney, to
sell, transfer and deliver all of the Shares which may be sold by such Selling
Stockholder pursuant to this Agreement and to comply with its other obligations
hereunder and thereunder.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such Selling
Stockholder of the transactions contemplated herein, except such as may have
been obtained under the Securities Act and such as may be required under the
federal and provincial securities laws of Canada or the blue sky laws or any
jurisdiction in connection with the purchase and distribution of the Shares by
the Underwriters and such other approvals as have been obtained.
(f) Neither the sale of the Securities being sold by such Selling
Stockholder nor the consummation of any other of the transactions herein
contemplated by such Selling Stockholder or the fulfillment of the terms hereof
by such Selling Stockholder will conflict with, result in a breach or violation
of, or constitute a default under any law or the terms of any indenture or other
agreement or instrument to which such Selling Stockholder is party or bound, any
judgement, order or decree applicable to such Selling Stockholder or any court
or regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over such Selling Stockholder.
(g) 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, except for such rights as are described in the
Prospectus under "Shares Eligible for Future Sale".
(h) Such Selling Stockholder does not have, or has waived prior to
the date hereof, any preemptive right, co-sale right or right of first refusal
or other similar right to purchase any of the Shares that are to be sold by the
Company or any of the other Selling Stockholders to the Underwriters pursuant to
this Agreement; and such Selling Stockholder does not own any warrants, options
or similar rights to acquire, and does not have any right or arrangement to
acquire, any capital stock, right, warrants, options or other securities from
the Company, other than those described in the Registration Statement and the
Prospectus.
(i) All information furnished by or on behalf of such Selling
Stockholder in writing expressly for use in the Registration Statement and
Prospectus is, and on the First Closing Date and the Additional Closing Date (as
defined below) will be, true, correct, and complete in all material respects,
and does not, and on the First Closing Date and the Additional Closing Date will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary to make such information not misleading. To the extent
such information appears in the Prospectus, such Selling Stockholder confirms as
accurate the number of shares of
9
Shares set forth opposite such Selling Stockholder's name in the Prospectus
under the caption "Principal and Selling Stockholders" (both prior to and
after giving effect to the sale of the Shares).
(j) 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 the
Common Stock to facilitate the sale or resale of the Shares.
(k) The Selling Stockholder has not distributed and will not
distribute, prior to the later of the Additional Closing Date (as defined below)
and the completion of the Underwriters' distribution of the Shares, any offering
material in connection with the offering and sale of the Shares by such Selling
Stockholder other than a preliminary prospectus, the Prospectus or the
Registration Statement.
(l) Each Other Selling Stockholder has no reason to believe that
the representations and warranties of the Company and the Principal Selling
Stockholders contained in Section 1(A) hereof are not true and correct, is
familiar with the Registration Statement and the Prospectus and has no knowledge
of any material fact, condition or information not disclosed in the Registration
Statement or the Prospectus which has had or may result in a Material Adverse
Change on the condition, financial or otherwise, or on the earnings, business,
operation or prospects, whether or not arising from transactions in the ordinary
course of business of the Company and its subsidiaries, considered as one
entity, and is not prompted to sell the Shares to be sold by such Selling
Stockholder by any information concerning the Company which is not set forth in
the Registration Statement and the Prospectus.
Any certificate signed by or on behalf of any Selling Stockholder
and delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Stockholder to each
Underwriter as to the matters covered thereby.
2. Purchase, Sale and Delivery of the Shares.
-----------------------------------------
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, (i) the Company agrees to issue and sell to the several Underwriters an
aggregate of 2,000,000 Firm Shares and (ii) the Selling Stockholders agree to
sell to the several Underwriters an aggregate of 2,000,000 Firm Shares, each
Selling Stockholder selling the number of Firm Shares set forth opposite such
Selling Stockholder's name on Schedule III. On the basis of the representations,
------------
warranties, covenants and agreements herein contained the Underwriters agree,
severally and not jointly, to purchase from the Company and the Selling
Stockholders, at a purchase price per share of [$ ____ ], the number of Firm
Shares set forth opposite the respective names of the Underwriters in Schedules
I and II hereto plus any additional number of Shares which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the office of Xxxxxxxx & Xxxxxxxx
LLP, 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, or at such other place
as shall be agreed upon by you and the Company, at
10
10:00 A.M. on the third or fourth business day (as permitted under Rule 15c6-1
under the Exchange Act) (unless postponed in accordance with the provisions of
Section 9 hereof) following the date of the effectiveness of the Registration
Statement (or, if the Company has elected to rely upon Rule 430A of the
Regulations, the third or fourth business day (as permitted under Rule 15c6-1
under the Exchange Act) after the determination of the initial public offering
price of the Shares), or such other time not later than ten business days
after such date as shall be agreed upon by you and the Company (such time and
date of payment and delivery being herein called the "Closing Date"). Payment
shall be made to the Company and the Selling Stockholders, (or the Custodian
named in the Custody Agreement on behalf of the Selling Stockholders), by wire
transfer of immediately available funds, against delivery to you for the
respective accounts of the Underwriters of certificates for the Firm Shares to
be purchased by them. Each Selling Stockholder hereby agrees that (i) it will
pay all stock transfer taxes, stamp duties and other similar taxes, if any,
payable upon the sale or delivery of the Shares to be sold by such Selling
Stockholder to the several Underwriters, or otherwise in connection with the
performance of such Selling Stockholders' obligations hereunder and (ii) the
Custodian is authorized to deduct for such payment any such amounts from the
proceeds to such Selling Stockholder hereunder and to hold such amounts for
the account of such Selling Stockholder with the Custodian under the Custody
Agreement. Certificates for the Firm Shares shall be registered in such name
or names and in such authorized denominations as you may request in writing at
least two full business days prior to the Closing Date. The Company will
permit you to examine and package such certificates for delivery at least one
full business day prior to the Closing Date. If you so elect, delivery of the
Firm Shares purchased from the Company may be made by credit through full fast
transfer to the accounts at The Depository Trust Company designated by you.
(c) In addition, the Company hereby grants to the U.S.
Underwriters the option to purchase up to 600,000 Additional Shares at the same
purchase price per share to be paid by the Underwriters to the Company for the
Firm Shares as set forth in this Section 2, for the sole purpose of covering
over- allotments in the sale of Firm Shares by the U.S. Underwriters. This
option may be exercised at any time, in whole or in part, on or before the
thirtieth day following the date of the Prospectus, by written notice by you to
the Company. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised and the date and time, as
reasonably determined by you, when the Additional Shares are to be delivered
(such date and time being herein sometimes referred to as the "Additional
Closing Date"); provided, however, that the Additional Closing Date shall not be
earlier than the Closing Date or earlier than the second full business day after
the date on which the option shall have been exercised nor later than the eighth
full business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Certificates for the Additional Shares shall be registered in
such name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will permit you to examine and package such certificates for
delivery at least one full business day prior to the Additional Closing Date. If
you so elect, delivery of the Additional Shares purchased from the Company may
be made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by you.
The number of Additional Shares to be sold to each U.S.
Underwriter shall be the number which bears the same ratio to the aggregate
number of Additional Shares being
11
purchased as the number of Firm Shares set forth opposite the name of such
U.S. Underwriter in Schedule I hereto (or such number increased as set forth
in Section 9 hereof) bears to the total number of Firm Shares being purchased
from the Company by the U.S. Underwriters, subject, however, to such
adjustments to eliminate any fractional shares as you in your sole discretion
shall make.
Payment for the Additional Shares shall be made by wire transfer
in immediately available funds at the offices of Xxxxxxxx & Xxxxxxxx LLP, 000
Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, or such other location as may be
mutually acceptable, upon delivery of the certificates for the Additional Shares
to you for the respective accounts of the U.S. Underwriters.
3. Offering. Upon your authorization of the release of the Firm
--------
Shares, the Underwriters propose to offer the Shares for sale to the public upon
the terms set forth in the Prospectus.
4. A. Covenants of the Company. The Company covenants and agrees
------------------------
with the Underwriters that:
(a) If the Registration Statement has not yet been declared
effective the Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
possible, and if Rule 430A is used or the filing of the Prospectus is otherwise
required under Rule 424(b) or Rule 434, the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) or Rule
434 within the prescribed time period and will provide evidence satisfactory to
you of such timely filing. If the Company elects to rely on Rule 434, the
Company will prepare and file a term sheet that complies with the requirements
of Rule 434.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any post-
effective amendment thereto or of the initiation, or the threatening, of any
proceedings therefor and (v) of the receipt of any comments from the Commission.
If the Commission shall propose or enter a stop order at any time, the Company
will make every reasonable effort to prevent the issuance of any such stop order
and, if issued, to obtain the lifting of such order as soon as possible. The
Company will not file any amendment to the Registration Statement or any
amendment of or supplement to the Prospectus (including the prospectus required
to be filed pursuant to Rule 424(b) or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement to
which you shall reasonably object in writing after being timely furnished in
advance a copy thereof.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would, in the judgment
of the Underwriters or the Company, include
12
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
if it shall be necessary at any time to amend or supplement the Prospectus or
Registration Statement to comply with the Act or the Regulations, the Company
will notify you promptly and prepare and file with the Commission an
appropriate amendment or supplement (in form and substance satisfactory to
you) which will correct such statement or omission and will use its best
efforts to have any amendment to the Registration Statement declared effective
as soon as possible.
(c) The Company will promptly deliver to you two conformed copies
of the Registration Statement, including exhibits and all amendments thereto,
and will maintain in the Company's files manually signed copies of such
documents for at least five years from the date of filing. The Company will
promptly deliver to each of the Underwriters such number of copies of any
preliminary prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, as you may reasonably
request.
(d) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process. The Company will promptly advise you of the
receipt by the Company of any notification with respect to suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and will use every reasonable
effort to obtain the withdrawal of any order of suspension as soon as possible.
(e) The Company will make generally available (within the meaning
of Section 11(a) of the Act) to its security holders and to you as soon as
practicable, but not later than 45 days after the end of its fiscal quarter in
which the first anniversary date of the effective date of the Registration
Statement occurs, an earning statement (in form complying with the provisions of
Rule 158 of the Regulations) covering a period of at least twelve consecutive
months beginning after the effective date of the Registration Statement.
(f) The Company shall engage and maintain, at its expense, a
registrar and transfer agent for the Common Stock.
(g) The Company shall cause to be prepared and delivered, at its
expense, within one business day from the effective date of this Agreement, to
the Underwriters an "electronic Prospectus" to be used by the Underwriters in
connection with the offering and sale of the Shares. As used herein, the term
"electronic Prospectus" means a form of Prospectus, and any amendment or
supplement thereto, that meets each of the following conditions: (i) it shall be
encoded in an electronic format, satisfactory to Bear, Xxxxxxx & Co. Inc., that
may be transmitted electronically by Bear, Xxxxxxx & Co. Inc. and the other
Underwriters to offerees and purchasers of the Shares for at least during the
period when the Prospectus is required to be delivered under the Act or the
Exchange Act ("the Prospectus Delivery Period"); (ii) it shall disclose the same
information as the paper Prospectus and Prospectus filed pursuant to XXXXX,
except to the
13
extent that graphic and image material cannot be disseminated electronically,
in which case such graphic and image material shall be replaced in the
electronic Prospectus with a fair and accurate narrative description or
tabular representation of such material, as appropriate; and (iii) it shall be
in or convertible into a paper format or an electronic format, satisfactory to
Bear, Xxxxxxx & Co. Inc., that will allow investors to store and have
continuously ready access to the Prospectus at any future time, without charge
to investors (other than any fee charged for subscription to the system as a
whole and for on-line time). Such electronic Prospectus may consist of a Rule
434 preliminary prospectus, together with the applicable term sheet, provided
that it otherwise satisfies the format and conditions described in the
immediately preceding sentence. The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to XXXXX or
otherwise with the Commission and in the Registration Statement at the time it
was declared effective an undertaking that, upon receipt of a request by an
investor or his or her representative within the Prospectus Delivery Period,
the Company shall transmit or cause to be transmitted promptly, without
charge, a paper copy of the Prospectus.
(h) [During the period of [90] days following the date of the
Prospectus, the Company will not, without the prior written consent of Bear,
Xxxxxxx & Co. Inc. (which consent may be withheld at the sole discretion of
Bear, Xxxxxxx & Co. Inc.), directly or indirectly, issue, sell, offer, contract
or grant any option to sell, pledge, transfer or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement under
the Act in respect of, any shares of Common Stock, options or warrants to
acquire shares of the Common Stock or securities exchangeable or exercisable for
or convertible into shares of Common Stock (other than as contemplated by this
Agreement with respect to the Shares); provided, however, that the Company may
(i) issue shares of its Common Stock or options to purchase its Common Stock, or
Common Stock upon exercise of options, pursuant to any stock option, warrant,
stock bonus or other stock plan or arrangement described in the Prospectus, or
(ii) issue shares of Common Stock in connection with acquisitions by the
Company, but only if the holders of such shares, options, warrants or shares
issued upon exercise of such options, agree in writing not to sell, offer,
contract or grant any option to sell (including without limitation any short
sale), pledge, transfer, or establish an open "put equivalent position" within
the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of any
such shares or options during such [90] day period without the prior written
consent of Bear, Xxxxxxx & Co. Inc. (which consent may be withheld at the sole
discretion of the Bear, Xxxxxxx & Co. Inc.).]
(i) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of (i) all
reports or other communications to its shareholders; and (ii) all reports,
financial statements and proxy or information statements filed by the Company
with the Commission or any national securities exchange.
(j) The Company will apply the proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
(k) The Company will use its best efforts to cause the Shares to
be qualified for inclusion in the Nasdaq National Market.
14
(l) The Company will file with the Commission in its periodic
reports pursuant to Section 13 or 15 of the Exchange Act such information as may
be required pursuant to Rule 463 of the Regulations.
(m) The Company, during the Prospectus Delivery Period, will 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.
Bear, Xxxxxxx & Co. Inc., on behalf of the several Underwriters,
may, in its sole discretion, waive in writing the performance by the Company of
any one or more of the foregoing covenants or extend the time for their
performance.
B. Covenants of the Selling Stockholders. Each Selling Stockholder
-------------------------------------
covenants and agrees with each Underwriter:
(a) [Other than the Shares sold pursuant to this Agreement, such
Selling Stockholder will not, during the period of 90 days from March __, 1999
(the "Lock-Up Period"), make a disposition of securities (as defined in Exhibit
A hereto) now owned or hereafter acquired directly by such person or with
respect to which such person has or hereafter acquires the power of disposition,
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a distribution
to partners or shareholders of such person, provided that the distributees
thereof agree in writing to be bound by the terms of this restriction, (iii)
with respect to dispositions of Common Stock acquired on the open market, or
(iv) with the prior written consent of Bear, Xxxxxxx & Co. Inc. The foregoing
restriction has been expressly agreed to preclude the holder of the securities
from engaging in any hedging or other transaction which is designed to or
reasonably expected to lead to or result in a disposition of securities during
the Lock-Up Period, even if such securities would be disposed of by someone
other than such holder. Such prohibited hedging or other transactions would
include, without limitation, any short sale (whether or not against the box) or
any purchase, sale or grant of any right (including, without limitation, any put
or call option) with respect to any securities or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from securities. Furthermore, such
person has also agreed and consented to the entry of stop transfer instructions
with the Company's transfer agent against the transfer of the securities held by
such person except in compliance with this restriction.]
(b) To deliver to the Representatives prior to the First Closing
Date a properly completed and executed United States Treasury Department Form
W-8 (if the Selling Stockholder is a non-United States Person) or Form W-9 (if
the Selling Stockholder is a United States Person).
(c) If, at any time prior to the date on which the distribution of
the Shares as contemplated herein and in the Prospectus has been completed, as
determined by the Representatives, such Selling Stockholder has knowledge of the
occurrence of any event as a result of which the Prospectus or the Registration
Statement, in each case as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
15
were made, not misleading, such Selling Stockholder will promptly notify the
Company and the Representatives.
5. Payment of Expenses. Whether or not the transactions contemplated
-------------------
in this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits thereto), any preliminary prospectus, the Prospectus and any amendments
or supplements thereto (including, without limitation, fees and expenses of the
Company's accountants and counsel), the underwriting documents (including this
Agreement, the Master Agreement Among Underwriters and the Master Selling
Agreement) and all other documents related to the public offering of the Shares
(including those supplied to the Underwriters in quantities as hereinabove
stated), (ii) the issuance, transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
qualification of the Shares under state or foreign securities or Blue Sky laws
or regulations, including the costs of printing and mailing a preliminary and
final "Blue Sky Survey" and the fees of counsel for the Underwriters and such
counsel's disbursements in relation thereto, (iv) quotation of the Shares on the
Nasdaq National Market, (v) filing fees of the Commission and the National
Association of Securities Dealers, Inc.; (vi) the cost of printing certificates
representing the Shares and (vii) the cost and charges of any transfer agent or
registrar.
6. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company and the Principal Selling Stockholders, and the
Selling Stockholders herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6 "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Xxxxxxx, Xxxxxxx & Xxxxxxxx
LLP ("Underwriters' Counsel") pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company of its obligations hereunder, and to
the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M., New York time, on the date of this Agreement, or at such
later time and date as shall have been consented to in writing by you; if the
Company shall have elected to rely upon Rule 430A or Rule 434 of the
Regulations, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 4(a) hereof; and, at or prior to the
Closing Date no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the opinion of
Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company, dated the Closing Date
addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
16
(i) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. Each of the Company and its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in good
standing which will not in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole. Each of the Company and its
subsidiaries has all requisite corporate authority to own, lease and license its
respective properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus. All of the issued
and outstanding capital stock of each subsidiary of the Company has been duly
and validly issued and is fully paid and nonassessable and was not issued in
violation of preemptive rights and, is owned directly or indirectly by the
Company, free and clear of any lien, encumbrance, claim, security interest,
restriction on transfer, shareholders' agreement, voting trust or other defect
of title whatsoever.
(ii) The Company has an authorized capital stock as set forth
in the Registration Statement and the Prospectus. All of the outstanding shares
of Common Stock are duly and validly authorized and issued, are fully paid and
nonassessable and were not issued in violation of or subject to any preemptive
rights. The Shares to be delivered on the Closing Date have been duly and
validly authorized and, when delivered by the Company in accordance with this
Agreement, will be duly and validly issued, fully paid and nonassessable and
will not have been issued in violation of or subject to any preemptive rights.
The Common Stock, the Firm Shares and the Additional Shares conform to the
descriptions thereof contained in the Registration Statement and the Prospectus.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(iv) There is no litigation or governmental or other action,
suit, proceeding or investigation before any court or before or by any public,
regulatory or governmental agency or body pending or to the best of such
counsel's knowledge, threatened against, or involving the properties or business
of, the Company or any of its subsidiaries, which is of a character required to
be disclosed in the Registration Statement and the Prospectus which has not been
properly disclosed therein.
(v) To such counsel's knowledge, all agreements,
instruments, franchises, licenses or permits required to be described in the
Registration Statement and the Prospectus or required to be filed as exhibits
to the Registration Statements have been so described and so filed.
(vi) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby by the
Company do not and will not (A) to such counsel's knowledge result in a material
breach of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time,
17
or both, would constitute a default) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any agreement, instrument,
franchise, license or permit known to such counsel to which the Company or any
of its subsidiaries is a party or by which any of such corporations or their
respective properties or assets may be bound or (B) violate or conflict with
any provision of the certificate of incorporation or by-laws of the Company or
any of its subsidiaries, or, to the best knowledge of such counsel, any
judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties or
assets. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties or
assets is required for the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby, except
for (1) such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no opinion) and (2) such
as have been made or obtained under the Act.
(vii) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the financial statements
and schedules and other financial data derived therefrom, as to which no opinion
need be rendered) comply as to form in all material respects with the
requirements of the Act and the Regulations.
(viii) The Registration Statement and the Rule 462(b)
Registration Statement, if any, is effective under the Act, and, to the best
knowledge of such counsel, no stop order suspending the effectiveness of either
of the Registration Statement or the Rule 462(b) Registration Statement, if any,
has been issued and no proceedings therefor have been initiated or threatened by
the Commission and all filings required by Rule 424(b) of the Regulations have
been made.
In addition, such opinion shall also contain a statement that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Underwriters at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and, no facts have come to the
attention of such counsel which would lead such counsel to believe that either
the Registration Statement at the time it became effective (including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434, if applicable), or any
amendment thereof made prior to the Closing Date as of the date of such
amendment, contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of its date (or any
amendment thereof or supplement thereto made prior to the Closing Date as of the
date of such amendment or supplement) and as of the Closing Date contained or
contains an untrue statement of a material fact or omitted or omits to state any
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 (it being understood
18
that such counsel need express no belief or opinion with respect to the
financial statements and schedules and other financial data included therein).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the General Corporation Law of the
State of Delaware, the General Corporation Law of the State of California or the
federal law of the United States, to the extent such counsel deems proper and to
the extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to Underwriters' Counsel) of other
counsel reasonably acceptable to Underwriters' Counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and certificates or other
written statements of officers of departments of various jurisdictions having
custody of documents respecting the corporate existence or good standing of the
Company and its subsidiaries, provided that copies of any such statements or
certificates shall be delivered to Underwriters' Counsel. The opinion of such
counsel for the Company shall state that the opinion of any such other counsel
is in form satisfactory to such counsel and, in their opinion, you and they are
justified in relying thereon.
(c) You shall have received on the Closing Date, the following
opinion of Xxxxxxxx & Xxxxxxxx LLP, counsel for the Selling Stockholders
substantially in the form of Exhibit B attached hereto, dated as of the Closing
---------
Date, addressed to the Underwriters and with reproduced copies or signed
counterparts thereof for each of the Underwriters.
In rendering such opinion, such counsel may rely as to questions
of law not involving the laws of the United States or the States of Delaware and
California upon opinions of local counsel and as to questions of fact upon
representations or certificates of the Selling Stockholders or officers of the
Selling Stockholders (when the Selling Stockholder is not a natural person), and
of governmental officials, in which case their opinion is to state that they are
so relying and that they have no knowledge of any material misstatement or
inaccuracy of any material misstatement or inaccuracy in any such opinion,
representation or certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' Counsel.
(d) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be satisfactory in
form and substance to you and to Underwriters' Counsel, and the Underwriters
shall have received from said Underwriters' Counsel a favorable opinion, dated
as of the Closing Date with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related matters as you
may reasonably require, and the Company shall have furnished to Underwriters'
Counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(e) At the Closing Date you shall have received a certificate of
the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date to the effect that (i) the condition set forth in subsection
(a) of this Section 6 has been satisfied, (ii) as of the date hereof and as of
the Closing Date the representations and warranties of the Company and the
Principal Selling Stockholders set forth in Section 1 hereof are accurate, (iii)
as of the Closing Date the obligations of the Company to be performed hereunder
on or prior thereto have been duly performed and (iv) subsequent to the
respective dates as of which information is given
19
in the Registration Statement and the Prospectus, the Company and its
subsidiaries have not sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, and there has not been any Material
Adverse Change, or any development involving a Material Adverse Change, except
in each case as described in or contemplated by the Prospectus.
(f) At the Closing Date you shall have received a written
certificate executed by Xxxxxxx Xxxxx and Xxxx Xxxxxxxxx on behalf of each
Selling Stockholder, dated as of such Closing Date, to the effect that:
(i) the representations, warranties and covenants of each
Selling Stockholder set forth in Section 1 of this Agreement are true and
correct with the same force and effect as though expressly made by such Selling
Stockholder on and as of such Closing Date; and
(ii) each Selling Stockholder has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to such Closing Date.
(g) At least three business days prior to 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.
(h) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter, from Ernst & Young LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriters and in form
and substance satisfactory to you, to the effect that: (i) they are independent
certified public accountants with respect to the Company within the meaning of
the Act and the Regulations and stating that the answer to Item 10 of the
Registration Statement is correct insofar as it relates to them; (ii) stating
that, in their opinion, the financial statements and schedules of the Company
included in the Registration Statement and the Prospectus and covered by their
opinion therein comply as to form in all material respects with the applicable
accounting requirements of the Act and the applicable published rules and
regulations of the Commission thereunder; (iii) on the basis of procedures
consisting of a reading of the latest available unaudited interim consolidated
financial statements of the Company, and its subsidiaries, a reading of the
minutes of meetings and consents of the shareholders and boards of directors of
the Company and its subsidiaries and the committees of such boards subsequent to
December 31, 1998, inquiries of officers and other employees of the Company and
its subsidiaries who have responsibility for financial and accounting matters of
the Company and its subsidiaries with respect to transactions and events
subsequent to December 31, 1998 and other specified procedures and inquiries to
a date not more than five days prior to the date of such letter, nothing has
come to their attention that would cause them to believe that: (A) the unaudited
consolidated financial statements and schedules of the Company presented in the
Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act and the
applicable published rules and
20
regulations of the Commission thereunder or that such unaudited consolidated
financial statements are not fairly presented in conformity with generally
accepted accounting principles applied on a basis substantially consistent
with that of the audited consolidated financial statements included in the
Registration Statement and the Prospectus; (B) with respect to the period
subsequent to December 31, 1998, there were, as of the date of the most recent
available monthly consolidated financial statements of the Company and its
subsidiaries, if any, and as of a specified date not more than five days prior
to the date of such letter, any changes in the capital stock or long-term
indebtedness of the Company or any decrease in the net current assets or
stockholders' equity of the Company, in each case as compared with the amounts
shown in the most recent balance sheet presented in the Registration Statement
and the Prospectus, except for changes or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur or which are
set forth in such letter; or (C) that during the period from December 31, 1998
to the date of the most recent available monthly consolidated financial
statements of the Company and its subsidiaries, if any, and to a specified
date not more than five days prior to the date of such letter, there was any
decrease, as compared with the corresponding period in the prior fiscal year,
in total revenues, or total or per share net income, except for decreases
which the Registration Statement and the Prospectus disclose have occurred or
may occur or which are set forth in such letter; and (iv) stating that they
have compared specific dollar amounts, numbers of shares, percentages of
revenues and earnings, and other financial information pertaining to the
Company and its subsidiaries set forth in the Registration Statement and the
Prospectus, which have been specified by you prior to the date of this
Agreement, to the extent that such amounts, numbers, percentages, and
information may be derived from the general accounting and financial records
of the Company and its subsidiaries or from schedules furnished by the
Company, and excluding any questions requiring an interpretation by legal
counsel, with the results obtained from the application of specified readings,
inquiries, and other appropriate procedures specified by you set forth in such
letter, and found them to be in agreement. In addition, such letter shall
state that the pro forma financial information included in the Registration
Statement and the Prospectus complies as to form in all material respects with
the applicable accounting requirements of the Act, including Rule 11-02 of
Regulation S-X, and that the pro forma adjustments have been properly applied
to historical amounts in the compilation of such pro forma financial
information.
(i) Prior to the Closing Date the Company shall have furnished to
you such further information, certificates and documents as you may reasonably
request.
(j) [You shall have received from each person who is a director,
officer or stockholder of the Company an agreement in the form of Exhibit A
hereto, and such agreement shall be in full force and effect on the Closing
Date.]
(k) At the Closing Date, the Shares shall have been approved for
inclusion on the Nasdaq National Market.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time
21
prior to, the Closing Date and the obligations of the Underwriters to purchase
the Additional Shares may be cancelled by you at, or at any time prior to, the
Additional Closing Date. Notice of such cancellation shall be given to the
Company in writing, or by telephone, telex or telegraph, confirmed in writing.
7. Indemnification.
---------------
(a) (i) Each of the Company and each of the Principal Selling
Stockholders, severally agree to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any and all
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related preliminary prospectus or the Prospectus, or
in any supplement thereto or amendment thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company and each Principal Selling Stockholders will
not be liable in any such case to the extent but only to the extent that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
you expressly for use therein. This indemnity agreement will be in addition to
any liability which the Company may otherwise have including under this
Agreement.
(ii) Each of the Other Selling Stockholders severally agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any and all losses, liabilities, claims,
damages and expenses whatsoever as incurred (including but not limited to
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
each Other Selling Stockholder will be liable in any such case to the extent but
only to the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon any such untrue statement or alleged untrue
22
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company or such Underwriter
by such Other Selling Stockholder expressly for use therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company, each Principal Selling Stockholder,
each Other Selling Stockholder, each of the directors of the Company, each of
the officers of the Company who shall have signed the Registration Statement,
and each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein; provided,
however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares purchased
by such Underwriter hereunder. This indemnity will be in addition to any
liability which any Underwriter may otherwise have including under this
Agreement. The Company and each Principal Selling Stockholder acknowledges that
the statements set forth in the last paragraph of the cover page and under the
caption "Underwriting" in the Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter expressly for use in the
registration statement relating to the Shares as originally filed or in any
amendment thereof, any related preliminary prospectus or the Prospectus or in
any amendment thereof or supplement thereto, as the case may be.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding
23
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless
(i) the employment of such counsel shall have been authorized in writing by
one of the indemnifying parties in connection with the defense of such action,
(ii) the indemnifying parties shall not have employed counsel to have charge
of the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have
the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be
borne by the indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement
of any claim or action effected without its written consent; provided,
however, that such consent was not unreasonably withheld.
8. Contribution. In order to provide for contribution in circumstances
------------
in which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, each Selling Stockholder
and the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company and the
Selling Stockholders any contribution received by the Company and the Selling
Stockholders from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company and one or more of the Underwriters may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company, each Selling Stockholder and the Underwriters from the
offering of the Shares or, if such allocation is not permitted by applicable law
or indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 7 hereof, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company, each Selling Stockholder and the Underwriters
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company or each Selling Stockholder
and (y) the underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company, each Selling Stockholder and of
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 the Company any Selling Stockholder or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, each Selling
Stockholder and the
24
Underwriters agree that it would not be just and 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 which does not take account of the equitable
considerations referred to above.
Notwithstanding the provisions of this Section 8, (i) in no case
shall any Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder, and (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Notwithstanding
the provisions of this Section 8 and the preceding sentence, 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. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the
same rights to contribution as such Underwriter, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of this Section 8 The liability of each Selling Stockholder under the
indemnity and reimbursement agreements contained in the provisions of this
Section 8 and Section 17 hereof shall be limited to an amount equal to the net
proceeds of the Shares sold by such Selling Stockholder to the Underwriters.
Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties, notify each party or parties from whom contribution may be sought, but
the omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 8 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
provided, however, that such consent was not unreasonably withheld.
9. Default by an Underwriter.
-------------------------
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
do not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions which
the numbers of Firm Shares set forth opposite their respective names in Schedule
I and Schedule II hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non- defaulting Underwriters.
25
(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any non-
defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within 5 calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Section 5, 7(a) and 8 hereof) or the Underwriters, but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be, for a period, not exceeding five
business days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 9 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares and Additional Shares.
10. Survival of Representations and Agreements. All representations
------------------------------------------
and warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement, including the agreements contained in Section 5,
the indemnity agreements contained in Section 7 and the contribution agreements
contained in Section 8, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
----------------------------------------
(a) This Agreement shall become effective, upon the later of when
(i) you and the Company shall have received notification of the effectiveness of
the Registration Statement or (ii) the execution of this Agreement. If either
the initial public offering price or the purchase price per Share has not been
agreed upon prior to 5:00 P.M., New York time, on the fifth full business day
after the Registration Statement shall have become effective, this Agreement
shall thereupon terminate without liability to the Company or the Underwriters
except as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you or by you
notifying the Company. Notwithstanding the
26
foregoing, the provisions of this Section 11 and of Sections 1, 5, 7 and 8
hereof shall at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement at any
time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (A) any domestic or international event or act or
occurrence has materially disrupted, or in your reasonable opinion will in the
immediate future materially disrupt, the market for the Company's securities or
securities in general; or (B) if trading on the New York or American Stock
Exchanges or on Nasdaq shall have been suspended, or minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, on the New York or American Stock Exchanges or on
Nasdaq by the New York or American Stock Exchanges or Nasdaq or by order of the
Commission or any other governmental authority having jurisdiction; or (C) if a
banking moratorium has been declared by a state or federal authority or if any
new restriction materially adversely affecting the distribution of the Firm
Shares or the Additional Shares, as the case may be, shall have become
effective; or (D) (i) if the United States becomes engaged in hostilities or
there is an escalation of hostilities involving the United States or there is a
declaration of a national emergency or war by the United States or (ii) if there
shall have been such change in political, financial or economic conditions if
the effect of any such event in (i) or (ii) as in your judgment makes it
impracticable or inadvisable to proceed with the offering, sale and delivery of
the Firm Shares or the Additional Shares, as the case may be, on the terms
contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be
by telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the Underwriters in connection herewith.
12. Notices. All communications hereunder, except as may be otherwise
-------
specifically provided herein, shall be in writing and , if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and confirmed
in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, X.X. 00000, Attention: Equity Syndicate; if sent to the Company, shall
be mailed, delivered, or telegraphed and confirmed in writing to the Company,
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxx Xxxxxxxxx.
13. Parties. This Agreement shall inure solely to the benefit of,
-------
and shall be binding upon, the Underwriters, each Selling Stockholder and the
Company and the controlling persons, directors, officers, employees and agents
referred to in Section 7 and 8, and their respective successors and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement
or any
27
provision herein contained. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of Shares from any of the
Underwriters.
14. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, but without
regard to principles of conflicts of law.
15. Counterparts. This Agreement may be signed in two or more
------------
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
16. Headings. The headings of the sections of this Agreement have
--------
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
17. Reimbursement of Underwriters' Expenses. If this Agreement is
---------------------------------------
terminated by the Representatives pursuant to Section 6, Section 9, Section
11, or Section 18, or if the sale to the Underwriters of the Shares on the
Closing Date is not consummated because of any refusal, inability or failure
on the part of the Company or the Selling Stockholders to perform any
agreement herein or to comply with any provision hereof, the Company agrees to
reimburse the Representatives and the other Underwriters (or such Underwriters
as have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Representatives and the Underwriters in connection with the proposed
purchase and the offering and sale of the Shares, including but not limited to
fees and disbursements of counsel, printing expenses, travel expenses,
postage, facsimile and telephone charges provided however, that (i) to the
extent such payment is ultimately held to be improper, the persons receiving
such payments shall promptly refund them and (ii) such persons shall provide
to the Company, upon request, reasonable assurances of their ability to effect
any refund, when and if due.
18. Failure of One or More of the Selling Stockholders to Sell and
--------------------------------------------------------------
Deliver Common 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, the
Company hereby agrees to sell and deliver to the Underwriters that number of
Shares equal to the number of Shares not sold and delivered by such Selling
Stockholders. Furthermore, if one or more of the Selling Stockholders shall fail
to sell and deliver to the Underwriters in the aggregate more than two hundred
thousand (200,000) of the Shares then the Underwriters may at their option, by
written notice from the Representatives to the Company and the Selling
Stockholders, terminate this Agreement without any liability on the part of any
Underwriter or, except as provided in Sections 5, 7 and 17 hereof, the Company
or the Selling Stockholders. 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,
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, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected.
28
If the foregoing correctly sets forth the understanding between
you and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
XXXX.XXX, INC.
By:
--------------------------------------------
Xxxxxxx Xxxxx
Chief Executive Officer and President
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX & XXXXX LLC
BANCBOSTON XXXXXXXXX XXXXXXXX
WIT CAPITAL CORPORATION
By Bear, Xxxxxxx & Co. Inc.
By:
--------------------------------
Authorized Signatory
On behalf of themselves and the other
U.S. Underwriters named in Schedule I hereto.
BEAR XXXXXXX INTERNATIONAL LIMITED
XXXXXXXXX & XXXXX LLC
BANCBOSTON XXXXXXXXX XXXXXXXX INTERNATIONAL LTD
DEUTSCHE BANK AG LONDON
By Bear, Xxxxxxx International Limited
By:
--------------------------------
Authorized Signatory
On behalf of themselves and the other
U.S. Underwriters named in Schedule II hereto
SIGNATURE PAGE TO UNDERWRITING AGREEMENT
SCHEDULE I
U.S. UNDERWRITERS
Name of Firm Number of Shares
------------ ----------------
Bear, Xxxxxxx & Co. Inc........................
Xxxxxxxxx & Xxxxx LLC..........................
BancBoston Xxxxxxxxx Xxxxxxxx..................
Wit Capital Corporation........................
Total.................................. 3,400,000
SCHEDULE II
INTERNATIONAL UNDERWRITERS
Name of Firm Number of Shares
------------ ----------------
Bear, Xxxxxxx International Limited.......................
Xxxxxxxxx & Xxxxx LLC.....................................
BancBoston Xxxxxxxxx Xxxxxxxx International Ltd...........
Deutsche Bank AG London...................................
Total.................................................. 600,000
SCHEDULE III
SELLING STOCKHOLDERS
Name Number of Shares
---- ----------------
Total.................................................. 2,000,000
EXHIBIT A
March ___, 1999
Bear, Xxxxxxx & Co., Inc.
Xxxxxxxxx & Xxxxx LLC
BancBoston Xxxxxxxxx Xxxxxxxx
Wit Capital Corporation
As Representatives of the Several Underwriters
c/o Bear, Xxxxxxx & Co., Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: XXXX.xxx, Inc. (the "Company")
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Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company (Common Stock) or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the Offering) for which you will act as the
representatives (the Representatives) of the underwriters. The undersigned
recognizes that the Offering will be of benefit to the undersigned and will
benefit the Company by, among other things, raising additional capital for its
operations. The undersigned acknowledges that you and the other underwriters
are relying on the representations and agreements of the undersigned contained
in this letter in carrying out the Offering and in entering into underwriting
arrangements with the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of Bear, Xxxxxxx & Co.,
Inc. (which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale) pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Securities Exchange Act
of 1934, as amended, or otherwise dispose of any shares of Common Stock, options
or warrants to acquire shares of Common Stock, or securities exchangeable or
exercisable for or convertible into shares of Common Stock currently or
hereafter owned either of record or beneficially (as defined in Rule 13d-3 under
Securities Exchange Act of 1934, as amended) by the undersigned, other than
shares purchased by the undersigned in the Offering, or publicly announce the
undersigned's intention to do any of the foregoing, for a period commencing on
December 9, 1998 and continuing to a date [180] days thereafter. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of shares
of
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Common Stock or securities convertible into or exchangeable or exercisable for
Common Stock held by the undersigned except in compliance with the foregoing
restrictions.
This agreement is irrevocable and will be binding on the undersigned and
the respective successors, heirs, personal representatives, and assigns of the
undersigned.
Dated:
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Signature
Printed Name of Holder
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Exhibit B
Matters to be Covered in the Opinion of Selling Stockholder Counsel
(i) The Agreement has been duly authorized, executed and
delivered by or on behalf of, and is a valid and binding agreement of, such
Selling Stockholder, enforceable in accordance with its terms, except as
rights to indemnification thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(ii) The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations under,
the Underwriting Agreement and its Custody Agreement and its Power of
Attorney will not contravene or conflict with result in a breach of, or
constitute a default under, the charter or by-laws, partnership agreement,
trust agreement or other organization documents, as the case may be, of
such Selling Stockholder, or, to the best of such counsel's knowledge,
violate, result in a breach of or constitute a default under the terms of
any other agreement or instrument to which such Selling Stockholder is a
party or by which it is bound, or any judgement, order or decree applicable
to such Selling Stockholder of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over such
Selling Stockholder.
(iii) Such Selling Stockholder has good and valid title to all
of the Shares which may be sold by such Selling Stockholder under the
Agreement and has the legal right and power, and all authorization and
approvals required [under its charter and by-laws,] [partnership
agreement,] [trust agreement] [or other organizational documents, as the
case may be,] to enter into the Agreement and its Custody Agreement and its
Power of Attorney, to sell, transfer and deliver all of the Shares which
may sold by such Selling Stockholder under the Agreement and to comply with
its other obligations under the Agreement, its Custody Agreement and its
Power of Attorney.
(iv) Each of the Custody Agreement and Power of Attorney of
such Selling Stockholder has been duly authorized, executed and delivered
by such Selling Stockholder and is a valid and binding agreement of such
Selling Stockholder, enforceable in accordance with its terms, except as
rights to indemnification thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general equitable
principles.
(v) Assuming that the Underwriters purchase the Shares which
are sold by such Selling Stockholder pursuant to the Agreement for value,
in good faith and without notice of any adverse claims, the delivery of
such Shares pursuant to the
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Agreement will pass good and valid title to such Shares, free and clear
of any security interest, mortgage, pledge, lieu encumbrance or other
claim.
(vi) To the best of such counsel's knowledge, no consent,
approval, authorization or other order of, or registration or filing with,
any court or governmental authority or agency, is required for the
consummation by such Selling Stockholder of the transactions contemplated
in the Agreement, except as required under the Securities Act, applicable
state securities or blue sky laws, and from the National Association of
Securities Dealers, LLC.
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